SecProbe.io

CORRESP
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  200
  East Randolph Drive

  Chicago,
  Illinois 60601

  Facsimile:

  312
  861-2200

  312
  861-2000

  www.kirkland.com

December
2, 2005

Via EDGAR and Facsimile

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

  Attn:

  Jennifer Thompson

  John Hertz

  John Cash

Re:                               Great Lakes Dredge &
Dock Corporation

Form 10-K for the year ended December 31, 2004

Filed March 30, 2005

Forms 8-K filed February 1, 2005 and April 26, 2005

File No. 333-64687

Ladies and Gentlemen:

On behalf of Great Lakes
Dredge & Dock Corporation, a Delaware corporation (the “Company”),
please find the response of the Company to the comment letter, dated September
29, 2005, received by Mr. Douglas B. Mackie from the Staff of the Securities
and Exchange Commission (the “Commission”).  The numbered paragraphs below set forth the
Staff’s comments together with the Company’s responses.

FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2004

Item 7 –
Management’s Discussion and Analysis, page 21

Costs and
Expenses, page 22

1.                                       We note your response to
comment 2 from our letter dated August 10, 2005.  Please provide us with a more detailed
explanation as to why fixed equipment costs are not recognized on a time or
hours of use basis.  Specifically:

•                       You state that recognizing expenses in proportion to
revenue provides better matching of expenses with revenues.  Help us understand why this is not the case
for annual reporting purposes.  Tell us
how your fourth quarter “true-up” adjustments work.  Quantify such adjustments for the past three
years.

•                       It is unclear to us why it is better to use your
method because “revenue generated per utilization hour by different types of
equipment can vary substantially”.  It
would appear to us that if time or hours of use were utilized this would
translate into a more meaningful result such that the margins for different
types of equipment would be different, as would be appropriate, because this
would match the economics of the project.

We recognize that when bidding a job you estimate the
project revenue necessary to cover the underlying costs of the equipment used,
including the fixed costs of the equipment.
However we fail to understand how the actual costs of the equipment
used, including fixed costs, would not be the best method for the purposes of
reporting historical results.  Please
advise.

In order for us to better understand your interim method of
depreciation, please also provide us a theoretical example of how fixed
equipment costs are recognized in a contract.

Response:

The Company would like to provide you further
background on its interim reporting policy for fixed equipment costs.  The Company’s policy, as discussed in its
MD&A, is to recognize the fixed equipment costs during the interim periods
in proportion to revenues recognized over the year to better match revenues and
expenses.  The Company has consistently
followed this accounting practice since becoming an SEC registrant in
1998.  The Company believes this is the
most appropriate accounting policy for its business and is consistent with the
accounting guidance in SOP 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts and APB 28, Interim
Financial Reporting.  In addition, the following
is an excerpt from the Company’s response dated December 11, 1998 to the
Commission’s comment letter sent November 2, 1998 related to the Company’s
Registration Statement on Form S-4 filed September 29, 1998.

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Commission’s September 1998 Comment Letter:

Allocation of equipment cost, page F-5

“14.  Companies usually have seasonal periods but
amortize depreciation and fixed costs on a straight line basis for financial
reporting purposes.  Please provide the
accounting literature or industry support for amortizing expenses based on
revenues.”

Company Response to September 1998 letter:

14. APB Opinion No. 28,
Interim Financial Reporting, provides the guidance supporting the Company’s
policy regarding the allocation of fixed equipment costs against revenues for
interim reporting purposes. Specifically, paragraph 14.d. of APB Opinion No. 28
provides that certain cost variances that are planned and expected to be
absorbed by the end of the annual period should ordinarily be deferred at interim
reporting dates.

This practice is further
supported by (SOP) 81-1, Accounting for Performance of Construction-Type and
Certain Production-Type Contracts, as such costs are considered contract costs
and are related to specific contracts on which the equipment is, or will be,
utilized.  Such costs are, therefore,
charged to operations as the related revenue from the contracts is recognized
under the percentage of completion method.
As the marine dredging industry is very capital intensive, and the overhead
costs which are subject to deferral/accrual are primarily related to the
dredging equipment, it is management’s position that such a policy provides a
more meaningful matching of revenues with the costs associated with generating
those revenues.”

The Commission had no further comments on
this matter in connection with the 1998 Registration Statement on S-4.

The remainder of the response will discuss
more specific details on the Company’s methodology as requested.

The Company budgets revenues and costs,
including its fixed equipment costs (depreciation, maintenance, insurance and
long-term equipment rentals), on an annual basis.  Within the year the Company allocates the
annual fixed equipment costs to each quarter based on revenues earned.  At the end of each quarter the Company takes
actual revenues earned to date over estimated annual revenue and multiplies
this ratio by the estimated annual fixed equipment costs. This amount is then
expensed for the quarter.  Each quarter
the Company revises the expectations for both annual revenues and fixed
equipment costs.  Therefore, there is a
“truing-up”

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of actual vs. estimate each quarter.  Defining the true-up calculation to be the
difference between what the Company recorded for fixed equipment costs vs. what
the Company would have recorded if it had hindsight as to the actual annual
revenues and costs during the year and using its current method of allocating
fixed equipment costs based on revenue, then the true-ups for the fourth
quarters for the years ending 2004, 2003 and 2002 were a reduction of expense
of $1,400, $1,300 and $1,800, respectively. These true-ups represent 1.4%, 1.7%
and 2.2% of costs of contract revenues for the respective quarters ended
December 31, 2004, 2003 and 2002.

As stated in the Company’s original response,
revenue is used for allocating fixed equipment costs because it serves as a
proxy for weighted average utilization.
Since all of these fixed costs are equipment related and equipment usage
is the activity that generates revenue, equipment utilization would be an
appropriate activity on which to allocate these costs over interim periods in
which the incurrence of these costs and the utilization levels of the equipment
can vary significantly.  However, in the
Company’s annual budgeting process, there is no process in place for budgeting
utilization. With over 200 pieces of equipment that can be used in numerous
combinations, the Company does not believe that it is practical to develop a
process to budget utilization.
Accordingly, there is no measure against which to compare actual
utilization each quarter.  The Company’s
budgeting process does develop an estimate of annual revenue and costs.  Therefore, the Company uses revenue for its
allocation method because it is estimable and the Company believes that revenue
levels are the best indicator of the overall utilization level of its
equipment, as there is a high correlation between revenues and the underlying
equipment utilization.  Also, as stated
previously, the Company does adjust its revenue to reflect only revenue
generated by its equipment (for instance revenue attributable to subcontracts
is excluded for purposes of this calculation).

In response to your final comment, the
Company does use the “actual costs” of the equipment on an annual basis to
expense fixed equipment costs as discussed above.  It is only on an interim basis that the
Company allocates these costs in accordance with APB Opinion No. 28.  The following is a theoretical example of how
the Company recognizes fixed equipment costs in “costs of contract revenues” on
an interim basis:

At the beginning of the year the Company
estimates that total dredging revenues will be $250,000 for the year.  At the end of the first, second and third
quarters the Company revises its estimate for total revenue to $255,000,
$265,000 and $260,000 respectively.
Similarly, the Company estimates fixed equipment costs to be $50,000 at
the beginning of the year and $52,000, $57,000 and $55,000 at the end of the
first, second and third quarters, respectively.
The following table shows how the fixed equipment costs are recognized
over the year.

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  1st quarter

  2nd quarter

  3rd quarter

  4th quarter

  Estimated annual revenue

  $

  255,000

  $

  265,000

  $

  260,000

  —

  Actual annual revenue

  —

  —

  —

  $

  270,000

  Actual quarterly revenue

  $

  65,000

  $

  65,000

  $

  67,000

  $

  73,000

  Percentage of year to date actual revenue
  to total estimated revenue

  25

  %

  49

  %

  76

  %

  100

  %

  Estimated annual fixed equipment costs

  $

  52,000

  $

  57,000

  $

  55,000

  —

  Actual annual fixed equipment costs

  —

  —

  —

  $

  57,000

  Fixed equipment costs recognized

  $

  13,000

  $

  14,930

  $

  13,870

  $

  15,200

Financial
Statements for the Year Ended December 31, 2004

Note 16 – Segment
Information, page 76

2.                                       We note your response to
comment 9 from our letter dated August 10, 2005.  We read on page 3 of your Form 10-K that you
are the only US dredging service provider with significant international
operations, which averaged 18% of your dredging contract revenues over the past
three years.  We read on page 29 of your
Form-10K that you incurred similar levels of utilization of your foreign-based
fleet in 2004 compared to 2003.  Given
the importance of your international operations to your business, we believe
that providing the disclosures required by paragraph 38(b) of SFAS 131 as of
year end will provide your readers with important insight into your
business.  Please provide disclosure in
future filings.

Response:

In response to the Staff’s comment, the Company will provide in
future filings the net book value, as of the date of the statements, of the
long-lived assets that are outside of the U.S.
If at a

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reporting date, long-lived assets located in
an individual foreign country are material, those amounts will be disclosed
separately.  The Company will continue to
indicate that the majority of its long-lived assets are marine vessels and
related equipment, which may be redeployed where needed to perform the
Company’s backlog of work.

*
*   *   *   *

We hope that the foregoing
has been responsive to the Staff’s comments.
Should you have any questions relating to any of the foregoing, please
feel free to contact Deborah Wensel, the Company’s Chief Financial Officer, at
(630) 574-2948 or the undersigned at (312) 861-2163.

  Sincerely,

  /s/ Carol Anne Huff

  Carol Anne Huff

  cc:

  Douglas B. Mackie

  Deborah Wensel

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