Army awards $157.8M for aircraft engine accessories, with Honeywell as sole provider

Contract Overview

Contract Amount: $157,855,748 ($157.9M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 1999-06-17

End Date: 2004-09-30

Contract Duration: 1,932 days

Daily Burn Rate: $81.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199909!2100!1117!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2399C0094 !A!*!* !19990617!20020331!009000050!139691877!139691877!N!99193!HONEYWELL INTERNATIONAL INC !1300 W WARNER RD !TEMPE !AZ!85284!55000!013!04!PHOENIX !MARICOPA !ARIZONA !0001!+000057122898!N!N!000000000000!2995!MISCELLANEOUS ENGINE ACCESSORIES, AIRCRAFT !A1B!AIRCRAFT ENGINES AND SPARES !1AHK!CH-47 CHINOOK !3724!3!*!*!*!B!A!*!D !N!J!1!001!N!1G!A!Y!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $157.9 million to HONEYWELL INTERNATIONAL INC. for work described as: 199909!2100!1117!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2399C0094 !A!*!* !19990617!20020331!009000050!139691877!139691877!N!99193!HONEYWELL INTERNATIONAL INC !1300 W WARNER RD !TEMPE !AZ!85284!55000!013!04!PHOENIX !MARICO… Key points: 1. Contract awarded to a single, established supplier suggests limited market alternatives. 2. Fixed-price contract type may offer cost certainty but limits contractor flexibility. 3. Long contract duration (over 5 years) indicates a sustained need for these specialized parts. 4. Geographic concentration in Arizona for the contractor's facility. 5. The contract falls under aircraft engines and spares, a critical defense sector.

Value Assessment

Rating: fair

The total value of $157.8 million over approximately 5 years for miscellaneous aircraft engine accessories is substantial. Without specific unit cost data or comparable contract benchmarks, a precise value-for-money assessment is challenging. However, the absence of competition and the specialized nature of the parts suggest that pricing may not have been aggressively negotiated. The contract's fixed-price nature provides some cost predictability for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Honeywell International Inc., was solicited. This indicates that the government likely determined that Honeywell was the only source capable of providing the required miscellaneous aircraft engine accessories. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the taxpayer.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive bidding, which can result in less favorable pricing for taxpayers.

Public Impact

The primary beneficiaries are the U.S. Army aviation units relying on CH-47 Chinook helicopters. The contract ensures the continued availability of critical engine accessories for maintaining aircraft operational readiness. The services are delivered through the supply chain managed by Honeywell International Inc. The contract has implications for the aerospace and defense manufacturing workforce, particularly in Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Lack of transparency in pricing due to no competitive bidding process.
Long-term duration may not account for evolving technology or market shifts.

Positive Signals

Ensures supply of critical components for essential military aircraft.
Fixed-price contract offers budget predictability.
Contractor has a track record in providing these specialized parts.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft components and spares. The market for specialized aircraft engine accessories is often characterized by high barriers to entry due to proprietary technology, stringent quality requirements, and established relationships with prime contractors. Spending in this sub-sector is driven by military readiness requirements and the operational lifespan of aircraft fleets. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar specialized aviation parts.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans in the provided data. As a sole-source award to a large corporation, the direct impact on small businesses is likely minimal unless Honeywell engages them as subcontractors. The absence of specific small business provisions suggests that opportunities for small business participation in this particular contract may be limited.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Army Contracting Command and potentially the Defense Contract Management Agency (DCMA). The fixed-price nature of the contract implies that oversight would focus on delivery schedules, quality assurance, and compliance with contract terms rather than detailed cost auditing. Transparency is limited due to the sole-source nature, and specific Inspector General (IG) involvement would depend on any identified performance issues or allegations of impropriety.

Related Government Programs

Aircraft Engine Maintenance and Repair
Aviation Spares and Components
Department of Defense Procurement
Army Aviation Support
CH-47 Chinook Helicopter Support

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $157.9 million to HONEYWELL INTERNATIONAL INC.. 199909!2100!1117!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2399C0094 !A!*!* !19990617!20020331!009000050!139691877!139691877!N!99193!HONEYWELL INTERNATIONAL INC !1300 W WARNER RD !TEMPE !AZ!85284!55000!013!04!PHOENIX !MARICOPA !ARIZONA !0001!+000057122898!N!N!000000000000!2995!MISCELLANEOUS ENGINE ACCESSORIES, AIRCRAFT !A1B!AIRCRAFT ENGINES AND SPARES !1AHK!CH-47 CHINOOK !3724!3!*!*!*!B!A!*!D !N!J!1!0

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 $157.9 million.

What is the period of performance?

Start: 1999-06-17. End: 2004-09-30.

What is Honeywell's historical performance and track record with the U.S. Army for similar contracts?

Honeywell International Inc. has a long-standing relationship with the U.S. military, including the Army, for providing a wide range of aerospace components and systems. Their track record typically involves supplying critical parts for various aircraft platforms. While specific performance metrics for this particular contract are not detailed in the provided data, Honeywell is generally recognized as a major, established supplier in the defense aerospace industry. Their history suggests a capacity to meet stringent military specifications and delivery requirements. However, without access to past performance evaluations or dispute records, a comprehensive assessment of their track record remains limited to general industry standing.

How does the $157.8 million contract value compare to similar sole-source awards for aircraft engine accessories?

Benchmarking this $157.8 million contract value against similar sole-source awards for aircraft engine accessories is challenging without access to a comprehensive database of comparable contracts. Sole-source awards, by their nature, lack direct price competition, making direct value comparisons difficult. However, the value suggests a significant quantity or high unit cost for these specialized components, likely tied to the CH-47 Chinook platform. The duration of over five years also contributes to the total value. Generally, sole-source procurements for highly specialized or proprietary aerospace parts tend to be higher in total value compared to competitively bid items due to the absence of market pressure on pricing.

What are the primary risks associated with this sole-source contract for miscellaneous aircraft engine accessories?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may not be achieving the best possible value for its expenditure. Another risk is vendor lock-in; the Army becomes dependent on Honeywell for these specific parts, potentially limiting future flexibility or negotiation leverage. Furthermore, if Honeywell faces production issues, supply chain disruptions, or significant price increases, the Army has limited alternative sources to mitigate these impacts. The long contract duration also carries a risk of obsolescence or the emergence of more cost-effective alternatives that cannot be easily incorporated due to the existing sole-source agreement.

How effective is the fixed-price contract type in managing costs for these specialized aircraft engine accessories?

The Firm Fixed Price (FFP) contract type is generally effective in managing costs by shifting the risk of cost overruns to the contractor, Honeywell. This means the government pays a set price regardless of the contractor's actual costs. This provides budget certainty and predictability for the Army. However, for highly specialized or technically complex items where cost estimation is difficult, the contractor may build in significant contingency into the price to protect against unforeseen expenses. In such cases, while the government has cost certainty, the initial price might be higher than it would be under a cost-reimbursement contract with strong oversight. The effectiveness also depends on the accuracy of the initial price negotiation and the contractor's ability to manage their own costs efficiently.

What is the historical spending pattern for CH-47 Chinook helicopter engine accessories by the Department of the Army?

Historical spending patterns for CH-47 Chinook helicopter engine accessories by the Department of the Army would likely show consistent, significant investment over time, reflecting the platform's long service life and critical role. Spending would fluctuate based on fleet readiness requirements, modernization programs, and the availability of spare parts. Contracts for such components are often long-term and may involve sole-source or limited-competition awards due to the specialized nature of the parts and the established supply chain. Analyzing past contract awards, including their values, durations, and competition levels, would reveal trends in procurement strategies and overall expenditure for maintaining the Chinook fleet's engine systems.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Honeywell International Inc (UEI: 139691877)

Address: 1300 W WARNER RD, TEMPE, AZ, 04

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline