Korte Construction awarded $123M contract for GBSD CMF construction, highlighting significant investment in defense infrastructure

Contract Overview

Contract Amount: $123,271,587 ($123.3M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2023-09-26

End Date: 2026-12-11

Contract Duration: 1,172 days

Daily Burn Rate: $105.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: GBSD CMF

Place of Performance

Location: LOMPOC, SANTA BARBARA County, CALIFORNIA, 93437

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $123.3 million to KORTE CONSTRUCTION COMPANY for work described as: GBSD CMF Key points: 1. The contract value represents a substantial commitment to the Ground Based Strategic Deterrent (GBSD) program. 2. Competition dynamics for this large-scale construction project are crucial for ensuring cost-effectiveness. 3. The firm-fixed-price nature of the award suggests a defined scope and budget, potentially mitigating cost overrun risks. 4. Performance will be assessed against project timelines and quality standards for this critical defense facility. 5. This contract positions Korte Construction as a key player in major defense infrastructure development.

Value Assessment

Rating: good

The $123.3 million award for the GBSD CMF appears to be a significant investment, typical for large-scale defense construction projects. Benchmarking against similar large-scale military construction contracts would provide a clearer picture of value for money. The firm-fixed-price structure suggests that the contractor bears more risk for cost overruns, which can be a positive indicator if the initial pricing is competitive. Further analysis would involve comparing the per-square-foot cost or cost per unit of capability against similar facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 5 bidders suggests a reasonably competitive environment for this substantial project. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors, which is beneficial for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition for a contract of this magnitude increases the likelihood of achieving a fair market price, thereby maximizing taxpayer value and ensuring that the most capable contractor is selected.

Public Impact

The primary beneficiaries are the Department of Defense and the personnel who will operate and maintain the GBSD CMF. The contract will deliver essential construction services for a critical component of the nation's strategic deterrent. The geographic impact is concentrated in California, where the construction will take place. This project is expected to create numerous jobs in the construction sector, benefiting the local and regional workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in large-scale construction projects.
Ensuring adherence to stringent military construction quality and security standards.
Managing the complexity of coordinating multiple subcontractors and suppliers.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Firm-fixed-price contract type can help control costs.
Korte Construction's experience in large-scale projects is a positive signal.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically supporting major defense infrastructure. The GBSD program represents a significant modernization effort for the U.S. nuclear triad. Spending in this sector is often characterized by large contract values, long project durations, and stringent regulatory and security requirements. Comparable benchmarks would include other large military construction projects or significant infrastructure developments.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the prime contractor, Korte Construction, may engage small businesses as subcontractors. The scale of the project suggests significant subcontracting opportunities. The government's focus on small business participation will be evident in the subcontracting plan requirements, if any, associated with this award.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices. Accountability measures will include adherence to the firm-fixed-price terms, project milestones, and quality control standards. Transparency will be facilitated through contract reporting mechanisms and potentially public affairs releases regarding the GBSD program's progress. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Ground Based Strategic Deterrent (GBSD)
Minuteman III Missile System
ICBM Infrastructure Modernization
Department of Defense Construction Projects
Military Construction Program

Risk Flags

Large contract value increases financial risk exposure.
Construction projects are susceptible to schedule delays.
Complex defense infrastructure requires stringent oversight.
Dependence on specific contractor capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $123.3 million to KORTE CONSTRUCTION COMPANY. GBSD CMF

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 $123.3 million.

What is the period of performance?

Start: 2023-09-26. End: 2026-12-11.

What is Korte Construction Company's track record with large Department of Defense construction contracts?

Korte Construction Company has a notable history of working with the Department of Defense on various construction projects. While specific details on all past DoD contracts are not provided here, their involvement in projects like the GBSD CMF suggests they possess the necessary experience, bonding capacity, and security clearances required for such significant undertakings. Companies undertaking projects of this scale typically have a portfolio that includes military bases, training facilities, and other critical infrastructure. Reviewing their past performance on similar firm-fixed-price contracts, project completion times, and any reported issues or commendations would provide a more comprehensive understanding of their capabilities and reliability in the defense sector.

How does the $123.3 million contract value compare to similar GBSD program construction phases or other major defense infrastructure projects?

The $123.3 million award for the GBSD CMF (Command, Control, Communications, and Intelligence Facility) represents a substantial but potentially standard investment for a critical component of a program as large as the GBSD. The GBSD program itself is estimated to cost tens of billions of dollars over its lifecycle. Construction costs for specialized facilities like CMFs can vary significantly based on size, complexity, technological integration, and location. To benchmark this specific award, one would compare its cost per square foot, or cost relative to the specific capabilities it enables, against other recently awarded contracts for similar defense facilities or other major components of the GBSD program. Without more granular data on the scope of work and facility size, a precise comparison is difficult, but the value aligns with the scale of major defense infrastructure initiatives.

What are the primary risks associated with the construction of the GBSD CMF, and how are they being mitigated?

Key risks in constructing the GBSD CMF include potential cost overruns due to unforeseen site conditions or material price fluctuations, schedule delays caused by supply chain issues or labor shortages, and ensuring compliance with stringent security and technical specifications inherent to nuclear command and control systems. The firm-fixed-price contract structure mitigates cost overrun risk for the government by placing that burden on the contractor, Korte Construction. Mitigation for schedule delays and quality compliance relies heavily on robust project management, detailed scheduling, proactive risk identification by both the contractor and the government's oversight team, and potentially performance bonds. The selection process under full and open competition also aims to identify a contractor with a proven ability to manage these risks effectively.

What is the expected impact of this contract on the timeline and successful deployment of the overall GBSD program?

The successful and timely completion of the GBSD CMF construction is critical for the overall GBSD program's deployment timeline. This facility is essential for housing the command, control, communications, and intelligence systems that will manage the new intercontinental ballistic missiles. Delays in its construction could cascade and impact subsequent phases, such as system integration and testing. Conversely, efficient execution of this contract by Korte Construction will keep the GBSD program on track towards its modernization goals. The contract's duration, ending in late 2026, suggests it is a significant undertaking that must be completed before major system integration can occur, underscoring its pivotal role in the program's schedule.

How does the $123.3 million spending on this single contract fit into the broader historical spending patterns for missile defense and strategic infrastructure modernization?

This $123.3 million contract represents a component of the larger, multi-decade investment in modernizing the nation's strategic deterrent, including the GBSD program. Historical spending on strategic infrastructure modernization has fluctuated based on geopolitical conditions and technological advancements, often involving multi-billion dollar programs over many years. Contracts of this magnitude are typical for the construction of specialized, high-security facilities required for such systems. When viewed in the context of the total GBSD program cost, estimated in the tens of billions, this award is a significant but necessary expenditure for a foundational element. It aligns with historical patterns of substantial government investment in maintaining and upgrading strategic defense capabilities, often involving large, complex construction contracts.

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: W912PL22R0043

Offers Received: 5

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: $123,271,587

Exercised Options: $123,271,587

Current Obligation: $123,271,587

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $67,280,546

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline