DoD's $24.8M Aberdeen Proving Ground construction contract awarded to Korte Construction Company

Contract Overview

Contract Amount: $24,808,411 ($24.8M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2015-09-24

End Date: 2019-08-14

Contract Duration: 1,420 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 20

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF D/B ARC AT ABERDEEN PROVING GROUND

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to KORTE CONSTRUCTION COMPANY for work described as: IGF::OT::IGF D/B ARC AT ABERDEEN PROVING GROUND Key points: 1. Contract value of $24.8 million for construction services. 2. Awarded under full and open competition, indicating a broad market solicitation. 3. The contract type is a firm-fixed-price definitive contract, providing cost certainty. 4. Performance period spans over 1400 days, suggesting a substantial project. 5. The contract was awarded to Korte Construction Company, a single entity. 6. Geographically located in Maryland, impacting local construction workforce and economy.

Value Assessment

Rating: fair

The contract value of $24.8 million for commercial and institutional building construction at Aberdeen Proving Ground appears to be within a reasonable range for a project of this scale and duration. Without specific details on the scope of work, it's difficult to benchmark against precisely similar contracts. However, the firm-fixed-price nature suggests that the initial pricing was agreed upon and should reflect market conditions at the time of award. Further analysis would require comparing the cost per square foot or per unit of construction against industry standards for similar government facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 20 bids (indicated by 'no': 20) suggests a healthy level of competition for this construction project. A robust competitive environment generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie to win the award.

Taxpayer Impact: The extensive competition for this contract likely resulted in a more cost-effective outcome for taxpayers, as multiple firms submitted proposals, driving down the price through competitive bidding.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel at Aberdeen Proving Ground, who will receive improved or new facilities. The contract delivers commercial and institutional building construction services, essential for military base operations and infrastructure. The geographic impact is concentrated in Maryland, potentially creating jobs and economic activity within the local construction sector. Workforce implications include employment opportunities for skilled trades, project managers, and support staff within Korte Construction Company and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or scope creep occurs, despite the firm-fixed-price structure.
Dependence on a single contractor, Korte Construction Company, for the entire project duration.
Risk of delays impacting the operational readiness or mission of the Aberdeen Proving Ground.
Quality control and adherence to construction standards require diligent oversight.

Positive Signals

Firm-fixed-price contract provides cost certainty and limits the government's exposure to price fluctuations.
Full and open competition suggests a competitive bidding process, likely resulting in a fair market price.
The contract duration of over 1400 days indicates a significant and well-defined project scope.
Awarded to a single entity, Korte Construction Company, simplifying contract management.

Sector Analysis

The construction industry is a significant sector for federal spending, particularly for infrastructure development and facility maintenance across various agencies. This contract falls under the Commercial and Institutional Building Construction category, which encompasses a wide range of projects from administrative buildings to specialized research facilities. Federal spending in this area is often driven by modernization needs, capacity expansion, and infrastructure upgrades. Benchmarks for similar construction projects can vary widely based on location, complexity, and specific requirements, but typically involve competitive bidding processes to ensure value.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false) and there is no explicit mention of small business subcontracting goals. Therefore, the primary contractor, Korte Construction Company, is likely a large business. This means that opportunities for small businesses would primarily be through subcontracting if Korte chooses to engage them. The absence of a specific small business set-aside suggests that the competition was open to all responsible bidders, and the focus was on securing the best overall offer rather than prioritizing small business participation directly through the prime contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. Transparency is generally maintained through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle. The firm-fixed-price nature of the contract also provides a degree of accountability by capping the government's financial liability.

Related Government Programs

Department of Defense Construction Contracts
Army Corps of Engineers Construction Projects
Federal Building and Infrastructure Projects
Aberdeen Proving Ground Facilities Management

Risk Flags

Potential for cost overruns due to long project duration.
Contractor performance risk.
Scope creep management.
Quality assurance and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to KORTE CONSTRUCTION COMPANY. IGF::OT::IGF D/B ARC AT ABERDEEN PROVING GROUND

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 $24.8 million.

What is the period of performance?

Start: 2015-09-24. End: 2019-08-14.

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

Korte Construction Company has a history of performing federal contracts, including work for the Department of Defense. Analyzing their past performance on similar projects, such as military base construction or institutional building projects, would provide insight into their reliability, quality of work, and ability to manage complex projects within budget and schedule. Federal procurement data often includes past performance evaluations, which can be reviewed to assess their track record. A review of their contract history might reveal a pattern of successful project completion or identify any recurring issues that could pose a risk for this current contract.

How does the awarded price of $24.8 million compare to similar construction projects at military installations?

Benchmarking the $24.8 million contract value requires detailed comparison with similar construction projects at military installations, considering factors like square footage, type of construction (e.g., barracks, research labs, administrative buildings), location, and the specific year of award. Without these granular details, a precise comparison is challenging. However, the fact that it was awarded under full and open competition with 20 bids suggests that the price was likely competitive within the market at the time of award. Further analysis could involve researching cost-per-square-foot data for comparable federal construction projects in the Mid-Atlantic region to assess if the pricing is within an expected range.

What are the primary risks associated with a firm-fixed-price contract for a project of this duration?

While firm-fixed-price (FFP) contracts offer cost certainty to the government, they carry inherent risks for the contractor, which can indirectly impact the government. For a project spanning over 1400 days, the primary risks include unforeseen site conditions, escalation of material costs (though often mitigated by contract clauses or market conditions at award), and potential for contractor-driven scope changes if not managed tightly. If the contractor underestimates costs or encounters significant unbudgeted issues, they may seek to reduce quality or delay completion to protect their profit margin, necessitating robust government oversight. Conversely, the government bears the risk if the contractor's initial bid was unrealistically low, potentially leading to disputes or contractor default.

How effective is the 'full and open competition' approach in ensuring value for money for this type of construction contract?

The 'full and open competition' approach is generally considered highly effective in ensuring value for money for construction contracts. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing. The presence of 20 bids for this contract strongly supports its effectiveness, as a larger number of bidders typically drives prices down and encourages contractors to offer their best terms. This competitive pressure incentivizes efficiency and innovation from the contractors, ultimately benefiting the government and taxpayers through potentially lower costs and higher quality outcomes.

What are the historical spending patterns for commercial and institutional building construction at Aberdeen Proving Ground?

Analyzing historical spending patterns for commercial and institutional building construction at Aberdeen Proving Ground would involve examining past contracts awarded for similar purposes over several fiscal years. This would reveal trends in contract values, types of construction services procured, and the primary contractors involved. Understanding these patterns can help identify periods of increased investment in facilities, potential budget fluctuations, and whether spending has been consistent or cyclical. Such analysis could also highlight if this $24.8 million contract represents a significant increase or decrease compared to historical averages for similar projects at the installation.

What are the potential implications of awarding a large construction contract to a single entity for the small business ecosystem?

Awarding a large construction contract like this one, valued at $24.8 million, to a single entity, Korte Construction Company, can have mixed implications for the small business ecosystem. If Korte Construction Company is a large business, the primary impact on small businesses would be through subcontracting opportunities. The extent of these opportunities depends on Korte's subcontracting plan and their willingness to engage small businesses. If there are no specific small business subcontracting goals mandated in the contract, small businesses might receive fewer opportunities than if the contract had been set aside or included strong subcontracting requirements. However, successful large prime contractors often rely on a network of specialized small business subcontractors, which can provide valuable work and build their capacity.

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: W912QR15R0014

Offers Received: 20

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: $24,808,411

Exercised Options: $24,808,411

Current Obligation: $24,808,411

Subaward Activity

Number of Subawards: 76

Total Subaward Amount: $73,079,491

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline