Korte Construction Company awarded $22.8M for Reserve Center construction, a significant investment in military infrastructure

Contract Overview

Contract Amount: $22,777,919 ($22.8M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2009-07-15

End Date: 2012-06-30

Contract Duration: 1,081 days

Daily Burn Rate: $21.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 15

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RESERVE CENTER

Place of Performance

Location: TYLER, SMITH County, TEXAS, 75701

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to KORTE CONSTRUCTION COMPANY for work described as: RESERVE CENTER Key points: 1. The contract value represents a substantial commitment to facility development. 2. Competition dynamics for this project are crucial for assessing value. 3. Performance history and project completion timelines are key risk indicators. 4. This contract fits within the broader context of military base sustainment and modernization. 5. The construction sector is vital for supporting defense infrastructure needs.

Value Assessment

Rating: fair

Benchmarking the $22.8 million award for the Reserve Center construction against similar Department of Defense projects is challenging without more specific project details. However, the duration of the contract (1081 days) suggests a significant undertaking. The firm-fixed-price structure aims to control costs, but the final value needs to be assessed against the scope of work and any change orders. Without comparable per-unit costs or detailed scope, a definitive value-for-money assessment is difficult, but the scale of the project indicates a substantial investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. With 15 bids received, this suggests a healthy level of interest and competition for the project. A robust competitive environment generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie for the award.

Taxpayer Impact: The high number of bids in a full and open competition is positive for taxpayers, as it increases the likelihood of receiving a competitive price and reduces the risk of overpayment.

Public Impact

The primary beneficiaries are the military personnel who will utilize the new Reserve Center facilities. The project delivers essential construction services for military readiness and operational support. The geographic impact is localized to Texas, supporting regional military presence. The contract has implications for the construction workforce in the region, providing employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope changes significantly.
Ensuring timely completion within the allocated budget is a common challenge in large construction projects.
Quality control and adherence to military construction standards require diligent oversight.

Positive Signals

Firm-fixed-price contract helps to cap costs.
Full and open competition suggests a competitive bidding process.
Awarded by the Department of the Army, indicating a significant need for the facility.

Sector Analysis

The construction sector is a critical component of federal spending, particularly for agencies like the Department of Defense that require extensive infrastructure. This contract for a Reserve Center falls under commercial and institutional building construction. The market for such projects is competitive, with numerous firms capable of undertaking large-scale builds. Benchmarking against other military construction projects of similar scale and complexity would provide further context on pricing and efficiency.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting goals. This suggests that the prime contractor, Korte Construction Company, likely handled the majority of the work or subcontracted to larger firms, with potential limited direct impact on the small business construction ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and project managers within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract type, which incentivizes the contractor to adhere to the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific details of ongoing oversight are not provided in this summary.

Related Government Programs

Military Construction Projects
Reserve Component Facilities
Department of Defense Infrastructure
General Building Construction

Risk Flags

Potential for scope creep
Long project duration increases risk exposure
Ensuring quality standards in large construction

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to KORTE CONSTRUCTION COMPANY. RESERVE CENTER

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 Army).

What is the total obligated amount?

The obligated amount is $22.8 million.

What is the period of performance?

Start: 2009-07-15. End: 2012-06-30.

What is the track record of Korte Construction Company with the Department of Defense?

Korte Construction Company has a history of working with the Department of Defense and other federal agencies on various construction projects. Their experience often includes military facilities, barracks, and other infrastructure. Reviewing their past performance on similar contracts, including any past performance evaluations or awards, would provide a clearer picture of their reliability and capability in executing large-scale defense projects. Specific details on their DoD contract history, including the number and value of previous awards, would be necessary for a comprehensive assessment of their track record.

How does the $22.8 million award compare to similar Reserve Center construction projects?

Comparing the $22.8 million award requires identifying similar projects in terms of size, scope, location, and construction type. Factors such as square footage, specific facility requirements (e.g., training areas, administrative spaces, maintenance bays), and regional construction cost indices play a significant role. Without access to a database of comparable projects with detailed cost breakdowns, a precise benchmark is difficult. However, the duration of over 1000 days suggests a substantial project, and the firm-fixed-price nature aims for cost control, but the ultimate value is contingent on the detailed specifications and execution.

What are the primary risks associated with this firm-fixed-price construction contract?

The primary risks associated with a firm-fixed-price (FFP) construction contract, while generally favorable for cost control, include potential for contractor disputes if the scope of work is not clearly defined, leading to change orders that can increase costs. There's also a risk that the contractor might cut corners on quality to maintain profitability if margins are tight. For the government, the risk is that the initial price might be inflated to account for contractor uncertainties, or that unforeseen site conditions or design changes necessitate costly modifications. Diligent oversight and clear contract specifications are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for taxpayer money in large construction projects?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in large construction projects. By soliciting bids from all responsible sources, the government maximizes the pool of potential contractors, fostering a competitive environment that drives down prices and encourages innovation. The presence of multiple bidders, as seen with the 15 bids on this Reserve Center project, increases the likelihood that the government will receive a fair and reasonable price. However, the effectiveness also depends on the clarity of the solicitation, the evaluation criteria, and the government's ability to manage the procurement process efficiently.

What is the historical spending trend for Reserve Center construction by the Department of the Army?

Historical spending trends for Reserve Center construction by the Department of the Army would reveal patterns in investment related to readiness, modernization, and infrastructure sustainment. Analyzing past budgets and contract awards for similar facilities would indicate whether spending has been consistent, increasing, or decreasing. This context is important for understanding the significance of the $22.8 million award and its place within the Army's broader capital investment strategy. Such analysis would require access to historical federal procurement data and budget allocations for military construction.

What are the implications of the contract duration (1081 days) on project management and cost?

A contract duration of 1081 days (approximately 3 years) for a Reserve Center construction project implies a complex and substantial undertaking. Longer durations increase the potential for cost escalation due to inflation, material price fluctuations, and labor market changes, even under a firm-fixed-price contract if scope changes occur. From a project management perspective, it requires sustained oversight, regular progress monitoring, and effective coordination among various stakeholders. For the military unit that will use the facility, it means a longer wait for operational readiness improvements. The extended timeline also presents opportunities for incorporating updated technologies or security requirements during the construction phase.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912QR08R0100

Offers Received: 15

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5700 OAKLAND AVE SUITE 200, SAINT LOUIS, MO, 90

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

Financial Breakdown

Contract Ceiling: $22,777,919

Exercised Options: $22,777,919

Current Obligation: $22,777,919

Contract Characteristics

Cost or Pricing Data: NO

Timeline