DoD awards $33M+ for armored vehicle parts, with Honeywell as sole provider

Contract Overview

Contract Amount: $32,963,172 ($33.0M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-12

End Date: 2025-09-30

Contract Duration: 383 days

Daily Burn Rate: $86.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TIGER DO PM 12.1

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $33.0 million to HONEYWELL INTERNATIONAL INC. for work described as: TIGER DO PM 12.1 Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant spending on a single contractor suggests potential for limited market alternatives. 3. Fixed-price contract type aims to control costs, but sole-source nature may limit savings. 4. Contract duration of over a year indicates ongoing need for these components. 5. Geographic concentration in Arizona for delivery may impact logistics and regional economic benefits. 6. Lack of competition raises concerns about potential overpayment compared to a competitive market.

Value Assessment

Rating: questionable

The contract's value of over $33 million for armored vehicle parts is substantial. However, without competitive bidding, it's difficult to benchmark the value for money. The fixed-price contract type is a positive sign for cost control, but the sole-source nature means taxpayers are reliant on the contractor's pricing without market validation. Comparing this to similar sole-source awards for specialized military components would be necessary for a more precise assessment of fairness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Honeywell International Inc., was considered. This typically occurs when a specific capability or product is only available from a single source. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to lower prices. The government's negotiating position is weakened without alternative suppliers.

Public Impact

The Department of the Army benefits from the continued supply of critical armored vehicle components. This contract supports the maintenance and readiness of military armored vehicles. The primary beneficiaries are military personnel relying on these vehicles for operations. Workforce implications are likely within Honeywell's manufacturing facilities, potentially in Arizona. The contract ensures the availability of specialized parts for national defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential savings.
Lack of transparency in pricing due to no competitive bidding.
Dependence on a single supplier for critical defense components.
Potential for cost overruns if pricing is not rigorously negotiated.

Positive Signals

Fixed-price contract type helps to cap costs.
Contract duration provides supply chain stability for essential parts.
Awarding to an established contractor like Honeywell may ensure quality and reliability.

Sector Analysis

The defense industrial base relies on specialized manufacturers for critical components like those for armored vehicles. Honeywell International Inc. is a major player in this sector, providing a range of aerospace and defense products. This contract fits within the broader category of defense manufacturing and sustainment, ensuring the operational readiness of military equipment. Spending benchmarks for similar sole-source awards for specialized military hardware are often high due to unique technical requirements and limited supplier bases.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the sole-source award to Honeywell International Inc. There is no explicit information regarding subcontracting plans for small businesses. The focus on a large, established prime contractor suggests that direct opportunities for small businesses may be limited unless they are part of Honeywell's existing supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract type, which shifts some risk to the contractor. Transparency may be limited due to the sole-source nature, but contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Armored Vehicle Manufacturing
Military Vehicle Parts
Defense Logistics and Sustainment
Sole-Source Defense Contracts
Honeywell International Inc. Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation
Dependence on single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 million to HONEYWELL INTERNATIONAL INC.. TIGER DO PM 12.1

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 $33.0 million.

What is the period of performance?

Start: 2024-09-12. End: 2025-09-30.

What is Honeywell International Inc.'s track record with the Department of Defense for similar armored vehicle components?

Honeywell International Inc. has a long-standing relationship with the Department of Defense, supplying a wide array of components and systems across various platforms, including aerospace and defense. For armored vehicles specifically, their involvement often centers on critical systems such as engines, transmissions, and other specialized parts. Historical data from federal procurement databases would likely show numerous contracts, both competitive and sole-source, for these types of goods. A review of past performance would assess their reliability, quality, and adherence to delivery schedules on previous DoD contracts. This specific contract, valued at over $33 million, indicates a significant ongoing requirement for their specialized products, suggesting a continued reliance on their capabilities by the Army.

How does the $33 million award compare to historical spending on armored vehicle parts by the Department of the Army?

The $33,296,317.94 award represents a substantial investment in armored vehicle components. To contextualize this, one would need to analyze historical spending patterns for similar parts or services by the Department of the Army over several fiscal years. This would involve looking at aggregate spending on categories like 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' (NAICS 336992) or specific parts identified in the contract. Comparing this single award to the total annual expenditure in this category can indicate its relative significance. Furthermore, examining trends in sole-source awards versus competitively awarded contracts for these components would reveal whether reliance on single suppliers is increasing or decreasing, impacting overall cost-effectiveness.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risk of a sole-source award is the lack of price competition, which can lead to inflated costs for the government. Without competing bids, the government has less leverage to negotiate favorable pricing, potentially resulting in taxpayers paying more than necessary. Another risk is vendor lock-in, where the government becomes overly dependent on a single supplier, making it difficult and costly to switch providers in the future. This dependence can also reduce incentives for the sole-source contractor to innovate or improve efficiency, as they face no direct competitive threat. Furthermore, if the sole-source contractor experiences production issues or financial instability, it could disrupt the supply chain for critical defense components.

How effective is the fixed-price contract type in mitigating risks for this sole-source award?

The fixed-price contract type (FIRM FIXED PRICE) is generally effective in mitigating cost overrun risks for the government, as the contractor assumes the responsibility for any cost increases above the agreed-upon price. This provides a degree of cost certainty for the $33 million award. However, its effectiveness is somewhat diminished in a sole-source scenario. While the total price is fixed, the government still lacks assurance that this fixed price represents the best possible value achievable through competition. The contractor may have built in higher profit margins or contingency reserves due to the lack of competitive pressure. Therefore, while it caps the government's liability, it doesn't guarantee optimal value for money compared to a competitively bid fixed-price contract.

What are the potential implications of this contract being awarded to Honeywell International Inc. in Arizona?

Awarding this contract to Honeywell International Inc., with a stated delivery location in Arizona (ST: AZ, SN: ARIZONA), has several implications. Economically, it signifies continued investment and potential job security or creation within Honeywell's Arizona facilities related to defense manufacturing. It reinforces Arizona's role in the defense industrial base. From a logistical standpoint, it concentrates the delivery and potential oversight activities within that region. For the Department of the Army, it means relying on a specific geographic base for the supply of these critical components, which could be a factor in supply chain resilience planning. The long-term impact depends on the sustained need for these components and Honeywell's continued operational capacity in Arizona.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component 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: $32,963,172

Exercised Options: $32,963,172

Current Obligation: $32,963,172

Subaward Activity

Number of Subawards: 133

Total Subaward Amount: $16,872,793

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV20D0062

IDV Type: IDC

Timeline