SUNDT’S FIRST WORK OUTSIDE THE UNITED STATES occurred in 1962. The company, in joint venture with the Infilco Company, built wastewater treatment and pumping plants in the Caribbean islands of Trinidad and Tobago. Infilco manufactured wastewater treatment equipment and at the time was headquartered in Tucson.
Sundt stayed close to home for the following decade, but declining work opportunities in the U.S. soon had officials looking overseas again. In January 1975 Sundt learned of a relocatable school project in Saudi Arabia. After studying the plans, Sundt realized that what the Saudis were looking for was very similar to some re-locatable buildings the company had built a few years earlier for the Flowing Wells School District. The building system they used was called Dyna-Strux.
Dyna-Strux Subsidiary Builds Prefab Panels
It was Bob Sundt’s idea in the late 1960s to create a subsidiary called Dyna-Strux to build prefabricated housing, using a polyurethane insulated sandwich panel structurally designed to be used as a wall panel or a roof panel. For exterior applications it was coated on one side with fiberglass. The product proved to be too expensive (and perhaps too innovative) for its time, and the company was eventually sold. But, before that happened, Dyna-Strux was used very successfully on the Flowing Wells School project.
Sundt Pursues Work in Saudi Arabia
Sundt was confident that it had an innovative solution for the Saudi school project, so it submitted a bid, but the contract went to a competitor. However this experience whetted Sundt’s appetite, and the company got very serious about pursuing work in Saudi Arabia. Thus began one of Sundt’s largest and most interesting projects. And it all started because of a product Sundt could hardly sell in the U.S.
The next opportunity Sundt learned about was a large project for the Royal Saudi Navy. It submitted a bid, but lost again. Bob Sundt was determined not to let that happen a third time, so he committed several employees and a considerable amount of money to pursue work in the Kingdom.
During this time Sundt sent two executives to Saudi Arabia to see what kind of work was available there and if they thought Sundt would be able to do it. The men were accompanied by representatives of the University Mechanical Company and Foley Electric. In that period, visitors to Saudi Arabia had to first go to Beirut to get a visa to enter Saudi Arabia.
There the four were met by a Saudi attorney named Saud Shawwaf. “I also met Saud on my first trip to the Kingdom when I stopped in Beirut to get my visa,” Bob Sundt recalled. “He told me to be sure to meet his brother, Tarek, which helped set the table for our later success.” Bob and Tarek became friends instantly and their friendship endured for many years.
Housing Project Was Sundt’s First Saudi Job
Sundt was successful in obtaining the next job, which was a housing project for the Arabian American Oil Company (Aramco) to build Western-style housing designed to U.S. standards. The houses were to be built in the Eastern Province in the towns of Abquaiq, Dhahran and Ras Tanura.
Sundt learned later that their winning bid had not been the low bid after all. But it was the most complete and was the best approach to the work. To those who knew the Sundt way of doing things, their bid was characteristic.
Sundt gave the Saudi’s a quote of $35,447,000 for the Aramco housing project. One of the changes they had to make on the bid was an increase in delivery costs, because in order to complete it on the shortened timeline the Saudi’s called for, they knew they couldn’t rely on delivery by ship. That’s because the port facilities were limited, and ships were always stacked up in the harbor, waiting their turn. So the new bid called for at least 35 trips by Boeing 747s.
Bob Sundt determined that the best way to do business in Saudi Arabia was to have Arabian partners. Sundt’s good friend, Tarek Shawwaf felt the same way, but he could not become Sundt’s partner due to conflict of interest issues. But his brother, Khalid, was free to form a partnership. Also, the brothers Shawwaf felt they should have a third partner, a member of the royal family.
Sundt and Tarek were taken to the home of Prince Khalid bin Saud bin Mohammed, who did not speak English. They met in an anti-chamber separate from the main house, where the women and children would be. It was a good meeting and the prince became the third partner.
Sundt said he assumed that Aramco would make an award almost instantly, but that was not the case. The project manager, an American named Ed Bullard, called Sundt at his hotel and said he had just as well go home because the award would not be made for some time. Sundt refused. “We came over here to either get the job or not to get it,” Bob Sundt told Bullard. “So we are prepared to stay until that can be worked out.”
This direct approach worked. A few minutes later Bullard called back and said that they had a meeting that afternoon in the contracts department of Aramco. In the meeting they were told that nobody was trying to get them to lower their price. More importantly, they were told that Sundt was going to get the contract as soon as they could close things out. Bob Sundt repeated that they would stay until the contracts were signed.
Actually, Sundt had already invested heavily in Saudi Arabia without having a signed contract. They had begun building an office building and had begun pouring concrete while waiting for the contract. It was a gamble, but a good one.
“The key to our successful start in Saudi Arabia was the fact that we had a game plan worked out before we received the award of the contract,” Bob Sundt wrote. “Our mobilization was very quick and very complete. Our Heavy Equipment Shop immediately started purchasing equipment to run the project.”
Of course everything did not always work out as planned. Where you have dozens, then hundreds of workers in a foreign land with a very different culture and in a climate with temperatures even higher than back home in Arizona, problems will almost certainly come up. It didn’t take long for some of the American workers to become unhappy with the living conditions and the strict cultural differences. Some left almost immediately after arrival, and the turnover was so severe that Sundt set up meetings between potential new hires and a psychiatrist, who told them what to expect in Saudi Arabia and how to survive.
Sundt’s presence in Saudi Arabia lasted 11 years and has always been an adventure that made everyone proud. After the contracts ended and the workers went home, the ties Sundt made with the Saudis remained. Not long before the Los Angeles Olympics in 1984, the Saudis came to Sundt again and asked them to build an expensive home for their ambassador on some property they bought in the Los Angeles area.
Sundt Acquires Australian Contractor Thorby Bros.
Saudi Arabia was Sundt’s largest international project, but a few others are worth noting. In 1980, Sundt acquired ownership of Thorby Bros., a small Australian general contractor located in Canberra. Sundt’s relationship with Thorby Bros. began in the late ’60s, when it provided Dyna-Strux panels to them for construction of an observatory in Australia.
When Sundt acquired Thorby Bros. they were finishing train washing facilities for the public transportation system in Sydney and for the Hamersley Mine in Western Australia. Thorby Bros. went on to build schools and perform work for the Royal Australian Navy. The company also pursued mining projects. The work that was done was successful, but the economy went into a down turn. Eventually the operation became so small that it was not practical for Sundt to own, so Sundt sold its interest back to the Thorby family.
Subsidiary Formed in Chile Pursues Mining Work
In 1982, Sundt entered the construction market in Chile through formation of Sundt Chile Ltda. This new subsidiary joined with two established mining and industrial contractors in Chile to form Brotec Delta Sundt Ltda. (BDS). The first project that BDS acquired was at the Chuquicamata open pit mine in northern Chile, the largest open pit copper mine in the world. BDS’s work included installation of a large primary crusher inside the pit and a two-kilometerlong conveyor belt to bring the crushed ore out of the pit for processing. Shortly thereafter, BDS constructed a solvent extraction/electro-winning plant at the El Teniente mine in central Chile, which at the time had the largest underground mining operation in the world. BDS also installed a large primary crusher at the La Disputada mine, located in the Andes Mountains near Santiago. While Sundt was operating in Chile, it also pursued mining work in Columbia and in Peru.
During the early ’80s, Sundt pursued U.S. Military work in Micronesia, which is in the Pacific Ocean west and south of Hawaii. Sundt did a school project for the U.S. Army Corps of Engineers on the Kwajalein Atoll, approximately 2,500 miles west of Hawaii. At the same time the company also obtained work with the U.S. Navy on Moen Island (now known as Weno Island) in the Truk Atoll (now known as the Chuuk Lagoon), about 500 miles southeast of Guam. That project was for the installation of a two-million-gallon water storage tank, water and sewage distribution lines, and pumping stations.
Sundt’s International Division Becomes Special Projects Division
In 1986, Sundt decided to exit the international construction marketplace. There were several reasons for this decision: The opportunity for additional work in Saudi Arabia appeared limited, the international marketplace had become very competitive, and company leaders felt it was best to concentrate their business development efforts on the domestic market, where there were many profitable projects to pursue. Sundt sold its interest in BDS to the other partners and stopped pursuing work in foreign lands. It also changed the name of the International Division to the Special Projects Division. However, the company soon found itself working overseas again—this time for the United States Government.
Sundt Takes on U.S. Navy Contracts in the Philippines
As the Special Projects Division was looking around for projects to pursue, it came upon an opportunity to build military family housing at Clark Air Base in the Philippines. Sundt was awarded several contracts by the Navy. (The Navy is the construction agent in the Pacific for all Department of Defense operations.) The two phases of military family housing at Clark totaled over 1,000 homes, and that was followed by a contract to build a 10,500-foot runway at Clark.
The housing work was unusual in many ways. First, because wood could not be used on the first floor of any structure due to termite problems in the area, the homes were all built with metal framing. Sundt set up a shop in Seattle to prefabricate the wall frame panels and other structural components, shipped them in containers to Clark, and assembled them on site.
Since the cost of labor in the Philippines was dramatically lower than it was in the mainland U.S., Sundt chose to use stucco on the exterior walls and cement plaster on wire lath instead of drywall for all of the interior walls and ceilings. The “lath and plaster” technique is similar to how homes in the U.S. were built up until the 1930s, when drywall became popular. The finished product was attractive, durable, and kept the homes at an even temperature in the hot tropical environment.
Construction of the runway faced many of its own challenges. The first was the unavailability of cement from local suppliers. The project team was able to identify a source in Indonesia, but had many difficulties getting it shipped to Clark Air Base. Also, cement in this part of the world comes only in bags. A warehouse was built to house the 1.2 million bags of cement needed for the runway project, and an around-the-clock operation was set up just to break the bags and transport the cement through an air system to six storage silos.
Another major obstacle was the rain, which began in May and continued almost uninterrupted for the next six months. There was also a 7.7 magnitude earthquake, which fortunately didn’t cause any damage except for some minor cracking in the concrete that had just been placed.
Volcanic Eruption Destroys Just-Completed Construction
However, shortly after Sundt completed the runway and last few homes at Clark and turned them over to the military, a natural disaster of unprecedented proportions occurred. On June 15th, 1991, Mount Pinatubo erupted. This was the second-largest volcanic eruption of the 20th century and by far the largest eruption to affect a densely populated area. The eruption caused high-speed avalanches of hot ash and gas, giant mudflows, and a cloud of volcanic ash hundreds of miles across. The impact to Sundt’s just-completed construction work was devastating and required extensive repairs.
This coincided with the negotiations between the Philippine and U.S. governments regarding continuing use of Clark Air Base. The deciding factor was the devastation caused by the volcano’s eruption. The U.S. backed away and prepared to move the military out of the country entirely. Sundt was the last U.S contractor working at Clark when the American flag was brought down for the last time.
But that wasn’t the end for Sundt, because a Philippine developer named Mondragon asked the company to stay at Clark and create a resort called Mimosa Resort from the abandoned air base facilities. Sundt remodeled the four-story Bachelor Officers Quarters into an upscale Holiday Inn, and the Officer’s Club became a casino. Sundt remained in the Philippines on assorted projects until 2001.
U.S. Government Work on Remote Diego Garcia Military Base
Other foreign work for the U.S. government was performed on Diego Garcia, an atoll in the Indian Ocean about 1,200 miles south of India that is part of the British Indian Ocean Territory (BIOT) and one of the most remote places on earth. Diego Garcia and its territorial waters are restricted from public access without permission and are exclusively used as a military base. The U.S. operates a large naval ship and submarine support base, military air base, communications and space tracking facilities, and an anchorage for pre-positioned military supplies for regional operations aboard Military Sealift Command ships in the lagoon. Sundt and a joint venture partner were tasked with building and renovating various facilities on the island, including erection of a 150,000-barrel fuel storage tank. The total value of the work was $13 million.
Projects in Mexico
The company pursued work in Mexico during the 1990s, but completed only a handful of projects. Part of the reason was a devaluation of the peso, which brought a halt to a partially completed Wal-Mart Super Center in Morelia, Michoacán. Another project that ran into financing problems and was never completed was a dairy pasteurization and processing plant in the town of Tepic, Nayarit. One building project that did end successfully was the renovation of a 160,000-square-foot factory in Agua Prieta, Sonora, so it could be used for assembling electronic connectors.
The largest completed contract in Mexico was Camino Mina Pilares, a $9 million, 37.5-mile-long access road to a wollastonite mine near Hermosillo. It was performed in joint venture with two Mexican construction firms.
Perhaps the most interesting undertaking was an attempt to introduce metal frame construction to Mexico’s housing industry. Sundt and a joint venture partner built three model homes in Ciudad Obregón, Sonora, using this technique, which is commonly found on commercial projects in the United States. The interior and exterior walls of homes in Mexico are generally constructed of earthen brick covered with plaster, because wood is very expensive and most areas have severe termite problems. From Sundt’s view, building homes in Mexico with metal studs would be quicker, less expensive, and would give the homes better insulation. Unfortunately the idea didn’t catch on, because Mexican homeowners, as it turned out, still preferred the solid feel of brick walls, and Sundt’s foray into the Mexico housing market was confined to just those three model homes.
Rebuilding the U.S. Embassy in Moscow
One of the more intriguing projects Sundt ever undertook overseas was its last in the 20th century—rebuilding the U.S. Embassy in Moscow.
In the 1980s the U.S. government hired a Russian contractor to build an eight-story office building in the embassy compound. But as it was nearing completion, American embassy workers found that the material they had been using was riddled with listening devices.
The embassy staff never occupied the building, and it sat for several years unfinished while the U.S. debated what to do with it. Eventually the embassy staff went in and began stripping the building from the inside. They took out partitions, flooring, ceilings, piping — nearly everything, in fact. Once it was stripped down to the skeleton of basic structure with exterior walls, they found that antennas for some of the listening devices ran up through the columns and shear walls. They even sliced across some of the shear walls and found listening devices—bugs—there as well. It was a mess.
Eventually the U.S. government selected HOK Architects to design major modifications to the building and put the plan out for competitive bids to a group of U.S. contractors. Part of the criteria was that the bidders must be U.S. firms and it was also stipulated that everyone involved in any way had to have a top secret security clearance.
Sundt pursued the work in joint venture with two other firms, H.B. Zachary Construction of San Antonio, and Ralph M. Parsons Engineering of Pasadena, Calif. The joint venture was called ZPS, and Zachary was the sponsoring partner.
ZPS had to set up a secured facility on Zachary’s property. It was fenced, had coded locks, and was secured so that only authorized personnel could get inside.
The joint venture also had a secured warehouse at the Port of Houston, where equipment and materials that had been purchased for the embassy project “in the blind” (no project identified) could be stored. All of this was done in the U.S. because the contract stipulated that nothing could be purchased overseas. All materials delivered to the warehouse at the Port of Houston—including minor items such as nails, cement, doors, windows and carpet—were inspected and placed in shipping containers.
The containers were shipped to Helsinki, Finland, and placed in another warehouse that was secured and managed by ZPS. The containers were frequently checked for any signs that they had been tampered with or breeched. If there was a breech, the containers were sent back. If they were not breeched, they were stored in the warehouse.
Then the supplies were trucked across Russia to another secured warehouse in Moscow. When the shipments arrived at the Moscow warehouse, they were again checked for tampering, and if there was none, they were taken into the warehouse, opened, inventoried and stored.
The Russians were in the building right next door, filming everything that was going on at the job site. And they were pretty open about it.
At the job site, Sundt removed some existing structures and built a camp to house 300 people. The workers were restricted for the distance they could go from the job site without getting a special visa. The camp was like a dormitory and there were private rooms for each individual. On the top floor there were about a dozen residences for people with families. They had an infirmary, an exercise facility, a shop almost like a convenience store, where you could buy deodorant and toothpaste, bread and potato chips, Coke and beer. There was a little bar and a TV area, and a library.
The crews began work on the building by first removing the penthouse and top two floors, then the exterior walls all the way to the ground. Next, scaffolding was installed around the building and wrapped with tarps. This was done to stymie the Russians, who were busy filming and eavesdropping on the construction activities.
The building itself wasn’t that difficult to build, but the need for top secret clearances, the challenging logistics and very tight security conditions were all huge challenges.