Honeywell's $25.3M EGI-M contract for GPS/INS modernization shows limited competition and fair value
Contract Overview
Contract Amount: $25,320,170 ($25.3M)
Contractor: Honeywell International Inc.
Awarding Agency: Department of Defense
Start Date: 2017-03-31
End Date: 2019-06-30
Contract Duration: 821 days
Daily Burn Rate: $30.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF EMBEDDED GLOBAL POSITIONING (GPS) / INERTIAL NAVIGATION SYSTEM (INS) - MODERNIZED (EGI-M) TECHNOLOGY MATURATION RISKY REDUCTION (TMRR)
Place of Performance
Location: CLEARWATER, PINELLAS County, FLORIDA, 33764
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $25.3 million to HONEYWELL INTERNATIONAL INC. for work described as: IGF::OT::IGF EMBEDDED GLOBAL POSITIONING (GPS) / INERTIAL NAVIGATION SYSTEM (INS) - MODERNIZED (EGI-M) TECHNOLOGY MATURATION RISKY REDUCTION (TMRR) Key points: 1. Contract awarded to a single, established provider, indicating potential for higher costs due to lack of competitive pressure. 2. The contract's cost-plus-fixed-fee structure requires careful monitoring to ensure cost containment. 3. Performance period of over two years suggests a significant, ongoing need for this technology. 4. The technology maturation and risk reduction focus points to an investment in future defense capabilities. 5. Awarded to a large, experienced defense contractor, suggesting a lower risk of performance failure. 6. Geographic concentration in Florida for contract performance.
Value Assessment
Rating: fair
Benchmarking the value of this specific technology maturation contract is challenging due to its specialized nature. However, the fixed fee component provides some cost predictability. The absence of competition suggests that the pricing may not have been driven down to the lowest possible level. Further analysis would require comparing the scope and deliverables against similar R&D or technology maturation efforts within the DoD.
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 considered. This approach is typically used when a specific capability is required that only one entity can provide, or in cases of urgent need. The lack of competition means that the government did not benefit from a bidding process that could have potentially lowered the price or improved terms.
Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competition, potentially leading to higher costs for taxpayers.
Public Impact
The primary beneficiary is the Department of the Air Force, which will receive modernized GPS/INS technology. The services delivered include technology maturation and risk reduction for embedded global positioning and inertial navigation systems. The contract performance is located in Florida, potentially impacting the local workforce and economy in that state. This contract supports the advancement of critical navigation and guidance systems for military aircraft and potentially other platforms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Cost-plus-fixed-fee contract requires diligent oversight to prevent cost overruns.
- Specialized technology may have limited alternative providers, increasing reliance on incumbent.
- Longer performance duration increases exposure to potential scope creep or evolving requirements.
Positive Signals
- Award to an established contractor with a track record in defense systems.
- Focus on technology maturation and risk reduction indicates a strategic investment in capability enhancement.
- Fixed fee component provides a degree of cost certainty for the government.
- Modernization of critical navigation systems enhances operational effectiveness.
Sector Analysis
The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. This is a highly specialized area within aerospace and defense manufacturing, characterized by significant R&D investment, long product development cycles, and stringent performance requirements. The market is often dominated by a few large, established defense contractors due to the complexity and capital intensity involved. Spending in this sector is driven by defense modernization priorities and the need for advanced navigation and positioning technologies.
Small Business Impact
This contract was not set aside for small businesses and was awarded to a large prime contractor, Honeywell International Inc. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contracts often involve some level of subcontracting to smaller, specialized firms.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight is crucial to monitor expenditures against the fixed fee and ensure compliance with contract terms. Transparency is generally maintained through contract reporting mechanisms, but specific details on public accessibility of performance metrics or cost breakdowns are not provided. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- GPS Modernization Programs
- Inertial Navigation System Development
- Defense Navigation and Guidance Systems
- Aerospace Technology Maturation
- Air Force Research and Development Contracts
Risk Flags
- Sole Source Award
- Cost-Plus-Fixed-Fee Structure
- Technology Maturation Risk Reduction (TMRR)
Tags
defense, department-of-the-air-force, honeywell-international-inc, sole-source, cost-plus-fixed-fee, technology-maturation, risk-reduction, gps, ins, navigation-systems, florida, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.3 million to HONEYWELL INTERNATIONAL INC.. IGF::OT::IGF EMBEDDED GLOBAL POSITIONING (GPS) / INERTIAL NAVIGATION SYSTEM (INS) - MODERNIZED (EGI-M) TECHNOLOGY MATURATION RISKY REDUCTION (TMRR)
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 $25.3 million.
What is the period of performance?
Start: 2017-03-31. End: 2019-06-30.
What is Honeywell's track record with similar GPS/INS modernization contracts?
Honeywell International Inc. has a long-standing history of providing advanced navigation, guidance, and control systems for military and commercial applications. They are a major player in the aerospace and defense industry, with extensive experience in developing and manufacturing components for GPS and INS. Their track record includes numerous contracts with the Department of Defense for similar technologies, often involving complex integration and modernization efforts. While specific details on past performance for the EGI-M TMRR contract are not publicly detailed here, Honeywell's overall reputation suggests a strong capability in delivering such advanced systems. Their experience likely encompasses meeting stringent military specifications and managing complex technological development projects.
How does the value of this contract compare to similar technology maturation efforts?
Direct value comparison for this specific EGI-M TMRR contract is difficult without access to detailed cost breakdowns and performance metrics, especially given its sole-source nature. Technology maturation and risk reduction contracts are inherently R&D-focused and can vary significantly in cost based on the complexity of the technology, the level of innovation required, and the specific risks being addressed. Generally, such contracts aim to reduce the technical risk before a full-scale production or deployment phase. The $25.3 million award over approximately two years suggests a substantial investment, consistent with the development of advanced defense technologies. Benchmarking against other sole-source R&D efforts within the DoD for similar navigation systems would be necessary for a more precise value assessment.
What are the primary risks associated with this contract?
The primary risks associated with this contract include technological risks inherent in maturing new technologies, potential cost overruns due to the cost-plus-fixed-fee structure, and schedule delays. As a sole-source award, there's also a risk of suboptimal pricing due to the lack of competitive bidding. Performance risks, while potentially mitigated by Honeywell's experience, still exist in complex technology development. Furthermore, the reliance on a single provider for this critical technology could pose a long-term strategic risk if alternative solutions are not concurrently explored or developed.
How effective is the cost-plus-fixed-fee (CPFF) contract type for this type of work?
The Cost-Plus-Fixed-Fee (CPFF) contract type is often used for research and development or complex services where the scope of work is not precisely defined at the outset, making it difficult to establish a firm fixed price. For technology maturation and risk reduction, CPFF can be effective because it allows the contractor to incur the necessary costs to achieve the objectives while providing the government with a fixed fee that represents the contractor's profit. This structure incentivizes the contractor to control costs to maximize their fee, but it also requires robust government oversight to ensure that all costs are reasonable, allocable, and allowable. The effectiveness hinges on the government's ability to monitor expenditures and manage the contractor's performance closely.
What is the historical spending trend for EGI-M or similar navigation systems by the Air Force?
Historical spending trends for Embedded Global Positioning (GPS) / Inertial Navigation System (INS) modernization by the Air Force indicate a consistent and significant investment in maintaining and enhancing these critical capabilities. The EGI-M program itself represents a continuation of efforts to upgrade aging navigation systems to meet modern operational demands, which often involve increased accuracy, resilience against jamming, and integration with newer platforms. Over the past decade, the Air Force has allocated substantial funds towards GPS modernization, INS development, and related navigation technologies, reflecting their strategic importance for air and space operations. Specific figures for EGI-M prior to this contract would require detailed budget analysis, but the overall trend shows sustained funding for advanced navigation solutions.
What are the implications of this contract being awarded on a sole-source basis?
Awarding this contract on a sole-source basis means that the Department of the Air Force did not conduct a competitive bidding process. This is typically justified when only one source is capable of meeting the requirement, such as for proprietary technology or unique expertise. The primary implication for the government and taxpayers is the potential for higher costs, as the price is not subject to downward pressure from competition. It also limits the government's ability to explore alternative solutions or leverage innovation from a broader range of potential suppliers. While it ensures the use of a specific, presumably capable, provider, it sacrifices the benefits of a competitive procurement environment.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Honeywell International Inc
Address: 13350 US HIGHWAY 19 NORTH, CLEARWATER, FL, 33764
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,320,170
Exercised Options: $25,320,170
Current Obligation: $25,320,170
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA854013D0002
IDV Type: IDC
Timeline
Start Date: 2017-03-31
Current End Date: 2019-06-30
Potential End Date: 2019-06-30 00:00:00
Last Modified: 2025-04-23
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