Korte Construction Company awarded $37.8M for Navy P-8A training facility construction

Contract Overview

Contract Amount: $37,856,267 ($37.9M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2014-07-21

End Date: 2016-04-29

Contract Duration: 648 days

Daily Burn Rate: $58.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 23

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF P-251A BASE BID P-8A MMA TRAINING FAC.

Place of Performance

Location: OAK HARBOR, ISLAND County, WASHINGTON, 98278

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $37.9 million to KORTE CONSTRUCTION COMPANY for work described as: IGF::OT::IGF P-251A BASE BID P-8A MMA TRAINING FAC. Key points: 1. Contract value appears reasonable given the scope of a major training facility. 2. Full and open competition suggests a competitive bidding process. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Project duration of 648 days indicates a substantial construction undertaking. 5. Geographic location in Washington state may influence labor and material costs. 6. The contract falls within the broader category of defense infrastructure spending.

Value Assessment

Rating: good

The contract value of $37.8 million for a P-8A MMA training facility appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar large-scale construction projects for military training facilities would provide a more precise assessment, but the initial value does not raise immediate red flags. The firm fixed-price nature of the contract suggests that the pricing was determined upfront and is intended to cover all contractor costs and profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, which can lead to better pricing and value for the government. The presence of 23 bids suggests a robust level of interest and competition for this construction project.

Taxpayer Impact: A high number of bidders in a full and open competition typically benefits taxpayers by driving down prices and encouraging contractors to offer their best value propositions.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who will utilize the P-8A MMA training facility. The contract delivers essential infrastructure for training pilots and aircrews on the P-8A Poseidon aircraft. The geographic impact is concentrated in Washington state, supporting local construction employment and related industries. Workforce implications include employment for construction workers, project managers, and subcontractors in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Risk of schedule delays due to weather or supply chain issues impacting construction.
Ensuring quality of construction meets stringent military standards requires diligent oversight.

Positive Signals

Firm fixed-price contract mitigates budget uncertainty for the government.
Full and open competition with 23 bidders suggests a competitive pricing environment.
Contract awarded to Korte Construction Company, a known entity in construction.

Sector Analysis

This contract falls within the construction sector, specifically commercial and institutional building construction, with a focus on defense infrastructure. The market for military construction is substantial, driven by the need to maintain and modernize facilities supporting various defense platforms. Comparable spending benchmarks would involve analyzing the cost per square foot or per training station for similar military training facilities across different branches and geographic locations.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). While Korte Construction Company may engage small businesses as subcontractors, there is no explicit requirement or tracking of small business set-asides within this specific contract award. The impact on the small business ecosystem would depend on Korte's subcontracting practices.

Oversight & Accountability

Oversight for this construction 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 type, which holds the contractor responsible for delivering the facility within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight reports are not detailed here. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Program
Naval Facilities Engineering Command Contracts
Defense Infrastructure Projects
P-8A Poseidon Program Support

Risk Flags

Potential for schedule delays
Risk of cost overruns (contractor responsibility)
Quality assurance oversight required
Site condition variability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.9 million to KORTE CONSTRUCTION COMPANY. IGF::OT::IGF P-251A BASE BID P-8A MMA TRAINING FAC.

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 $37.9 million.

What is the period of performance?

Start: 2014-07-21. End: 2016-04-29.

What is Korte Construction Company's track record with Department of Defense contracts, particularly for large-scale facilities?

Korte Construction Company has a history of working with the Department of Defense, including projects for various branches. Their experience often includes large-scale construction, such as barracks, training facilities, and administrative buildings. Analyzing their past performance on similar fixed-price contracts, adherence to schedules, and budget performance would provide further insight into their reliability for this P-8A training facility project. Specific details on past project success rates, any disputes, or contract modifications would offer a more comprehensive view of their track record.

How does the awarded value of $37.8 million compare to the average cost of similar P-8A training facilities or comparable military training infrastructure?

Direct comparison to the average cost of P-8A specific training facilities is challenging without more granular data on facility size, scope, and location. However, $37.8 million for a substantial training complex suggests a cost per square foot that would need to be benchmarked against other large institutional or military construction projects. Factors like land acquisition, specialized equipment integration, and regional construction cost indices in Washington state would influence this figure. A comprehensive value assessment would require comparing this contract's cost metrics (e.g., cost per square foot, cost per training station) against a database of similar government construction projects.

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

The primary risks for a firm fixed-price contract lie with the contractor, who assumes responsibility for cost overruns. However, risks to the government can include potential compromises in quality if the contractor seeks to reduce costs, or schedule delays if the contractor faces unforeseen challenges. Mitigation strategies employed by the government include thorough pre-award evaluations of contractor capability, detailed contract specifications, robust quality assurance surveillance plans (QASP), and clear performance metrics. The government also retains the right to inspect work and enforce contract terms, including liquidated damages for delays.

What is the expected effectiveness of the P-8A MMA training facility once completed, in terms of enhancing pilot and aircrew readiness?

The effectiveness of the P-8A MMA training facility is directly tied to its ability to provide realistic and comprehensive training scenarios for aircrews operating the P-8A Poseidon aircraft. This includes simulators, classroom facilities, and potentially maintenance training areas. A well-equipped and modern facility is crucial for improving pilot proficiency, mission readiness, and overall operational effectiveness of the P-8A fleet, which is vital for maritime patrol and anti-submarine warfare missions. The success of the facility will be measured by its utilization rates and the perceived improvement in aircrew performance metrics.

How has federal spending on military construction, particularly for aviation training facilities, trended over the past 5-10 years?

Federal spending on military construction, including aviation training facilities, has generally seen fluctuations driven by defense budgets, strategic priorities, and the modernization of military platforms. Following periods of significant engagement, there's often an increased focus on infrastructure upgrades and new facility development to support advanced aircraft like the P-8A. Trends may show increased investment in simulation and training technologies, necessitating new or upgraded physical infrastructure. Analyzing historical budget allocations for Military Construction, Army, Navy, and Air Force accounts would reveal specific trends in this category.

What is the significance of the 'definitive contract' award type in this context?

A definitive contract is a fixed-price contract that is awarded after a definitive statement of work, specifications, and terms and conditions have been established. In this case, it signifies that the scope of work for constructing the P-8A training facility was clearly defined before the contract was finalized. This contrasts with other contract types like letter contracts or basic ordering agreements, providing a higher degree of certainty for both the government and the contractor regarding the project's requirements and financial obligations.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N4425513R4003

Offers Received: 23

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5700 OAKLAND AVE STE 200, SAINT LOUIS, MO, 63110

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

Financial Breakdown

Contract Ceiling: $37,856,267

Exercised Options: $37,856,267

Current Obligation: $37,856,267

Subaward Activity

Number of Subawards: 112

Total Subaward Amount: $122,223,319

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline