DOE's $3B Kansas City Plant Contract for Facilities Support Services Awarded to Honeywell
Contract Overview
Contract Amount: $3,026,466,040 ($3.0B)
Contractor: Honeywell Federal Manufacturing & Technologies, LLC
Awarding Agency: Department of Energy
Start Date: 2010-09-30
End Date: 2015-09-30
Contract Duration: 1,826 days
Daily Burn Rate: $1.7M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Other
Official Description: TAS::89 0240::TAS MANAGEMENT AND OPERATION OF THE KANSAS CITY PLANT
Place of Performance
Location: KANSAS CITY, JACKSON County, MISSOURI, 64131
State: Missouri Government Spending
Plain-Language Summary
Department of Energy obligated $3.03 billion to HONEYWELL FEDERAL MANUFACTURING & TECHNOLOGIES, LLC for work described as: TAS::89 0240::TAS MANAGEMENT AND OPERATION OF THE KANSAS CITY PLANT Key points: 1. Significant contract value of over $3 billion for facilities support. 2. Sole-source award to Honeywell Federal Manufacturing & Technologies, LLC. 3. Contract duration of 5 years (2010-2015). 4. Facilities Support Services sector, NAICS 561210. 5. Cost Plus Incentive Fee (CPIF) contract type.
Value Assessment
Rating: questionable
The contract's total value is substantial. Without competitive bidding, it's difficult to assess if the pricing represents fair market value. The CPIF structure aims to incentivize performance, but the baseline for 'incentive' is crucial for value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and potentially leads to higher costs for taxpayers compared to a competitively bid contract.
Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about potential overspending and inefficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract could lock in potentially suboptimal pricing. Essential government operations rely on the services provided, making oversight critical. The specific performance incentives within the CPIF contract need careful monitoring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Lack of competition
- Potential for cost overruns
Positive Signals
- Established contractor with experience
- Incentive fee structure to drive performance
Sector Analysis
This contract falls under Facilities Support Services, a broad category encompassing maintenance, operation, and management of facilities. Spending in this sector can vary widely depending on the complexity and scale of the facilities managed. Benchmarks are difficult without specific service details.
Small Business Impact
The data indicates this contract was not set aside for small businesses and was awarded to a large corporation, Honeywell. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of Energy to ensure performance standards are met and costs are managed effectively. Regular audits and performance reviews are critical for accountability.
Related Government Programs
- Facilities Support Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Sole-source awards reduce transparency and accountability.
- Potential for contractor lock-in and reduced innovation.
- High contract value increases financial risk.
- CPIF contracts can be complex to manage and audit effectively.
Tags
facilities-support-services, department-of-energy, mo, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $3.03 billion to HONEYWELL FEDERAL MANUFACTURING & TECHNOLOGIES, LLC. TAS::89 0240::TAS MANAGEMENT AND OPERATION OF THE KANSAS CITY PLANT
Who is the contractor on this award?
The obligated recipient is HONEYWELL FEDERAL MANUFACTURING & TECHNOLOGIES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $3.03 billion.
What is the period of performance?
Start: 2010-09-30. End: 2015-09-30.
What specific justifications were provided for the sole-source award, and were alternatives thoroughly explored?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For a contract of this scale and nature, the agency would need to demonstrate compelling reasons, such as unique capabilities, national security imperatives, or lack of viable alternatives. A thorough review of market research and potential sources would be expected to precede such a determination.
How effectively did the incentive fee structure control costs and drive desired performance outcomes over the contract's life?
The effectiveness of the Cost Plus Incentive Fee (CPIF) structure hinges on the clarity and attainability of the performance targets and the fairness of the cost-sharing formula. Analyzing the contractor's performance against these metrics, the actual incentive payouts, and the final cost compared to initial estimates would reveal how well it controlled costs and achieved objectives.
What was the total cost variance compared to initial projections, and what factors contributed to any significant deviations?
Assessing the total cost variance requires comparing the final contract cost against the initial estimated cost. Significant deviations could stem from scope changes, unforeseen operational challenges, inflation, or inefficiencies. Understanding these factors is crucial for evaluating the agency's cost management and the contractor's execution.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Honeywell International Inc (UEI: 139691877)
Address: 2000 E 95TH ST POST, KANSAS CITY, MO, 64131
Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,550,438,914
Exercised Options: $3,912,946,914
Current Obligation: $3,026,466,040
Subaward Activity
Number of Subawards: 3693
Total Subaward Amount: $886,848,054
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-09-30
Current End Date: 2015-09-30
Potential End Date: 2015-09-30 00:00:00
Last Modified: 2016-08-25
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