DoD's $73M Honeywell Contract for CDS4 to CDS5 Upgrade Faces Scrutiny Over Competition and Value
Contract Overview
Contract Amount: $73,228,459 ($73.2M)
Contractor: Honeywell International Inc.
Awarding Agency: Department of Defense
Start Date: 2008-09-03
End Date: 2016-07-29
Contract Duration: 2,886 days
Daily Burn Rate: $25.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: TO MODIFY AND UPDATE CONTROL DISPLAY SYSTEM (CDS4) TO CDS5 CONFIGURATION.
Place of Performance
Location: PHOENIX, MARICOPA County, ARIZONA, 85027
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $73.2 million to HONEYWELL INTERNATIONAL INC. for work described as: TO MODIFY AND UPDATE CONTROL DISPLAY SYSTEM (CDS4) TO CDS5 CONFIGURATION. Key points: 1. Significant investment of $73.2M for system upgrade. 2. Sole-source award to Honeywell raises questions about competitive pricing. 3. Long contract duration (2008-2016) may indicate potential for cost overruns. 4. Sector: Defense, specifically electronic component manufacturing.
Value Assessment
Rating: questionable
The contract value of $73.2M for a system upgrade is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar system modernization efforts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis to Honeywell International Inc. This lack of competition limits price discovery and may result in a higher cost to the government than if multiple vendors had bid.
Taxpayer Impact: The sole-source nature of this contract potentially leads to increased taxpayer expenditure due to the absence of competitive pressure on pricing.
Public Impact
Taxpayers may have overpaid due to the lack of competitive bidding. The long duration of the contract could indicate potential inefficiencies or scope creep. The upgrade of critical control systems impacts national defense capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Long contract duration
- Lack of small business participation
Positive Signals
- Essential system upgrade for defense operations
Sector Analysis
This contract falls within the Defense sector, specifically related to electronic component manufacturing and system integration. Spending benchmarks for similar large-scale defense system upgrades are difficult to establish without competitive data.
Small Business Impact
The data indicates no small business participation in this contract. This suggests a missed opportunity to leverage small business innovation and support economic growth.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure the government received fair value and that the upgrade was executed efficiently and effectively.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Long contract duration may indicate inefficiencies
- No small business participation
- Cost-plus contract type can incentivize higher spending
Tags
other-electronic-component-manufacturing, department-of-defense, az, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.2 million to HONEYWELL INTERNATIONAL INC.. TO MODIFY AND UPDATE CONTROL DISPLAY SYSTEM (CDS4) TO CDS5 CONFIGURATION.
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 $73.2 million.
What is the period of performance?
Start: 2008-09-03. End: 2016-07-29.
What was the justification for the sole-source award, and was a market research conducted to confirm no other vendors could provide the upgrade?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. Without specific documentation, it's presumed the agency determined Honeywell possessed the exclusive ability to perform the CDS4 to CDS5 upgrade. Further review would be needed to confirm the thoroughness of market research and the validity of the sole-source justification.
How did the final cost compare to the initial cost-plus-fixed-fee estimates, and were there significant cost overruns?
As a cost-plus-fixed-fee contract, the government pays allowable costs plus a fixed fee. The total expenditure of $73.2M represents the final cost. Analyzing the initial estimates against the final cost is crucial to determine if significant cost overruns occurred. Without access to the detailed cost breakdowns and initial projections, it's impossible to definitively assess cost efficiency or identify potential areas of overspending.
What specific improvements and enhanced capabilities did the CDS5 configuration offer over CDS4, and were these improvements critical to mission effectiveness?
The upgrade from CDS4 to CDS5 likely involved modernizing the control display system to enhance operational efficiency, improve user interface, incorporate new functionalities, and potentially increase reliability and security. The criticality of these improvements to mission effectiveness would depend on the specific role of the CDS within the Department of Defense's operations. A detailed technical assessment would be required to quantify the benefits.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ08R0132
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Honeywell International Inc (UEI: 139691877)
Address: 9201 SAN MATEO BLVD. NE, ALBUQUERQUE, NM, 87113
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $73,228,459
Exercised Options: $73,228,459
Current Obligation: $73,228,459
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-09-03
Current End Date: 2016-07-29
Potential End Date: 2016-07-29 00:00:00
Last Modified: 2021-02-22
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