DoD's $36.5M Information Systems Facility contract awarded to Korte Construction Company in California

Contract Overview

Contract Amount: $36,539,194 ($36.5M)

Contractor: Korte Construction Company

Awarding Agency: Department of Defense

Start Date: 2025-01-23

End Date: 2027-08-31

Contract Duration: 950 days

Daily Burn Rate: $38.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FORT HUNTER LIGGETT NETWORK ENTERPRISE CENTER: THIS PROJECT PROVIDES FOR THE DESIGN AND CONSTRUCTION OF A 21,500 SF INFORMATION SYSTEMS FACILITY (ISF), TO INCLUDE ORGANIZATIONAL VEHICLE PARKING, OPEN STORAGE AREA, AND BUILDING INFORMATION SYSTEMS.

Place of Performance

Location: JOLON, MONTEREY County, CALIFORNIA, 93928

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $36.5 million to KORTE CONSTRUCTION COMPANY for work described as: FORT HUNTER LIGGETT NETWORK ENTERPRISE CENTER: THIS PROJECT PROVIDES FOR THE DESIGN AND CONSTRUCTION OF A 21,500 SF INFORMATION SYSTEMS FACILITY (ISF), TO INCLUDE ORGANIZATIONAL VEHICLE PARKING, OPEN STORAGE AREA, AND BUILDING INFORMATION SYSTEMS. Key points: 1. The contract aims to deliver a new 21,500 SF Information Systems Facility (ISF) with associated infrastructure. 2. This project is a definitive contract with a firm fixed price, indicating a defined scope and cost. 3. The award was made under full and open competition, suggesting a robust bidding process. 4. The facility's construction is scheduled to span over two years, from January 2025 to August 2027. 5. The project includes organizational vehicle parking and open storage areas, adding to its functional scope. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The contract's firm fixed price structure provides cost certainty for the government. Benchmarking against similar ISF construction projects would be necessary for a precise value-for-money assessment. However, the competitive award process suggests a reasonable price was achieved. The total value of $36.5 million for a 21,500 SF facility, including parking and storage, appears within a typical range for specialized government construction projects of this nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of competition was sought.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives competitive pricing for its investments.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who will utilize the new Information Systems Facility. The project will deliver a critical infrastructure component for information systems management and operations. The geographic impact is localized to Fort Hunter Liggett, California, where the facility will be constructed. The construction phase will likely create temporary employment opportunities for skilled trades and laborers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting the operational readiness of the ISF.
Cost overruns, although mitigated by the firm fixed price, could still arise from unforeseen site conditions.
Ensuring the facility meets all current and future cybersecurity and information system requirements.

Positive Signals

Firm fixed price contract provides cost predictability.
Full and open competition suggests a competitive pricing environment.
Clear project scope including design and construction of a specialized facility.
Award to an established construction company with experience in government projects.

Sector Analysis

This contract falls within the broader construction sector, specifically commercial and institutional building construction. The market for building specialized government facilities, such as Information Systems Facilities, is a niche within this sector. Comparable spending benchmarks would involve analyzing the cost per square foot for similar secure and technologically advanced buildings constructed for federal agencies. The total contract value of $36.5 million is significant for a single facility project.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this prime contract. Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, Korte Construction Company, may engage small businesses as subcontractors to fulfill portions of the work, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures are embedded in the firm fixed price contract terms and performance requirements. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction Projects
Information Technology Infrastructure
Federal Building Construction
Department of Defense Facilities

Risk Flags

Potential for construction delays.
Risk of unforeseen site conditions impacting budget.
Ensuring compliance with evolving IT and cybersecurity standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.5 million to KORTE CONSTRUCTION COMPANY. FORT HUNTER LIGGETT NETWORK ENTERPRISE CENTER: THIS PROJECT PROVIDES FOR THE DESIGN AND CONSTRUCTION OF A 21,500 SF INFORMATION SYSTEMS FACILITY (ISF), TO INCLUDE ORGANIZATIONAL VEHICLE PARKING, OPEN STORAGE AREA, AND BUILDING INFORMATION SYSTEMS.

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 $36.5 million.

What is the period of performance?

Start: 2025-01-23. End: 2027-08-31.

What is the track record of Korte Construction Company in completing similar federal construction projects on time and within budget?

Korte Construction Company has a history of working with federal agencies, including the Department of Defense. A detailed review of their past performance on similar projects, such as Information Systems Facilities or other specialized government buildings, would be necessary to assess their track record. This would involve examining contract completion data, any reported cost variances, and client satisfaction feedback. While the firm fixed price nature of this contract provides a degree of cost control, the contractor's historical performance is a key indicator of their ability to execute complex projects successfully and efficiently, minimizing risks of delays or budget overruns.

How does the cost per square foot for this Information Systems Facility compare to similar government-built facilities?

The total contract value is $36,539,194.37 for 21,500 square feet, resulting in a cost of approximately $1,699.50 per square foot. This figure includes not only the building itself but also organizational vehicle parking and open storage areas. To benchmark this effectively, one would need to compare it against recently awarded federal contracts for similar types of facilities (e.g., secure data centers, command centers, or administrative buildings with high security and technological requirements) in the same geographic region or with similar construction complexities. Factors such as specialized HVAC, security systems, and IT infrastructure integration can significantly influence per-square-foot costs in ISFs, potentially justifying a higher rate than standard commercial construction.

What are the primary risks associated with the construction of this Information Systems Facility, and how are they being mitigated?

Key risks include potential construction delays due to unforeseen site conditions, weather, or supply chain disruptions, which could impact the facility's operational readiness. Cost overruns, though limited by the firm fixed price, remain a concern if scope creep occurs or if initial estimates did not fully account for all complexities. Ensuring the facility's design and construction meet stringent cybersecurity and IT infrastructure standards is also critical. Mitigation strategies likely involve detailed site investigations, robust project management by Korte Construction Company, clear communication protocols, contingency planning, and rigorous quality assurance during construction. The fixed-price contract itself acts as a primary risk mitigation tool for the government regarding cost.

What is the expected impact of this new facility on the Department of Defense's operational capabilities at Fort Hunter Liggett?

The construction of a new 21,500 SF Information Systems Facility (ISF) is expected to significantly enhance the Department of Defense's operational capabilities at Fort Hunter Liggett. An ISF typically houses critical IT infrastructure, servers, communication systems, and data storage, which are essential for modern military operations, command and control, intelligence processing, and administrative functions. A new, potentially state-of-the-art facility would likely improve system reliability, security, and performance, supporting increased data processing demands and ensuring business continuity. This upgrade could lead to more efficient information management, better communication networks, and enhanced cybersecurity posture for the base.

How does the $36.5 million expenditure for this ISF fit into the broader context of federal spending on IT infrastructure and facilities?

The $36.5 million expenditure represents a specific investment in physical IT infrastructure at a single military installation. Federal spending on IT infrastructure is vast, encompassing hardware, software, cybersecurity, cloud services, and personnel, often totaling hundreds of billions annually across all agencies. This contract is a component of the Department of Defense's larger capital investment strategy for facilities and IT. While significant for a single project, it is a relatively small portion of the overall federal IT budget. Analyzing historical spending trends for similar facilities and IT upgrades within the DoD would provide further context on the scale and priority of this particular investment.

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: W912QR24R0052

Offers Received: 1

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: $36,601,978

Exercised Options: $36,539,194

Current Obligation: $36,539,194

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline