DoD spent $83.8M on electronic control units, with Honeywell International Inc. securing the contract

Contract Overview

Contract Amount: $83,764,713 ($83.8M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2009-04-16

End Date: 2016-04-30

Contract Duration: 2,571 days

Daily Burn Rate: $32.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ELECTRONIC CONTROL UNITS

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $83.8 million to HONEYWELL INTERNATIONAL INC. for work described as: ELECTRONIC CONTROL UNITS Key points: 1. The contract value represents a significant investment in critical aircraft components. 2. Competition dynamics suggest a potentially competitive bidding process for this requirement. 3. The duration of the contract indicates a long-term need for these units. 4. The firm-fixed-price structure shifts cost risk to the contractor. 5. The award was made by the Department of the Army, a major defense spender. 6. The North American Industry Classification System code points to specialized manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific unit cost data or comparisons to similar electronic control units. However, the total award of over $83 million over a nearly 7-year period suggests a substantial procurement. The firm-fixed-price contract type generally aims for cost certainty, but the absence of detailed cost breakdowns makes a precise value-for-money assessment difficult. Further analysis would require understanding the complexity and technological sophistication of the electronic control units procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With two bidders, the competition level appears moderate. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the nature of the competition would need further investigation to fully assess its impact on pricing.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially leading to more competitive pricing and better value.

Public Impact

The Department of Defense benefits from the acquisition of essential electronic control units for its aircraft fleet. These units are critical for the operational readiness and performance of various military aircraft. The contract supports manufacturing activities within the United States, specifically in Arizona. The procurement likely sustains jobs within the aerospace and defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed cost breakdowns hinders precise value assessment.
Moderate competition (2 bidders) may not have yielded the lowest possible price.
Contract duration could lead to price escalation if not managed effectively.
Limited public information on the specific technical requirements of the ECUs.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Firm-fixed-price contract shifts cost risk to the contractor.
Long-term contract indicates a sustained and critical need for the components.
Contractor is a large, established defense supplier with significant experience.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for electronic control units is highly specialized, requiring advanced engineering and manufacturing capabilities. Spending in this area is driven by the need for sophisticated avionics and control systems in modern military aircraft. Comparable spending benchmarks would typically involve analyzing other procurements of similar electronic components for defense applications, considering factors like technological complexity and volume.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses mentioned. As a large prime contract awarded to a major corporation, the direct impact on the small business ecosystem might be limited unless Honeywell actively engages small businesses as subcontractors. Further investigation into subcontracting plans would be necessary to determine the extent of small business participation.

Oversight & Accountability

The Department of Defense employs various oversight mechanisms for contracts of this nature, including contract performance monitoring, quality assurance surveillance plans, and financial audits. Accountability is typically managed through contract clauses and performance metrics. Transparency is facilitated through contract award databases like FPDS. Inspector General offices within the DoD may conduct audits or investigations into contract performance and financial integrity if specific concerns arise.

Related Government Programs

Aircraft Parts Manufacturing
Aerospace Electronics
Defense Procurement
Avionics Systems
Military Aircraft Components

Risk Flags

Contract Duration
Moderate Competition
Lack of Detailed Cost Data
Specialized Component

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.8 million to HONEYWELL INTERNATIONAL INC.. ELECTRONIC CONTROL UNITS

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 $83.8 million.

What is the period of performance?

Start: 2009-04-16. End: 2016-04-30.

What is the specific type and function of the electronic control units procured under this contract?

The contract data identifies the item as 'ELECTRONIC CONTROL UNITS' (NAICS 336413 - Other Aircraft Parts and Auxiliary Equipment Manufacturing). While the specific function isn't detailed in the provided data, electronic control units in aircraft are typically sophisticated microcomputer systems that manage and control various aircraft functions. These can range from engine control (FADEC - Full Authority Digital Engine Control), flight control systems, environmental control systems, to navigation and communication systems. Given the Department of Defense context, these units are likely critical for the operation, safety, and performance of military aircraft, potentially involving complex real-time processing and high reliability standards.

How does the awarded price compare to industry benchmarks for similar electronic control units?

A direct comparison of the awarded price ($83.8 million) to industry benchmarks for similar electronic control units is difficult without more specific technical details about the units procured (e.g., complexity, processing power, environmental hardening, specific applications) and without access to proprietary pricing data from competitors or market research reports. However, the duration of the contract (over 7 years) and the firm-fixed-price nature suggest a significant, long-term requirement. The fact that it was competed suggests that the government sought competitive pricing. To perform a robust benchmark, one would need to identify comparable systems, analyze their unit costs based on volume, and consider the technological advancements and reliability requirements specific to military applications.

What are the key performance indicators (KPIs) used to assess the contractor's performance?

The provided contract data does not explicitly list the Key Performance Indicators (KPIs) used to assess Honeywell International Inc.'s performance. However, for a contract involving the manufacturing of critical aircraft components like electronic control units, typical KPIs would likely include: on-time delivery rates, adherence to quality standards (e.g., defect rates, compliance with MIL-SPEC or AS9100 standards), technical performance meeting specified requirements, and potentially cost control within the firm-fixed-price structure. Contract administration and quality assurance personnel from the Department of the Army would monitor these aspects throughout the contract's lifecycle.

What is the historical spending trend for electronic control units by the Department of Defense?

The provided data only covers a single contract award from 2009 to 2016 totaling $83.8 million. To understand historical spending trends for electronic control units by the Department of Defense (DoD), a broader analysis of contract awards over multiple years and across different branches (Army, Navy, Air Force, Marines) would be necessary. This would involve querying federal procurement databases for similar products (e.g., using the same or related PSC codes and keywords) and analyzing the total obligated amounts, number of contracts, and key contractors over time. Such an analysis could reveal fluctuations in demand, shifts in technology, and changes in procurement strategies.

What is the potential impact of this contract on Honeywell's market position in the aerospace electronics sector?

Securing a contract of this magnitude ($83.8 million over 7 years) for critical electronic control units would likely solidify or enhance Honeywell International Inc.'s market position within the aerospace electronics sector, particularly in the defense segment. It demonstrates their capability to meet stringent military specifications and manage large-scale production. This award could serve as a reference for future contracts and potentially lead to follow-on orders or opportunities to supply components for new aircraft programs. It also indicates a strong existing relationship with the Department of the Army, a key customer in the defense industry.

Were there any specific technological advancements or requirements that influenced the competition for this contract?

The provided data does not specify the technological advancements or unique requirements that influenced the competition for this contract. However, in the defense sector, procurements often involve requirements for high reliability, extreme environmental resistance (temperature, vibration, radiation), advanced processing capabilities, and compliance with stringent military standards. If this contract involved cutting-edge technology or highly specialized units, it might have limited the number of capable bidders, even under full and open competition. Conversely, if the requirements were more standardized, a larger pool of competitors might have been expected.

Industry Classification

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

Product/Service Code: ENGINE ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W58RGZ08R0648

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell International Inc (UEI: 139691877)

Address: 111 S 34TH ST, PHOENIX, AZ, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $124,852,804

Exercised Options: $83,764,713

Current Obligation: $83,764,713

Contract Characteristics

Cost or Pricing Data: YES

Timeline