DoD's $18.7M Honeywell Contract for Mobile Parts Hospital Lacks Competition, Raises Cost Concerns
Contract Overview
Contract Amount: $18,739,840 ($18.7M)
Contractor: KBR Wyle Services, LLC
Awarding Agency: Department of Defense
Start Date: 2010-03-23
End Date: 2013-03-22
Contract Duration: 1,095 days
Daily Burn Rate: $17.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: MPH SUSTAINMENT SERVICE CONTRACT. THE MPH IS A SELF-CONTAINED, SELF-SUSTAINING MOBILE MANUFACTURING SYSTEM THAT EFFICIENTLY FABRICATES STANDARD AND UNIQUE PARTS AT OR NEAR THE POINT OF NEED TO ENHANCE SOLDIER READINESS. HONEYWELL IS THE SERVICE PROVIDER OF THE MOBILE PARTS HOSPITAL IN SWA SINCE 2006.
Place of Performance
Location: COLUMBIA, HOWARD County, MARYLAND, 21046
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $18.7 million to KBR WYLE SERVICES, LLC for work described as: MPH SUSTAINMENT SERVICE CONTRACT. THE MPH IS A SELF-CONTAINED, SELF-SUSTAINING MOBILE MANUFACTURING SYSTEM THAT EFFICIENTLY FABRICATES STANDARD AND UNIQUE PARTS AT OR NEAR THE POINT OF NEED TO ENHANCE SOLDIER READINESS. HONEYWELL IS THE SERVICE PROVIDER OF THE MOBILE PARTS HOSPI… Key points: 1. The contract supports a critical mobile manufacturing system for soldier readiness. 2. Honeywell has been the sole provider since 2006, indicating a potential lack of market competition. 3. The Time and Materials pricing structure may lead to cost overruns without strict oversight. 4. The sector is Defense, specifically supporting advanced manufacturing capabilities.
Value Assessment
Rating: questionable
The contract's Time and Materials (T&M) pricing structure, coupled with a lack of competition, raises concerns about potential cost inefficiencies. Benchmarking against similar sustainment contracts is difficult without competitive bids.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Honeywell. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive environment.
Taxpayer Impact: The lack of competition and T&M pricing structure may result in higher taxpayer costs due to potentially inflated prices and reduced efficiency.
Public Impact
Ensures critical parts are available at the point of need for soldiers, enhancing readiness. Supports advanced manufacturing technology for specialized and standard parts. Long-term sole-source arrangement may limit innovation and cost-saving opportunities for the DoD.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Time and Materials pricing
- Lack of competition since 2006
Positive Signals
- Provides critical sustainment for soldier readiness
- Supports advanced manufacturing capabilities
Sector Analysis
This contract falls within the Defense sector, specifically supporting advanced manufacturing and logistics. Spending benchmarks for sustainment services can vary widely, but sole-source T&M contracts often warrant closer scrutiny.
Small Business Impact
The data indicates this contract was not awarded to small businesses. There is no information provided on subcontracting opportunities for small businesses within this contract.
Oversight & Accountability
The long duration and sole-source nature of this contract suggest a need for robust oversight to ensure fair pricing and effective service delivery. Independent cost analysis would be beneficial.
Related Government Programs
- Hand and Edge Tool Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Time and Materials pricing structure
- Lack of competition
- Long contract duration without re-competition
- Potential for cost overruns
Tags
hand-and-edge-tool-manufacturing, department-of-defense, md, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.7 million to KBR WYLE SERVICES, LLC. MPH SUSTAINMENT SERVICE CONTRACT. THE MPH IS A SELF-CONTAINED, SELF-SUSTAINING MOBILE MANUFACTURING SYSTEM THAT EFFICIENTLY FABRICATES STANDARD AND UNIQUE PARTS AT OR NEAR THE POINT OF NEED TO ENHANCE SOLDIER READINESS. HONEYWELL IS THE SERVICE PROVIDER OF THE MOBILE PARTS HOSPITAL IN SWA SINCE 2006.
Who is the contractor on this award?
The obligated recipient is KBR WYLE SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $18.7 million.
What is the period of performance?
Start: 2010-03-23. End: 2013-03-22.
What is the justification for the sole-source award and why has it remained non-competed since 2006?
The justification for the sole-source award is not provided in the data. However, given Honeywell's continuous service since 2006, it suggests a long-standing relationship or unique capabilities. A thorough review would be needed to determine if competition is now feasible or if the original justification remains valid.
How does the Time and Materials pricing impact cost control and value for money in this contract?
Time and Materials (T&M) pricing can lead to cost uncertainty as it reimburses the contractor for direct labor hours and material costs, plus a fee. Without strong government oversight and defined ceilings, this structure can incentivize longer project durations and higher costs, potentially diminishing value for money compared to fixed-price contracts.
What are the risks associated with relying on a single vendor for such a critical sustainment service over an extended period?
The primary risks include vendor lock-in, lack of competitive pressure leading to higher prices, potential stagnation in innovation, and vulnerability if the vendor faces financial or operational difficulties. This long-term sole-source arrangement necessitates rigorous performance monitoring and contingency planning.
Industry Classification
NAICS: Manufacturing › Cutlery and Handtool Manufacturing › Hand and Edge Tool Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W56HZV09R0460
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Parent Company: KBR, Inc. (UEI: 784072626)
Address: 7000 COLUMBIA GATEWAY DR STE 100, COLUMBIA, MD, 21046
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $20,412,706
Exercised Options: $20,412,706
Current Obligation: $18,739,840
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-03-23
Current End Date: 2013-03-22
Potential End Date: 2013-03-22 00:00:00
Last Modified: 2017-08-17
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