DoD awards $76M contract for Minuteman III gyroscopic accelerometer repair to Honeywell, a sole-source action

Contract Overview

Contract Amount: $76,249,256 ($76.2M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2022-03-21

End Date: 2026-06-30

Contract Duration: 1,562 days

Daily Burn Rate: $48.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: REPAIR OF PENDULOUS INTEGRATED GYROSCOPIC ACCELEROMETER FOR MINUTEMAN III MISSILE LGM-30

Place of Performance

Location: CLEARWATER, PINELLAS County, FLORIDA, 33764

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $76.2 million to HONEYWELL INTERNATIONAL INC. for work described as: REPAIR OF PENDULOUS INTEGRATED GYROSCOPIC ACCELEROMETER FOR MINUTEMAN III MISSILE LGM-30 Key points: 1. Contract awarded to a single source, raising questions about price competitiveness. 2. Long-term contract duration (over 4 years) suggests a critical, ongoing need. 3. Repair and maintenance services for strategic missile components indicate high-stakes national security implications. 4. The specific nature of the component suggests a highly specialized and potentially limited market. 5. Performance-based contract type may incentivize efficient and effective repair services.

Value Assessment

Rating: questionable

The contract value of $76.2 million for repair of a specific missile component is substantial. Without comparable contract data for this niche service, it is difficult to definitively benchmark value. However, the sole-source nature of the award raises concerns about whether the government secured the best possible price. The Cost Plus Fixed Fee (CPFF) structure means costs are reimbursed plus a fixed fee, which can lead to cost overruns if not closely managed. The base award amount of $48.8 million with significant options suggests potential for increased spending.

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 typically occurs when a unique product or service is required, or when only one vendor possesses the necessary expertise or proprietary technology. The lack of competition means the government did not explore potential alternative providers or negotiate based on multiple bids, which could lead to higher costs.

Taxpayer Impact: The absence of competition for this critical missile component repair means taxpayers may be paying a premium, as there was no market pressure to drive down prices.

Public Impact

The primary beneficiaries are the Department of Defense and the Air Force, ensuring the operational readiness of the Minuteman III missile system. Services delivered include the repair and maintenance of pendulous integrated gyroscopic accelerometers, crucial for missile guidance. The geographic impact is national, as the Minuteman III is a key component of the U.S. nuclear triad. Workforce implications include the need for highly specialized technicians and engineers at Honeywell to perform these sensitive repairs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize higher spending if not rigorously overseen.
Long contract duration may mask inefficiencies if performance is not continuously monitored.
Lack of transparency in the sole-source justification requires careful review.
Potential for vendor lock-in due to specialized nature of the component.

Positive Signals

Award to incumbent contractor (Honeywell) likely ensures continuity of essential services.
Specialized nature of the component suggests Honeywell possesses unique technical expertise.
Contract includes options, allowing for flexibility in meeting future needs.
Focus on repair and maintenance ensures readiness of a critical national asset.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the maintenance and repair of strategic missile systems. The market for such specialized components is highly concentrated, often dominated by a few original equipment manufacturers or highly specialized repair facilities. The total addressable market for such niche repair services is difficult to quantify but is directly tied to the operational lifespan and maintenance requirements of the U.S. nuclear deterrent. Comparable spending benchmarks are scarce due to the unique nature of the component and the sole-source award.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by the 'sb': false flag. Honeywell International Inc. is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this award notice. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless Honeywell voluntarily engages small businesses for specific support services not detailed here.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. As a sole-source award, scrutiny on cost reasonableness and performance will be paramount. The Cost Plus Fixed Fee structure necessitates robust financial oversight to ensure costs are legitimate and the fixed fee is earned. Transparency may be limited due to the sole-source nature, but contract performance reviews and audits by the agency or potentially the Government Accountability Office (GAO) would serve as accountability measures.

Related Government Programs

Minuteman III Sustainment Program
Strategic Nuclear Deterrent Maintenance
Aerospace Component Repair Services
Defense Logistics Agency (DLA) Repair Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration
Critical defense component repair

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.2 million to HONEYWELL INTERNATIONAL INC.. REPAIR OF PENDULOUS INTEGRATED GYROSCOPIC ACCELEROMETER FOR MINUTEMAN III MISSILE LGM-30

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 $76.2 million.

What is the period of performance?

Start: 2022-03-21. End: 2026-06-30.

What is Honeywell's track record with similar sole-source contracts for critical defense components?

Honeywell International Inc. has a long history of contracting with the U.S. government, including the Department of Defense, across various defense platforms. While specific data on sole-source contracts for identical components is not readily available in this context, Honeywell is a major defense contractor known for its work on avionics, propulsion, and other critical systems. Their track record generally indicates a capacity to deliver complex technological solutions. However, the nature of sole-source awards means that comparisons are often limited to their performance on other sole-source actions or their ability to meet stringent military specifications. Evaluating their past performance on similar high-stakes, specialized repair contracts would require a deeper dive into agency procurement records and performance reviews.

How does the $76.2 million contract value compare to historical spending on Minuteman III accelerometer repairs?

Determining a precise historical spending comparison for this specific contract is challenging without access to detailed historical procurement data for the Minuteman III program's gyroscopic accelerometers. The $76.2 million figure represents the total potential value over the contract's duration, including options. The base award is $48.8 million. Given the long service life of the Minuteman III and the specialized nature of its components, it's plausible that cumulative repair costs over decades could be substantial. However, without specific figures for prior repair contracts of this component, it's difficult to ascertain if this award represents an increase, decrease, or stable level of spending. The sole-source nature also complicates direct price comparisons with any potentially competed contracts from the past.

What are the primary risks associated with a sole-source award for critical missile component repair?

The primary risks associated with a sole-source award for critical missile component repair include elevated costs due to a lack of price competition, potential for complacency from the contractor regarding innovation or efficiency, and a reduced incentive to maintain competitive pricing. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, making future transitions difficult or expensive. Furthermore, without competitive pressure, there's a possibility that the quality or timeliness of service could be impacted if not rigorously monitored. Ensuring adequate oversight and performance metrics becomes even more critical in sole-source situations to mitigate these inherent risks and protect taxpayer interests.

How effective is the Cost Plus Fixed Fee (CPFF) contract type in ensuring program effectiveness for specialized repairs?

The Cost Plus Fixed Fee (CPFF) contract type aims to balance cost control with contractor incentive for specialized repairs. The government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can be effective when the scope of work is not fully defined or involves significant uncertainty, as is often the case with complex repairs. It incentivizes the contractor to control costs to avoid exceeding the estimated cost ceiling, as their fee remains fixed. However, effectiveness hinges on robust government oversight to ensure costs are reasonable and allocable, and that the fixed fee adequately compensates for the risk and effort. If oversight is weak, contractors may have less incentive to minimize costs, potentially leading to higher overall expenditures than anticipated.

What are the implications of the contract duration (1562 days) for the Minuteman III program's readiness?

A contract duration of 1562 days (approximately 4.3 years) for the repair of gyroscopic accelerometers for the Minuteman III missile system suggests a long-term, sustained need for these services to maintain the operational readiness of the U.S. nuclear deterrent. This duration implies that the component is critical and requires ongoing maintenance or that the repair process itself is complex and time-consuming. A well-managed contract of this length can ensure consistent support, preventing degradation of vital systems. Conversely, a poorly managed contract could lead to delays, cost overruns, or gaps in service, potentially impacting the readiness of the missile system. The extended period underscores the strategic importance of these components and the need for reliable, long-term sustainment.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA821420R7010

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell Safety Products USA, Inc.

Address: 13350 US HIGHWAY 19 N, CLEARWATER, FL, 33764

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: $76,249,256

Exercised Options: $76,249,256

Current Obligation: $76,249,256

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,380,761

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline