Honeywell International Inc. awarded $152.6M for engineering services, with a significant portion funded by a firm-fixed-price contract

Contract Overview

Contract Amount: $13,753,474 ($13.8M)

Contractor: Honeywell International Inc

Awarding Agency: Department of Defense

Start Date: 2003-10-17

End Date: 2009-01-31

Contract Duration: 1,933 days

Daily Burn Rate: $7.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200407!000744!2100!W56HZV!TACOM - WARREN !DAAE0703CN191 !A!N! !N! ! !20031017!20071030!152578043!152578043!139691877!N!HONEYWELL INTERNATIONAL INC !717 NORTH BENDIX DRIVE !SOUTH BEND !IN!46620!71000!141!18!SOUTH BEND !ST. JOSEPH !INDIANA !+000009856883!Y!N!000000000000!1005!GUNS, THROUGH 30 MM !S1 !SERVICES !000 !* !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!Y!J!1!001!N!1A!Z!N!Z! ! !Y!C!N! ! ! !Z!Z!A!A!00 !A!A!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SOUTH BEND, ST. JOSEPH County, INDIANA, 46628

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $13.8 million to HONEYWELL INTERNATIONAL INC for work described as: 200407!000744!2100!W56HZV!TACOM - WARREN !DAAE0703CN191 !A!N! !N! ! !20031017!20071030!152578043!152578043!139691877!N!HONEYWELL INTERNATIONAL INC !717 NORTH BENDIX DRIVE !SOUTH BEND !IN!46620!71000!141!18!SOUTH BEND !ST. … Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. The contract's duration of over 5 years suggests a long-term need for these engineering services. 3. A substantial portion of the contract value was secured through a firm-fixed-price agreement. 4. The services provided fall under engineering, indicating a focus on technical and design support. 5. The contract was not competed, suggesting potential limitations in market exploration. 6. The geographic location of the contractor is in Indiana, potentially impacting local economic contributions.

Value Assessment

Rating: fair

The total award amount of $152.6 million for engineering services is substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess value for money. The firm-fixed-price nature of the contract shifts risk to the contractor, which can be beneficial if managed effectively. However, the lack of competition means there was no direct price comparison to ensure the most economical outcome for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement, or in situations where competition is not feasible or practical. The lack of multiple bidders means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government did not have the opportunity to evaluate multiple proposals and select the best value at the lowest price.

Public Impact

The primary beneficiary is the Department of Defense, which receives critical engineering support. The services delivered are likely related to the design, development, or maintenance of defense systems. The geographic impact is centered around the contractor's location in South Bend, Indiana, and the operational areas of the Department of Defense. Workforce implications include employment opportunities for engineers and technical staff at Honeywell International Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can limit innovation by not exploring alternative solutions from other vendors.
Long contract duration without re-competition could reduce incentives for cost efficiency over time.

Positive Signals

Firm-fixed-price contract structure transfers cost overrun risk to the contractor.
Award to an established contractor like Honeywell suggests a level of trust and proven capability.
The contract supports critical defense engineering needs, ensuring mission readiness.

Sector Analysis

This contract falls within the Engineering Services sector, a broad category encompassing a wide range of technical and design expertise. The market for defense engineering services is significant, with major aerospace and defense contractors playing a key role. Comparable spending benchmarks are difficult to establish without more specific details on the nature of the engineering services provided, but large-scale engineering contracts for defense applications often run into tens or hundreds of millions of dollars.

Small Business Impact

There is no indication that this contract involved a small business set-aside. As a sole-source award to a large corporation, it is unlikely to have direct subcontracting opportunities specifically targeted at small businesses unless initiated by the prime contractor. The absence of a set-aside means that the direct economic benefit to the small business ecosystem from this specific award is likely minimal.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract databases, although detailed cost breakdowns may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Aerospace Engineering Support
Military Systems Development
Research and Development (Defense)

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (inherent in fixed-price if scope changes significantly)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.8 million to HONEYWELL INTERNATIONAL INC. 200407!000744!2100!W56HZV!TACOM - WARREN !DAAE0703CN191 !A!N! !N! ! !20031017!20071030!152578043!152578043!139691877!N!HONEYWELL INTERNATIONAL INC !717 NORTH BENDIX DRIVE !SOUTH BEND !IN!46620!71000!141!18!SOUTH BEND !ST. JOSEPH !INDIANA !+000009856883!Y!N!000000000000!1005!GUNS, THROUGH 30 MM !S1 !SERVICES !000 !* !541330!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is HONEYWELL INTERNATIONAL INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $13.8 million.

What is the period of performance?

Start: 2003-10-17. End: 2009-01-31.

What specific engineering services were provided under this contract, and how do they align with current defense priorities?

The contract data indicates the primary NAICS code is 541330, which corresponds to Engineering Services. While the specific nature of these services is not detailed, they likely encompass areas such as systems engineering, design, analysis, testing, and integration for defense platforms or technologies. Given the award date and the contractor, these services could have been related to aircraft, ground vehicles, or other military equipment. The alignment with current defense priorities would depend on the specific projects undertaken, but generally, engineering services are crucial for maintaining technological superiority, modernizing existing systems, and developing new capabilities to meet evolving threats.

How does the $152.6 million award compare to other engineering services contracts awarded by the Department of Defense during the same period?

Comparing the $152.6 million award to other Department of Defense (DoD) engineering services contracts from the early 2000s requires access to historical contract databases. However, it is a substantial sum, suggesting a significant scope of work or a long-term engagement. The DoD frequently awards large contracts for engineering support, particularly to major defense contractors like Honeywell. Without specific benchmarks for similar sole-source, firm-fixed-price engineering contracts of that era, it's challenging to definitively state if this award was high or low. However, the lack of competition inherently limits the ability to benchmark against potentially lower prices from competing bids.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk of a sole-source award for a contract of this magnitude is the potential for inflated pricing due to the absence of competitive pressure. The government may not achieve the best possible price or value. Another risk is the lack of exposure to innovative solutions or alternative approaches that other qualified contractors might offer. Furthermore, over-reliance on a single contractor can create dependency and potentially reduce leverage in future negotiations. There's also a risk that the contractor may not feel the same urgency to control costs or improve efficiency as they would in a competitive environment.

What was the historical spending pattern for similar engineering services by the awarding agency prior to this contract?

Analyzing historical spending patterns for similar engineering services by the awarding agency (Department of Defense, specifically TACOM) prior to this contract would require extensive data mining. However, it's reasonable to assume that the DoD consistently invests significant resources in engineering services to support its complex weapon systems and technological development. The fact that this contract was awarded to Honeywell, a major defense contractor, suggests a pre-existing relationship or recognized capability. Without specific historical data, we can infer that the agency likely had ongoing needs for such services, and this contract represents a significant, albeit sole-source, fulfillment of those needs.

What is Honeywell International Inc.'s track record with the Department of Defense, particularly concerning large engineering contracts?

Honeywell International Inc. has a long and extensive track record as a major contractor for the Department of Defense, involved in a wide array of products and services, including aerospace, defense electronics, and advanced materials. They have historically secured numerous large contracts for engineering, manufacturing, and support services. Their experience with complex defense systems suggests a strong capability to fulfill demanding engineering requirements. While specific performance metrics for this particular contract are not detailed here, Honeywell's sustained presence as a prime contractor indicates a generally accepted level of performance and reliability with the DoD.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 717 NORTH BENDIX DRIVE, SOUTH BEND, IN, 02

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline