Honeywell awarded $24.3M IDIQ for aircraft engine parts, with limited competition

Contract Overview

Contract Amount: $24,349,789 ($24.3M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2024-05-13

End Date: 2026-07-31

Contract Duration: 809 days

Daily Burn Rate: $30.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 5 YEAR IDIQ FOR STARTER, ENGINE.

Place of Performance

Location: TEMPE, MARICOPA County, ARIZONA, 85284

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to HONEYWELL INTERNATIONAL INC. for work described as: 5 YEAR IDIQ FOR STARTER, ENGINE. Key points: 1. Contract awarded as a delivery order under an existing IDIQ, suggesting a pre-established relationship. 2. The firm-fixed-price structure aims to control costs for the government. 3. Limited competition raises questions about potential price optimization and value for money. 4. The contract duration of approximately 809 days aligns with typical sustainment needs. 5. Focus on aircraft engine parts places this within a critical defense sustainment sector. 6. The contract's value is moderate within the context of major defense procurements.

Value Assessment

Rating: fair

The contract value of $24.3 million over roughly two years for aircraft engine parts appears moderate. Without specific details on the parts or quantities, a direct comparison to similar contracts is challenging. However, the 'NOT COMPETED' status suggests potential for higher pricing than if full and open competition had been pursued. Benchmarking against market rates for similar components would be necessary to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a delivery order under an existing IDIQ and was not competed. The data indicates a 'NOT COMPETED' status, implying that this specific order was likely placed directly with Honeywell without soliciting bids from other vendors. This approach is often used for specialized parts or when a specific vendor has unique capabilities or existing sustainment agreements.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the most competitive pricing that could have been achieved through a broader bidding process.

Public Impact

The Department of the Army benefits from the continued availability of critical aircraft engine parts. This contract supports the operational readiness of military aircraft. The geographic impact is primarily within Arizona, where Honeywell International Inc. is located. The contract supports jobs within the aerospace manufacturing and maintenance sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing for taxpayers.
Reliance on a single source for critical components can create supply chain vulnerabilities.
Limited transparency into the pricing justification due to non-competitive award.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award under an existing IDIQ suggests a streamlined process for a known requirement.
Honeywell is a well-established provider of aerospace components, implying a degree of reliability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for such parts is characterized by high technical barriers to entry, stringent quality requirements, and often long-term sustainment needs for military platforms. Spending in this area is critical for maintaining fleet readiness. Comparable spending benchmarks would involve looking at other sustainment contracts for similar engine types or aircraft platforms.

Small Business Impact

The contract data indicates that small business participation was not a stated requirement (sb: false) and the award was not specifically set aside for small businesses. Therefore, this contract is unlikely to have direct subcontracting implications for small businesses unless Honeywell voluntarily includes them in its supply chain. The overall impact on the small business ecosystem is minimal for this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a delivery order under an IDIQ, the initial IDIQ award likely underwent significant review. However, the lack of competition for this specific order reduces the inherent oversight provided by a competitive bidding process. Transparency is limited by the non-competitive nature of the award.

Related Government Programs

Aircraft Engine Manufacturing
Defense Logistics Agency (DLA) Contracts
Military Aircraft Sustainment Programs
Aerospace Parts Procurement

Risk Flags

Limited Competition
Potential for Price Inflation
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to HONEYWELL INTERNATIONAL INC.. 5 YEAR IDIQ FOR STARTER, ENGINE.

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 $24.3 million.

What is the period of performance?

Start: 2024-05-13. End: 2026-07-31.

What is Honeywell's track record with the Department of Defense for similar contracts?

Honeywell International Inc. has a long-standing and extensive track record of supplying various components and systems to the Department of Defense, including aircraft engines and related parts. They are a major defense contractor with numerous awards across different branches and agencies. Their history includes both competitive and sole-source awards, often related to specialized or proprietary technologies. Analyzing their past performance on similar firm-fixed-price delivery orders for engine components would provide context on their reliability and pricing consistency. However, specific performance metrics and past issues would require deeper dives into contract databases and performance reports.

How does the $24.3 million value compare to typical spending on aircraft engine parts by the Army?

The $24.3 million value for this 5-year IDIQ (with a current delivery order value not explicitly stated but implied to be within this ceiling) is a moderate amount for aircraft engine parts. The Department of Defense, and specifically the Army, spends billions annually on aircraft sustainment, which includes parts, maintenance, and upgrades. Individual component contracts can range from thousands to hundreds of millions of dollars depending on the criticality, volume, and complexity of the parts. This contract likely covers a specific set of components for a particular engine type or fleet. To benchmark effectively, one would need to compare it against other contracts for similar engine models or part categories, considering factors like quantity, lead times, and the specific engine platforms supported.

What are the primary risks associated with a 'NOT COMPETED' award for critical aircraft engine parts?

The primary risks associated with a 'NOT COMPETED' award for critical aircraft engine parts include potential overpayment due to the absence of competitive pricing pressure, reduced incentive for the contractor to innovate or offer cost-saving solutions, and potential supply chain vulnerabilities if the sole-source provider faces production issues or goes out of business. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, making future procurements more difficult and potentially more expensive. Furthermore, the lack of transparency in the bidding process can obscure potential conflicts of interest or inefficiencies.

How does the firm-fixed-price (FFP) contract type mitigate risks for this type of procurement?

The Firm-Fixed-Price (FFP) contract type is beneficial for the government in this scenario as it shifts the risk of cost overruns to the contractor, Honeywell. Under an FFP agreement, the price is set and not subject to adjustment based on the contractor's actual costs. This provides budget certainty for the Department of the Army. For critical components like aircraft engine parts, where specifications are well-defined and performance requirements are clear, FFP helps control costs and prevents unexpected increases. However, it's crucial that the initial price negotiated reflects fair market value, which is a challenge when the contract is not competed.

What is the significance of the NAICS code 336412 (Aircraft Engine and Engine Parts Manufacturing) in understanding this contract?

The North American Industry Classification System (NAICS) code 336412, 'Aircraft Engine and Engine Parts Manufacturing,' precisely categorizes the industry and the nature of the goods being procured. This code signifies that the contract is for the production or supply of engines for aircraft, or components thereof. Understanding this classification helps in identifying the specific market segment, potential competitors (even if not competed this time), and relevant industry standards and regulations. It allows for comparison with other government spending or industry data within this specialized manufacturing sector, providing context for the contract's scope and economic relevance.

What does the contract duration (809 days) imply about the nature of the requirement?

A contract duration of approximately 809 days (roughly 2 years and 2 months) for an IDIQ with a delivery order suggests a requirement for ongoing sustainment or replenishment of parts over a defined period. This timeframe is typical for ensuring the availability of critical components needed for regular maintenance, repair, and operational readiness of aircraft fleets. It indicates that the need for these specific engine parts is not a one-time purchase but a recurring necessity. The duration allows for predictable budgeting and supply chain management for the Department of the Army over the specified period.

Industry Classification

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

Product/Service Code: ENGINE ACCESSORIES

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: 1300 W WARNER RD, TEMPE, AZ, 85284

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: $24,349,789

Exercised Options: $24,349,789

Current Obligation: $24,349,789

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ23D0095

IDV Type: IDC

Timeline