DoD's $36.6M R&D contract for advanced inertial measurement systems awarded to Honeywell

Contract Overview

Contract Amount: $36,631,923 ($36.6M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2008-02-29

End Date: 2015-09-17

Contract Duration: 2,757 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ADVANCE INERTIAL MEASUREMENT

Place of Performance

Location: CLEARWATER, PINELLAS County, FLORIDA, 33764

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $36.6 million to HONEYWELL INTERNATIONAL INC. for work described as: ADVANCE INERTIAL MEASUREMENT Key points: 1. Contract focused on research and development, indicating investment in future capabilities. 2. Sole awardee suggests a specialized need or limited market for this specific technology. 3. Long duration (2008-2015) points to a complex, multi-year development effort. 4. Cost-plus-fixed-fee structure can incentivize contractor efficiency while managing risk. 5. Awarded by the Defense Contract Management Agency, indicating robust oversight. 6. The contract's value is moderate for a multi-year R&D effort in this sector.

Value Assessment

Rating: good

The contract's total value of $36.6 million over its 7-year duration appears reasonable for a specialized R&D effort in advanced inertial measurement technology. Benchmarking against similar R&D contracts is challenging due to the specific nature of the technology, but the cost-plus-fixed-fee structure, while carrying some risk of cost overruns, is common for R&D where final costs are uncertain. The fixed fee component provides a degree of cost control for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, with only one award, it suggests that Honeywell was the most qualified or best-suited bidder for this specific requirement. The level of competition at the bid stage is positive, but the single award limits direct price comparison post-award.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of proposals and potentially more competitive pricing. However, the ultimate value for taxpayers depends on the effectiveness of the competition in driving down costs and ensuring the best technical solution was selected.

Public Impact

The Department of Defense benefits from advancements in inertial measurement technology, crucial for navigation and guidance systems. This contract supports the development of potentially cutting-edge technology for military applications. The geographic impact is primarily in Florida, where the contractor is located. The contract likely supported specialized engineering and research roles within Honeywell.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to higher final costs if not managed carefully.
The long duration of the contract could introduce risks related to technological obsolescence or changing requirements.

Positive Signals

Awarded under full and open competition, suggesting a robust initial selection process.
The contract is for Research and Development, indicating investment in future technological superiority.
The fixed fee component provides a ceiling on contractor profit, offering some cost predictability.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical sciences and engineering. The market for advanced inertial measurement units (IMUs) is critical for defense, aerospace, and increasingly for commercial applications like autonomous vehicles. Spending in this area is driven by the need for precise, reliable, and often miniaturized navigation and sensing solutions. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of R&D and the specific technological advancements sought.

Small Business Impact

There is no indication that this contract involved small business set-asides. As a large R&D contract awarded to a major corporation, the primary focus was likely on specialized technical capabilities rather than small business participation. Subcontracting opportunities for small businesses may have existed but are not detailed in the provided data.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet their contractual obligations and that funds are used appropriately. The cost-plus-fixed-fee structure implies ongoing financial oversight to track costs against the fixed fee. Transparency is generally maintained through contract reporting requirements, though specific details of R&D progress are often sensitive.

Related Government Programs

Advanced Navigation Systems
Guidance, Navigation, and Control (GNC) Systems
Defense Research and Development Programs
Inertial Navigation Systems (INS)

Risk Flags

Long contract duration may increase risk of obsolescence.
Cost-plus-fixed-fee contracts require diligent oversight to manage costs effectively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.6 million to HONEYWELL INTERNATIONAL INC.. ADVANCE INERTIAL MEASUREMENT

Who is the contractor on this award?

The obligated recipient is HONEYWELL INTERNATIONAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $36.6 million.

What is the period of performance?

Start: 2008-02-29. End: 2015-09-17.

What was the specific technological advancement sought by the Department of Defense in this contract?

The contract data indicates the focus was on 'ADVANCE INERTIAL MEASUREMENT' technology. This typically refers to improvements in Inertial Measurement Units (IMUs), which are devices that use accelerometers and gyroscopes to measure and report a vehicle's specific force, angular rate, and sometimes magnetic field. Advancements in this area are critical for enhancing the accuracy, reliability, and potentially reducing the size, weight, and power consumption of navigation and guidance systems used in aircraft, missiles, and other platforms. The R&D effort likely aimed to push the boundaries of existing IMU technology, potentially exploring new sensor designs, improved algorithms for drift correction, or enhanced resistance to environmental factors like vibration and temperature.

How does the cost-plus-fixed-fee (CPFF) contract structure compare to other R&D contract types in terms of value for money?

The Cost-Plus-Fixed-Fee (CPFF) structure is common for R&D contracts where the scope of work is not fully defined at the outset, making it difficult to establish a firm fixed price. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing their profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. Compared to Cost-Plus-Incentive-Fee (CPIF), CPFF offers less direct incentive for cost reduction beyond avoiding disallowed costs. However, it provides more cost certainty for the government than a pure cost-plus-cost (Cost-Plus-Award-Fee) contract where the fee can vary significantly. For taxpayers, CPFF offers a balance: it allows for innovation in uncertain R&D environments while providing a defined profit margin, unlike purely fixed-price contracts which might carry a higher initial price to account for contractor risk.

What are the potential risks associated with a multi-year R&D contract like this one?

Multi-year R&D contracts, such as this 7-year award, carry several inherent risks. Technological obsolescence is a significant concern; the technology being developed might be surpassed by advancements elsewhere before the contract concludes or the system is fielded. Requirements creep is another risk, where the evolving needs of the end-user lead to changes in the contract's scope, potentially increasing costs and extending timelines. Contractor performance risk also exists; the contractor may struggle to achieve the desired technical milestones or deliver the expected performance due to unforeseen technical challenges. Furthermore, budget instability within the funding agency can pose a risk, as future year funding may be reduced or eliminated, impacting program continuity. Finally, the long duration can make it difficult to maintain consistent program oversight and ensure the initial objectives remain relevant.

Given the 'full and open competition' and single award, what does this imply about the market for advanced inertial measurement technology?

The combination of 'full and open competition' followed by a single award suggests a specialized market for advanced inertial measurement technology. 'Full and open competition' indicates that the government actively sought proposals from all responsible sources, implying a desire for broad market engagement. However, the subsequent single award to Honeywell International Inc. points towards a situation where, despite the open competition, only one offeror possessed the unique technical capabilities, intellectual property, or specific experience required to meet the government's stringent requirements. This could indicate a high barrier to entry for competitors, perhaps due to extensive prior research, proprietary technology, or specialized manufacturing processes. It suggests that while the initial solicitation was competitive, the actual market for this specific advancement may be concentrated among a few highly specialized firms.

What is the significance of the contract being awarded by the Defense Contract Management Agency (DCMA)?

The award being managed by the Defense Contract Management Agency (DCMA) signifies that the contract falls under the purview of a specialized agency focused on contract administration and oversight for the Department of Defense. DCMA's role is crucial in ensuring that defense contractors adhere to contract terms, deliver quality products and services on time, and manage costs effectively. For an R&D contract like this, DCMA would likely monitor progress against milestones, review incurred costs for allowability and allocability, ensure compliance with regulations, and facilitate communication between the contractor and the government program office. Their involvement suggests a structured approach to oversight, aiming to mitigate risks associated with cost, schedule, and performance, thereby providing a layer of assurance for the government and taxpayers.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell International Inc (UEI: 139691877)

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $302,860,812

Exercised Options: $69,493,697

Current Obligation: $36,631,923

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline