DoD awards $149.5M contract for Air Force Mobility Command HQ renovation, highlighting construction sector activity

Contract Overview

Contract Amount: $149,448,105 ($149.4M)

Contractor: Korte -River City JV

Awarding Agency: Department of Defense

Start Date: 2021-11-10

End Date: 2026-12-10

Contract Duration: 1,856 days

Daily Burn Rate: $80.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATION OF BUILDING 1600, HEADQUARTERS FOR THE AIR FORCE MOBILITY COMMAND AT SCOTT AIR FORCE BASE, ILLINOIS.

Place of Performance

Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $149.4 million to KORTE -RIVER CITY JV for work described as: RENOVATION OF BUILDING 1600, HEADQUARTERS FOR THE AIR FORCE MOBILITY COMMAND AT SCOTT AIR FORCE BASE, ILLINOIS. Key points: 1. Contract value of $149.5M indicates significant investment in critical infrastructure. 2. Full and open competition suggests a robust bidding environment for this project. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Project duration of 1856 days points to a long-term commitment to facility upgrades. 5. Location in Illinois places the project within a key state for federal construction. 6. The award to KORTE-RIVER CITY JV signifies a major win for the selected contractor.

Value Assessment

Rating: good

The $149.5 million contract for the renovation of Building 1600 at Scott Air Force Base represents a substantial investment. Benchmarking against similar large-scale institutional building renovations, this price appears within a reasonable range, assuming the scope of work is comprehensive. The firm-fixed-price structure suggests that the government has secured a defined cost, though the ultimate value will depend on the contractor's efficiency and management of unforeseen issues. Further analysis would require detailed cost breakdowns and comparison with recent similar projects.

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 two bidders, as noted, suggests a competitive process, though the exact number of proposals received is not detailed. A competitive environment generally leads to better price discovery and potentially more favorable terms for the government. The specific details of the bidding process, including the number of proposals and the evaluation criteria, would provide a clearer picture of the competition's intensity.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and increasing the likelihood of selecting the best value proposal. This process helps ensure that taxpayer funds are used efficiently by fostering a market-driven approach to contract awards.

Public Impact

The primary beneficiaries are the Air Force Mobility Command personnel who will utilize the modernized headquarters. The project will deliver a renovated and updated facility, improving operational efficiency and working conditions. Geographic impact is concentrated at Scott Air Force Base, Illinois, with potential indirect economic benefits to the local region through construction employment. Workforce implications include job creation for construction workers, engineers, and project managers during the renovation period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen structural or environmental issues arise during renovation.
Schedule delays could impact the operational readiness of the Air Force Mobility Command.
Contractor performance risk, although mitigated by fixed-price terms, remains a factor in project success.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a strong likelihood of competitive pricing.
The project addresses critical infrastructure needs for a key military command.

Sector Analysis

The construction sector is a significant component of federal spending, particularly for infrastructure and facility upgrades. This contract falls within the Commercial and Institutional Building Construction category. The Department of Defense is a major client within this sector, consistently awarding large contracts for base improvements and operational facilities. The market for large-scale government construction projects is competitive, with established firms often vying for these opportunities. Benchmarks for similar renovations can vary widely based on location, complexity, and specific requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-value construction project, it is likely that the prime contractor will engage subcontractors. The extent to which small businesses will participate as subcontractors is not specified but is a common practice in federal construction to meet subcontracting goals. Further review of the contract's subcontracting plan would be necessary to assess the specific impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and program management personnel within the Department of the Army, which awarded the contract on behalf of the Air Force. The firm-fixed-price nature of the contract shifts much of the performance risk to the contractor. Transparency is generally maintained through contract award announcements and reporting requirements. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Air Force Base Infrastructure Modernization
Department of Defense Facilities Construction
Military Command Headquarters Upgrades
Scott Air Force Base Projects

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions
Contractor performance management
Scope creep management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $149.4 million to KORTE -RIVER CITY JV. RENOVATION OF BUILDING 1600, HEADQUARTERS FOR THE AIR FORCE MOBILITY COMMAND AT SCOTT AIR FORCE BASE, ILLINOIS.

Who is the contractor on this award?

The obligated recipient is KORTE -RIVER CITY JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $149.4 million.

What is the period of performance?

Start: 2021-11-10. End: 2026-12-10.

What is the track record of KORTE-RIVER CITY JV with the federal government, particularly on similar construction projects?

Assessing the track record of KORTE-RIVER CITY JV requires a review of their past federal contract awards and performance history. Information from sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be crucial. Key metrics to examine include the number and value of previous contracts, the types of projects undertaken (e.g., military construction, renovations, specific building types), and any reported performance issues or commendations. A history of successful, on-time, and within-budget project completion for similar-sized and complex federal construction contracts would indicate a lower performance risk for this current award. Conversely, a pattern of delays, cost overruns, or negative performance reviews would raise concerns about their ability to execute this significant renovation effectively.

How does the awarded price of $149.5 million compare to market rates for similar large-scale institutional building renovations?

The awarded price of $149.5 million for the renovation of Building 1600 needs to be benchmarked against current market rates for comparable projects. This involves analyzing the cost per square foot or per functional unit (e.g., per office space, per lab area) for similar renovations undertaken by other federal agencies or in the private sector in the same geographic region. Factors influencing this comparison include the age and condition of the existing building, the scope of work (e.g., structural, MEP, finishes, IT infrastructure), and the specific requirements of a military headquarters. Without detailed cost breakdowns and access to proprietary market data, a precise comparison is difficult. However, if publicly available data on recent large federal building renovations in the Midwest region shows significantly lower costs per square foot for similar scope, it might suggest this contract is priced at the higher end of the market range. Conversely, if it aligns with or is below comparable projects, it indicates good value.

What are the primary risks associated with a multi-year renovation project of this magnitude, and how are they being mitigated?

Multi-year renovation projects of this magnitude carry inherent risks, including potential schedule delays due to unforeseen site conditions (e.g., hazardous materials, structural issues), supply chain disruptions affecting material availability, labor shortages, and scope creep if requirements change during the project. For this specific contract, the firm-fixed-price (FFP) structure is a key mitigation strategy, placing the financial risk of cost overruns primarily on the contractor, KORTE-RIVER CITY JV. The 1856-day duration (approximately 5 years) necessitates robust project management and scheduling by the contractor. The government's mitigation efforts likely involve detailed contract oversight, regular progress reviews, and clear change order procedures. The Air Force's involvement in defining requirements and ensuring timely decisions also plays a role. The presence of two bidders in a full and open competition suggests a level of contractor confidence in managing these risks.

What is the expected impact of this renovation on the operational effectiveness and efficiency of the Air Force Mobility Command?

The renovation of Building 1600, serving as the headquarters for the Air Force Mobility Command (AMC), is expected to significantly enhance operational effectiveness and efficiency. Modernizing the facility should provide updated workspaces that improve collaboration, communication, and technological integration, crucial for a command center. Improved infrastructure, such as updated HVAC, electrical, and IT systems, can lead to greater reliability and reduced downtime, ensuring continuity of operations. Enhanced security features may also be incorporated. Ultimately, a modern, functional headquarters supports better decision-making, improved morale among personnel, and a more streamlined command structure, all contributing to the AMC's ability to execute its global mission effectively.

How does the historical spending on building renovations at Scott Air Force Base compare to this specific award?

To assess how this $149.5 million award compares to historical spending on renovations at Scott Air Force Base, one would need to analyze past contract data for the installation. This involves identifying previous renovation projects, their scope, duration, and awarded values. If Scott AFB has a history of smaller, incremental upgrades, this single large contract would represent a significant increase in investment for facility modernization. Conversely, if the base has previously undergone similarly large-scale renovation efforts, this award might be seen as part of a continuing program. Examining the frequency and average cost of past renovation contracts would provide context. Without specific historical data for Scott AFB, it's difficult to definitively state if this award is an outlier or part of a trend, but its substantial value suggests a major commitment to upgrading the AMC headquarters.

What are the implications of the 'DEFINITIVE CONTRACT' award type for government flexibility and contractor commitment?

The award of a 'DEFINITIVE CONTRACT' (aw: DEFINITIVE CONTRACT) typically follows the award of a basic ordering agreement (BOA) or similar contract vehicle. This means that specific orders (delivery or task orders) will be placed against the definitive contract as needed. For the government, this offers flexibility in ordering goods or services over a period, potentially at pre-negotiated prices. For the contractor, it signifies a commitment to provide the specified goods or services when ordered, up to a certain ceiling amount (in this case, $149.5 million). The 'DEFINITIVE CONTRACT' itself establishes the terms and conditions, while individual orders detail the specific quantities, delivery schedules, and prices for each transaction. This structure is common for long-term projects or when requirements may fluctuate.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912QR20R0087

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12441 US HIGHWAY 40, HIGHLAND, IL, 62249

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $163,883,188

Exercised Options: $149,448,105

Current Obligation: $149,448,105

Actual Outlays: $4,609,175

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline