DoD's $28.5M Barracks Renovation Contract Awarded to Korte Construction Company Faces Scrutiny

Contract Overview

Contract Amount: $28,542,629 ($28.5M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2018-07-31

End Date: 2022-03-18

Contract Duration: 1,326 days

Daily Burn Rate: $21.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 15

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF P403 RECRUIT RECONDITIONING CENTER BARRACK RENOVATION

Place of Performance

Location: PARRIS ISLAND, BEAUFORT County, SOUTH CAROLINA, 29905

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $28.5 million to KORTE CONSTRUCTION COMPANY for work described as: IGF::OT::IGF P403 RECRUIT RECONDITIONING CENTER BARRACK RENOVATION Key points: 1. The contract awarded to Korte Construction Company for barracks renovation is for $28.5 million. 2. The contract was awarded under full and open competition. 3. The project duration was 1326 days, significantly longer than typical construction projects. 4. The sector is Commercial and Institutional Building Construction. 5. There is no indication of small business participation.

Value Assessment

Rating: questionable

The contract value of $28.5 million for barracks renovation appears high, especially considering the extended duration. Benchmarking against similar projects is difficult without more specific details on the scope of work, but the cost per day is substantial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust price discovery process. However, the extended duration and significant cost raise questions about whether the competitive process fully optimized value for taxpayers.

Taxpayer Impact: The substantial cost of this project, coupled with its long duration, suggests a potentially inefficient use of taxpayer funds if the value delivered does not align with the expenditure.

Public Impact

Military personnel may experience prolonged substandard living conditions due to the extended renovation timeline. Taxpayers are funding a significant expenditure for a project that has taken over three years to complete. The lack of small business involvement might represent a missed opportunity for economic development in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended project duration
High contract value for renovation
No small business participation

Positive Signals

Awarded through full and open competition

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector can vary widely based on project scope, location, and economic conditions. The $28.5 million value is significant for a single renovation project.

Small Business Impact

The contract data indicates that small businesses were not involved in this award, either as prime contractors or potentially as subcontractors. This is a missed opportunity to support small business growth and economic diversification within the construction sector.

Oversight & Accountability

While awarded through full and open competition, the extended duration and significant cost warrant further oversight to ensure accountability and efficient use of funds. The contracting agency should monitor progress closely and address any delays or cost overruns.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Extended project duration
High contract value
Lack of small business participation
Potential for cost overruns due to long timeline

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.5 million to KORTE CONSTRUCTION COMPANY. IGF::OT::IGF P403 RECRUIT RECONDITIONING CENTER BARRACK RENOVATION

Who is the contractor on this award?

The obligated recipient is KORTE CONSTRUCTION COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $28.5 million.

What is the period of performance?

Start: 2018-07-31. End: 2022-03-18.

What specific factors contributed to the unusually long 1326-day duration for this barracks renovation project?

The extended duration of 1326 days (approximately 3.6 years) for this barracks renovation project is a significant concern. Potential contributing factors could include unforeseen site conditions, scope creep, contractor performance issues, funding delays, or complex logistical challenges inherent in military base construction. A detailed review of project milestones, change orders, and contractor reports would be necessary to pinpoint the exact causes.

How does the $28.5 million cost compare to similar barracks renovation projects of comparable scope and complexity?

Benchmarking the $28.5 million cost against similar barracks renovations is crucial for assessing value. Without detailed scope information, a direct comparison is difficult. However, the cost per square foot or per barracks unit needs to be evaluated against industry standards and other government contracts. If this project's cost significantly exceeds benchmarks, it suggests potential overpricing or inefficiencies that warrant investigation.

What measures were in place to ensure effective oversight and accountability given the long project timeline and substantial cost?

Effective oversight for a project of this magnitude and duration typically involves regular progress reviews, independent quality assurance checks, and stringent financial management. The Department of the Navy should have had contract officers and technical representatives actively monitoring the contractor's performance, adherence to schedule, and budget. Documentation of these oversight activities is essential to confirm accountability and justify the project's eventual cost and completion.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: N4008516R5522

Offers Received: 15

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5700 OAKLAND AVE STE 275, SAINT LOUIS, MO, 63110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,740,669

Exercised Options: $29,740,669

Current Obligation: $28,542,629

Subaward Activity

Number of Subawards: 129

Total Subaward Amount: $753,817,706

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline