DoD's $53M Creech AFB facility construction contract awarded to Korte Construction Company

Contract Overview

Contract Amount: $53,021,415 ($53.0M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2019-09-26

End Date: 2022-05-23

Contract Duration: 970 days

Daily Burn Rate: $54.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCTION OF MQ-9 GCS OPERATIONS FAC AND OPERATIONS/COMMAND FACILITY CREECH AFB, NV

Place of Performance

Location: INDIAN SPRINGS, CLARK County, NEVADA, 89018

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $53.0 million to KORTE CONSTRUCTION COMPANY for work described as: DESIGN AND CONSTRUCTION OF MQ-9 GCS OPERATIONS FAC AND OPERATIONS/COMMAND FACILITY CREECH AFB, NV 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, potentially leading to better pricing. 3. Project duration of 970 days indicates a significant undertaking with potential for schedule-related risks. 4. Fixed-price contract type shifts risk to the contractor, but scope creep could still impact final cost. 5. Construction of critical operational facilities for MQ-9 Reaper program highlights strategic importance. 6. Location in Nevada may influence labor costs and material availability.

Value Assessment

Rating: good

The contract value of $53,014,150 for the design and construction of MQ-9 GCS Operations Facility and Operations/Command Facility at Creech AFB appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar military construction projects would provide a more precise assessment, but the scope includes significant architectural and engineering work. The firm-fixed-price nature of the contract suggests that the government has a clear understanding of the project requirements and has negotiated a price that aims to control costs, with the contractor bearing the majority of the financial risk.

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 3 bidders suggests a moderate level of competition for this significant construction project. While more bidders could potentially drive prices lower, three offers generally provide a reasonable basis for price discovery and selection.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, which can lead to more competitive pricing and better value for the government.

Public Impact

The primary beneficiaries are the U.S. Air Force and the MQ-9 Reaper program, which will gain essential operational and command facilities. The project delivers critical infrastructure for the sustainment and expansion of MQ-9 drone operations. The geographic impact is concentrated at Creech Air Force Base in Nevada. The construction activities will likely create temporary employment opportunities for skilled trades and construction workers in the Nevada region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the project's complexity and duration.
Risk of cost overruns if unforeseen site conditions or design changes occur, despite fixed-price contract.
Dependence on specialized construction firms capable of meeting military facility standards.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Project addresses a critical need for MQ-9 program infrastructure.
Contractor has a track record in construction, though specific experience with military facilities needs further review.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for military construction is substantial, driven by ongoing modernization and operational needs of the Department of Defense. Projects like this require specialized expertise in design, engineering, and adherence to stringent government building codes and security requirements. Comparable spending benchmarks would typically be found in other large-scale military base construction or renovation projects.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses explicitly stated in the provided data. This suggests that the primary award went to a larger firm, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army contracting command. The project's execution would be monitored for adherence to the contract terms, schedule, and quality standards. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

MQ-9 Reaper Program Support Facilities
Creech Air Force Base Infrastructure Projects
Department of Defense Military Construction
Air Combat Command Facilities

Risk Flags

Potential for schedule overruns
Risk of unforeseen site conditions
Contractor performance monitoring required
Material price volatility over project duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.0 million to KORTE CONSTRUCTION COMPANY. DESIGN AND CONSTRUCTION OF MQ-9 GCS OPERATIONS FAC AND OPERATIONS/COMMAND FACILITY CREECH AFB, NV

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 $53.0 million.

What is the period of performance?

Start: 2019-09-26. End: 2022-05-23.

What is Korte Construction Company's track record with similar Department of Defense construction projects?

Korte Construction Company has a history of working with the Department of Defense and other government agencies on various construction projects. While specific details on their experience with MQ-9 related facilities are not provided in this data snippet, their past performance on similar-sized military construction, including barracks, training facilities, and administrative buildings, suggests they possess the necessary qualifications. A deeper dive into their project portfolio, client testimonials, and past performance reviews from federal agencies would offer a more comprehensive understanding of their capabilities and reliability in executing complex defense contracts.

How does the awarded amount of $53 million compare to similar military construction projects for drone operations facilities?

Directly comparing the $53 million award to similar projects is challenging without specific project details such as square footage, complexity of systems installed, and geographic location, which can significantly influence costs. However, for large-scale military construction projects involving specialized facilities like command and control centers and operational support buildings, $53 million is within a plausible range. Projects of this nature often include advanced technological infrastructure, secure communication systems, and robust physical security measures, all of which contribute to the overall cost. Benchmarking against publicly available data for other Air Force or DoD facility constructions of comparable size and function would be necessary for a more precise value assessment.

What are the primary risks associated with the 970-day duration of this construction project?

The 970-day duration (approximately 2.6 years) for this construction project presents several inherent risks. Schedule delays are a primary concern, potentially stemming from weather disruptions, unforeseen site conditions (e.g., soil issues, underground utilities), material shortages, labor availability, or contractor performance issues. Given the firm-fixed-price nature, delays can increase the contractor's costs, potentially leading to pressure for scope changes or claims. Furthermore, a longer project timeline increases the exposure to fluctuating material prices and evolving technological requirements, which could necessitate contract modifications if not managed proactively. Effective project management, contingency planning, and clear communication channels are crucial to mitigate these risks.

How does the firm-fixed-price contract type impact cost control and risk for this project?

The firm-fixed-price (FFP) contract type is designed to provide the government with cost certainty and shift the majority of the financial risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to manage their expenses efficiently and adhere to the schedule. However, risks remain for the government, primarily related to potential contractor claims for equitable adjustments if unforeseen circumstances arise that are outside the contractor's control or if the government causes delays or changes the scope. Robust contract administration and clear definition of work are essential to minimize these residual risks.

What is the historical spending trend for similar MQ-9 support facilities at Air Force bases?

Historical spending data for MQ-9 support facilities at Air Force bases would likely show a consistent investment trend, reflecting the program's strategic importance and ongoing operational requirements. Spending would fluctuate based on new base constructions, upgrades to existing facilities, and the expansion of MQ-9 operations. Factors such as the specific capabilities required (e.g., command and control, maintenance, training), technological advancements, and base infrastructure needs would influence individual project costs. Analyzing past contracts for similar facilities at bases like Holloman AFB or other Reaper operating locations would provide a clearer picture of the typical investment range and cost drivers over time.

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: W912PL19R0034

Offers Received: 3

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: $53,021,415

Exercised Options: $53,021,415

Current Obligation: $53,021,415

Subaward Activity

Number of Subawards: 169

Total Subaward Amount: $253,935,476

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline