Department of the Army awards $41M for aircraft engine parts, citing sole-source justification

Contract Overview

Contract Amount: $41,020,674 ($41.0M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2023-04-26

End Date: 2025-09-30

Contract Duration: 888 days

Daily Burn Rate: $46.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: T55-GA-714A ENGINES, ELECTRONIC CONTROL UNITS, AND ENGINE INSTALLATION KITS

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $41.0 million to HONEYWELL INTERNATIONAL INC. for work described as: T55-GA-714A ENGINES, ELECTRONIC CONTROL UNITS, AND ENGINE INSTALLATION KITS Key points: 1. Contract awarded to Honeywell International Inc. for critical aircraft engine components. 2. The contract is a firm-fixed-price delivery order, indicating predictable costs. 3. The duration of the contract extends over 888 days, suggesting a long-term need. 4. The award was not competed, raising questions about potential cost savings. 5. The primary location for performance is Arizona. 6. The North American Industry Classification System (NAICS) code is 336412, related to aircraft engine manufacturing.

Value Assessment

Rating: questionable

The contract value of $41,020,674 for aircraft engine parts and control units is significant. Without a competitive bidding process, it is difficult to benchmark the value for money. The firm-fixed-price structure provides cost certainty for the government, but the lack of competition may have led to a higher price than could have been achieved through an open market. Further analysis would require comparing this award to similar sole-source procurements for comparable components or assessing Honeywell's pricing history for these specific items.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The justification for a sole-source award typically involves specific circumstances, such as the proprietary nature of the technology or the unique capabilities of a single supplier. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, there is less assurance that the price reflects the lowest possible cost for these essential aircraft engine components.

Public Impact

The U.S. Army benefits from the continued availability of critical engine parts and control units for its aircraft fleet. This contract ensures the operational readiness and maintenance of military aviation assets. The services delivered are essential for the sustainment of Army aviation operations. The geographic impact is primarily in Arizona, where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can limit innovation by excluding potential new entrants.
Dependence on a single supplier can create supply chain risks.

Positive Signals

Ensures continued supply of critical, potentially specialized, aircraft engine components.
Firm-fixed-price contract provides cost certainty for the government.
Long contract duration suggests a stable and predictable supply chain for essential parts.

Sector Analysis

The aircraft engine and engine parts manufacturing sector is a critical component of the aerospace and defense industry. This contract falls under NAICS code 336412. The market is often characterized by high barriers to entry due to complex technology, significant R&D investment, and stringent quality requirements. Major players like Honeywell dominate specialized segments. Spending in this sector is driven by military modernization, maintenance, and sustainment programs, with government contracts forming a substantial portion of the market.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the available data. The award to a large, established prime contractor like Honeywell suggests that the focus is on specialized, high-value components where large firms typically hold the necessary certifications and manufacturing capabilities. This could limit direct opportunities for small businesses to participate in this specific procurement.

Oversight & Accountability

The Department of the Army is responsible for overseeing this contract. As a sole-source award, oversight would focus on ensuring that Honeywell meets the contract's technical specifications, delivery schedules, and quality standards. Transparency may be limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected. The firm-fixed-price nature simplifies some aspects of financial oversight.

Related Government Programs

Aircraft Engine Maintenance and Repair
Military Aircraft Parts Procurement
Aerospace Manufacturing Contracts
Department of Defense Supply Chain Management

Risk Flags

Sole-source award lacks competitive pricing.
Potential for higher costs due to lack of competition.
Dependence on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.0 million to HONEYWELL INTERNATIONAL INC.. T55-GA-714A ENGINES, ELECTRONIC CONTROL UNITS, AND ENGINE INSTALLATION KITS

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 $41.0 million.

What is the period of performance?

Start: 2023-04-26. End: 2025-09-30.

What is Honeywell International Inc.'s track record with the Department of the Army for similar contracts?

Honeywell International Inc. has a substantial history of contracting with the Department of the Army and other federal agencies, particularly in the aerospace and defense sectors. They are a major supplier of avionics, engines, and related components. For similar contracts involving aircraft engine parts and electronic control units, Honeywell has consistently been a primary vendor. Analyzing past awards for comparable items, especially those also awarded sole-source or with limited competition, would provide context on their pricing and performance history. However, specific details on past performance metrics and pricing benchmarks for this exact type of component would require deeper database access.

How does the $41 million contract value compare to historical spending on similar aircraft engine components by the Army?

Comparing the $41 million contract value requires a detailed analysis of historical spending patterns for specific engine models and component types. Without knowing the exact engine platforms and the specific parts covered by T55-GA-714A ENGINES, ELECTRONIC CONTROL UNITS, AND ENGINE INSTALLATION KITS, a precise comparison is difficult. However, given the nature of military aircraft components, which often involve advanced technology and stringent quality control, $41 million over approximately two years (from April 2023 to September 2025) for critical engine parts and control units is within a plausible range for sole-source procurements. Historical data on sole-source awards for similar high-value, specialized aerospace components would be necessary for a robust benchmark.

What are the primary risks associated with this sole-source contract award?

The primary risks associated with this sole-source contract are related to cost and potential lack of innovation. Without competition, there is a heightened risk that the government may not be achieving the lowest possible price for these critical components. This could lead to inefficient use of taxpayer funds. Additionally, relying solely on Honeywell for these specific parts can create a dependency, potentially leading to supply chain vulnerabilities if the contractor faces production issues or significant price increases in the future. The lack of competitive pressure might also disincentivize Honeywell from pursuing cost-saving innovations or efficiencies that could benefit the Army.

What is the expected program effectiveness or impact of this contract on Army aviation readiness?

The expected program effectiveness hinges on the reliable supply of T55-GA-714A engine components, electronic control units, and installation kits. These parts are crucial for the maintenance and operational readiness of Army aircraft that utilize the T55 engine, such as the CH-47 Chinook helicopter. By ensuring the availability of these parts through a dedicated contract, the Army aims to minimize downtime, maintain flight safety, and sustain its aviation fleet's operational capability. The contract's duration and firm-fixed-price nature suggest a focus on predictable sustainment, directly contributing to the long-term readiness of these vital assets.

What are the historical spending patterns for aircraft engine parts and related components by the Department of the Army?

The Department of the Army historically spends billions of dollars annually on aircraft maintenance, repair, and overhaul, a significant portion of which is allocated to engine components, parts, and related systems. Spending patterns are influenced by fleet size, aircraft age, operational tempo, and modernization programs. Contracts for engine parts, like those for the T55-GA-714A, are often long-term and can be awarded through competitive bids or sole-source justifications when specific technological or logistical requirements exist. Analyzing aggregated spending data under relevant NAICS codes (like 336412) and Federal Procurement Data System (FPDS) reports would reveal trends in contract values, award types, and major suppliers over time.

Are there any specific performance metrics or Key Performance Indicators (KPIs) associated with this contract?

The provided data does not explicitly detail the specific performance metrics or Key Performance Indicators (KPIs) for this contract. However, for a firm-fixed-price delivery order of this nature, typical KPIs would likely revolve around on-time delivery of components, adherence to quality standards (e.g., defect rates, compliance with technical specifications), and potentially responsiveness to urgent requirements. The contract's success will be measured by the Army's ability to receive the necessary parts without delays or quality issues, thereby maintaining aircraft operational readiness. Formal performance evaluations would be conducted throughout the contract's period of performance.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

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: 111 S 34TH ST, PHOENIX, AZ, 85034

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: $41,020,674

Exercised Options: $41,020,674

Current Obligation: $41,020,674

Subaward Activity

Number of Subawards: 110

Total Subaward Amount: $18,285,112

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ21D0027

IDV Type: IDC

Timeline