FAA's $17M Honeywell Contract for LAAS Technical Issues Faces Scrutiny Over Competition and Value

Contract Overview

Contract Amount: $17,026,083 ($17.0M)

Contractor: Honeywell Gmbh

Awarding Agency: Department of Transportation

Start Date: 2008-05-13

End Date: 2008-05-13

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: LAAS WORK ACTIVITY INVESTMENT ANALYSIS TO SOLVE THE OUTSTANDING TECHNICAL ISSUES RELATED TO MEETING FAA INTEGRITY AND PERFORMANCE REQUIREMENTS. HONEYWELL INTERNATIONAL INC CONTRACT # DTFAWA-03-D-03009 SPEND PLAN # 08-AJW-4300-2002

Place of Performance

Location: MORRISTOWN, MORRIS County, NEW JERSEY, 07960

State: New Jersey Government Spending

Plain-Language Summary

Department of Transportation obligated $17.0 million to HONEYWELL GMBH for work described as: LAAS WORK ACTIVITY INVESTMENT ANALYSIS TO SOLVE THE OUTSTANDING TECHNICAL ISSUES RELATED TO MEETING FAA INTEGRITY AND PERFORMANCE REQUIREMENTS. HONEYWELL INTERNATIONAL INC CONTRACT # DTFAWA-03-D-03009 SPEND PLAN # 08-AJW-4300-2002 Key points: 1. Contract awarded to Honeywell International Inc. for $17.03M to address LAAS technical issues. 2. Full and open competition was cited, but specific details on price discovery are limited. 3. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 4. The sector is 'Other Electronic Component Manufacturing', with a focus on aviation integrity. 5. Potential risks include cost escalation and the effectiveness of the technical solutions.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee contract type, while allowing for flexibility, carries a risk of cost escalation. Benchmarking against similar contracts for aviation technical solutions is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition. However, the limited information on the bidding process and the Cost Plus Fixed Fee structure may have impacted the government's ability to secure the most cost-effective solution.

Taxpayer Impact: Taxpayer funds are being used to address critical aviation system issues. The effectiveness of the spending will depend on the successful resolution of technical problems and the long-term reliability of the LAAS system.

Public Impact

Ensures the integrity and performance of the Local Area Augmentation System (LAAS) for aviation. Addresses critical technical issues that could impact flight safety and efficiency. Supports the modernization of air traffic management systems. Potential for long-term cost savings if technical issues are resolved effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Limited detail on price discovery
Potential for cost overruns

Positive Signals

Addresses critical aviation system integrity
Full and open competition cited
Focus on meeting FAA requirements

Sector Analysis

This contract falls under the 'Other Electronic Component Manufacturing' sector, specifically addressing the Local Area Augmentation System (LAAS) for the Federal Aviation Administration. Spending in aviation technology is crucial for safety and efficiency, with benchmarks often tied to system performance improvements and reliability.

Small Business Impact

There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to determine small business participation.

Oversight & Accountability

The contract's oversight would typically involve the Federal Aviation Administration monitoring Honeywell's progress and expenditures to ensure technical issues are resolved within the contract's scope and budget. Accountability rests on achieving the stated performance requirements.

Related Government Programs

Other Electronic Component Manufacturing
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Cost Plus Fixed Fee contract type may lead to cost overruns.
Limited transparency on price discovery despite 'full and open competition'.
Potential for scope creep if technical issues are not clearly defined.
Effectiveness of technical solutions is not yet proven.
Contract duration is zero, suggesting it might be a task order or a completed project with no active period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $17.0 million to HONEYWELL GMBH. LAAS WORK ACTIVITY INVESTMENT ANALYSIS TO SOLVE THE OUTSTANDING TECHNICAL ISSUES RELATED TO MEETING FAA INTEGRITY AND PERFORMANCE REQUIREMENTS. HONEYWELL INTERNATIONAL INC CONTRACT # DTFAWA-03-D-03009 SPEND PLAN # 08-AJW-4300-2002

Who is the contractor on this award?

The obligated recipient is HONEYWELL GMBH.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.0 million.

What is the period of performance?

Start: 2008-05-13. End: 2008-05-13.

What specific technical issues were identified, and how does this $17M investment directly address them to meet FAA integrity and performance requirements?

The data indicates the investment is for 'LAAS WORK ACTIVITY INVESTMENT ANALYSIS TO SOLVE THE OUTSTANDING TECHNICAL ISSUES RELATED TO MEETING FAA INTEGRITY AND PERFORMANCE REQUIREMENTS.' While the exact nature of the technical issues is not detailed, the funding is allocated to analyze and resolve these problems to ensure the LAAS system meets stringent FAA standards for reliability and operational performance.

Given the Cost Plus Fixed Fee structure, what mechanisms were in place to control costs and ensure the government received the best value, especially under 'full and open competition'?

A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover costs plus a fixed fee. While 'full and open competition' suggests multiple bids were considered, the CPFF structure inherently carries a risk of cost escalation. Robust government oversight, clear performance metrics, and detailed cost reviews are crucial to ensure value and prevent unnecessary spending under this contract type.

What is the expected long-term impact on aviation safety and efficiency if these technical issues are successfully resolved by Honeywell?

Successfully resolving the technical issues within the LAAS system is expected to significantly enhance aviation safety and efficiency. This includes improving navigation accuracy for aircraft, potentially enabling more direct flight paths, reducing delays, and ensuring compliance with evolving FAA integrity and performance mandates, thereby supporting the overall modernization of air traffic management.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: KAISERLEISTR. 39, OFFENBACH

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $45,828,616

Exercised Options: $17,909,563

Current Obligation: $17,026,083

Parent Contract

Parent Award PIID: DTFAWA03D03009

IDV Type: IDC

Timeline