Army awards $20.8M construction contract for airfield structures at Tinker AFB, Oklahoma

Contract Overview

Contract Amount: $20,826,430 ($20.8M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2006-06-30

End Date: 2010-01-28

Contract Duration: 1,308 days

Daily Burn Rate: $15.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 200608!600807!2100!W912BV!USA ENGINEER DISTRICT TULSA !W912BV06C2010 !A!N! !N! ! !20060630!20080609!081639411!081639411!081639411!N!KORTE CONSTRUCTION COMPANY !700 ST LOUIS UNION STATIO!SAINT LOUIS !MO!63103!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000019941000!N!N!000000000000!Y129!OTHER AIRFIELD STRUCTURES !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !236220!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!003!B! !D!N!Z! ! !N!C!N! ! ! !A!B!A!A!000!A!C!Y! !N! ! ! ! !0001! !

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73159

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $20.8 million to KORTE CONSTRUCTION COMPANY for work described as: 200608!600807!2100!W912BV!USA ENGINEER DISTRICT TULSA !W912BV06C2010 !A!N! !N! ! !20060630!20080609!081639411!081639411!081639411!N!KORTE CONSTRUCTION COMPANY !700 ST LOUIS UNION STATIO!SAINT LOUIS !MO!63103!73800!017!40!TINKER AFB !CANA… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $20.8 million falls within a moderate spending range for construction projects of this nature. 3. Performance period of 1308 days indicates a long-term project, potentially increasing risk exposure. 4. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 5. The contract was awarded to KORTE CONSTRUCTION COMPANY, a single entity, raising questions about potential concentration risk. 6. The absence of small business set-aside flags suggests this was not specifically targeted for small business participation.

Value Assessment

Rating: fair

The contract value of $20.8 million for airfield structures appears to be within a reasonable range for a project of this duration and scope. However, without specific benchmarks for similar airfield construction projects at Tinker AFB or comparable military installations, a precise value-for-money assessment is challenging. The firm fixed-price contract type suggests that the contractor assumed the risk for cost overruns, which can be a positive indicator for the government if the price was competitive. Further analysis would require comparing this contract's unit costs to industry standards for similar construction elements.

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. The data shows 3 bids were received. While this suggests some level of competition, the low number of bidders could imply limited market interest or a highly specialized requirement. A higher number of bids typically leads to better price discovery and potentially lower prices for the government.

Taxpayer Impact: With only 3 bids submitted, taxpayers may not have benefited from the most competitive pricing possible. A more robust competition could have driven down costs further.

Public Impact

The primary beneficiary of this contract is the Department of the Army, specifically for infrastructure improvements at Tinker Air Force Base. The contract will result in the construction of 'OTHER AIRFIELD STRUCTURES,' enhancing the operational capabilities of the base. The geographic impact is localized to Oklahoma, specifically the area around Tinker AFB. The project will likely involve a workforce in the construction sector, contributing to local employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (3 bidders) may have resulted in a higher price than if more firms had participated.
The long contract duration (1308 days) increases the risk of unforeseen issues, cost escalations, or performance degradation.
The specific nature of 'OTHER AIRFIELD STRUCTURES' could involve specialized requirements that limit the pool of qualified contractors.

Positive Signals

Awarded under full and open competition, ensuring a broad opportunity for qualified contractors to bid.
Firm Fixed Price contract type shifts cost overrun risk to the contractor.
The contract is for essential infrastructure development at a key military installation.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction (NAICS 236220). The market for military construction is substantial, driven by the Department of Defense's continuous need to maintain and upgrade its facilities. Comparable spending benchmarks would involve analyzing other airfield construction or base infrastructure projects awarded by the Army or other branches of the military, considering factors like project size, complexity, and location.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). This means that both large and small businesses were eligible to compete. While there's no direct indication of subcontracting requirements, large prime contractors often utilize small businesses for specialized tasks, which could provide opportunities for the small business ecosystem. However, the absence of a specific set-aside means small businesses had to compete directly with potentially larger, more resourced firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and project management offices. The firm fixed-price nature of the contract provides a degree of accountability by fixing the total cost. Transparency is facilitated by the public availability of contract award data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Military Construction
Airfield Operations Support
Base Infrastructure Development
Department of Defense Facilities Management

Risk Flags

Limited Competition
Long Contract Duration
Potential for Cost Overruns (Contractor Risk)
Need for Specialized Construction Expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.8 million to KORTE CONSTRUCTION COMPANY. 200608!600807!2100!W912BV!USA ENGINEER DISTRICT TULSA !W912BV06C2010 !A!N! !N! ! !20060630!20080609!081639411!081639411!081639411!N!KORTE CONSTRUCTION COMPANY !700 ST LOUIS UNION STATIO!SAINT LOUIS !MO!63103!73800!017!40!TINKER AFB !CANADIAN !OKLAHOMA !+000019941000!N!N!000000000000!Y129!OTHER AIRFIELD STRUCTURES !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !236220!E! !3! ! ! ! ! !999

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 Army).

What is the total obligated amount?

The obligated amount is $20.8 million.

What is the period of performance?

Start: 2006-06-30. End: 2010-01-28.

What is the track record of KORTE CONSTRUCTION COMPANY with federal contracts, particularly with the Department of Defense?

KORTE CONSTRUCTION COMPANY has a history of federal contracting, as indicated by this award. To assess their track record thoroughly, one would need to examine their past performance on similar projects, including contract values, completion timeliness, and any documented performance issues or awards. A deeper dive into their contract history with the Department of Defense and other agencies would reveal their experience with firm fixed-price contracts, construction of airfield structures, and adherence to government standards. Analyzing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) would provide crucial insights into their reliability and quality of work.

How does the awarded price of $20.8 million compare to similar airfield structure construction contracts?

Benchmarking this $20.8 million contract against similar airfield structure projects requires access to a broader dataset of federal contracts. Factors such as the specific types of structures (e.g., hangars, control towers, maintenance facilities), the geographic location, the complexity of the site, and the prevailing construction costs at the time of award are critical for a fair comparison. Without these comparative data points, it's difficult to definitively state whether $20.8 million represents excellent, fair, or questionable value. However, given the duration of the contract (over 3 years), the price appears to be for a substantial undertaking.

What are the primary risks associated with a firm fixed-price contract for a long-duration construction project like this?

The primary risk with a firm fixed-price (FFP) contract, especially for a long-duration project (1308 days), is that the contractor may face significant cost increases due to unforeseen circumstances, material price fluctuations, or labor cost escalations. If the initial price estimate was too low or if market conditions change drastically, the contractor could incur substantial losses, potentially impacting their financial stability and ability to complete the project. Conversely, if the contractor accurately predicted costs and managed efficiently, they could realize a higher profit margin. For the government, the risk is that the contractor might cut corners on quality to protect profits if costs rise unexpectedly, or that the initial price might have been inflated to account for perceived risks.

What is the significance of the NAICS code 236220 for this contract?

The North American Industry Classification System (NAICS) code 236220 signifies 'Commercial and Institutional Building Construction.' This classification indicates that the contract is for the construction of buildings intended for commercial or institutional use, rather than purely residential or industrial manufacturing facilities. For airfield structures, this code is appropriate as these facilities serve institutional purposes supporting the operational needs of an airbase. It helps categorize the contract within the broader construction industry, allowing for comparisons with other similar types of building construction projects and informing the assessment of market dynamics and contractor capabilities.

What does the limited number of bidders (3) suggest about the market for this type of construction service?

A limited number of bidders, such as the 3 received for this contract, can suggest several possibilities about the market for this specific type of construction service. It might indicate that the project requires highly specialized skills, equipment, or security clearances that only a few companies possess. Alternatively, it could reflect a lack of aggressive marketing by the contracting agency to attract more bidders, or perhaps the project's location or specific requirements made it less attractive to a wider range of firms. In some cases, it might also suggest a concentrated market where only a few large players dominate. This limited competition could potentially lead to higher prices for the government compared to a scenario with more bidders.

How might the long performance period (1308 days) impact the overall cost and risk of this contract?

A long performance period of 1308 days (approximately 3.5 years) significantly increases the potential for cost and performance risks. For a firm fixed-price contract, the contractor must account for potential inflation in material and labor costs over this extended period. Unexpected changes in regulations, environmental conditions, or technological advancements relevant to airfield structures could also arise. Furthermore, the longer the project duration, the greater the chance of personnel turnover within the contractor's team, potential shifts in project priorities for the government, or unforeseen site conditions that could lead to delays and cost overruns, despite the fixed-price nature. Robust project management and contingency planning are crucial for mitigating these extended-term risks.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 700 ST LOUIS UNION STATIO, SAINT LOUIS, MO, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline