DoD's $13.8M contract for missile systems R&D awarded to Honeywell, with 4 bidders

Contract Overview

Contract Amount: $13,858,632 ($13.9M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2000-10-30

End Date: 2008-01-09

Contract Duration: 2,627 days

Daily Burn Rate: $5.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200107!000218!1700!AT716 !NAVAL AIR SYSTEMS COMMAND !N0001901C0033 !A!N!*!N! !20001030!20031030!039115845!039115845!139691877!N!HONEYWELL SENSOR AND GUIDANCE !2600 RIDGWAY PARKWAY !MINNEAPOLIS !MN!55413!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000000700000!N!N!000000000000!AC27!RDTE/MISSILE AND SPACE SYSTEMS-OP SYSTEM DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !2CNY!BGM-109 TOMAHAWK !541710!*!*!3! ! ! !*!*!*!B!*!*!B! !A !N!U!2!004!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55413

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $13.9 million to HONEYWELL INTERNATIONAL INC. for work described as: 200107!000218!1700!AT716 !NAVAL AIR SYSTEMS COMMAND !N0001901C0033 !A!N!*!N! !20001030!20031030!039115845!039115845!139691877!N!HONEYWELL SENSOR AND GUIDANCE !2600 RIDGWAY PARKWAY !MINNEAPOLIS !MN!55413!43000!053!27!MINNEAPOLIS !HENNE… Key points: 1. Contract awarded for research and development of missile and space systems, specifically the Tomahawk missile. 2. The contract utilized full and open competition, indicating a competitive bidding process. 3. Honeywell Sensor and Guidance was the contractor, with a contract value of $13.8 million. 4. The contract duration was approximately 7 years, from October 2000 to January 2008. 5. The North American Industry Classification System (NAICS) code 541710 suggests a focus on R&D in physical, engineering, and life sciences. 6. The contract type was Cost Plus Fixed Fee (CPFF), which can carry higher risk for the government if costs exceed estimates.

Value Assessment

Rating: fair

The contract value of $13.8 million for over 7 years of R&D for a missile system appears reasonable given the complexity of defense technology. However, without specific benchmarks for similar R&D efforts on the Tomahawk program or comparable systems, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns, which warrants careful monitoring of expenditures against the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four bidders participating. This level of competition is generally positive as it allows for a wider range of potential contractors to submit proposals, theoretically leading to better pricing and innovation. The presence of four bidders suggests a healthy competitive environment for this specific type of defense R&D.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through competitive bidding and encouraging contractors to offer their best value propositions.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the U.S. Navy, who utilize the Tomahawk missile system. The services delivered include research and development for missile and space systems, enhancing the capabilities of existing platforms. The geographic impact is primarily within the United States, with research likely conducted at contractor facilities and government oversight locations. Workforce implications include employment for scientists, engineers, and support staff involved in advanced defense technology research.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
Long contract duration (over 7 years) may indicate potential for scope creep or evolving requirements.
Specific details on R&D deliverables and milestones are not readily available, making performance assessment difficult.
Reliance on a single contractor for a critical component of a major weapons system could pose supply chain risks.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Multiple bidders (4) indicate a competitive market for this type of R&D.
Contractor (Honeywell) is a well-established defense contractor with a track record in sensor and guidance systems.
Contract focused on R&D, which is crucial for maintaining technological superiority in defense.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research and Development for missile systems. The market for defense R&D is characterized by high technological barriers, significant government investment, and long development cycles. Comparable spending benchmarks would typically involve other major defense R&D programs for advanced weapon systems, often running into hundreds of millions or billions of dollars over their lifecycle.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the nature of advanced missile system R&D, it is likely that large, specialized defense contractors like Honeywell were best positioned to compete. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would have been provided by the Department of Defense, likely through the Defense Contract Management Agency (DCMA). Accountability measures would include adherence to contract terms, delivery of R&D milestones, and financial reporting. Transparency is generally limited in defense R&D contracts due to national security considerations, but Inspector General (IG) reports may exist for specific investigations or audits.

Related Government Programs

BGM-109 Tomahawk Missile Program
Missile Defense Systems R&D
Advanced Weapons Systems Development
Department of Defense Research and Development Contracts
Honeywell Defense Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Long contract duration may indicate evolving requirements or potential for scope creep.
Lack of specific performance metrics makes value assessment difficult.
Reliance on a single contractor for critical R&D could pose long-term risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.9 million to HONEYWELL INTERNATIONAL INC.. 200107!000218!1700!AT716 !NAVAL AIR SYSTEMS COMMAND !N0001901C0033 !A!N!*!N! !20001030!20031030!039115845!039115845!139691877!N!HONEYWELL SENSOR AND GUIDANCE !2600 RIDGWAY PARKWAY !MINNEAPOLIS !MN!55413!43000!053!27!MINNEAPOLIS !HENNEPIN !MINNESOTA !+000000700000!N!N!000000000000!AC27!RDTE/MISSILE AND SPACE SYSTEMS-OP SYSTEM DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !2CNY!BGM-109 TOMAHAWK !541710!*!*!3! ! ! !*!*!*!B!*!*!B!

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 $13.9 million.

What is the period of performance?

Start: 2000-10-30. End: 2008-01-09.

What was Honeywell's track record with the Department of Defense prior to this contract?

Honeywell International Inc. has a long and extensive history as a major defense contractor for the U.S. Department of Defense and allied nations. Prior to this specific contract (awarded in 2000), Honeywell had been involved in numerous defense programs, supplying a wide array of products and services including avionics, guidance systems, sensors, control technologies, and propulsion systems for various aircraft, missiles, and space applications. Their established presence and expertise in these areas would have made them a strong contender for defense R&D contracts requiring specialized knowledge in areas like missile guidance and control.

How does the $13.8 million value compare to similar missile R&D contracts?

Directly comparing the $13.8 million value of this specific R&D contract to 'similar' contracts is challenging without more granular data on the scope and objectives of those other contracts. However, R&D for major weapon systems like the Tomahawk can span many years and involve significant investment. While $13.8 million might seem modest for a full system development, it could represent a specific phase, a component improvement, or a particular research effort within a larger program. For context, broader missile development programs can easily reach hundreds of millions or even billions of dollars over their lifecycle. This contract's value suggests a focused R&D effort rather than a complete system overhaul or new development.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, especially for Research and Development (R&D), is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs incurred, plus a predetermined fixed fee representing profit. If the R&D effort proves more complex or costly than initially estimated, the government bears the burden of these increased costs. While the fee is fixed, the total contract price can escalate significantly. This necessitates robust government oversight to ensure costs are reasonable and allocable, and that the contractor exercises due diligence in managing expenses to achieve the R&D objectives within the anticipated cost framework.

How effective was this R&D effort in improving the Tomahawk missile system?

The provided data does not contain specific metrics or outcomes related to the effectiveness of the R&D effort funded by this contract. Assessing the effectiveness would require reviewing technical reports, performance evaluations, and subsequent upgrades or operational improvements made to the BGM-109 Tomahawk missile system that can be directly attributed to this contract's R&D activities. Without access to these post-contractual assessments or detailed R&D deliverables, determining the precise impact and effectiveness remains speculative.

What were historical spending patterns for the Tomahawk missile program around the time of this contract?

Historical spending patterns for the Tomahawk missile program around the period of this contract (2000-2008) would likely show significant investment, reflecting its status as a key strategic weapon system. The Tomahawk has undergone numerous upgrades and modifications throughout its service life. Spending would encompass procurement, sustainment, modernization, and ongoing R&D efforts. While this specific $13.8 million contract represents a portion of that spending, the overall program costs would be substantially higher, involving multiple contracts for hardware, software, integration, testing, and training, often spread across many fiscal years and involving various defense agencies and contractors.

What is the significance of the NAICS code 541710 for this contract?

The North American Industry Classification System (NAICS) code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' signifies that the primary purpose of this contract was to conduct scientific research and experimental development. This code indicates that the work involved systematic study to gain new knowledge, with the expectation that this knowledge would be applied to develop new or improved products, processes, or services. For this contract, it specifically points to R&D activities related to the physical sciences and engineering aspects of missile systems, rather than, for example, biological or social sciences research.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Honeywell International Inc (UEI: 139691877)

Address: 2600 RIDGWAY PARKWAY, MINNEAPOLIS, MN, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline