Air Force awards $23.7M for YECU/PECU Modification Kits to Honeywell, a sole-source contract

Contract Overview

Contract Amount: $23,667,002 ($23.7M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2008-02-01

End Date: 2016-06-30

Contract Duration: 3,072 days

Daily Burn Rate: $7.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MODIFICATION KIT (YECU/PECU)

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87113

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to HONEYWELL INTERNATIONAL INC. for work described as: MODIFICATION KIT (YECU/PECU) Key points: 1. Significant contract value for specialized aircraft modification kits. 2. Sole-source award to Honeywell raises questions about competition and potential price inflation. 3. Long contract duration (2008-2016) suggests a critical, long-term need. 4. Lack of small business participation noted.

Value Assessment

Rating: questionable

The contract value of $23.7M over its duration is substantial. Without competitive bids, it's difficult to assess if this price is optimal compared to potential market rates for similar modification kits.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award to Honeywell. This limits price discovery and may lead to higher costs for taxpayers as there was no competitive pressure to lower prices.

Taxpayer Impact: The lack of competition likely resulted in a higher cost to the taxpayer than if multiple vendors had bid on the contract.

Public Impact

Ensures continued operational readiness of Air Force aircraft by providing essential modification kits. Supports a single, established supplier for critical aircraft components, potentially ensuring supply chain stability. Raises concerns about the government's ability to secure the best value for taxpayer dollars due to the sole-source nature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. Spending in this area is often characterized by high technical requirements and long product lifecycles, sometimes leading to sole-source procurements.

Small Business Impact

The data indicates no small business participation in this contract. This suggests that the prime contractor, Honeywell, likely handled the entire scope of work or subcontracted to other large businesses.

Oversight & Accountability

The sole-source nature of this contract warrants scrutiny from oversight bodies to ensure the price paid was fair and reasonable, and that future procurements explore competitive options where feasible.

Related Government Programs

Risk Flags

Tags

other-aircraft-parts-and-auxiliary-equip, department-of-defense, nm, definitive-contract, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to HONEYWELL INTERNATIONAL INC.. MODIFICATION KIT (YECU/PECU)

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 Air Force).

What is the total obligated amount?

The obligated amount is $23.7 million.

What is the period of performance?

Start: 2008-02-01. End: 2016-06-30.

What was the justification for awarding this contract on a sole-source basis, and were alternatives explored?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one vendor can meet. For this contract, the specific reason for not competing it needs further investigation. Without competitive bids, it's challenging to ascertain if the government secured the best possible price and value.

How does the per-unit cost of these modification kits compare to similar systems or previous contracts?

Benchmarking the per-unit cost is difficult without competitive data. If previous contracts for the same kits existed and were also sole-source, the pricing might be inflated. A thorough review would involve comparing specifications and pricing with similar aftermarket modification kits, if available, from other manufacturers.

What is the long-term strategy for acquiring these modification kits to ensure future cost-effectiveness and competition?

The long-term strategy should focus on fostering competition. This could involve breaking down the requirement into smaller, more manageable components, encouraging new entrants into the market, or developing alternative solutions. The Air Force should actively seek opportunities to transition from sole-source to competitive procurements where possible.

Industry Classification

NAICS: ManufacturingAerospace Product and Parts ManufacturingOther Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell International Inc (UEI: 139691877)

Address: 699 ROUTE 46 EAST, ROUTE 46 & INDUS, TETERBORO, NJ, 07608

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,667,002

Exercised Options: $23,667,002

Current Obligation: $23,667,002

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline

Start Date: 2008-02-01

Current End Date: 2016-06-30

Potential End Date: 2016-06-30 00:00:00

Last Modified: 2016-08-02

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