DoD awards $14.1M for gas turbine power units, with a 763-day duration

Contract Overview

Contract Amount: $14,100,000 ($14.1M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-22

End Date: 2027-10-25

Contract Duration: 763 days

Daily Burn Rate: $18.5K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: POWER UNIT,GAS TURB

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $14.1 million to HONEYWELL INTERNATIONAL INC. for work described as: POWER UNIT,GAS TURB Key points: 1. Contract awarded to Honeywell International Inc. for critical aircraft parts. 2. The contract is a firm-fixed-price delivery order, indicating predictable costs. 3. Competition was conducted under Simplified Acquisition Procedures (SAP), suggesting a streamlined process for smaller value procurements. 4. The contract duration of 763 days allows for sustained supply chain support. 5. The award falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code. 6. The contract is not set aside for small businesses, indicating a focus on established suppliers.

Value Assessment

Rating: good

The contract value of $14.1 million for 763 days of supply for gas turbine power units appears reasonable given the specialized nature of aerospace components. Benchmarking against similar sole-source or limited-competition awards for complex aerospace parts suggests this pricing is within an expected range. The firm-fixed-price structure provides cost certainty for the Department of Defense, mitigating risks associated with fluctuating material or labor costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a limited number of bidders or a less formal solicitation process compared to full and open competition. While specific bidder numbers are not provided, SAP is often used for procurements valued below certain thresholds where full and open competition may not be cost-effective. The limited competition may result in less aggressive pricing than a broad solicitation.

Taxpayer Impact: The use of SAP suggests an effort to balance procurement efficiency with cost control. Taxpayers benefit from a potentially faster acquisition process, but the limited competition might mean slightly higher prices than could be achieved through a wider bidding process.

Public Impact

The Department of Defense (DoD) is the primary beneficiary, receiving essential power units for aircraft. This contract ensures the continued operational readiness of military aviation assets. The services delivered are critical for maintaining and repairing aircraft engines. The contract's impact is primarily on the defense sector's supply chain and maintenance capabilities. Workforce implications include support for manufacturing and logistics personnel at Honeywell and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited price competition due to SAP.
Reliance on a single large business contractor could pose supply chain risks if not managed proactively.

Positive Signals

Award to a well-established aerospace manufacturer (Honeywell) suggests reliability and quality.
Firm-fixed-price contract provides cost predictability.
Longer contract duration ensures sustained availability of critical parts.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, stringent quality requirements, and significant R&D investment. Honeywell International Inc. is a major player in this industry, particularly in defense and aerospace components. This contract for gas turbine power units fits within the broader category of aircraft engine and parts manufacturing, a segment that supports the operational needs of military forces globally. Spending in this area is consistent with defense budgets allocated for aircraft sustainment and modernization.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'sb': false parameter. The award to Honeywell International Inc., a large corporation, suggests that the primary focus was on established capabilities and potentially large-scale production. There are no explicit subcontracting requirements mentioned in the provided data, but large prime contractors often engage small businesses for specific components or services. The lack of a small business set-aside means opportunities for small businesses in this specific procurement are likely indirect, through subcontracting.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), which are responsible for ensuring contractor compliance, quality, and cost reasonableness. The firm-fixed-price nature of the contract simplifies some aspects of financial oversight. Transparency is facilitated through contract databases like FPDS. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Engine Maintenance and Repair
Defense Logistics and Supply Chain Management
Aerospace Component Manufacturing
Military Aircraft Sustainment Programs

Risk Flags

Limited competition may impact price.
Reliance on a single large contractor.
Potential for supply chain disruption.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to HONEYWELL INTERNATIONAL INC.. POWER UNIT,GAS TURB

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $14.1 million.

What is the period of performance?

Start: 2025-09-22. End: 2027-10-25.

What is Honeywell International Inc.'s track record with the Department of Defense for similar aerospace components?

Honeywell International Inc. has a long-standing and extensive track record as a major defense contractor, supplying a wide array of aerospace components, systems, and services to the Department of Defense. Their portfolio includes engines, avionics, and auxiliary power units for various military aircraft platforms. Historical data indicates consistent contract awards across different branches of the military for both new production and sustainment efforts. While specific performance metrics for individual contracts are not detailed here, Honeywell's continued success in securing large defense contracts suggests a generally positive performance history and a strong relationship with the DoD. Their experience in complex manufacturing and adherence to stringent military specifications are key factors in their sustained presence in the defense market.

How does the awarded price of $14.1 million for these power units compare to market rates or previous similar contracts?

Without specific details on the exact type and quantity of 'POWER UNIT,GAS TURB' and the precise technical specifications, a direct price comparison is challenging. However, $14.1 million for a 763-day delivery order (approximately two years) for specialized aerospace components like gas turbine power units is generally considered within a reasonable range for a firm-fixed-price contract awarded to a major manufacturer like Honeywell. The aerospace industry, particularly for military applications, involves high R&D costs, stringent quality control, and complex manufacturing processes, which contribute to higher unit prices compared to commercial off-the-shelf items. If this contract involved a limited competition under SAP, the price might be slightly higher than what could be achieved through full and open competition, but it reflects the balance between acquisition speed and cost for specialized defense needs.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential supply chain disruptions, technological obsolescence, and performance issues. Given that Honeywell is a large, established contractor, the risk of outright contractor failure is low. However, reliance on a single source for critical components, even if competed under SAP, can create vulnerabilities. Mitigation strategies likely include robust quality assurance processes, regular performance reviews by the Defense Contract Management Agency (DCMA), and maintaining adequate inventory levels. The firm-fixed-price structure mitigates cost overrun risks for the government. Technological obsolescence is managed through the contract's defined period and potential for future upgrades or replacements. Performance risks are addressed through contractual clauses and oversight.

How effective is the 'COMPETED UNDER SAP' approach for acquiring specialized aerospace parts like these power units?

Competing under Simplified Acquisition Procedures (SAP) for specialized aerospace parts like gas turbine power units can be an effective approach when the procurement value falls within SAP thresholds and when full and open competition is deemed less efficient or practical. SAP streamlines the acquisition process, potentially leading to faster delivery times and reduced administrative burden for both the government and potential offerors. However, it typically involves a more limited number of bidders compared to full and open competition. For highly specialized items where only a few qualified manufacturers exist, SAP can still yield competitive results. The effectiveness hinges on whether the solicitation reaches a sufficient number of capable suppliers to ensure fair pricing and adequate choice, while still leveraging the efficiencies of the SAP process.

What are the historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) by the Department of Defense?

Historical spending by the Department of Defense (DoD) within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) sector has been substantial and consistent, reflecting the ongoing need to maintain and modernize a vast fleet of military aircraft. This category encompasses a wide range of components beyond engines and airframes, including landing gear, avionics, control systems, and auxiliary power units. Annual spending in this sector typically runs into billions of dollars, driven by sustainment contracts, spare parts procurement, and upgrades. The DoD is a primary customer for manufacturers in this space, often awarding large, long-term contracts to ensure supply chain stability for critical aviation assets. Spending levels can fluctuate based on defense budgets, operational tempo, and specific modernization initiatives.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell Safety Products USA, Inc.

Address: 1944 E SKY HARBOR CIR, PHOENIX, AZ, 85034

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

Financial Breakdown

Contract Ceiling: $14,100,000

Exercised Options: $14,100,000

Current Obligation: $14,100,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: SPE4A122G0015

IDV Type: BOA

Timeline