DoD awards $11.87M for Eagle-M navigational software upgrade, a sole-source contract to Honeywell

Contract Overview

Contract Amount: $11,872,500 ($11.9M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-11

End Date: 2027-12-31

Contract Duration: 1,268 days

Daily Burn Rate: $9.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PHASE 3 SOFTWARE UPGRADE FOR EAGLE-M NAVIGATIONAL EQUIPMENT.

Place of Performance

Location: CLEARWATER, PINELLAS County, FLORIDA, 33764

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to HONEYWELL INTERNATIONAL INC. for work described as: PHASE 3 SOFTWARE UPGRADE FOR EAGLE-M NAVIGATIONAL EQUIPMENT. Key points: 1. Contract awarded for a critical software upgrade to existing navigational equipment. 2. Sole-source award to Honeywell raises questions about potential lack of competition and price optimization. 3. The contract duration of over three years suggests a significant scope of work. 4. Performance is tied to the Department of the Army's operational readiness. 5. The specific NAICS code indicates a focus on specialized aerospace systems manufacturing. 6. The firm-fixed-price contract type shifts cost risk to the contractor.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive bids. The $11.87 million award for a software upgrade, while potentially justified by the specialized nature of the Eagle-M system, warrants scrutiny. Without comparative pricing from other vendors, it's difficult to ascertain if this represents a fair market value. The duration of the contract (over 3 years) also suggests a substantial effort, and the absence of competition means taxpayers may not be benefiting from the most cost-effective solution.

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 solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified in specific circumstances, such as when a unique capability is required or only one vendor can provide the necessary service, they often lead to higher prices and reduced innovation due to the lack of competitive pressure.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium for goods or services, as there is no competitive pressure to drive down costs. This limits the government's ability to secure the best possible price and value for taxpayer dollars.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive an upgraded navigational system essential for its operations. The contract delivers critical software upgrades for the Eagle-M navigational equipment, enhancing its functionality and reliability. The geographic impact is primarily within Florida, where the contract is managed and potentially where the work is performed. Workforce implications may include specialized software engineers and technicians at Honeywell, as well as military personnel who will operate and maintain the upgraded systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source nature limits opportunities for new entrants or innovative solutions.
Dependence on a single vendor for critical system upgrades can create long-term risks.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Honeywell is an established contractor with a track record in aerospace systems.
The upgrade addresses a specific, stated need for navigational equipment enhancement.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on navigation and guidance systems. The NAICS code 334511 covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. The market for such specialized systems is often dominated by a few large, established players like Honeywell, due to high barriers to entry, significant R&D investment, and stringent qualification requirements. Spending in this area is critical for national defense and aviation safety.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award to a large corporation, it is unlikely to directly benefit small businesses through prime contract opportunities. Subcontracting opportunities may exist, but they are not explicitly detailed in the provided data and would depend on Honeywell's internal procurement practices.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified software upgrade within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the pricing and justification more difficult. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Software Development Contracts
Navigational Systems Procurement
Aerospace Equipment Manufacturing
Army Aviation Support Contracts
Sole-Source Defense Acquisitions

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of competition.
Vendor lock-in risk for future upgrades and maintenance.
Limited transparency in pricing and justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to HONEYWELL INTERNATIONAL INC.. PHASE 3 SOFTWARE UPGRADE FOR EAGLE-M NAVIGATIONAL EQUIPMENT.

Who is the contractor on this award?

The obligated recipient is HONEYWELL INTERNATIONAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $11.9 million.

What is the period of performance?

Start: 2024-07-11. End: 2027-12-31.

What is the specific functionality or performance improvement expected from the Eagle-M software upgrade?

The provided data does not detail the specific functional improvements expected from the Eagle-M software upgrade. However, given the nature of navigational equipment, upgrades typically aim to enhance accuracy, reliability, processing speed, user interface, or incorporate new features such as improved threat detection, enhanced communication capabilities, or compliance with updated regulatory standards. The 'PHASE 3 SOFTWARE UPGRADE' designation suggests this is part of a larger, multi-stage modernization effort for the Eagle-M system, likely addressing identified deficiencies or incorporating advancements in avionics technology to maintain operational effectiveness and safety.

Can the government provide a justification for the sole-source award to Honeywell?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For this contract, the justification would likely stem from Honeywell's unique position as the original manufacturer or sole developer of the Eagle-M navigational system, possessing proprietary knowledge, software code, and technical expertise essential for its upgrade. Without this proprietary access, other potential contractors would face insurmountable technical hurdles and significant delays in developing a comparable solution, making a sole-source award to Honeywell the most practical, albeit less competitive, path to fulfilling the Army's requirement.

What is Honeywell's track record with Department of Defense contracts, particularly for navigational systems?

Honeywell International Inc. has a long and extensive history of contracting with the Department of Defense (DoD) and other government agencies, particularly in the aerospace and defense sectors. They are a major provider of avionics, engines, and other critical systems for military aircraft and platforms. Their track record includes numerous contracts for navigation, guidance, and control systems, as well as software development and integration for various military applications. While specific performance metrics for individual contracts are not detailed here, Honeywell is generally recognized as a capable and experienced supplier within the defense industrial base, often holding significant positions in the development and sustainment of complex defense systems.

How does the $11.87 million cost compare to previous upgrades or similar systems?

Direct comparison of the $11.87 million cost is difficult without access to historical data for previous Eagle-M upgrades or pricing for comparable navigational systems from other manufacturers. As a sole-source award, this figure is not benchmarked against competitive bids. However, the contract's duration of over three years (1268 days) suggests a substantial scope of work, potentially involving significant research, development, testing, and integration efforts. The firm-fixed-price structure implies that this amount covers all anticipated costs for the specified software upgrade phase. Further analysis would require access to internal government cost estimates, historical contract data for the Eagle-M system, and market research on similar aerospace software development projects.

What are the potential risks associated with a sole-source contract for critical software?

Sole-source contracts for critical software, like the Eagle-M upgrade, carry several inherent risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, as the contractor faces less pressure to optimize costs. Secondly, it can stifle innovation, as there is no external incentive for the sole provider to develop novel or more efficient solutions. Thirdly, it creates vendor lock-in, making the government heavily reliant on a single supplier for future upgrades, maintenance, and support, which can be problematic if the vendor's priorities shift or if they experience financial difficulties. Finally, without competitive benchmarking, it is harder for the government to ensure it is receiving the best value for its investment.

What is the significance of the NAICS code 334511 in the context of this contract?

The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' is highly significant for this contract. It precisely categorizes the industry segment involved: the manufacturing of sophisticated systems and instruments used for navigation and guidance, particularly in aviation and maritime contexts. This code indicates that the contract is for highly specialized, technology-intensive products. Companies operating under this code typically possess advanced engineering capabilities, proprietary technologies, and often hold security clearances, reflecting the critical nature of their products for defense, aerospace, and safety applications. This specialization often contributes to the limited number of qualified vendors and can be a factor in sole-source justifications.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

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 Safety Products USA, Inc.

Address: 13350 US HIGHWAY 19 N, CLEARWATER, FL, 33764

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

Financial Breakdown

Contract Ceiling: $11,872,500

Exercised Options: $11,872,500

Current Obligation: $11,872,500

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $773,511

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: FA857620D0001

IDV Type: IDC

Timeline