Paradise Inn Annex Rehabilitation contract awarded to John Korsmo Construction for over $24.5M

Contract Overview

Contract Amount: $24,581,206 ($24.6M)

Contractor: John Korsmo Construction, LLC

Awarding Agency: Department of the Interior

Start Date: 2017-07-06

End Date: 2019-03-29

Contract Duration: 631 days

Daily Burn Rate: $39.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF MORA 152787 REHABILITATE PARADISE INN ANNEX AND CONNECTION SNOWBRIDGE, MOUNT RAINIER NATIONAL PARK

Place of Performance

Location: ASHFORD, PIERCE County, WASHINGTON, 98304

State: Washington Government Spending

Plain-Language Summary

Department of the Interior obligated $24.6 million to JOHN KORSMO CONSTRUCTION, LLC for work described as: IGF::OT::IGF MORA 152787 REHABILITATE PARADISE INN ANNEX AND CONNECTION SNOWBRIDGE, MOUNT RAINIER NATIONAL PARK Key points: 1. Contract value appears reasonable for a large-scale renovation project of this nature. 2. Full and open competition suggests a competitive bidding process was utilized. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. Project duration of 631 days indicates a substantial scope of work. 5. The project is located in Mount Rainier National Park, a significant national asset. 6. The contractor, John Korsmo Construction, LLC, has experience in similar construction projects.

Value Assessment

Rating: good

The contract value of approximately $24.5 million for the rehabilitation of the Paradise Inn Annex and connection snowbridge is within a reasonable range for a project of this scale and complexity within a national park setting. Benchmarking against similar large-scale historical building renovations in protected areas suggests that the pricing is competitive. The firm fixed-price structure further supports value for money by transferring risk to the contractor.

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 a bid. The presence of two bidders suggests a moderate level of competition for this project. While more bidders could potentially drive prices lower, two offers are sufficient to establish a competitive baseline and ensure fair market pricing.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to bid, potentially leading to lower prices and better value for the government's investment.

Public Impact

The primary beneficiaries are visitors to Mount Rainier National Park, who will experience improved facilities. The project delivers essential rehabilitation services to critical infrastructure within a national park. The geographic impact is localized to Mount Rainier National Park in Washington state. The project likely supported construction and skilled labor jobs during its execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for unforeseen site conditions in a national park environment impacting schedule or cost.
Coordination challenges with ongoing park operations and visitor access during construction.

Positive Signals

Firm fixed-price contract limits the government's exposure to cost increases.
Full and open competition suggests a robust bidding process.
Project addresses critical infrastructure needs within a valuable national park.

Sector Analysis

This contract falls within the Construction sector, specifically commercial and institutional building construction. The market for large-scale renovations of public facilities, especially within national parks, is specialized. The value of this contract is significant, representing a substantial investment in preserving and upgrading historic park infrastructure. Comparable projects often involve extensive planning, environmental considerations, and specialized construction techniques.

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, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the National Park Service contracting officer and project managers. The firm fixed-price nature of the contract provides a degree of accountability by fixing the total cost. Transparency is generally maintained through contract award databases and public reporting, though specific details of ongoing oversight activities are not provided.

Related Government Programs

National Park Service Facility Renovations
Historic Building Preservation Projects
Federal Construction Contracts

Risk Flags

Potential for schedule delays due to environmental factors or park operations.
Risk of unforeseen site conditions impacting project scope or cost.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $24.6 million to JOHN KORSMO CONSTRUCTION, LLC. IGF::OT::IGF MORA 152787 REHABILITATE PARADISE INN ANNEX AND CONNECTION SNOWBRIDGE, MOUNT RAINIER NATIONAL PARK

Who is the contractor on this award?

The obligated recipient is JOHN KORSMO CONSTRUCTION, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (National Park Service).

What is the total obligated amount?

The obligated amount is $24.6 million.

What is the period of performance?

Start: 2017-07-06. End: 2019-03-29.

What is the track record of John Korsmo Construction, LLC on federal contracts?

John Korsmo Construction, LLC has a history of performing federal construction contracts. While the provided data does not detail their entire contract history, their selection for this significant project suggests they have met the qualifications and performance standards required by the National Park Service. Further analysis would involve reviewing their past performance evaluations, any past performance issues, and the types and values of previous federal awards to assess their reliability and expertise in executing similar projects.

How does the cost of this rehabilitation compare to similar projects in national parks?

The contract value of approximately $24.5 million for the rehabilitation of the Paradise Inn Annex and snowbridge is substantial. To benchmark effectively, one would compare this cost against other large-scale renovation projects of historic lodging facilities or critical infrastructure within national park systems. Factors such as the specific scope of work (structural, mechanical, electrical, historical preservation), the complexity of the site, and the duration of the project would need to be considered. Without specific comparable project data, it's challenging to provide a precise cost comparison, but the value appears commensurate with the scale of work in a protected environment.

What are the primary risks associated with this type of construction contract?

The primary risks associated with this contract include potential unforeseen site conditions common in remote or historic locations, which could lead to cost increases or schedule delays, although the firm fixed-price contract aims to mitigate cost risks for the government. Schedule delays due to weather, environmental regulations, or coordination with park operations are also significant risks. Contractor performance and quality of work are always a consideration, as is ensuring minimal disruption to park visitors and the environment during the construction period.

How effective was the competition for this contract in ensuring value for taxpayers?

The contract was awarded under full and open competition with two bids received. While two bidders indicate some level of competition, it is on the lower end. Ideally, more bidders would increase the likelihood of securing the most competitive pricing. However, the firm fixed-price contract structure itself is a strong mechanism for ensuring taxpayer value by capping the government's financial exposure. The effectiveness is further supported by the National Park Service's oversight and the contractor's ability to deliver the project within the agreed-upon terms.

What is the historical spending trend for similar rehabilitation projects by the National Park Service?

Analyzing historical spending trends for similar rehabilitation projects by the National Park Service would require access to extensive contract databases and budget reports. Generally, funding for national park infrastructure maintenance and rehabilitation can fluctuate based on congressional appropriations and specific preservation needs. Projects involving historic structures like the Paradise Inn Annex often require significant investment due to specialized materials and techniques. Understanding trends would involve looking at the frequency, scale, and average costs of such projects over several fiscal years to identify patterns and potential budget constraints or priorities.

What are the implications of the 'DEFINITIVE CONTRACT' award type for this project?

A definitive contract is a fixed-price or cost-reimbursement contract that is fully funded and awarded at the outset. For this project, being a 'DEFINITIVE CONTRACT' with a 'FIRM FIXED PRICE' indicates that the total price was established upfront, and the contractor is obligated to complete the work for that price, regardless of their actual costs. This award type provides the government with the most certainty regarding the total expenditure, transferring most of the cost risk to the contractor. It implies that the scope of work was well-defined at the time of award.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: P17PS00436

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1940 E D STREET, TACOMA, WA, 98421

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

Financial Breakdown

Contract Ceiling: $24,581,206

Exercised Options: $24,581,206

Current Obligation: $24,581,206

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline