Air Force Awards $108M Enterprise Performance Based Logistics Contract for Aircraft Power Support to Honeywell
Contract Overview
Contract Amount: $108,051,974 ($108.1M)
Contractor: Honeywell International Inc.
Awarding Agency: Department of Defense
Start Date: 2019-11-26
End Date: 2024-09-30
Contract Duration: 1,770 days
Daily Burn Rate: $61.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: BASIC CONTRACT AWARD FOR THE ENTERPRISE PERFORMANCE BASED LOGISTICS CONTRACT FOR SECONDARY POWER SUPPORT FOR B-1, B-2, E-3, F-15, C-130, F-16, A-10, AND GROUND CARTS. PERFORMANCE AT HILL AFB IN SUPPORT OF 419 SCMS
Place of Performance
Location: PHOENIX, MARICOPA County, ARIZONA, 85034
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $108.1 million to HONEYWELL INTERNATIONAL INC. for work described as: BASIC CONTRACT AWARD FOR THE ENTERPRISE PERFORMANCE BASED LOGISTICS CONTRACT FOR SECONDARY POWER SUPPORT FOR B-1, B-2, E-3, F-15, C-130, F-16, A-10, AND GROUND CARTS. PERFORMANCE AT HILL AFB IN SUPPORT OF 419 SCMS Key points: 1. This contract focuses on critical logistics support for multiple aircraft platforms, indicating a significant need for sustained operational readiness. 2. Honeywell International Inc. is the sole awardee, raising questions about the extent of competition and potential price discovery. 3. The contract's duration and fixed-price structure with economic price adjustment introduce potential risks related to cost overruns and inflation. 4. The sector is primarily aerospace and defense, a high-value and complex industry with long-term sustainment requirements.
Value Assessment
Rating: questionable
The $108 million award for a multi-year logistics contract appears substantial. Without direct benchmarks for similar performance-based logistics contracts for this specific suite of aircraft, a definitive value assessment is difficult. However, the lack of competition suggests potential for higher-than-market pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This method limits price discovery and may result in less favorable pricing for the government compared to a competitive process.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive pressure.
Public Impact
Ensures continued operational readiness for key Air Force aircraft, impacting national defense capabilities. Supports critical maintenance and sustainment for aging aircraft fleets, extending their service life. The significant contract value represents a substantial allocation of taxpayer funds towards defense logistics. Potential for increased costs due to economic price adjustments over the contract's duration.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Economic price adjustment clause introduces cost escalation risk.
- Long contract duration increases exposure to market fluctuations.
- Lack of small business participation noted.
Positive Signals
- Performance-based logistics aims for efficiency and readiness.
- Supports critical national defense assets.
- Awardee has established expertise in aerospace logistics.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft sustainment and logistics. Spending in this area is critical for maintaining military readiness and often involves long-term, high-value contracts due to the complexity and specialized nature of the equipment.
Small Business Impact
The data indicates that this contract was not awarded to small businesses (ss: false, sb: false). This suggests that the prime contractor, Honeywell, is likely handling the entire scope of work, potentially with its own subsidiaries or large subcontractors, rather than engaging a broad base of small businesses for this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective performance. The Department of the Air Force is responsible for monitoring contract execution and ensuring compliance with terms and conditions to safeguard taxpayer interests.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Economic Price Adjustment (EPA)
- Long contract duration (1770 days)
- No small business participation
- Potential for cost overruns
- Lack of transparency in price justification
Tags
aircraft-manufacturing, department-of-defense, az, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $108.1 million to HONEYWELL INTERNATIONAL INC.. BASIC CONTRACT AWARD FOR THE ENTERPRISE PERFORMANCE BASED LOGISTICS CONTRACT FOR SECONDARY POWER SUPPORT FOR B-1, B-2, E-3, F-15, C-130, F-16, A-10, AND GROUND CARTS. PERFORMANCE AT HILL AFB IN SUPPORT OF 419 SCMS
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 $108.1 million.
What is the period of performance?
Start: 2019-11-26. End: 2024-09-30.
What is the justification for the sole-source award, and what steps were taken to ensure the government received fair and reasonable pricing without competition?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. For this contract, the specific justification is not provided in the data. However, the government should have conducted a thorough market research and price analysis to determine if the proposed price was fair and reasonable, potentially using historical data or independent cost estimates.
What are the potential risks associated with the economic price adjustment (EPA) clause in this fixed-price contract, and how are they being mitigated?
The EPA clause allows for price adjustments based on economic factors like inflation. The primary risk is uncontrolled cost escalation, which could significantly increase the contract's total value beyond initial projections. Mitigation strategies might include establishing caps on adjustments, using specific economic indices, and rigorous monitoring of the factors driving the adjustments by the contracting officer.
How will the performance-based aspects of this contract be measured and enforced to ensure optimal logistics support and value for taxpayer money?
Performance-based logistics contracts typically tie payment and award fees to achieving specific performance metrics (e.g., aircraft availability, response times, parts delivery). The Air Force must have clearly defined Key Performance Indicators (KPIs) and a robust system for tracking and evaluating Honeywell's performance against these metrics. Regular reviews and audits will be crucial to ensure accountability and value.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
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: SPRPA114R002U
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
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: $108,051,974
Exercised Options: $108,051,974
Current Obligation: $108,051,974
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPRPA118D001U
IDV Type: IDC
Timeline
Start Date: 2019-11-26
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2024-09-19
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