DOT's $6.8M Honeywell ESPC Energy Project faces long-term financing liability, awarded via full and open competition

Contract Overview

Contract Amount: $6,843,249 ($6.8M)

Contractor: Honeywell International, Inc

Awarding Agency: Department of Transportation

Start Date: 2016-12-21

End Date: 2039-12-31

Contract Duration: 8,410 days

Daily Burn Rate: $814/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF - CSA-ESA ESPC ENERGY PROJECT GROUP 1 ISSUED AS A TASK ORDER OFF OF DOE CONTRACT #DE-AM36-09-GO29035 ADVANCE PAYMENTS WILL BE MADE ON THIS TASK ORDER. NAICS: 541330 SIZE STD: $38.5M ALL VENDORS MUST HAVE AN ACTIVE REGISTRATION IN THE SAM.GOV TO RECEIVE THE AWARD. THE SAM REQUIREMENTS ARE AS FOLLOWS: YOU MUST HAVE A DUNS&BRADSTREET NUMBER. (A NUMBER CAN BE OBTAINED (FREE OF CHARGE) BY CALLING 1-800-333-0505). THEN YOU MUST REGISTER WITH SAM BY APPLYING ONLINE AT WWW.SAM.GOV (THIS MAY TAKE A DAY OR TWO TO SHOW ACTIVE). FOR PURPOSES OF THIS T.O., THE GOVERNMENT SHALL REMAIN LIABLE FOR THE STIPULATED MONTHLY FINANCING TERMINATION LIABILITY BALANCE SET FORTH IN THE MONTHLY FINANCING TERMINATION LIABILITY SCHEDULE BASED ON THE AVAILABILITY OF FUNDS. THESE TERMINATION VALUES, INCLUDING THE 3.0% PREPAYMENT CHARGE, HAVE BEEN NEGOTIATED AND ARE STIPULATED AS ALLOWABLE COSTS IN THIS TASK ORDER.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $6.8 million to HONEYWELL INTERNATIONAL, INC for work described as: IGF::OT::IGF - CSA-ESA ESPC ENERGY PROJECT GROUP 1 ISSUED AS A TASK ORDER OFF OF DOE CONTRACT #DE-AM36-09-GO29035 ADVANCE PAYMENTS WILL BE MADE ON THIS TASK ORDER. NAICS: 541330 SIZE STD: $38.5M ALL VENDORS MUST HAVE AN ACTIVE REGISTRATION IN THE SAM.GOV TO RECEIVE THE AWARD. … Key points: 1. The project, an Energy Savings Performance Contract (ESPC), aims to improve energy efficiency. 2. Awarded to Honeywell International, Inc. under a DOE contract, indicating a large, established vendor. 3. The long duration (2016-2039) and advance payments introduce financial risks and require careful oversight. 4. Engineering Services (NAICS 541330) is a common sector for such large-scale infrastructure projects.

Value Assessment

Rating: questionable

The contract value of $6.8M for an 8410-day duration (approx. 23 years) is substantial. Benchmarking against similar ESPC projects is difficult without more detailed scope information, but the long-term financing liability is a notable factor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the use of a task order off an existing DOE contract might limit the pool of potential bidders compared to a standalone solicitation.

Taxpayer Impact: The long-term nature of the contract and the government's liability for termination suggest potential for significant taxpayer exposure if the project is not executed as planned or if funding is interrupted.

Public Impact

Taxpayers may see long-term benefits from energy cost savings, but also bear the risk of financing and termination liabilities. The project's success hinges on effective energy management and the long-term performance of installed systems. Advance payments require robust financial controls to ensure funds are used appropriately and for the intended purpose.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term government liability for financing termination.
Advance payments increase upfront financial risk.
Extended contract duration (23 years) poses performance and obsolescence risks.
Reliance on a single large vendor for a critical infrastructure project.

Positive Signals

Potential for significant long-term energy cost savings.
Awarded through full and open competition.
Project addresses critical energy efficiency needs.

Sector Analysis

This ESPC falls within the Engineering Services sector, often involving complex infrastructure upgrades and long-term performance guarantees. Spending in this area is driven by federal mandates for energy efficiency and sustainability.

Small Business Impact

The contract was awarded to Honeywell International, Inc., a large corporation, and there is no indication of specific provisions or set-asides for small businesses in the provided data. This suggests limited direct opportunities for small businesses on this specific task order.

Oversight & Accountability

The long-term nature and advance payments necessitate strong oversight from the Federal Aviation Administration to monitor project performance, financial expenditures, and ensure compliance with contract terms. Regular reviews of the termination liability schedule are crucial.

Related Government Programs

Engineering Services
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Long-term financial liability.
Advance payment risk.
Extended performance period.
Potential for technology obsolescence.
Vendor lock-in due to long duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $6.8 million to HONEYWELL INTERNATIONAL, INC. IGF::OT::IGF - CSA-ESA ESPC ENERGY PROJECT GROUP 1 ISSUED AS A TASK ORDER OFF OF DOE CONTRACT #DE-AM36-09-GO29035 ADVANCE PAYMENTS WILL BE MADE ON THIS TASK ORDER. NAICS: 541330 SIZE STD: $38.5M ALL VENDORS MUST HAVE AN ACTIVE REGISTRATION IN THE SAM.GOV TO RECEIVE THE AWARD. THE SAM REQUIREMENTS ARE AS FOLLOWS: YOU MUST HAVE A DUNS&BRADSTREET NUMBER. (A NUMBER CAN BE OBTAINED (FREE OF CHARGE) BY CALLING 1-800-333-0505). THEN YOU MUST REGISTER WITH SAM BY APPLYING ONLINE AT WWW.SAM.GOV (THIS

Who is the contractor on this award?

The obligated recipient is HONEYWELL INTERNATIONAL, INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $6.8 million.

What is the period of performance?

Start: 2016-12-21. End: 2039-12-31.

What is the projected return on investment for this ESPC, considering the total contract value and the expected energy savings over its 23-year lifespan?

Calculating the precise ROI requires detailed energy audit reports, projected utility rates, and the specific scope of energy conservation measures implemented. Without this granular data, it's impossible to quantify the exact ROI. However, ESPCs are designed to be cost-neutral or cost-saving, meaning savings should ideally cover financing and project costs over time.

How will the government manage the financial risk associated with the 'stipulated monthly financing termination liability balance' over the next two decades?

The government manages this risk through careful budgeting and fund allocation, ensuring funds are available as stipulated in the monthly schedule. Continuous monitoring of the project's progress and financial health is essential. Contingency planning for potential early termination scenarios, including understanding the exact liability amounts at different project stages, is also critical.

What mechanisms are in place to ensure the long-term effectiveness and maintenance of the energy conservation measures beyond the initial installation phase?

ESPCs typically include performance guarantees and ongoing measurement and verification (M&V) protocols. Honeywell is likely responsible for ensuring the measures remain effective and may provide maintenance services. The contract should clearly define performance standards, reporting requirements, and remedies for underperformance over the project's duration.

Industry Classification

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

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell Safety Products USA, Inc.

Address: 1985 DOUGLAS DRIVE, GOLDEN VALLEY, MN, 55422

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

Financial Breakdown

Contract Ceiling: $16,623,304

Exercised Options: $6,843,249

Current Obligation: $6,843,249

Actual Outlays: $3,557,051

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29035

IDV Type: IDC

Timeline