Honeywell International Inc. awarded $126.5M for TIGER Program engine revitalization, a sole-source contract

Contract Overview

Contract Amount: $126,504,633 ($126.5M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2020-12-17

End Date: 2023-02-28

Contract Duration: 803 days

Daily Burn Rate: $157.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $126.5 million to HONEYWELL INTERNATIONAL INC. for work described as: TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant investment in military vehicle sustainment and readiness. 3. Long contract duration (803 days) suggests complex revitalization needs. 4. Fixed-price contract type shifts some performance risk to the contractor. 5. Geographic concentration in Arizona for this critical defense service. 6. No small business set-aside indicates a focus on large prime contractors.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The total award of $126.5 million over approximately 2.6 years indicates a substantial investment in maintaining critical military assets. Without comparable contract data or a competitive bidding process, it's difficult to definitively assess if the pricing represents optimal value for money. However, the firm fixed-price structure aims to control costs for the government.

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 approach is typically used when only one vendor possesses the necessary capabilities, proprietary technology, or when urgency dictates a direct award. The lack of competition means that price discovery through market forces was not leveraged, potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not have multiple offers to choose from. This can result in a higher overall expenditure for the required services.

Public Impact

Benefits the U.S. Army by ensuring the operational readiness of its armored vehicle fleet. Delivers essential engine revitalization services for critical military platforms. Geographic impact is concentrated in Arizona, where the contractor's facility is located. Supports specialized technical jobs within the defense manufacturing and maintenance sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Long-term contract duration could mask inefficiencies if not closely monitored.
Concentration of a critical defense service with a single large contractor.

Positive Signals

Addresses a critical need for military vehicle sustainment, enhancing readiness.
Firm fixed-price contract provides cost certainty for the government.
Contractor's established expertise in aerospace and defense systems.
Supports the operational capabilities of the U.S. Army's armored fleet.

Sector Analysis

The defense industrial base relies heavily on specialized contractors for the maintenance and modernization of complex military equipment. Honeywell International Inc. is a major player in this sector, providing a wide range of aerospace and defense solutions. This contract for engine revitalization fits within the broader market for military vehicle sustainment, a segment that sees consistent government spending to ensure fleet readiness. Comparable spending benchmarks are difficult to establish for sole-source awards, but the scale of this contract reflects the high cost of maintaining advanced military hardware.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like Honeywell International Inc. suggests a focus on established capabilities and potentially large-scale operations. This approach may limit direct opportunities for small businesses to participate in this specific contract, although they may be involved in Honeywell's broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a firm fixed-price contract, the primary accountability measure is the contractor's delivery of the specified engine revitalization services within the agreed-upon price. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key oversight elements. Inspector General involvement would be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM
Military Armored Vehicle, Tank, and Tank Component Manufacturing
Department of the Army Sustainment Contracts
Defense Engine Maintenance and Overhaul

Risk Flags

Sole-source award lacks competitive pricing validation.
Potential for higher costs due to lack of competition.
Limited transparency on justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $126.5 million to HONEYWELL INTERNATIONAL INC.. TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM

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 $126.5 million.

What is the period of performance?

Start: 2020-12-17. End: 2023-02-28.

What is the specific justification provided by the Department of the Army for awarding this contract on a sole-source basis to Honeywell International Inc.?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. Typically, sole-source justifications are required under federal acquisition regulations (FAR) when only one responsible source is available or capable of meeting the agency's needs. Common reasons include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a specific system requires parts or services only available from the original manufacturer. A detailed justification document, often including market research and a statement of the unique need, would normally be required and made publicly available, though it is not present in the abbreviated data.

How does the firm fixed-price contract type impact risk allocation between the government and Honeywell International Inc. for this engine revitalization effort?

A firm fixed-price (FFP) contract, like the one awarded to Honeywell, places the primary risk of cost overruns on the contractor. Honeywell is obligated to complete the engine revitalization services for the agreed-upon price, regardless of its actual costs. This provides the government with cost certainty. If Honeywell's costs exceed the contract price due to inefficiencies, poor planning, or unexpected material price increases, the contractor absorbs those losses. Conversely, if Honeywell can complete the work for less than the fixed price, it realizes a higher profit margin. This structure incentivizes the contractor to manage its costs effectively and perform efficiently.

What are the potential implications of this contract's sole-source nature on long-term pricing and future competition for similar engine revitalization services?

Sole-source awards can have several long-term implications. Firstly, without competitive pressure, the initial pricing may not reflect the lowest achievable market rate, potentially setting a precedent for higher costs in subsequent contracts if the same justification is used. Secondly, it can stifle the development of a competitive market for these specific services, as other potential providers may not have the opportunity to demonstrate their capabilities or gain experience. Over time, this can lead to increased reliance on the incumbent contractor and potentially higher sustainment costs for the government if alternative sources are not cultivated or if the incumbent's pricing escalates without market checks.

Can the $126.5 million total award be considered a benchmark for similar military engine revitalization contracts, given its sole-source status?

No, the $126.5 million total award cannot be reliably used as a benchmark for similar military engine revitalization contracts due to its sole-source nature. Benchmarking relies on comparing prices and terms from competitive procurements where market forces have established a price range. A sole-source award lacks this competitive validation. The price is determined through negotiation between the agency and the single awarded contractor, influenced by factors specific to that contractor's capabilities, cost structure, and the agency's perceived need, rather than a broader market assessment. Therefore, this figure represents the negotiated value for this specific instance, not necessarily a market-driven price.

What is Honeywell International Inc.'s general track record in performing large-scale defense contracts, particularly those involving complex vehicle systems?

Honeywell International Inc. has a long and extensive track record in the aerospace and defense industry, managing numerous large-scale contracts for the U.S. military and other government agencies. They are known for their expertise in complex systems, including engines, avionics, and vehicle components. While specific performance details for every contract are not always public, Honeywell generally operates within the established defense industrial base and has experience with high-value, technically demanding projects. Their history suggests a capacity to handle significant defense procurements, though the success and value of any specific contract depend on its unique requirements and execution.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell International Inc

Address: 111 S 34TH ST, PHOENIX, AZ, 85034

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $126,504,633

Exercised Options: $126,504,633

Current Obligation: $126,504,633

Actual Outlays: $64,555,113

Subaward Activity

Number of Subawards: 244

Total Subaward Amount: $28,056,093

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV20D0062

IDV Type: IDC

Timeline