DoD Awards $36.7M for Aircraft Engine Parts to Honeywell, Raising Concerns Over Competition
Contract Overview
Contract Amount: $36,711,108 ($36.7M)
Contractor: Honeywell International Inc.
Awarding Agency: Department of Defense
Start Date: 2023-09-08
End Date: 2028-08-30
Contract Duration: 1,818 days
Daily Burn Rate: $20.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: SPARES
Place of Performance
Location: TEMPE, MARICOPA County, ARIZONA, 85284
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $36.7 million to HONEYWELL INTERNATIONAL INC. for work described as: SPARES Key points: 1. Significant contract value for specialized aircraft engine parts. 2. Sole-source award to Honeywell International Inc. limits competitive pricing. 3. Long contract duration (5 years) may not reflect current market conditions. 4. Focus on a niche manufacturing sector (NAICS 336412).
Value Assessment
Rating: questionable
The contract value of $36.7 million over five years for aircraft engine parts requires careful scrutiny. Without competitive bidding, it's difficult to ascertain if this price represents fair market value compared to similar contracts or potential alternatives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Honeywell International Inc., was considered. This significantly limits price discovery and competitive pressure, potentially leading to higher costs for the government.
Taxpayer Impact: The lack of competition in this sole-source award could result in taxpayers paying a premium for these critical aircraft engine parts.
Public Impact
Ensures continued availability of critical aircraft engine parts for defense operations. Potential for higher costs due to the absence of competitive bidding. Long-term commitment may impact flexibility in acquiring future parts. Supports a key defense contractor in a specialized manufacturing area.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Ensures supply of critical parts
- Established contractor
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector. Spending in this sector is crucial for maintaining military readiness, but competitive procurement is vital to ensure cost-effectiveness.
Small Business Impact
The contract does not indicate any specific provisions or set-asides for small businesses. The sole-source nature of the award further suggests that small business participation was not a primary consideration in the procurement process.
Oversight & Accountability
The sole-source justification for this significant contract award warrants thorough oversight to ensure it was indeed the most appropriate method and that pricing is reasonable. Post-award monitoring will be key.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Long contract duration may not be cost-effective.
- Lack of small business participation.
- Dependency on a single supplier.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, az, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $36.7 million to HONEYWELL INTERNATIONAL INC.. SPARES
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 $36.7 million.
What is the period of performance?
Start: 2023-09-08. End: 2028-08-30.
What is the justification for the sole-source award, and has a market research report been conducted to confirm Honeywell is the only viable source?
The justification for a sole-source award typically involves demonstrating that only one responsible source can satisfy the agency's needs. This often occurs when a product is proprietary or requires unique expertise. A thorough market research report should have been conducted to validate this claim and explore any potential alternatives or competitive options before proceeding with a sole-source procurement.
How will the Defense Logistics Agency ensure fair and reasonable pricing over the five-year contract duration without competitive benchmarking?
The agency can employ several strategies to ensure fair and reasonable pricing. This includes conducting independent government cost estimates, reviewing Honeywell's cost proposals, analyzing historical pricing data for similar items, and potentially negotiating price adjustments based on market fluctuations or the introduction of new technologies. Regular performance reviews and audits can also help identify potential cost overruns.
What is the potential impact on aircraft readiness if Honeywell faces production issues or supply chain disruptions during this sole-source contract period?
A sole-source contract creates a significant dependency on a single supplier. If Honeywell experiences production issues or supply chain disruptions, it could directly impact the availability of critical aircraft engine parts, potentially leading to grounded aircraft and reduced military readiness. Contingency planning, such as identifying alternative suppliers for components or maintaining higher inventory levels, would be crucial.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: ENGINE ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Honeywell International Inc
Address: 1300 W WARNER RD, TEMPE, AZ, 85284
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: $36,711,108
Exercised Options: $36,711,108
Current Obligation: $36,711,108
Subaward Activity
Number of Subawards: 26
Total Subaward Amount: $2,456,439
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX22D0008
IDV Type: IDC
Timeline
Start Date: 2023-09-08
Current End Date: 2028-08-30
Potential End Date: 2028-08-30 12:08:00
Last Modified: 2023-11-01
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