Korte Construction Company awarded $43.3M for multi-aircraft hangar construction in Oklahoma

Contract Overview

Contract Amount: $43,328,225 ($43.3M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2009-08-26

End Date: 2012-07-02

Contract Duration: 1,041 days

Daily Burn Rate: $41.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MULTI-AIRCRAFT HANGAR

Place of Performance

Location: TINKER AFB, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $43.3 million to KORTE CONSTRUCTION COMPANY for work described as: MULTI-AIRCRAFT HANGAR Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The firm fixed-price contract type transfers risk to the contractor. 4. Project duration of 1041 days indicates a significant construction undertaking. 5. The contract was awarded by the Department of the Army, a major federal entity. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial building construction.

Value Assessment

Rating: good

The contract value of $43.3 million for a multi-aircraft hangar is within a typical range for large federal construction projects. Benchmarking against similar Department of Defense hangar constructions would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the initial bid was considered competitive and that cost overruns are primarily the contractor's responsibility, which is a positive indicator for cost control.

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. With 7 bids received, the competition level appears robust, suggesting that the government likely received competitive pricing. This level of competition generally leads to better price discovery and potentially lower costs for the taxpayer compared to sole-source or limited competition scenarios.

Taxpayer Impact: The extensive competition for this hangar construction project likely resulted in a more favorable price for taxpayers. A wider pool of bidders increases the likelihood of securing the best value and minimizes the risk of inflated costs due to a lack of market pressure.

Public Impact

The primary beneficiaries are the Department of the Army and its aviation units, who will gain essential infrastructure for aircraft maintenance and storage. The project delivers a critical piece of infrastructure: a multi-aircraft hangar. The geographic impact is concentrated in Oklahoma, supporting local economic activity through construction jobs and material sourcing. Workforce implications include employment opportunities for construction workers, engineers, and project managers in the Oklahoma region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting operational readiness.
Ensuring compliance with stringent military construction standards and specifications.
Managing the complexity of a large-scale construction project over a multi-year period.

Positive Signals

Firm fixed-price contract mitigates cost overrun risk for the government.
Full and open competition suggests a competitive bid process leading to potentially better pricing.
Award to an established construction company with experience in federal projects.
Project duration is clearly defined, allowing for structured planning and execution.

Sector Analysis

The construction sector, particularly for large institutional and government facilities, is a significant part of the federal contracting landscape. This contract falls under commercial and institutional building construction, a segment that requires specialized expertise and adherence to rigorous standards. Federal spending in this area often involves large, complex projects with long lead times and substantial budgets, reflecting the scale and criticality of government infrastructure needs.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses in the provided data. The award went to Korte Construction Company, which is likely a large business. Further analysis would be needed to determine if subcontracting opportunities were offered to small businesses as part of the project execution.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified hangar within the agreed budget and timeline. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight reports or IG investigations are not detailed in the provided data.

Related Government Programs

Military Construction
Aircraft Maintenance Facilities
Department of Defense Construction Contracts
General Building Construction

Risk Flags

Potential for cost overruns if contractor underestimates complexity.
Risk of construction delays impacting military readiness.
Ensuring adherence to stringent military construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.3 million to KORTE CONSTRUCTION COMPANY. MULTI-AIRCRAFT HANGAR

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 $43.3 million.

What is the period of performance?

Start: 2009-08-26. End: 2012-07-02.

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

Korte Construction Company has a significant history of federal contracting, including numerous awards from the Department of Defense and other government agencies. Their portfolio often includes large-scale construction projects such as hangars, barracks, and training facilities. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a generally positive track record. A deeper dive into contract performance ratings, past performance questionnaires, and any documented disputes or terminations would provide a more comprehensive view of their reliability and quality of work for federal clients.

How does the awarded price of $43.3 million compare to similar multi-aircraft hangar projects awarded by the Department of Defense in the past five years?

The $43.3 million price tag for this multi-aircraft hangar is substantial, reflecting the complexity and scale typical of such military infrastructure. To benchmark effectively, one would compare this figure against the cost per square foot or cost per aircraft bay of similar hangars awarded by the DoD. Factors such as location, specific design requirements (e.g., specialized environmental controls, security features), and the prevailing economic conditions at the time of award significantly influence pricing. Without access to a detailed cost breakdown or comparable project data, it's challenging to definitively state if this represents excellent or merely fair value. However, given the full and open competition, it suggests the price was deemed competitive within the market at the time of award.

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

The primary risk with a firm fixed-price (FFP) contract is that the contractor bears the brunt of any cost overruns, which can incentivize cutting corners on quality or safety if not properly managed. For the government, the risk is less about cost escalation and more about potential contractor default or substandard performance if the contractor underestimated costs. Mitigation strategies include robust pre-award evaluation of contractor capabilities and financial stability, clear and detailed contract specifications to minimize ambiguity, and diligent government oversight during construction to ensure adherence to quality standards and timelines. The contractor's own risk management, including accurate bidding and efficient project execution, is crucial for their profitability and successful project completion.

What is the historical spending pattern for multi-aircraft hangars by the Department of the Army, and does this contract align with those trends?

Historical spending on multi-aircraft hangars by the Department of the Army typically fluctuates based on modernization needs, operational tempo, and budget allocations. Large hangar projects are infrequent but represent significant capital investments. This $43.3 million contract appears to be a substantial, but not unprecedented, investment. Analyzing past awards for similar facilities over the last decade would reveal average project costs, typical contract durations, and the prevalence of different contract types. If this contract's value and scope align with the general scale of previous hangar constructions, it suggests a continuation of established investment patterns for critical aviation infrastructure.

How does the duration of 1041 days (approximately 2.85 years) impact the assessment of this contract's value and risk?

A duration of 1041 days for a multi-aircraft hangar project indicates a complex and lengthy construction process. This extended timeline inherently increases certain risks, such as potential exposure to fluctuating material costs (though mitigated by FFP), weather delays, and the need for sustained project management oversight. However, for large-scale, specialized construction like military hangars, such durations are often necessary to ensure quality, safety, and adherence to complex specifications. From a value perspective, a longer duration might imply a higher overall cost, but it also allows for meticulous execution. The key is whether the project milestones and final delivery align with the operational needs of the Army, making the extended timeline a necessary component rather than a detriment.

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: W912BV09R2003

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $43,328,225

Exercised Options: $43,328,225

Current Obligation: $43,328,225

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline