Honeywell International Inc. awarded $28.7M for TIGER III services, a sole-source contract for armored vehicle support

Contract Overview

Contract Amount: $28,716,740 ($28.7M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-01

End Date: 2025-12-31

Contract Duration: 456 days

Daily Burn Rate: $63.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TIGER III CONTRACT YEAR FIVE SERVICES

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $28.7 million to HONEYWELL INTERNATIONAL INC. for work described as: TIGER III CONTRACT YEAR FIVE SERVICES Key points: 1. Contract value represents a significant investment in specialized military vehicle maintenance and upgrades. 2. Sole-source award indicates a lack of readily available alternative providers or a need for specific contractor expertise. 3. Performance period of over a year suggests ongoing operational requirements for the supported systems. 4. Fixed-price contract type aims to control costs and provide predictability for the government. 5. The contract falls under the broad category of military vehicle manufacturing and support services. 6. Geographic location in Arizona may point to specific operational bases or maintenance facilities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized services. Without competitive bids, it's difficult to ascertain if the $28.7 million represents optimal value for money. The firm-fixed-price structure offers some cost control, but the absence of competition raises questions about potential overpricing compared to what might be achieved in a more open market. Further analysis would require understanding the specific technical requirements and the unique capabilities Honeywell brings to this contract.

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. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure, as the government did not benefit from multiple offers driving down prices.

Public Impact

The primary beneficiaries are the U.S. Army units relying on the TIGER III armored vehicles for operational readiness. Services delivered likely include maintenance, repair, upgrades, and technical support for these critical military assets. The geographic impact is centered in Arizona, where the contractor is located and potentially where the services are performed or supported. Workforce implications include employment opportunities for skilled technicians and engineers at Honeywell, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to inflated pricing.
Potential for vendor lock-in due to specialized knowledge.
Limited transparency into cost drivers without competitive benchmarks.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Honeywell's established expertise in defense systems.
Contract supports critical military operational readiness.

Sector Analysis

The defense sector, particularly military vehicle manufacturing and support, is characterized by high technological complexity and specialized expertise. Contracts like this are crucial for maintaining the operational effectiveness of the U.S. armed forces. The market often involves a limited number of prime contractors capable of handling such sophisticated systems. Spending in this sub-sector is driven by modernization efforts, sustainment of existing fleets, and evolving battlefield requirements. Comparable spending benchmarks are difficult to establish without detailed service scope, but large-scale vehicle sustainment contracts can run into hundreds of millions of dollars annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This means that opportunities for small businesses to participate in this specific contract are likely limited to direct supply chain roles or as subcontractors to Honeywell, rather than being primary awardees. The absence of set-asides may reduce the direct economic benefit to the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded within the contract's performance work statement and delivery schedules. Transparency is limited due to the sole-source nature, but contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

TIGER III Program
Armored Vehicle Sustainment
Military Vehicle Maintenance
Defense Logistics Agency Support
Army Combat Systems

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns if contractor does not manage expenses effectively under FFP.
Dependence on a single contractor for critical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.7 million to HONEYWELL INTERNATIONAL INC.. TIGER III CONTRACT YEAR FIVE SERVICES

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 $28.7 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-12-31.

What specific technical capabilities does Honeywell possess that justify this sole-source award for TIGER III services?

The justification for a sole-source award typically rests on unique technical capabilities, proprietary knowledge, or essential integration requirements that only one contractor can fulfill. For the TIGER III program, Honeywell International Inc. likely possesses specialized expertise in the design, manufacturing, maintenance, and upgrade of the specific armored vehicle systems involved. This could include proprietary software, unique diagnostic tools, specialized repair techniques, or deep historical knowledge of the platform's lifecycle. Without this specific expertise, the Army might face significant delays, increased costs, or an inability to maintain the vehicles' operational readiness. The contract's 'nd' field, 'Military Armored Vehicle, Tank, and Tank Component Manufacturing,' further suggests a deep integration with the production and sustainment chain of these complex platforms.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in a sole-source scenario?

A firm-fixed-price (FFP) contract type is generally preferred by the government as it shifts the majority of cost risk to the contractor. In a sole-source situation like the TIGER III contract, where competitive pricing is absent, the FFP structure provides a degree of cost certainty for the government. The total price is established upfront, and the contractor is obligated to complete the work for that amount, regardless of their actual costs. This prevents cost overruns from impacting the government's budget, unlike cost-reimbursement contracts. However, the FFP price itself might be higher in a sole-source context because the contractor has less incentive to minimize costs when competition is not a factor. Therefore, while FFP controls budget exposure, it doesn't inherently guarantee the lowest possible price in a non-competitive environment.

What are the potential long-term implications of relying on a sole-source provider for critical military vehicle support?

Relying on a sole-source provider for critical military vehicle support can lead to several long-term implications. Firstly, it can create vendor lock-in, making it difficult and costly to switch providers in the future, even if market conditions change. Secondly, the lack of competition can stifle innovation and reduce the incentive for the sole provider to improve efficiency or reduce costs over time. This can lead to sustained higher prices for the government. Thirdly, it increases the government's vulnerability if the sole provider experiences financial difficulties, operational disruptions, or decides to exit the market. This dependence can impact the long-term sustainment strategy and readiness of the military assets supported by the contract.

Can the 'br' value of 62975 provide any insight into the scale or type of services rendered under this contract?

The 'br' value of 62975, likely representing a Base Requirement or similar metric, is difficult to interpret definitively without further context specific to the TIGER III program or the Army's contracting nomenclature. It could potentially relate to a quantity of units, a specific service level, or a baseline operational tempo. For instance, it might represent 62,975 hours of labor, a certain number of vehicle maintenance cycles, or a baseline support package for a fleet of that size. However, given the contract's total value of approximately $28.7 million, this number suggests a substantial scope of work. If it represents hours, the implied hourly rate would be around $456 ($28.7M / 62975), which aligns with specialized technical services in the defense sector. Further clarification from program documentation would be needed for a precise understanding.

What is the historical spending pattern for TIGER III services, and how does this award compare?

Historical spending data for the TIGER III program is not provided in the given data snippet. To assess this award's context, one would need to examine past contract awards for TIGER III services, potentially including previous years of Honeywell's involvement or awards to other contractors if the program was competed previously. Comparing the current $28.7 million award to historical figures would reveal trends in spending, identify potential cost increases or decreases over time, and indicate the program's overall budget trajectory. Understanding if this is a typical annual award, a one-time surge in spending, or a reduction compared to previous periods is crucial for a comprehensive analysis of federal spending efficiency.

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: $28,716,740

Exercised Options: $28,716,740

Current Obligation: $28,716,740

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $7,603,328

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