Navy awards $32.5M for EA-18G electronic warfare components, with no competition

Contract Overview

Contract Amount: $32,478,947 ($32.5M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2010-09-23

End Date: 2020-01-31

Contract Duration: 3,417 days

Daily Burn Rate: $9.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8 X 10 AMPD FOR EA-18G

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87113

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $32.5 million to HONEYWELL INTERNATIONAL INC. for work described as: 8 X 10 AMPD FOR EA-18G Key points: 1. Contract awarded without competition raises questions about potential overpayment and lack of market pressure. 2. The long duration of the contract (over 9 years) suggests a stable, long-term need for these components. 3. Awarded to Honeywell International Inc., a major defense contractor with a significant presence in the sector. 4. The specific part number (334290) indicates a specialized component within the EA-18G's complex systems. 5. The firm-fixed-price contract type shifts cost risk to the contractor, but the lack of competition limits upside for the government. 6. The contract's value, while substantial, needs to be benchmarked against similar EW components for a true value assessment.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for the same specific component. The lack of competition means there's no market-driven price discovery to assess if the $32.5 million represents a fair price. While firm-fixed-price contracts are generally preferred, the absence of competition prevents a robust value-for-money analysis. Further investigation into historical pricing for this component, if available, would be necessary to determine if the government received a competitive price.

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 component is proprietary, highly specialized, or the original manufacturer is the only viable source. The lack of competition means the Navy did not benefit from multiple bids, which could have driven down the price through competitive pressure. This approach limits the government's ability to explore alternative suppliers or negotiate more favorable terms.

Taxpayer Impact: The absence of competition for this critical electronic warfare component means taxpayers may have paid a premium. Without competing offers, it's difficult to ascertain if the price reflects the best possible value achievable in a competitive market.

Public Impact

The primary beneficiaries are the U.S. Navy's EA-18G Growler squadrons, which rely on these components for electronic warfare capabilities. The contract ensures the continued availability of critical electronic warfare components, supporting national defense and mission readiness. The geographic impact is primarily centered around Honeywell's manufacturing facilities, likely in New Mexico, contributing to local employment. The contract supports specialized manufacturing jobs within the aerospace and defense industry, requiring skilled labor for production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract value.
Potential for inflated pricing due to sole-source award.
Long contract duration without competitive re-evaluation.
Limited transparency into the pricing justification for a sole-source award.

Positive Signals

Firm-fixed-price contract type mitigates cost overrun risk for the government.
Award to an established contractor with experience in defense systems.
Ensures continued supply of a critical component for a key military platform.

Sector Analysis

This contract falls within the "Other Communications Equipment Manufacturing" sector, a segment of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles, often involving specialized components for defense platforms. The EA-18G is a critical electronic warfare aircraft, and its components are part of a complex, high-value supply chain. Spending in this area is often driven by specific platform needs and national security requirements, with limited direct market comparables outside of defense-specific procurement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the contractor, Honeywell International Inc., is a large corporation, suggesting that subcontracting opportunities for small businesses may exist but are not explicitly mandated or tracked within this data. The focus is on a large prime contract awarded to a major defense manufacturer, rather than direct small business engagement.

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 negotiation process would be subject to internal review and potentially audits by the Defense Contract Audit Agency (DCAA). Transparency is limited due to the non-competitive nature, but contract performance and delivery would be monitored. Inspector General jurisdiction would apply if specific allegations of fraud, waste, or abuse arise.

Related Government Programs

EA-18G Growler Program
Electronic Warfare Systems
Aerospace Component Manufacturing
Department of Defense Procurement
Naval Aviation Support Equipment

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.5 million to HONEYWELL INTERNATIONAL INC.. 8 X 10 AMPD FOR EA-18G

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 $32.5 million.

What is the period of performance?

Start: 2010-09-23. End: 2020-01-31.

What is the historical spending trend for this specific component or similar components procured by the Navy?

Analyzing historical spending for this specific part number (334290) is difficult without access to detailed procurement databases. However, general trends in electronic warfare (EW) component spending for platforms like the EA-18G have likely remained consistent or increased due to evolving threats and the platform's critical role. The Navy's overall budget for EW systems is substantial, reflecting the importance of this capability. Without specific historical data for this component, it's challenging to identify a trend, but the long duration of this contract suggests a sustained need. Future spending will likely depend on the EA-18G's service life and modernization efforts.

How does the per-unit cost of these components compare to similar EW components on other Navy aircraft?

A direct per-unit cost comparison is difficult without knowing the exact specifications and complexity of the '8 X 10 AMPD FOR EA-18G' and comparable components on other Navy aircraft. Electronic warfare systems are highly specialized and vary significantly in cost based on their function, technology, and integration requirements. Components for a dedicated EW platform like the EA-18G might be more complex and thus more expensive than general communication or sensor components on other aircraft. A thorough analysis would require detailed technical specifications and pricing data for multiple component types across different platforms to establish a meaningful benchmark.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically stems from factors such as proprietary technology, unique manufacturing capabilities, or the component being essential to a specific system where only one source can provide it. For the '8 X 10 AMPD FOR EA-18G', it's probable that Honeywell International Inc. is the original equipment manufacturer (OEM) or possesses unique tooling, intellectual property, or specialized processes required for its production. The Department of the Navy would have had to document this justification, often citing Federal Acquisition Regulation (FAR) clauses that permit non-competitive procurements under specific circumstances, such as when only one responsible source is available.

What are the potential risks associated with a long-term, sole-source contract for critical defense components?

The primary risks associated with a long-term, sole-source contract include potential price escalation over time without competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of supply chain resilience if the sole source faces production issues. For critical defense components, this can lead to higher overall program costs and potential vulnerabilities in national security if supply is disrupted. The government also loses the opportunity to explore potentially more cost-effective or technologically advanced alternatives that might emerge in a competitive market. Continuous monitoring and potential renegotiation strategies are crucial to mitigate these risks.

What is Honeywell International Inc.'s track record with the Department of Defense, particularly on EW systems?

Honeywell International Inc. is a major defense contractor with a long-standing and extensive track record of supplying various systems and components to the Department of Defense (DoD), including those related to aerospace and electronic warfare. They are known for producing a wide range of products, from avionics and engines to sensors and control systems. Their involvement with critical platforms like the EA-18G suggests a proven ability to meet stringent military specifications and performance requirements. While specific contract performance details require deeper analysis, Honeywell's consistent presence as a prime contractor indicates a generally reliable, albeit often high-cost, supplier within the defense industrial base.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001909R0267

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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,498,884

Exercised Options: $32,478,947

Current Obligation: $32,478,947

Contract Characteristics

Cost or Pricing Data: NO

Timeline