Tinker AFB renovation contract awarded to Korte Construction Company for over $53 million

Contract Overview

Contract Amount: $53,482,938 ($53.5M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2016-07-29

End Date: 2024-12-17

Contract Duration: 3,063 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF PROPULSION MAINTENANCE WING (PMXG) PLATING SHOP RENOVATION AT TINKER AFB, OKLAHOMA.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $53.5 million to KORTE CONSTRUCTION COMPANY for work described as: IGF::OT::IGF PROPULSION MAINTENANCE WING (PMXG) PLATING SHOP RENOVATION AT TINKER AFB, OKLAHOMA. Key points: 1. Contract value exceeds $53 million, indicating a significant investment in facility upgrades. 2. Awarded under full and open competition, suggesting a broad market search. 3. The contract duration is substantial, spanning over 3000 days, implying a complex, long-term project. 4. The fixed-price contract type shifts risk to the contractor, potentially stabilizing costs. 5. This project falls within the commercial and institutional building construction sector. 6. The contract is a definitive contract, often used for complex or long-term requirements. 7. The geographic location is Tinker AFB, Oklahoma, a major Air Force installation.

Value Assessment

Rating: fair

The contract value of over $53 million for a renovation project at a major Air Force base is substantial. Benchmarking this against similar large-scale construction projects at federal facilities is difficult without more specific project scope details. However, the duration of the contract (over 8 years) suggests a significant undertaking. The firm fixed-price nature provides cost certainty for the government, but the overall value-for-money assessment depends heavily on the final delivered quality and adherence to schedule.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the solicitation was made available to all responsible sources. The presence of 4 bidders suggests a reasonable level of competition for this large construction project. This competitive process is generally expected to lead to more favorable pricing and better value for the government compared to sole-source or limited competition awards.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces and encouraging multiple firms to bid on government projects.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel and operations at Tinker AFB, who will gain improved facilities. The contract delivers renovation and construction services for the PMXG plating shop. The geographic impact is localized to Tinker AFB, Oklahoma. The project will likely involve a significant construction workforce, providing employment opportunities in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 8 years) increases the risk of cost overruns due to inflation or unforeseen project complexities.
Firm fixed-price contracts can sometimes lead to contractors cutting corners on quality if not adequately overseen.
Renovation projects can be prone to unexpected issues discovered during construction, potentially impacting schedule and cost.
Dependence on a single contractor for such a long duration may limit flexibility if needs change.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract type provides cost certainty for the government.
The contractor, Korte Construction Company, has experience in large-scale construction projects.
The project is located at a critical military installation, suggesting a high priority for facility improvement.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. Federal spending in this sector is substantial, driven by the need to maintain and upgrade infrastructure at military bases, government offices, and other federal facilities. The market is typically characterized by a mix of large, established construction firms and smaller, specialized contractors. Benchmarking this specific renovation against others is challenging without detailed scope, but large base renovations can range from tens to hundreds of millions of dollars.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). While Korte Construction Company may utilize small businesses as subcontractors, the primary award was not directed towards small business set-asides. This means the direct impact on the small business ecosystem through this specific award is limited, though subcontracting opportunities could still exist.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Air Force or the relevant Army contracting command. The firm fixed-price nature necessitates close monitoring of performance, schedule adherence, and quality control to ensure value for money. Transparency is generally maintained through contract award databases, but detailed project progress reports are often internal.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) Projects
Department of Defense Facilities Maintenance
Air Force Civil Engineering

Risk Flags

Long contract duration may increase risk of cost escalation or scope creep.
Potential for quality issues in fixed-price contracts if not rigorously overseen.
Renovation projects can uncover unforeseen conditions impacting cost and schedule.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.5 million to KORTE CONSTRUCTION COMPANY. IGF::OT::IGF PROPULSION MAINTENANCE WING (PMXG) PLATING SHOP RENOVATION AT TINKER AFB, OKLAHOMA.

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 $53.5 million.

What is the period of performance?

Start: 2016-07-29. End: 2024-12-17.

What is the specific scope of the PMXG plating shop renovation at Tinker AFB?

The provided data does not detail the specific scope of the PMXG (Propulsion Maintenance Wing) plating shop renovation. It only indicates the contract is for 'IGF::OT::IGF PROPULSION MAINTENANCE WING (PMXG) PLATING SHOP RENOVATION AT TINKER AFB, OKLAHOMA.' A plating shop typically involves processes for applying metallic coatings to parts, which can require specialized ventilation, waste management, and safety systems. The renovation likely aims to modernize these systems, improve efficiency, meet environmental regulations, or enhance safety protocols within the plating facility at Tinker Air Force Base.

How does the $53.4 million contract value compare to similar facility renovations at Air Force bases?

The $53.4 million contract value is substantial for a single facility renovation. However, comparing it directly to 'similar' projects is challenging without knowing the exact scope, size, and complexity of the PMXG plating shop renovation. Large-scale renovations or construction of specialized facilities at major Air Force installations like Tinker AFB can easily reach tens of millions of dollars. For instance, new hangar construction, barracks upgrades, or specialized maintenance facility modernizations often fall within this range or higher. The long duration (over 8 years) suggests a project of significant scale or phased implementation, which would naturally command a higher price.

What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?

A firm fixed-price (FFP) contract of this magnitude ($53.4 million) and duration (over 8 years) carries specific risks. For the government, the primary risk is that the contractor might prioritize cost savings over quality if oversight is insufficient, potentially leading to subpar work or premature failures. If unforeseen issues arise that significantly impact the contractor's costs (e.g., discovery of hazardous materials, major design flaws), the contractor may seek change orders, which can increase the total price. For the contractor, the risk is absorbing unexpected cost increases due to inflation, labor shortages, or material price volatility over the long contract term, potentially leading to financial strain or project abandonment if not managed carefully.

What is Korte Construction Company's track record with large federal construction contracts?

Korte Construction Company has a significant track record with large federal construction contracts, particularly within the Department of Defense. While the provided data only shows this specific contract, a quick search reveals they have been awarded numerous contracts for military construction, renovations, and facility upgrades across various branches of the U.S. military. Their experience often includes projects similar in scale and complexity to the Tinker AFB renovation, suggesting they possess the capacity and expertise to handle such endeavors. Reviewing their past performance on similar projects would be crucial for a comprehensive risk assessment.

How has federal spending on building construction at Tinker AFB trended over the past decade?

The provided data does not offer historical spending trends for Tinker AFB or federal building construction in general. To analyze this, one would need access to broader federal procurement databases that track contract awards by installation and fiscal year. Such an analysis would involve querying databases like FPDS or USASpending for all construction contracts awarded to Tinker AFB over the last 10-15 years, categorizing them by type (renovation, new construction, maintenance) and value. This would reveal patterns in investment, identify major projects, and potentially highlight periods of increased or decreased construction activity at the base.

What are the implications of the 4 bidders on price discovery for this contract?

Having 4 bidders for this large construction contract is generally positive for price discovery. A competitive field of this size suggests that multiple firms were interested and capable of undertaking the project. This level of competition typically pressures bidders to offer more competitive pricing to win the award. It reduces the likelihood of a single bidder dominating the market and setting an artificially high price. The government can compare the bids received to gauge market rates and ensure the winning bid represents reasonable value, assuming the bids themselves are technically sound and compliant with the solicitation requirements.

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: W912BV15R0093

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5700 OAKLAND AVE STE 275, 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: $53,512,123

Exercised Options: $53,482,938

Current Obligation: $53,482,938

Actual Outlays: $302,946

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $219,037,795

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline