DoD's $55.8M Hangar 5 Recapitalization Contract Awarded to Korte Construction Company

Contract Overview

Contract Amount: $55,856,873 ($55.9M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2007-06-07

End Date: 2010-06-30

Contract Duration: 1,119 days

Daily Burn Rate: $49.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FIRM FIXED PRICE (FFP) P169 HANGAR 5 RECAPITALIZATION

Place of Performance

Location: OAK HARBOR, ISLAND County, WASHINGTON, 98278

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $55.9 million to KORTE CONSTRUCTION COMPANY for work described as: FIRM FIXED PRICE (FFP) P169 HANGAR 5 RECAPITALIZATION Key points: 1. The contract is for a Firm Fixed Price (FFP) Hangar 5 Recapitalization project. 2. Awarded by the Department of the Navy, it falls under Commercial and Institutional Building Construction. 3. The project duration was 1119 days, indicating a significant construction undertaking. 4. The contract was awarded through full and open competition, suggesting a competitive bidding process.

Value Assessment

Rating: good

The contract was awarded using a Firm Fixed Price (FFP) type, which is generally favorable for the government in construction projects as it shifts cost overrun risk to the contractor. The award amount of $55.8M for a hangar recapitalization over approximately three years appears reasonable for a project of this nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This method typically fosters price discovery and encourages competitive pricing, likely resulting in a more favorable outcome for the government.

Taxpayer Impact: The use of full and open competition suggests that taxpayers benefited from a competitive bidding process, potentially leading to cost savings compared to non-competitive awards.

Public Impact

Military readiness: The recapitalization of Hangar 5 is crucial for maintaining operational capabilities of naval aviation assets. Economic impact: The contract supported jobs in the construction sector and related industries in Washington state. Infrastructure investment: This project represents a significant investment in critical military infrastructure. Contractor performance: Korte Construction Company's successful completion of this large-scale project demonstrates their capability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arose during construction, despite FFP.
Dependence on a single contractor for a critical infrastructure project.
Long project duration could lead to delays impacting operational readiness.

Positive Signals

Awarded through full and open competition, promoting competitive pricing.
Firm Fixed Price contract type limits government financial risk.
Project addresses critical infrastructure needs for the Department of the Navy.
Significant investment in regional construction employment.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for military infrastructure. Spending benchmarks in this sector can vary widely based on project scope, location, and specific requirements. However, a $55.8 million project for a hangar recapitalization is a substantial investment.

Small Business Impact

The data indicates that this contract was not awarded to small businesses (ss: false, sb: false). The primary award went to Korte Construction Company, a larger entity. There is no information provided on subcontracting opportunities for small businesses within this contract.

Oversight & Accountability

The contract was awarded by the Department of the Navy, a component of the Department of Defense, which has established oversight mechanisms for major construction projects. The use of full and open competition and a Firm Fixed Price contract type are standard practices aimed at ensuring accountability and value for money.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for scope creep if unforeseen structural issues were discovered.
Risk of construction delays impacting military operational schedules.
Contractor performance risk, although mitigated by FFP and competition.
Lack of explicit small business participation noted in the award data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.9 million to KORTE CONSTRUCTION COMPANY. FIRM FIXED PRICE (FFP) P169 HANGAR 5 RECAPITALIZATION

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 $55.9 million.

What is the period of performance?

Start: 2007-06-07. End: 2010-06-30.

What was the specific scope of the Hangar 5 recapitalization, and how did it enhance operational capabilities?

The specific scope of the Hangar 5 recapitalization likely involved structural repairs, upgrades to utilities, modernization of hangar bay doors, and potentially improvements to environmental controls and safety systems. The enhancements would aim to ensure the hangar could accommodate modern aircraft, improve maintenance efficiency, and meet current safety and environmental standards, thereby directly supporting naval aviation operational readiness and mission effectiveness.

Were there any significant cost variances or change orders during the contract period, and how were they managed?

While the contract was Firm Fixed Price, which aims to cap costs, large construction projects can encounter unforeseen issues. Management of cost variances would involve rigorous change order processes, requiring justification and approval for any deviations from the original scope. The Department of the Navy would have procedures to review and approve or reject change requests to ensure they were necessary and priced appropriately, minimizing impact on the overall contract value.

How did the competitive bidding process for this contract ensure the best value was achieved for the government?

The full and open competition process allowed multiple qualified construction firms to submit bids, fostering a competitive environment. This competition drives down prices as contractors vie for the award. The government likely evaluated bids based on a combination of price and technical merit, ensuring that the selected proposal offered the best overall value, balancing cost-effectiveness with the contractor's ability to meet project requirements and timelines.

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: N4425506R2109

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 700 SAINT LOUIS UNION STA # 200, SAINT LOUIS, MO, 63103

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $55,856,873

Exercised Options: $55,856,873

Current Obligation: $55,856,873

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline