Korte Construction Company awarded $23.7M contract for Fort Campbell operations and maintenance

Contract Overview

Contract Amount: $23,664,640 ($23.7M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2011-07-06

End Date: 2013-07-17

Contract Duration: 742 days

Daily Burn Rate: $31.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 14

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: D/B CONSTRUCT FTC SOF BN/CO OPS PHASE 5

Place of Performance

Location: FORT CAMPBELL, MONTGOMERY County, TENNESSEE, 42223

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to KORTE CONSTRUCTION COMPANY for work described as: D/B CONSTRUCT FTC SOF BN/CO OPS PHASE 5 Key points: 1. Contract value represents a significant investment in base infrastructure. 2. Full and open competition suggests a competitive bidding process. 3. Fixed-price contract type may offer cost certainty but limits flexibility. 4. Contract duration of over two years indicates a substantial operational need. 5. Performance in Tennessee aligns with regional construction market activity.

Value Assessment

Rating: good

The contract value of $23.7 million for operations and maintenance at Fort Campbell appears reasonable given the scope of work. Benchmarking against similar large-scale construction and maintenance contracts for military installations suggests this price falls within expected ranges. The firm fixed-price structure indicates a commitment to a defined cost, which is generally favorable for the government when project requirements are well-defined. However, without specific details on the scope of services, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 14 bids suggests a healthy level of interest and competition for this requirement. A competitive bidding process typically leads to better price discovery and can result in more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The robust competition for this contract likely resulted in a more cost-effective outcome for taxpayers, ensuring that the government received competitive pricing for essential base operations and maintenance services.

Public Impact

The primary beneficiaries are the U.S. Army personnel and their families stationed at Fort Campbell, who rely on well-maintained facilities for their operations and quality of life. The contract delivers essential operations and maintenance services, ensuring the functionality and upkeep of critical infrastructure at the military installation. The geographic impact is concentrated at Fort Campbell, Tennessee, supporting the local economy through construction-related activities and employment. Workforce implications include employment opportunities for skilled construction workers, project managers, and support staff in the Tennessee region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term maintenance contracts if not managed tightly.
Reliance on a single contractor for extended periods could lead to complacency if oversight is insufficient.

Positive Signals

Firm fixed-price contract provides cost predictability.
Full and open competition suggests a strong market response and potentially competitive pricing.
Contract duration indicates a stable, long-term need being met.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically supporting government infrastructure. The market for military base construction and maintenance is substantial, with significant annual federal spending allocated to these needs. This contract represents a portion of that broader spending, contributing to the operational readiness and infrastructure integrity of a major U.S. Army installation. Comparable spending benchmarks would involve analyzing other large-scale construction and O&M contracts awarded to military bases across different branches of the armed forces.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger entity, Korte Construction Company. The absence of set-aside provisions means that opportunities for small businesses would likely depend on the prime contractor's own subcontracting decisions, rather than a direct government mandate.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon budget. Transparency is facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction
Base Operations Support
Facility Maintenance Contracts
Department of Defense Infrastructure Projects

Risk Flags

Potential for cost overruns if scope is not clearly defined.
Risk of quality degradation if contractor prioritizes profit over standards.
Contractor performance history needs thorough review for reliability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to KORTE CONSTRUCTION COMPANY. D/B CONSTRUCT FTC SOF BN/CO OPS PHASE 5

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 $23.7 million.

What is the period of performance?

Start: 2011-07-06. End: 2013-07-17.

What is the historical spending pattern for operations and maintenance at Fort Campbell?

Analyzing historical spending patterns for operations and maintenance at Fort Campbell is crucial for understanding the long-term financial commitment to the base's infrastructure. While this specific contract awarded to Korte Construction Company is for $23.7 million, it represents a snapshot in time. To provide a comprehensive view, one would need to examine annual budgets allocated for O&M at Fort Campbell over the past 5-10 years. This would involve looking at data from the Department of Defense and the Army's budget justifications. Such an analysis would reveal trends in spending, identify any significant increases or decreases, and help contextualize the current contract's value against historical expenditures. It would also highlight whether this contract is part of a larger, ongoing investment strategy or a standalone project. Without access to detailed historical budget data for Fort Campbell's O&M, a precise comparison is not possible, but the $23.7 million figure suggests a substantial allocation for the contract period.

How does the number of bidders (14) compare to similar large-scale construction contracts?

A total of 14 bidders for a $23.7 million contract for military base construction and maintenance, awarded under full and open competition, generally indicates a healthy level of market interest. For large-scale federal construction projects, the number of bids can vary significantly based on project complexity, geographic location, and the specific agency's procurement strategy. Typically, contracts in the tens of millions of dollars that are broadly competed can attract anywhere from a handful to over a dozen qualified bidders. A higher number of bids, like 14 in this case, is often seen as a positive sign, suggesting that the solicitation was well-structured, the requirements were clear, and the market perceived the opportunity as viable and potentially profitable. This level of competition is usually associated with better price discovery and a greater likelihood of the government securing favorable terms. Conversely, very few bids might signal potential issues with the solicitation, market limitations, or a lack of contractor interest.

What are the potential risks associated with a firm fixed-price contract for this type of service?

While firm fixed-price (FFP) contracts are often preferred by the government for their cost certainty, they carry specific risks, particularly for long-term, complex projects like base operations and maintenance. The primary risk for the government is that the contractor may cut corners on quality or scope to protect their profit margin if costs escalate unexpectedly due to unforeseen site conditions, material price increases, or labor shortages. Conversely, the contractor bears the risk of cost overruns. If their initial bid was too low or if project requirements change significantly (requiring formal change orders), their profit could be eroded or they could incur a loss. For the government, managing an FFP contract requires very clear and detailed specifications upfront. Ambiguities can lead to disputes. Furthermore, if the contractor is not performing adequately, the government's leverage to compel improvements without resorting to contract termination or costly renegotiation can be limited, as the focus is on meeting the fixed price for the defined scope.

What is Korte Construction Company's track record with federal contracts, particularly with the Department of Defense?

Korte Construction Company has a significant history of working with the federal government, including numerous contracts with the Department of Defense (DoD) and other agencies. Their portfolio often includes military construction, renovations, and facility support services. Examining their past performance, particularly on similar projects (e.g., base operations, building construction for military installations), would provide insight into their reliability, quality of work, and ability to manage large federal contracts. Data from federal procurement databases (like SAM.gov or FPDS) would typically show the volume and value of contracts awarded to Korte, their performance ratings on past projects (if available), and any history of contract disputes or terminations. A strong track record with the DoD suggests familiarity with military requirements, security protocols, and government contracting procedures, which can be a positive indicator for future performance on contracts like the one at Fort Campbell.

How does this contract's value compare to the overall DoD spending on construction and maintenance?

The $23.7 million awarded to Korte Construction Company for operations and maintenance at Fort Campbell represents a specific allocation for one installation. The Department of Defense (DoD) has a vast infrastructure portfolio, and its annual spending on construction, renovation, and maintenance across all its bases and facilities worldwide amounts to billions of dollars. For context, the DoD's Military Construction, Defense (MILCON) budget alone typically runs into the tens of billions annually, covering new construction and major renovations. Operations and Maintenance (O&M) budgets are also substantial, funding the day-to-day upkeep and functional support of these installations. Therefore, while $23.7 million is a significant sum for a single contract, it is a relatively small fraction of the DoD's total infrastructure expenditure. This contract likely addresses a specific set of O&M needs at Fort Campbell, contributing to the larger goal of maintaining a functional and secure military presence.

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: W912QR11R0006

Offers Received: 14

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5700 OAKLAND AVE STE 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: $23,664,640

Exercised Options: $23,664,640

Current Obligation: $23,664,640

Subaward Activity

Number of Subawards: 195

Total Subaward Amount: $160,343,103

Contract Characteristics

Cost or Pricing Data: NO

Timeline