Tinker AFB KC-46A Hangar Project Awarded to Korte Construction for $73.2M Under Full and Open Competition

Contract Overview

Contract Amount: $73,232,344 ($73.2M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2019-09-27

End Date: 2022-08-02

Contract Duration: 1,040 days

Daily Burn Rate: $70.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCTION OF THE KC-46A FUEL MAINTENANCE HANGAR ON THE KC-46A CAMPUS AT TINKER AFB, OKLAHOMA.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73141

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $73.2 million to KORTE CONSTRUCTION COMPANY for work described as: DESIGN AND CONSTRUCTION OF THE KC-46A FUEL MAINTENANCE HANGAR ON THE KC-46A CAMPUS AT TINKER AFB, OKLAHOMA. Key points: 1. The contract value of $73.2 million represents a significant investment in critical Air Force refueling tanker infrastructure. 2. The project was awarded through full and open competition, suggesting a competitive bidding process aimed at achieving fair market value. 3. The firm-fixed-price contract type shifts performance risk to the contractor, Korte Construction Company. 4. The project duration of 1040 days indicates a substantial construction undertaking. 5. The geographic location in Oklahoma may have implications for local workforce and material sourcing. 6. The absence of small business set-aside flags suggests the primary awardee is not a small business, with subcontracting opportunities to be monitored.

Value Assessment

Rating: good

The contract value of $73.2 million for the design and construction of a specialized maintenance hangar appears reasonable given the scope of work for the KC-46A program. Benchmarking against similar large-scale military construction projects would provide further context, but the firm-fixed-price nature suggests a defined cost expectation. The award to Korte Construction Company, a known entity in federal contracting, also lends some confidence in the pricing structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a healthy level of competition for this significant construction project. This competitive environment is generally expected to drive down prices and encourage efficient project execution by the winning contractor.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to ensure that the government secures the best possible price and value for the construction of this essential military facility.

Public Impact

The primary beneficiaries are the U.S. Air Force and the personnel operating and maintaining the KC-46A Pegasus tanker aircraft. The project delivers a specialized maintenance hangar crucial for the operational readiness and longevity of the KC-46A fleet. The geographic impact is concentrated at Tinker Air Force Base in Oklahoma, potentially creating local construction jobs and economic activity. The construction activities will likely involve a skilled workforce in various trades, contributing to employment in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design changes arise, despite the firm-fixed-price contract.
Dependence on Korte Construction Company's performance and financial stability for timely and quality completion.
Risk of supply chain disruptions impacting material availability and construction timelines.

Positive Signals

Firm-fixed-price contract structure incentivizes contractor efficiency and cost control.
Award through full and open competition suggests a robust vetting of bidders and competitive pricing.
The project supports a critical national defense asset (KC-46A), indicating high priority and likely strong program oversight.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for large-scale, specialized military facilities. The market for such projects is characterized by a limited number of large construction firms capable of undertaking complex, high-value government contracts. Spending in this sector for military infrastructure is often driven by modernization efforts and the need for specialized support facilities for new or upgraded weapon systems like the KC-46A.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contract was awarded to a large business. While there is no explicit mention of subcontracting goals, large federal construction contracts often include provisions for small business participation. It will be important to monitor subcontracting awards to ensure opportunities are provided to the small business ecosystem.

Oversight & Accountability

Oversight for this project will likely be managed by the relevant Department of the Air Force contracting and engineering commands at Tinker AFB. The firm-fixed-price contract type provides a degree of accountability by fixing the total cost. Transparency is typically maintained through contract award databases and reporting requirements. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

KC-46A Pegasus Program
Air Force Military Construction
Tinker Air Force Base Infrastructure Projects
Defense Contract Management Agency (DCMA) Oversight

Risk Flags

Potential for cost growth due to unforeseen site conditions.
Contractor performance risk impacting schedule and quality.
Supply chain vulnerabilities affecting material delivery.
Adequacy of small business subcontracting participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.2 million to KORTE CONSTRUCTION COMPANY. DESIGN AND CONSTRUCTION OF THE KC-46A FUEL MAINTENANCE HANGAR ON THE KC-46A CAMPUS 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 $73.2 million.

What is the period of performance?

Start: 2019-09-27. End: 2022-08-02.

What is Korte Construction Company's track record with similar large-scale military construction projects?

Korte Construction Company has a documented history of performing federal construction contracts, including projects for various branches of the U.S. military. Their portfolio often includes aviation-related facilities, hangars, and other specialized structures. A detailed review of their past performance ratings, any past performance issues, and the scale and complexity of previously completed military projects would be necessary for a comprehensive assessment. Examining their financial stability and bonding capacity is also crucial for a project of this magnitude. While specific project details are not provided here, their engagement on the KC-46A campus suggests they possess the requisite experience and qualifications for this type of work.

How does the $73.2 million cost compare to similar KC-46A support facilities or other large military hangars?

Benchmarking the $73.2 million cost requires comparing it to similar projects in terms of size, complexity, location, and specific functional requirements. For instance, the cost per square foot of this hangar should be compared to other recently constructed aircraft maintenance facilities, particularly those designed for wide-body aircraft like the KC-46A. Factors such as specialized equipment installation (e.g., fuel systems, heavy lifting cranes), unique environmental controls, and site preparation complexities at Tinker AFB will influence the overall cost. Without access to a database of comparable military construction projects with detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the firm-fixed-price nature and competitive award suggest an effort to align costs with market expectations for such specialized infrastructure.

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

While a firm-fixed-price (FFP) contract shifts most cost risk to the contractor, Korte Construction Company, certain risks remain. The primary risk is that unforeseen site conditions (e.g., subsurface contamination, unexpected geological issues) or significant design changes mandated by the government could lead to change orders, potentially increasing the total cost beyond the initial $73.2 million. Contractor performance risk is also present; if Korte Construction experiences financial difficulties or management issues, project delays and quality compromises could occur. Furthermore, the FFP structure might incentivize the contractor to cut corners on quality or safety to maximize profit if not adequately monitored. Robust government oversight and clear contract terms are essential to mitigate these risks.

How effective is the 'full and open competition' strategy in ensuring optimal value for taxpayer funds on this project?

The 'full and open competition' strategy is generally considered the most effective method for ensuring optimal value for taxpayer funds in federal contracting. By allowing all responsible sources to compete, it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. In this case, the award to Korte Construction Company resulted from 4 bids, indicating a reasonable level of competition. This process helps prevent price inflation that can occur with sole-source or limited-competition contracts. The government's ability to define clear requirements and evaluation criteria is crucial for translating this competitive process into tangible value, ensuring the selected contractor offers the best combination of price, technical capability, and past performance.

What are the historical spending patterns for similar hangar construction projects at Air Force bases?

Historical spending on similar hangar construction projects at Air Force bases reveals significant variability influenced by factors such as aircraft size, technological requirements, base location, and the specific era of construction. Large aircraft hangars, especially those incorporating specialized systems like fuel maintenance capabilities for advanced tankers such as the KC-46A, represent substantial capital investments. Costs can range from tens of millions to well over a hundred million dollars. Trends show increasing complexity and cost over time due to evolving aircraft designs and stricter environmental and safety regulations. Analyzing past projects at bases like Tinker AFB or other major hubs for tanker operations would provide a clearer benchmark for the $73.2 million award, considering inflation and technological advancements.

What are the potential workforce implications of this $73.2 million construction project in Oklahoma?

A construction project of this magnitude, valued at $73.2 million, is expected to have notable workforce implications in the Oklahoma region surrounding Tinker Air Force Base. It will likely generate demand for a variety of skilled trades, including electricians, plumbers, HVAC technicians, heavy equipment operators, carpenters, and general laborers. The duration of the project (1040 days) suggests sustained employment opportunities over several years. Furthermore, indirect employment could be created in supporting industries such as material supply, logistics, engineering, and project management. The specific impact will depend on the availability of local skilled labor and the extent to which Korte Construction Company utilizes local subcontractors and hires local workers.

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: TWO STEP

Solicitation ID: W912BV18R0047

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: $73,232,344

Exercised Options: $73,232,344

Current Obligation: $73,232,344

Subaward Activity

Number of Subawards: 214

Total Subaward Amount: $449,429,967

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline