DoD Awards $40.7M for Inertial Navigation Units to Honeywell, Raising Competition Concerns
Contract Overview
Contract Amount: $40,686,100 ($40.7M)
Contractor: Honeywell International Inc.
Awarding Agency: Department of Defense
Start Date: 2006-11-17
End Date: 2010-05-31
Contract Duration: 1,291 days
Daily Burn Rate: $31.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: INERTIAL NAVIGATION UNIT (INU)
Place of Performance
Location: CLEARWATER, PINELLAS County, FLORIDA, 33764
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $40.7 million to HONEYWELL INTERNATIONAL INC. for work described as: INERTIAL NAVIGATION UNIT (INU) Key points: 1. Significant award of $40.7M for critical Inertial Navigation Units (INUs). 2. Sole awardee, Honeywell International Inc., highlights potential lack of competition. 3. Contract awarded by Department of Defense (Army) with a firm fixed price. 4. Long contract duration (1291 days) may impact price competitiveness over time.
Value Assessment
Rating: questionable
The award of $40.7M for INUs appears high given the lack of competition. Benchmarking against similar contracts is difficult without more data, but the firm fixed price suggests cost certainty for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Honeywell International Inc. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for this significant award may result in taxpayers paying a premium for the INUs.
Public Impact
Military readiness may depend on the reliable performance of these navigation units. Taxpayers may be overpaying due to the absence of competitive bidding. Future procurements should explore competitive strategies to ensure best value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Long contract duration
Positive Signals
- Firm fixed price contract type
- Awarded to established contractor
Sector Analysis
The Department of Defense frequently procures complex electronic equipment like Inertial Navigation Units. Spending in this sector is substantial, and competitive sourcing is crucial for cost efficiency.
Small Business Impact
This award does not appear to involve small businesses, as it was a sole-source contract to a large corporation. Opportunities for small business participation are likely limited.
Oversight & Accountability
The non-competitive nature of this award warrants further review by oversight bodies to ensure the government received fair pricing and to explore future competitive strategies.
Related Government Programs
- Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Potential for overpricing
- Lack of competitive pressure
- Long contract duration without review
Tags
radio-and-television-broadcasting-and-wi, department-of-defense, fl, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $40.7 million to HONEYWELL INTERNATIONAL INC.. INERTIAL NAVIGATION UNIT (INU)
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 Army).
What is the total obligated amount?
The obligated amount is $40.7 million.
What is the period of performance?
Start: 2006-11-17. End: 2010-05-31.
What is the justification for the sole-source award of the Inertial Navigation Units?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that cannot be met by other sources. Without specific documentation, it's difficult to ascertain the exact reason, but it suggests a lack of readily available alternatives or a perceived necessity to use Honeywell's specific product.
What is the risk associated with awarding a long-term contract without competition?
The primary risk is paying a non-competitive price, potentially exceeding fair market value. Additionally, a lack of competition can stifle innovation and reduce the incentive for the contractor to improve efficiency or offer better terms over the contract's life. This can lead to suboptimal value for taxpayer dollars.
How effective is a firm fixed price contract in this non-competitive scenario?
A firm fixed price contract provides cost certainty for the government, meaning the price is set and unlikely to change. However, in a non-competitive scenario, the 'firm' price might be inflated. While it protects against cost overruns, it doesn't guarantee the government is getting the best possible price or value.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: INSTRUMENTS AND LABORATORY EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W52H0907R0028
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Honeywell International Inc (UEI: 139691877)
Address: 13350 US HIGHWAY 19 N, CLEARWATER, FL, 13
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $40,686,100
Exercised Options: $40,686,100
Current Obligation: $40,686,100
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2006-11-17
Current End Date: 2010-05-31
Potential End Date: 2010-05-31 00:00:00
Last Modified: 2010-04-24
More Contracts from Honeywell International Inc.
- Federal Contract — $1.8B (Department of Defense)
- Tiger II Services and Hardware UCA — $1.2B (Department of Defense)
- Aircraft Engines/Engine Parts — $934.2M (Department of Defense)
- Non-Personal Services - Secondary Power Logistics Solution (spls) — $798.7M (Department of Defense)
- 200607!000110!5700!fa8626!asc/Lpk !FA862606C2065 !A!N! !N! ! !20060425!20070122!195908637!195908637!139691877!n!honeywell Intl !13350 US Highway 19 North !clearwater !fl!33764!12875!103!12!clearwater !pinellas !florida !+000000398530!n!n!000121531465!5895!miscellaneous Communication Equipment !A7 !electronics and Communication Equip !000 !NOT Discernable !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !c!n!j!1!001!n!1a!a!y!a! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! ! !0001! ! — $451.3M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)