Honeywell International Inc. awarded $62.1M for F/A-18E/F forward fit systems, a sole-source contract

Contract Overview

Contract Amount: $62,188,459 ($62.2M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2007-05-21

End Date: 2020-12-31

Contract Duration: 4,973 days

Daily Burn Rate: $12.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 5X5 FWD AMPD FOR F/A-18E/F FORWARD FIT

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87113

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $62.2 million to HONEYWELL INTERNATIONAL INC. for work described as: 5X5 FWD AMPD FOR F/A-18E/F FORWARD FIT Key points: 1. Contract awarded for critical aircraft components, indicating a need for specialized manufacturing capabilities. 2. Sole-source award suggests limited market alternatives or unique technological requirements. 3. Long contract duration (4973 days) implies a sustained need for these systems. 4. Firm Fixed Price contract type shifts cost risk to the contractor. 5. Awarded by the Department of the Navy, highlighting defense sector focus. 6. The contract value is substantial, reflecting the complexity and importance of the systems.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific, advanced technology involved. Without competitive bids, it's difficult to ascertain if the $62.1 million price represents optimal value for money. However, the firm fixed-price structure provides cost certainty for the government. The long duration suggests a consistent need, and the award amount is in line with complex defense systems procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary technology, expertise, or security clearances to fulfill the requirement. The lack of competition limits the government's ability to leverage market forces to drive down prices or encourage innovation from a wider pool of suppliers.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Navy's F/A-18E/F Super Hornet fleet, ensuring operational readiness. Services delivered include the manufacturing and integration of forward fit systems essential for aircraft operation. The geographic impact is primarily tied to Honeywell's manufacturing facilities, likely in New Mexico. Workforce implications include skilled manufacturing and engineering jobs supporting advanced aerospace production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pricing and potential innovation.
Long contract duration could mask potential inefficiencies if not actively managed.
Lack of transparency in sole-source justification requires careful review.
Dependence on a single supplier for critical components poses supply chain risk.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Award to an established defense contractor with a track record.
Ensures continued operational capability for a key naval aircraft.
Long-term contract supports stable production and workforce.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft systems. The market for advanced avionics and navigation systems is characterized by high barriers to entry due to technological complexity, stringent quality requirements, and significant R&D investment. Honeywell is a major player in this space, and this contract represents a significant portion of spending on specialized components for a key military platform.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information on subcontracting plans for small businesses. Given the specialized nature of the components and the sole-source award, the direct impact on the small business ecosystem may be limited unless Honeywell actively engages small businesses as subcontractors for specific parts or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and pricing would be subject to review by relevant oversight bodies within the Department of Defense, potentially including the Defense Contract Audit Agency (DCAA) and the Inspector General. Transparency is limited by the non-competitive nature, but contract performance metrics and financial reporting would be key accountability measures.

Related Government Programs

F/A-18E/F Super Hornet aircraft procurement
Avionics and Navigation Systems Manufacturing
Defense Aerospace Component Production
Naval Aviation Support Systems

Risk Flags

Sole-source award
Long contract duration
Potential for non-competitive pricing
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.2 million to HONEYWELL INTERNATIONAL INC.. 5X5 FWD AMPD FOR F/A-18E/F FORWARD FIT

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 Navy).

What is the total obligated amount?

The obligated amount is $62.2 million.

What is the period of performance?

Start: 2007-05-21. End: 2020-12-31.

What is Honeywell's track record with the Department of the Navy for similar systems?

Honeywell International Inc. has a long-standing relationship with the Department of the Navy and other defense agencies, supplying a wide array of avionics, navigation, and control systems for various aircraft platforms. Their history includes numerous contracts for both new production and sustainment of military aircraft, including the F/A-18 family. While specific performance metrics for this particular contract are not detailed here, Honeywell's general track record in the defense sector is characterized by its ability to deliver complex technological solutions. However, as with any large defense contractor, past performance reviews and any associated issues or disputes would be crucial for a comprehensive assessment. The duration and value of this contract suggest a level of trust and established capability in meeting the Navy's requirements for these critical F/A-18E/F systems.

How does the $62.1 million value compare to similar F/A-18E/F component contracts?

Direct comparison of the $62.1 million value is difficult without access to specific contract details for identical or highly similar components for the F/A-18E/F. However, considering the 'forward fit' nature, these systems are likely integrated during the initial manufacturing of the aircraft. The value reflects the complexity, technology, and quantity of systems procured over the contract's extended period. Defense contracts for major aircraft components, especially those involving advanced avionics and navigation, often run into tens or hundreds of millions of dollars, particularly when spread over many years. The firm fixed-price structure also implies that this total value was determined upfront. Without competitive bidding data, it's hard to definitively state if it's high or low, but it is within the expected range for significant aircraft system procurements.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract stem from the lack of competition. Firstly, there's a risk of paying a non-competitive price, potentially higher than what could be achieved through a competitive bidding process. Secondly, sole-source awards can reduce the incentive for the contractor to innovate or improve efficiency, as there is no direct market pressure. Thirdly, there's a dependency risk; the Navy relies entirely on Honeywell for these specific components, making the supply chain vulnerable to disruptions at Honeywell's end (e.g., production issues, financial instability, or strategic shifts). Finally, the long duration of the contract (nearly 14 years) increases the risk of cost overruns if initial estimates were inaccurate or if unforeseen technical challenges arise, although the firm fixed-price nature mitigates this to some extent for the government.

How effective is the firm fixed-price (FFP) contract type in managing costs for this procurement?

The Firm Fixed Price (FFP) contract type is generally considered effective in managing costs for the government, especially for procurements where the scope of work is well-defined and risks can be reasonably anticipated. Under an FFP contract, the contractor agrees to a total price for a well-defined product or service. This shifts the risk of cost overruns from the government to the contractor. If Honeywell's costs exceed the agreed-upon price, their profit margin decreases; if costs are lower, their profit increases. For this contract, the FFP structure provides significant cost certainty for the Department of the Navy, as the total expenditure is capped at the agreed price. This is particularly beneficial for long-term contracts where cost fluctuations could otherwise be substantial. However, it also means the government forgoes potential savings if the contractor achieves efficiencies beyond expectations, and the initial price negotiation is critical.

What is the historical spending trend for F/A-18E/F forward fit systems?

Analyzing the historical spending trend for F/A-18E/F forward fit systems requires looking at aggregate data for this specific aircraft type and component category over time. This single contract, awarded in 2007 and ending in 2020 with a value of $62.1 million, represents a portion of the overall investment in the Super Hornet program. Historically, the F/A-18E/F program has seen significant procurement funding over its lifecycle, supporting the production of hundreds of aircraft. Spending on critical systems like forward fit components would fluctuate based on production rates, upgrade cycles, and sustainment needs. Without access to broader contract databases or program-level financial reports, it's challenging to establish a precise trend solely from this data point. However, the sustained nature of this contract suggests a consistent requirement for these systems throughout a significant portion of the aircraft's operational life.

What are the implications of the contract's long duration (4973 days)?

The contract duration of 4973 days, approximately 13.6 years, has several implications. Firstly, it indicates a long-term, stable requirement for the F/A-18E/F forward fit systems, likely tied to the aircraft's production run or a significant sustainment phase. This long-term commitment provides predictability for both the government and the contractor, allowing for better production planning and resource allocation. For the government, it ensures a continuous supply of critical components. However, such a long duration also increases the risk of technological obsolescence if the systems are not designed with future upgrades in mind. It also necessitates robust contract management to ensure performance remains high and costs stay aligned with initial expectations throughout the contract's life, despite the firm fixed-price nature. Furthermore, it suggests that the initial acquisition was for a substantial quantity or a long period of support.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001906R0068

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell International Inc (UEI: 139691877)

Address: 9201 SAN MATEO BLVD NE, ALBUQUERQUE, NM, 01

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $67,173,250

Exercised Options: $62,188,459

Current Obligation: $62,188,459

Contract Characteristics

Cost or Pricing Data: YES

Timeline