Army awards $72.7M construction contract for AIT Barracks, with Sundt Construction Inc. as prime

Contract Overview

Contract Amount: $72,681,718 ($72.7M)

Contractor: Sundt Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-09-25

End Date: 2013-09-28

Contract Duration: 1,829 days

Daily Burn Rate: $39.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION-AIT BARRACKS SWR

Place of Performance

Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $72.7 million to SUNDT CONSTRUCTION, INC. for work described as: CONSTRUCTION-AIT BARRACKS SWR Key points: 1. Contract value represents a significant investment in military infrastructure. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type aims to control costs for the government. 4. Project duration of nearly five years indicates a large-scale undertaking. 5. Geographic focus on Arizona may leverage regional construction expertise.

Value Assessment

Rating: fair

The contract value of $72.7 million for the AIT Barracks construction is substantial. Without specific benchmarks for similar barracks construction projects in Arizona or comparable military installations, a precise value-for-money assessment is challenging. However, the firm fixed-price nature of the contract suggests an effort to lock in costs. The number of bids received (3) is on the lower side for a full and open competition, which could imply less competitive pricing than ideal.

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. However, only three bids were received. While this is a competitive process, a lower number of bidders can sometimes lead to less aggressive pricing compared to scenarios with a higher number of competing firms.

Taxpayer Impact: A competitive process is generally beneficial for taxpayers by encouraging lower bids. However, with only three bidders, the potential for cost savings may be less than if more companies had participated.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize the new barracks. The project delivers essential infrastructure for military training and housing. The geographic impact is concentrated in Arizona, supporting local economic activity. The construction project likely created numerous jobs for skilled trades and laborers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (3) in a full and open competition could indicate potential issues with market reach or contractor availability for this specific type of project.
Long project duration (1829 days) increases the risk of cost overruns due to inflation or unforeseen construction challenges.

Positive Signals

Firm Fixed Price contract type helps mitigate cost escalation risks for the government.
Awarded by the Department of the Army, suggesting alignment with critical defense infrastructure needs.
Construction located in Arizona, potentially utilizing established regional expertise and supply chains.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. The market for large-scale military construction is significant, driven by government needs for training facilities, housing, and operational infrastructure. Comparable spending benchmarks would typically involve other large barracks, training centers, or administrative buildings awarded by federal agencies, particularly the Department of Defense.

Small Business Impact

The contract was not set aside for small businesses, and the prime contractor, Sundt Construction, Inc., is a large entity. There is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether Sundt actively seeks small business subcontractors for specialized work or materials.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Army Corps of Engineers district responsible for construction projects. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to complete the work to specifications within the agreed price. Transparency is generally maintained through contract award databases, though specific project oversight details are often internal.

Related Government Programs

Military Barracks Construction
Department of Defense Facilities
Army Training Infrastructure
Large-Scale Construction Projects

Risk Flags

Limited competition (3 bidders)
Long project duration (nearly 5 years)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $72.7 million to SUNDT CONSTRUCTION, INC.. CONSTRUCTION-AIT BARRACKS SWR

Who is the contractor on this award?

The obligated recipient is SUNDT CONSTRUCTION, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $72.7 million.

What is the period of performance?

Start: 2008-09-25. End: 2013-09-28.

What is Sundt Construction, Inc.'s track record with large federal construction contracts, particularly for the Department of Defense?

Sundt Construction, Inc. has a significant history of working with the federal government, including numerous contracts with the Department of Defense and other agencies. Their portfolio includes a variety of construction projects, such as barracks, training facilities, and infrastructure upgrades. Analyzing their past performance on similar-sized projects, adherence to schedules, and budget management on previous federal contracts would provide insight into their capability to execute this AIT Barracks project successfully. A review of their contract history might reveal any patterns of cost overruns, delays, or disputes on comparable projects, which could serve as indicators of potential risks for this current contract.

How does the awarded price of $72.7 million compare to similar AIT barracks construction projects or large institutional buildings in Arizona?

Benchmarking the $72.7 million award requires comparing it against similar projects in terms of size, scope, and location. Specifically, looking at the cost per square foot or cost per bed for other barracks or large institutional buildings constructed in Arizona around the 2008-2013 timeframe (contract award and duration) would be informative. Factors such as prevailing wage rates, material costs, and specific site conditions in Arizona would need to be considered. Without access to detailed cost data for comparable projects, it's difficult to definitively state if this award represents excellent, fair, or questionable value. However, the firm fixed-price nature suggests an attempt to control costs.

What are the primary risk indicators associated with a nearly five-year construction project of this magnitude?

The primary risk indicators for a 1829-day (nearly five-year) construction project of this magnitude include potential for significant cost escalation due to inflation in labor and materials over the extended period, unforeseen site conditions that could lead to delays and change orders, and the contractor's ability to maintain consistent workforce and management focus over such a long duration. Additionally, changes in military requirements or funding priorities could impact the project. The firm fixed-price nature mitigates some cost risks for the government, but scope creep or extensive delays could still lead to contract modifications and increased overall expenditure.

How effective are firm fixed-price contracts in managing costs for long-duration military construction projects like this one?

Firm Fixed Price (FFP) contracts are generally considered effective tools for managing costs in construction projects, especially when the scope of work is well-defined. For long-duration projects like the AIT Barracks, an FFP contract locks in the price, transferring most of the cost risk to the contractor. This incentivizes the contractor to control costs and manage resources efficiently to maximize profit. However, the effectiveness can be diminished if the initial cost estimate was inaccurate, or if unforeseen circumstances necessitate significant contract modifications, which can add costs and complexity. Careful initial scope definition and robust change order management are crucial for FFP success on long projects.

What does the limited number of bidders (3) in a full and open competition suggest about the market for this type of specialized construction?

A limited number of bidders (three) in a full and open competition for a large federal construction project can suggest several possibilities. It might indicate that the project requires highly specialized skills, significant bonding capacity, or extensive experience with military construction standards, thereby narrowing the pool of qualified contractors. Alternatively, it could reflect challenging market conditions, such as a high demand for construction services leading contractors to prioritize other projects, or perhaps specific requirements in the solicitation that deterred broader participation. This limited competition could potentially lead to less competitive pricing than if more bidders had vied for the contract.

What are the historical spending patterns for similar military construction projects awarded by the Department of the Army?

Historical spending patterns for similar military construction projects awarded by the Department of the Army reveal a consistent and substantial investment in infrastructure. These projects often involve large dollar values, ranging from tens to hundreds of millions of dollars, depending on the scope and scale. Spending is typically driven by modernization efforts, troop housing needs, training facility upgrades, and operational readiness requirements. Analyzing past awards can show trends in contract types (e.g., FFP vs. Cost-Plus), average project durations, and the prevalence of full and open competition versus set-asides. This specific $72.7 million contract aligns with the typical scale of significant barracks or training facility 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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9126G07R0124

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Sundt Companies Inc (UEI: 073354982)

Address: 2620 S 55TH ST, TEMPE, AZ, 04

Business Categories: Category Business, Not Designated a Small Business, Subchapter S Corporation

Financial Breakdown

Contract Ceiling: $72,681,718

Exercised Options: $72,681,718

Current Obligation: $72,681,718

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G08D0066

IDV Type: IDC

Timeline