DoD's $1.66B New Housing Contract Awarded to Sundt Construction for Arizona Project
Contract Overview
Contract Amount: $16,631,621 ($16.6M)
Contractor: Sundt Construction, Inc.
Awarding Agency: Department of Defense
Start Date: 2004-09-24
End Date: 2008-08-29
Contract Duration: 1,435 days
Daily Burn Rate: $11.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 9
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Place of Performance
Location: TEMPE, MARICOPA County, ARIZONA, 85282
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $16.6 million to SUNDT CONSTRUCTION, INC. for work described as: Key points: 1. Significant investment in military family housing infrastructure. 2. Large contract value suggests a substantial project scope. 3. Full and open competition indicates a potentially competitive bidding process. 4. Fixed-price contract type aims to control costs for the government.
Value Assessment
Rating: fair
The contract value of $1.66 billion is substantial for new single-family housing construction. Benchmarking this against similar large-scale military housing projects would be necessary to assess its value comprehensively.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting multiple bidders participated. This method generally promotes price discovery and can lead to more competitive pricing for the government.
Taxpayer Impact: The substantial investment in housing aims to improve quality of life for service members and their families, potentially boosting morale and retention, which has indirect taxpayer benefits.
Public Impact
Enhances quality of life for military families stationed in Arizona. Addresses potential housing shortages and improves living conditions. Supports local economy through construction jobs and related services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 4 years) could lead to cost overruns if not managed effectively.
- Fixed-price contracts can shift risk to the contractor, potentially impacting quality if margins are too tight.
- Geographic concentration in Arizona may not address housing needs in other regions.
Positive Signals
- Full and open competition suggests potential for good pricing.
- Investment in essential infrastructure like housing is a positive signal for service members.
- Firm fixed price contract provides cost certainty for the government.
Sector Analysis
This contract falls within the construction sector, specifically new single-family housing. Large government construction projects often involve significant capital and long timelines, requiring robust project management.
Small Business Impact
While the primary awardee is Sundt Construction, Inc., the contract's scale may offer subcontracting opportunities for small businesses in various trades and material supply within the construction process.
Oversight & Accountability
The Department of the Air Force is responsible for oversight. Given the contract's value and duration, regular progress reviews, quality inspections, and financial audits are crucial for accountability.
Related Government Programs
- New Single-Family Housing Construction (except For-Sale Builders)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High cost per unit.
- Long contract duration.
- Potential for cost escalation under fixed price.
- Limited number of units awarded.
- Geographic concentration.
Tags
new-single-family-housing-construction-e, department-of-defense, az, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.6 million to SUNDT CONSTRUCTION, INC.. See the official description on USAspending.
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 Air Force).
What is the total obligated amount?
The obligated amount is $16.6 million.
What is the period of performance?
Start: 2004-09-24. End: 2008-08-29.
What is the average cost per housing unit compared to market rates or similar government projects?
Without specific unit counts or detailed cost breakdowns, a precise per-unit cost comparison is difficult. However, the total award of $1.66 billion for 9 units suggests an exceptionally high cost per unit, potentially indicating complex project requirements, extensive amenities, or significant infrastructure development beyond basic housing construction.
What are the specific risks associated with a fixed-price contract for such a long-duration project?
A firm fixed-price contract over a 4-year period carries risks of material cost escalation, labor shortages, and unforeseen site conditions. If the contractor underestimated these factors, they might face reduced profit margins, potentially impacting quality or leading to change order requests. Conversely, the government benefits from cost certainty.
How effectively does this project address the broader military housing needs across different installations?
This single contract focuses on a specific location in Arizona and appears to involve a very small number of units (9). While it addresses a localized need, its impact on the overall military housing shortage across numerous installations nationwide is likely minimal. A broader strategy involving multiple projects in various locations would be needed for widespread impact.
Industry Classification
NAICS: Construction › Residential Building Construction › New Single-Family Housing Construction (except For-Sale Builders)
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: 9
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Sundt Companies Inc (UEI: 073354982)
Address: 4101 E IRVINGTON RD, TUCSON, AZ, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $16,631,621
Exercised Options: $16,631,621
Current Obligation: $16,631,621
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F4162202D0001
IDV Type: IDC
Timeline
Start Date: 2004-09-24
Current End Date: 2008-08-29
Potential End Date: 2008-08-29 00:00:00
Last Modified: 2011-11-07
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