DoD awards $17.3M construction contract to Krempp Construction Inc. for MTEF/SSEF building

Contract Overview

Contract Amount: $17,337,236 ($17.3M)

Contractor: Krempp Construction Inc

Awarding Agency: Department of Defense

Start Date: 2023-12-08

End Date: 2025-11-17

Contract Duration: 710 days

Daily Burn Rate: $24.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MTEF/SSEF BUILDING CONSTRUCTION.

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46216

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to KREMPP CONSTRUCTION INC for work described as: MTEF/SSEF BUILDING CONSTRUCTION. Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is a firm fixed-price type, which transfers risk to the contractor. 4. Project duration of 710 days indicates a significant construction undertaking. 5. The contract is for building construction, a common and essential government need. 6. The award was made by the Department of the Army, a major DoD component.

Value Assessment

Rating: good

The contract value of $17.3 million for a definitive contract of this scope is within a reasonable range for large-scale institutional building construction. Benchmarking against similar Department of Defense construction projects of comparable size and complexity would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor bears the primary financial risk, which can be a positive indicator of cost control if managed effectively.

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 the solicitation was broadly advertised and multiple bids were likely considered. While the specific number of bidders is not provided, this procurement method generally fosters price discovery and encourages competitive pricing. The exclusion of sources clause might warrant further investigation to understand its specific application and impact on the competitive landscape.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it maximizes the potential for receiving the best value through a wide range of offers, driving down costs through market forces.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who will utilize the new MTEF/SSEF building. The contract delivers essential construction services for a new facility. The geographic impact is localized to Indiana, where the construction will take place. The project will likely create or sustain jobs in the construction sector within Indiana.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders limits a full assessment of competition intensity.
The 'exclusion of sources' clause requires further scrutiny to ensure it did not unduly restrict competition.
Performance history of Krempp Construction Inc. on similar government contracts is not detailed here.

Positive Signals

Firm fixed-price contract type shifts cost overrun risk to the contractor.
Full and open competition generally leads to better pricing for the government.
The project is awarded to an established construction company.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this sector supports infrastructure development and facility maintenance across various government agencies. Comparable spending benchmarks for large-scale institutional construction projects by the Department of Defense can range widely based on location, complexity, and specific requirements, but $17.3 million represents a substantial investment.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While this contract was competed broadly, there is no explicit information on subcontracting plans for small businesses. Further review of the contract terms and conditions would be necessary to determine if any small business subcontracting goals were established or met, which could impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm fixed-price contract type, which penalizes contractor cost overruns. Transparency is facilitated by the public nature of federal contract awards, though detailed project progress and specific oversight activities are not publicly itemized in this summary.

Related Government Programs

Department of Defense Military Construction
Federal Building and Facilities Construction
Army Corps of Engineers Construction Contracts

Risk Flags

Potential for cost overruns if contractor's bid was too aggressive.
Quality control during construction needs diligent oversight.
Impact of 'exclusion of sources' on competitive pricing requires monitoring.
Contractor's past performance on similar projects should be reviewed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to KREMPP CONSTRUCTION INC. MTEF/SSEF BUILDING CONSTRUCTION.

Who is the contractor on this award?

The obligated recipient is KREMPP CONSTRUCTION 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 $17.3 million.

What is the period of performance?

Start: 2023-12-08. End: 2025-11-17.

What is the track record of Krempp Construction Inc. with federal contracts, particularly within the Department of Defense?

Information regarding Krempp Construction Inc.'s specific track record with federal contracts, especially within the Department of Defense, is not detailed in the provided data. A comprehensive analysis would require accessing federal procurement databases (like SAM.gov or FPDS) to review past performance, contract awards, and any reported issues or successes. Understanding their history with similar firm fixed-price construction projects and their performance on projects of comparable scale would be crucial for assessing their reliability and capability for this $17.3 million award.

How does the awarded amount of $17.3 million compare to similar large-scale institutional building construction projects undertaken by the Department of Defense in recent years?

The $17.3 million award for the MTEF/SSEF building construction is a significant sum, typical for substantial institutional facilities. To benchmark its value, one would compare it against similar projects awarded by the Department of Defense or other federal agencies for buildings of comparable size, function (e.g., training facilities, administrative buildings), and complexity. Factors like geographic location, prevailing labor costs, material prices, and specific architectural requirements heavily influence construction costs. Without access to a database of comparable projects, it's difficult to definitively state if this represents excellent or merely fair value, but it aligns with the expected cost range for major federal construction endeavors.

What are the primary risks associated with this firm fixed-price construction contract, and how are they mitigated?

The primary risk with a firm fixed-price (FFP) contract is that the contractor, Krempp Construction Inc., bears the financial burden of any cost overruns. This risk is mitigated by the contractor's own project management, accurate initial bidding, and efficient execution. For the government, risks include potential quality compromises if the contractor seeks to cut costs excessively, or contractor default if they underbid significantly. Mitigation for the government involves robust contract oversight, clear performance standards, and potentially performance bonds. The 'full and open competition' aspect also mitigates risk by ensuring a competitive price was likely established upfront.

What is the expected effectiveness and impact of the MTEF/SSEF building once completed?

The effectiveness and impact of the MTEF/SSEF building are directly tied to its intended purpose, which is not fully specified by the acronyms alone. Assuming it serves a critical operational or training function for the Department of the Army, its completion is expected to enhance military readiness, improve training capabilities, or provide necessary administrative support. The impact will be felt by the military personnel utilizing the facility and potentially by the local economy through job creation during construction and ongoing operational support. Its effectiveness will be measured by its ability to fulfill its designed purpose reliably and efficiently over its lifespan.

How does the historical spending pattern for building construction within the Department of the Army compare to this specific award?

Historical spending patterns for building construction within the Department of the Army are substantial, given its vast infrastructure needs. The Army frequently awards large contracts for barracks, training facilities, maintenance depots, and administrative buildings. An award of $17.3 million is significant but not unusual for a major construction project. To assess its place within historical patterns, one would need to analyze annual spending data for Army construction contracts, looking at the frequency and average value of awards for similar types of facilities. This specific contract appears to be a standard component of the Army's ongoing infrastructure investment.

What does the 'full and open competition after exclusion of sources' procurement method imply about the bidding environment and potential price?

The 'full and open competition after exclusion of sources' method implies that the solicitation was widely advertised, allowing all responsible prospective contractors to submit offers. However, the 'exclusion of sources' component suggests that certain potential sources were intentionally excluded, likely due to specific requirements, past performance issues, or other pre-defined criteria. While aiming for broad competition, this exclusion could potentially limit the number of bidders compared to pure 'full and open' competition. The impact on price is generally positive due to competition, but the exclusion might have slightly reduced the downward pressure on price compared to a scenario with no exclusions.

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: SEALED BID

Solicitation ID: W912QR23B0017

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 215 MAIN ST, JASPER, IN, 47546

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

Financial Breakdown

Contract Ceiling: $17,344,839

Exercised Options: $17,344,839

Current Obligation: $17,337,236

Actual Outlays: $2,288,598

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline