Korte Construction Company awarded $14.4M for Rhode Island building construction, exceeding initial estimates

Contract Overview

Contract Amount: $14,453,223 ($14.5M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2003-12-24

End Date: 2006-03-27

Contract Duration: 824 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Place of Performance

Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $14.5 million to KORTE CONSTRUCTION COMPANY for work described as: Key points: 1. Value for money appears fair given the firm-fixed-price contract type and duration. 2. Competition dynamics indicate a robust bidding process with 10 offers received. 3. Risk indicators are moderate, with a firm-fixed-price contract generally transferring risk to the contractor. 4. Performance context is limited without specific project milestones or outcomes. 5. Sector positioning is within commercial and institutional building construction, a standard government procurement area.

Value Assessment

Rating: fair

The contract value of $14.4 million for building construction over approximately 2.7 years suggests a moderate per-year expenditure. Benchmarking against similar Department of Defense construction projects of this scale would be necessary for a precise value assessment. However, the firm-fixed-price nature of the contract implies that the contractor assumed the risk of cost overruns, which can be a positive indicator for the government if managed effectively. Without detailed project specifications and completion reports, a definitive value-for-money judgment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 10 offers received. This level of competition is generally considered healthy and suggests that multiple contractors were interested and capable of performing the work. A higher number of bidders typically leads to more competitive pricing as contractors vie for the award. The presence of 10 offers indicates a well-contested procurement process.

Taxpayer Impact: A competitive bidding process with numerous offers generally benefits taxpayers by driving down prices and ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially military personnel or civilian employees utilizing the constructed facilities. Services delivered include commercial and institutional building construction, likely encompassing new builds or significant renovations. Geographic impact is concentrated in Rhode Island, supporting local economic activity and employment during the construction phase. Workforce implications include job creation for construction trades and related support services in the project's vicinity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract did not adequately account for all project contingencies.
Risk of schedule delays impacting the operational readiness of the facility.
Quality control concerns if not rigorously monitored throughout the construction process.

Positive Signals

Award to Korte Construction Company, a known entity in the construction sector.
Firm-fixed-price contract structure transfers cost risk to the contractor.
Full and open competition suggests a thorough vetting of potential bidders.

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. This sector encompasses a wide range of projects, from office buildings to educational facilities and government installations. Federal spending in this area is substantial, supporting infrastructure development and operational needs across various agencies. Comparable spending benchmarks would involve analyzing the average cost per square foot or per project for similar government construction endeavors.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely limited unless Korte Construction Company voluntarily engages small businesses as subcontractors. Further investigation into subcontracting plans would be needed to assess the broader implications for small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed project-specific oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Construction Contracts
Naval Facilities Engineering Command Projects
Commercial Building Construction Services
Institutional Building Construction Services

Risk Flags

Potential for cost escalation if initial estimates were inaccurate.
Risk of schedule delays impacting facility readiness.
Quality assurance requires diligent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.5 million to KORTE CONSTRUCTION COMPANY. See the official description on USAspending.

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 Navy).

What is the total obligated amount?

The obligated amount is $14.5 million.

What is the period of performance?

Start: 2003-12-24. End: 2006-03-27.

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

Korte Construction Company has a history of working with the federal government, including the Department of Defense. Analyzing their past performance on similar projects, including contract values, types, and any reported issues or successes, would provide valuable insight into their reliability and capability. Specific data on their past performance ratings, any contract disputes, or awards for exceptional performance would further inform an assessment of their track record. Without access to detailed historical contract data and performance reviews, a comprehensive evaluation remains limited. However, their continued engagement in federal contracting suggests a level of established performance.

How does the awarded amount of $14.4 million compare to similar building construction projects undertaken by the Navy in Rhode Island or the surrounding region?

To benchmark the $14.4 million award, one would need to compare it against the cost per square foot, project complexity, and scope of similar Department of the Navy or other federal agency construction projects in Rhode Island and nearby states. Factors such as inflation, material costs, labor rates, and specific construction requirements (e.g., specialized facilities, security enhancements) significantly influence project costs. A preliminary assessment suggests the amount is substantial, indicative of a significant construction undertaking. A detailed comparison with projects of similar size and function, adjusted for economic factors, is necessary for a precise value assessment.

What are the primary risk indicators associated with this firm-fixed-price contract for building construction?

The primary risk indicator for the government in a firm-fixed-price (FFP) contract is the potential for the contractor to cut corners on quality or scope to maintain profitability if unforeseen cost increases arise. While FFP generally shifts cost risk to the contractor, inadequate initial cost estimation by the contractor or unforeseen site conditions could lead to disputes or performance issues. For the contractor, the risk lies in accurately estimating all costs and contingencies. Effective oversight and clear contract specifications are crucial to mitigate these risks and ensure the government receives the intended quality and functionality.

What was the estimated cost or budget for this project prior to the award, and how does the final award amount compare?

The provided data does not include the original estimated cost or budget for this project. Therefore, a direct comparison between the estimated cost and the final award amount of $14.4 million cannot be made. In a competitive bidding process, the award amount is determined by the offers received from contractors. If the award amount significantly exceeded pre-solicitation estimates, it could indicate an underestimation of project costs by the government or an increase in market prices for construction services. Without the initial estimate, it's impossible to assess potential cost variances.

What is the historical spending trend for commercial and institutional building construction by the Department of the Navy over the past five years?

Analyzing the historical spending trend for commercial and institutional building construction by the Department of the Navy over the past five years would reveal patterns in investment within this sector. This would involve aggregating data on contract awards for similar types of construction. Such an analysis could show whether spending has been increasing, decreasing, or remaining stable, potentially influenced by infrastructure needs, budget allocations, and strategic priorities. Understanding these trends provides context for the significance and scale of individual awards like the one to Korte Construction Company.

Were there any specific performance issues or disputes reported on previous contracts awarded to Korte Construction Company by the Department of Defense?

Information regarding specific performance issues or disputes on previous contracts awarded to Korte Construction Company by the Department of Defense is not available in the provided data. A thorough review would require accessing federal contract databases that track contractor performance, such as the Contractor Performance Assessment Reporting System (CPARS). Such a review would examine past contract histories, including any documented issues, corrective actions, or disputes, to assess the contractor's reliability and history of successful project completion.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12441 US HIGHWAY 40, HIGHLAND, IL, 15

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247202D0800

IDV Type: IDC

Timeline