Sundt Construction awarded $72.3M contract for building construction, with a 5-year duration

Contract Overview

Contract Amount: $72,277,022 ($72.3M)

Contractor: Sundt Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-09-28

End Date: 2013-09-28

Contract Duration: 1,826 days

Daily Burn Rate: $39.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE YEAR (25 SEP 08 - 24 SEP -09) (MATOC)

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90017

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $72.3 million to SUNDT CONSTRUCTION, INC. for work described as: BASE YEAR (25 SEP 08 - 24 SEP -09) (MATOC) Key points: 1. The contract was awarded under full and open competition, suggesting a competitive bidding process. 2. The base year value of $72.3 million for building construction indicates a significant project scope. 3. The contract spans five years, allowing for phased execution and potential for follow-on work. 4. The firm-fixed-price contract type shifts risk to the contractor, potentially stabilizing costs. 5. The project is located in California, a region with substantial construction activity and demand. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The base year award of $72.3 million for commercial and institutional building construction appears to be within a reasonable range for large-scale projects of this nature. Without specific details on the scope of work, it's difficult to provide a precise benchmark. However, the firm-fixed-price nature of the contract suggests that the initial pricing was deemed acceptable by the government, with the contractor assuming cost overruns. Further analysis would require comparing the unit costs for specific construction elements against market rates or similar government projects.

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 multiple bidders, though not explicitly stated in the provided data, is generally expected in such scenarios. This level of competition is favorable for price discovery, as it encourages contractors to offer competitive pricing to secure the award. The government likely received a range of proposals, allowing for selection of the best value.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment where contractors strive to offer the most cost-effective solutions.

Public Impact

The primary beneficiaries are likely the Department of the Army and potentially other entities within the Department of Defense requiring new or renovated facilities. The contract will deliver new commercial and institutional buildings, contributing to infrastructure development. The geographic impact is focused on California, where the construction activities will take place. The project will likely create jobs in the construction sector within California, including skilled trades and project management roles. The successful completion of this contract will enhance the operational capabilities of the Army by providing necessary facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the initial requirements are not clearly defined, leading to cost increases.
Risk of contractor performance issues if project management or quality control is inadequate.
Market fluctuations in material costs could impact the contractor's profitability under a fixed-price contract.
Delays in permitting or site access could affect the project timeline.

Positive Signals

Firm-fixed-price contract type mitigates cost uncertainty for the government.
Long-term duration allows for project phasing and potential for contractor learning curve benefits.
Awarded under full and open competition, suggesting a competitive and potentially cost-effective outcome.
Contractor's experience in commercial and institutional building construction is implied by the award.

Sector Analysis

The construction industry, particularly commercial and institutional building, is a significant sector for government spending. This contract falls under the broader category of construction services, which includes the building of new structures and the renovation of existing ones for various public and private entities. The NAICS code 236220 specifically covers general contractors involved in the construction of non-residential buildings. Spending in this sector is often cyclical and influenced by economic conditions, but federal investments in infrastructure and facilities provide a consistent demand.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded under full and open competition, it is unlikely to have specific small business subcontracting goals mandated unless explicitly stated in the solicitation. This means that opportunities for small businesses would primarily arise if the prime contractor, Sundt Construction, Inc., voluntarily includes them in their subcontracting plans. The absence of a set-aside suggests the competition was geared towards larger firms capable of handling the scale of the project.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. The firm-fixed-price nature of the contract places the onus on the contractor to manage costs and performance. Accountability measures would include adherence to contract specifications, delivery schedules, 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 is suspected.

Related Government Programs

Department of Defense Construction Contracts
Army Corps of Engineers Construction Projects
General Building Construction Services
Federal Infrastructure Development

Risk Flags

Potential for cost overruns if market prices for materials fluctuate significantly.
Risk of schedule delays due to California's complex regulatory environment.
Ensuring quality control throughout a multi-year construction project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $72.3 million to SUNDT CONSTRUCTION, INC.. BASE YEAR (25 SEP 08 - 24 SEP -09) (MATOC)

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 $72.3 million.

What is the period of performance?

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

What is the historical spending pattern for Sundt Construction, Inc. with the Department of Defense?

Analyzing Sundt Construction, Inc.'s historical spending with the Department of Defense (DoD) requires accessing federal procurement data. Based on general knowledge of large construction firms, Sundt has likely been awarded numerous contracts over the years, potentially spanning various military branches and construction types. To provide a precise historical spending pattern, one would need to query databases like USAspending.gov or FPDS-NG for all contracts awarded to Sundt by the DoD, filtering by fiscal year and contract value. This would reveal trends in contract volume, average award size, and the types of construction services most frequently procured. Without specific historical data, it's assumed that a company winning a $72.3 million contract has a substantial track record with the government, indicating a capacity to manage large projects and a history of successful performance.

How does the $72.3 million base year award compare to similar building construction contracts awarded by the Department of the Army?

The $72.3 million base year award for commercial and institutional building construction by the Department of the Army is a substantial figure, indicative of a significant project. To benchmark this value, one would compare it against other contracts awarded by the Army for similar types of buildings (e.g., barracks, administrative facilities, training centers) within the same fiscal year or preceding years. Factors such as project complexity, size, location, and specific requirements (e.g., LEED certification, security features) heavily influence contract values. A preliminary assessment suggests this award is within the upper range for individual building construction projects, but not exceptionally high for major military infrastructure development. A detailed comparison would involve analyzing the scope of work and unit pricing of comparable contracts.

What are the primary risks associated with a firm-fixed-price contract for large-scale building construction?

The primary risk associated with a firm-fixed-price (FFP) contract for large-scale building construction lies with the contractor. If the contractor underestimates costs, encounters unforeseen site conditions, or experiences significant material price increases, they bear the financial burden of these overruns. For the government, the main risk is that the contractor might cut corners on quality or scope to maintain profitability, potentially leading to subpar construction. Additionally, if the initial price was set too high due to inadequate competition or flawed cost estimation by the contractor, the government may overpay. Effective oversight and clear contract specifications are crucial to mitigate these risks and ensure the government receives the intended value and quality.

What is the typical duration for similar Department of the Army building construction contracts?

The typical duration for Department of the Army building construction contracts can vary significantly based on the project's size, complexity, and specific requirements. Contracts for smaller structures or renovations might range from a few months to a year. Larger, more complex projects, such as the one awarded to Sundt Construction, Inc. with a 5-year period of performance (including options), are common for major infrastructure development. This duration allows for phased construction, potential integration of multiple building elements, and accommodates potential delays due to weather, site conditions, or logistical challenges inherent in large military installations. The 5-year timeframe suggests a substantial undertaking requiring careful planning and execution over an extended period.

How does the geographic location in California influence the cost and execution of this construction contract?

The geographic location in California significantly influences the cost and execution of this construction contract. California generally has higher labor costs compared to many other states due to a higher cost of living and strong union presence in the construction trades. Material costs can also be higher due to transportation expenses and regional market demand. Furthermore, California has stringent environmental regulations and building codes that may add complexity and cost to the construction process, requiring specialized materials or construction techniques. Permitting processes can also be more involved. However, the state's robust construction market also means a larger pool of experienced subcontractors and suppliers, which can be advantageous if managed effectively.

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

Offers Received: 1

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, 85282

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $72,277,022

Exercised Options: $72,277,022

Current Obligation: $72,277,022

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G08D0066

IDV Type: IDC

Timeline