DoD awards $144M for Disaster Resiliency Program Phase 1 to Korte Construction Company

Contract Overview

Contract Amount: $144,018,423 ($144.0M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2024-10-10

End Date: 2027-04-30

Contract Duration: 932 days

Daily Burn Rate: $154.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DISASTER RESILIENCY PROGRAM (DRP) PHASE 1

Place of Performance

Location: INDIAN SPRINGS, CLARK County, NEVADA, 89018

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $144.0 million to KORTE CONSTRUCTION COMPANY for work described as: DISASTER RESILIENCY PROGRAM (DRP) PHASE 1 Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a definitive contract with a firm fixed price, indicating defined scope and cost. 3. Project duration is 932 days, spanning over two and a half years. 4. The contract is for Commercial and Institutional Building Construction. 5. The award amount is substantial, reflecting a significant investment in disaster resiliency. 6. The contract is not set aside for small businesses, nor does it appear to have specific subcontracting goals mentioned.

Value Assessment

Rating: good

The contract value of $144M for a multi-year construction project appears within a reasonable range for large-scale federal building initiatives. Benchmarking against similar large construction contracts awarded by the Department of the Army for facility upgrades or new construction would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs, but the overall value is contingent on the successful execution and scope adherence over the project's duration.

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 two bidders suggests a moderate level of competition for this significant project. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions, but two bidders can still result in a fair market price if the bidding environment is robust.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the best value for the government by encouraging multiple firms to offer their most competitive pricing and capabilities.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who will gain enhanced disaster resilience at their facilities. The services delivered include construction and potentially related engineering and design services for disaster resiliency. The geographic impact is focused on facilities managed by the Department of the Army, likely within Nevada given the 'SN' code. Workforce implications may include job creation for construction workers, engineers, and project managers employed by Korte Construction Company and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the fixed-price nature.
Dependence on Korte Construction Company's past performance and capacity to manage a project of this scale.
Risk of schedule delays due to weather, supply chain issues, or site-specific complexities.
Ensuring compliance with all environmental and safety regulations throughout the construction process.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding environment.
Firm fixed-price contract type helps to lock in costs and manage budget predictability.
The project addresses critical disaster resiliency needs, enhancing the security and operational continuity of DoD facilities.
Korte Construction Company has a history of performing federal construction contracts, suggesting relevant experience.

Sector Analysis

The Commercial and Institutional Building Construction sector is a significant part of the broader construction industry, encompassing a wide range of projects from office buildings to specialized government facilities. Federal spending in this sector is often driven by infrastructure upgrades, modernization efforts, and the need for secure, resilient facilities. This contract fits within the government's ongoing investment in maintaining and improving its physical assets, with a specific focus on enhancing their ability to withstand and recover from disasters.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting goals in the provided data. This means that the prime contractor, Korte Construction Company, has the discretion to subcontract portions of the work. While this offers flexibility, it also means that opportunities for small businesses to participate in this specific contract may be limited unless proactively pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and relevant project managers within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract structure, which penalizes deviations from agreed-upon costs. Transparency is typically maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction
Facility Sustainment, Restoration, and Modernization
Disaster Preparedness and Response Programs
Department of Defense Infrastructure Projects

Risk Flags

Potential for schedule delays
Risk of cost overruns (contractor risk)
Contractor performance risk
Scope creep management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $144.0 million to KORTE CONSTRUCTION COMPANY. DISASTER RESILIENCY PROGRAM (DRP) PHASE 1

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 $144.0 million.

What is the period of performance?

Start: 2024-10-10. End: 2027-04-30.

What is Korte Construction Company's track record with similar-sized federal construction contracts, particularly those focused on resilience or disaster mitigation?

Korte Construction Company has a history of performing federal construction contracts, including projects for various branches of the military and other government agencies. While specific details on past disaster mitigation projects of this exact scale are not provided in the summary data, their experience with large-scale construction suggests a capacity to handle complex requirements. A deeper dive into their contract history, including performance evaluations and any past issues on similar projects, would be necessary for a comprehensive assessment of their suitability and risk profile for the Disaster Resiliency Program Phase 1.

How does the $144M award compare to the average cost of similar disaster resiliency construction projects for the Department of Defense?

Benchmarking the $144M award requires comparing it to similar-sized projects within the Department of Defense or other federal agencies that focus on disaster resiliency or large-scale facility construction. Without specific data on comparable projects (e.g., square footage, scope of resilience measures, specific facility types), it's challenging to definitively state if this award represents a superior or inferior value. However, for a multi-year, large-scale construction initiative aimed at enhancing resilience, the figure appears substantial and aligns with the significant investment typically required for such critical infrastructure improvements.

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

The primary risks associated with a firm fixed-price contract of this magnitude ($144M) and duration (932 days) include potential cost overruns for the contractor if unforeseen issues arise (e.g., material price escalations beyond projections, unexpected site conditions, scope creep not managed through formal change orders). For the government, the risk lies in potentially paying a premium if the initial price was set too high due to limited competition or if the contractor is unable to deliver the full scope as intended within the fixed price. Contractor performance risk is also significant; if Korte Construction Company underperforms, the project's resilience goals may not be fully met, even within the fixed budget.

What specific disaster resiliency measures are included in Phase 1 of this program, and how will their effectiveness be measured?

The provided data summary does not specify the exact disaster resiliency measures included in Phase 1 of the program. These could range from structural hardening against extreme weather events (hurricanes, earthquakes, floods) to upgrades in power, communication, and IT infrastructure to ensure continuity of operations. The effectiveness measurement would typically be defined in the contract's performance work statement (PWS) and could involve post-construction testing, certifications, and ongoing monitoring protocols. The success of the program will ultimately be judged by the enhanced ability of the facilities to withstand and recover from disruptive events.

What has been the historical spending trend for the Disaster Resiliency Program (DRP) or similar initiatives within the Department of the Army?

The provided data pertains to a specific contract award for 'DISASTER RESILIENCY PROGRAM (DRP) PHASE 1' and does not offer historical spending trends for the DRP or similar initiatives within the Department of the Army. To assess historical spending, one would need to analyze budget allocations and contract awards over multiple fiscal years related to disaster preparedness, facility hardening, and resilience efforts. Understanding these trends would provide context on the program's growth, funding stability, and the government's long-term commitment to disaster resiliency.

How many bids were received, and what does the number of bidders suggest about the market for this type of construction service?

The data indicates that two bids were received for this contract. A competition with two bidders suggests a moderately competitive market for this specific type of large-scale disaster resiliency construction service. While more bidders generally lead to greater price discovery and potentially lower costs for the government, two bidders can still result in a competitive outcome if both are capable and motivated. The level of competition might indicate a specialized market or high barriers to entry for firms not already established in federal contracting or large-scale construction.

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: W912PL24R0002

Offers Received: 2

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: $144,018,423

Exercised Options: $144,018,423

Current Obligation: $144,018,423

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $2,538,468

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline