DoD awards $27.4M for KC-46 Kitting Facility Construction, with 3 bidders in full and open competition

Contract Overview

Contract Amount: $27,436,389 ($27.4M)

Contractor: Diversified Construction of Oklahoma, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-14

End Date: 2026-07-20

Contract Duration: 644 days

Daily Burn Rate: $42.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: KITTING FACILITY CONSTRUCTION FOR THE KC-46 PROGRAM.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $27.4 million to DIVERSIFIED CONSTRUCTION OF OKLAHOMA, INC. for work described as: KITTING FACILITY CONSTRUCTION FOR THE KC-46 PROGRAM. Key points: 1. The contract value represents a significant investment in critical infrastructure for the KC-46 program. 2. Competition dynamics suggest a potentially competitive bidding environment, which can drive better pricing. 3. The fixed-price contract type shifts performance risk to the contractor. 4. Construction is slated for completion in mid-2026, aligning with program timelines. 5. The project is located in Oklahoma, potentially impacting the local construction workforce and economy. 6. The contract's duration of 644 days indicates a substantial construction undertaking.

Value Assessment

Rating: good

The contract's value of $27.4 million for a kitting facility appears reasonable given the scope of construction for a major defense program like the KC-46. Benchmarking against similar large-scale industrial construction projects within the Department of Defense would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract suggests that the contractor has a clear understanding of the project's requirements and associated costs, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that while the competition was broad, specific sources may have been excluded for defined reasons. With three bidders, the competition level is moderate. A higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. However, three bidders still suggest a degree of market interest and capability.

Taxpayer Impact: A moderate level of competition, with three bidders, suggests that taxpayers are likely receiving a fair price, though further competition could potentially yield greater savings.

Public Impact

The primary beneficiaries are the Department of Defense and the KC-46 program, ensuring operational readiness. The contract delivers essential construction services for a kitting facility, crucial for aircraft component management. The geographic impact is concentrated in Oklahoma, potentially creating local construction jobs and economic activity. The project will likely involve skilled construction labor, contributing to the regional workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the fixed-price contract.
Risk of schedule delays impacting the KC-46 program's overall timeline.
Ensuring compliance with all environmental and safety regulations during construction.

Positive Signals

The firm fixed-price contract structure transfers significant cost risk to the contractor.
The contractor, Diversified Construction of Oklahoma, Inc., has experience in commercial and institutional building.
The award follows a competitive bidding process, suggesting a vetted selection.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. The market for large-scale government construction projects is substantial, driven by defense, infrastructure, and public works needs. This specific project supports the aerospace and defense sub-sector by providing necessary facilities for a key military aircraft program. Comparable spending benchmarks would involve analyzing the cost per square foot or per project for similar defense facility constructions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor may choose to subcontract portions of the work to small businesses as part of their overall project management strategy, which could provide opportunities within the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Army contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is facilitated through contract award databases like SAM.gov. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

KC-46 Pegasus Tanker Program
Defense Construction Projects
Military Aircraft Support Facilities
Air Mobility Command Infrastructure

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions
Contractor performance variability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.4 million to DIVERSIFIED CONSTRUCTION OF OKLAHOMA, INC.. KITTING FACILITY CONSTRUCTION FOR THE KC-46 PROGRAM.

Who is the contractor on this award?

The obligated recipient is DIVERSIFIED CONSTRUCTION OF OKLAHOMA, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.4 million.

What is the period of performance?

Start: 2024-10-14. End: 2026-07-20.

What is the track record of Diversified Construction of Oklahoma, Inc. on federal contracts, particularly for defense-related construction?

A review of federal contract databases would be necessary to fully assess Diversified Construction of Oklahoma, Inc.'s track record. Information regarding past performance, including successful completion of similar projects, adherence to schedules and budgets, and any history of disputes or contract terminations, is crucial. For defense-related construction, specific experience with military specifications, security requirements, and large-scale facility development would be particularly relevant. Without access to detailed historical performance data, it is difficult to provide a definitive assessment of their suitability beyond the current award.

How does the awarded price compare to industry benchmarks for similar kitting facility construction projects?

To benchmark the $27.4 million award, one would need to compare it against the cost per square foot or cost per unit of capacity for similar kitting facilities or industrial buildings constructed for defense programs. Factors such as location, specific technological requirements, site preparation complexity, and the inclusion of specialized equipment would influence these benchmarks. A preliminary assessment suggests the price is within a reasonable range for a project of this scale and type, but a detailed cost-per-square-foot analysis against comparable DoD construction projects would provide a more robust comparison.

What are the primary risks associated with this construction contract, and how are they being mitigated?

The primary risks include potential cost overruns due to unforeseen site conditions or material price fluctuations, schedule delays impacting the KC-46 program, and contractor performance issues. Mitigation strategies are primarily driven by the firm fixed-price contract type, which places the financial risk of cost overruns on the contractor. The government's mitigation efforts would involve rigorous oversight of the construction process, clear performance milestones, and potentially liquidated damages clauses for significant delays. The moderate competition level also suggests the government selected a capable contractor.

What is the expected impact of this facility on the operational effectiveness of the KC-46 program?

The kitting facility is essential for organizing, assembling, and distributing mission-critical components and equipment for the KC-46 aircraft. Its completion is expected to streamline logistics, reduce lead times for parts, and ensure that the right equipment is available when and where it is needed for aircraft maintenance, modification, and deployment. This directly supports the operational readiness and sustainment of the KC-46 fleet, enhancing its capability as an aerial refueler and strategic airlift platform.

How has spending on KC-46 program infrastructure evolved over the past five years?

Analyzing historical spending on KC-46 program infrastructure over the past five years would require accessing detailed budget and contract award data for the program. This would likely reveal trends in investment related to aircraft production, testing, training facilities, and operational support infrastructure. Spending patterns might reflect different phases of the program, such as initial development, production ramp-up, and sustainment. An increase in infrastructure spending could indicate a maturing program requiring more robust support facilities, like the kitting facility being constructed.

What is the significance of the 'after exclusion of sources' clause in the competition type?

The 'full and open competition after exclusion of sources' designation means that while the solicitation was broadly advertised, certain potential offerors were intentionally excluded from bidding. This exclusion must be justified by specific criteria outlined in federal acquisition regulations, such as national security concerns, unique capabilities, or prior performance issues with specific contractors. The implication is that the competition was intended to be broad among eligible firms, but not necessarily open to all firms in the market. This can sometimes limit the number of bidders and potentially impact the competitiveness of the pricing.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912BV23R0014

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6288 BOUCHER DR, EDMOND, OK, 73034

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

Financial Breakdown

Contract Ceiling: $27,982,114

Exercised Options: $27,436,389

Current Obligation: $27,436,389

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline