Army awards $188.5M contract for CH-47F Chinook helicopter components to Honeywell International Inc

Contract Overview

Contract Amount: $24,551,331 ($24.6M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2005-06-14

End Date: 2014-07-31

Contract Duration: 3,334 days

Daily Burn Rate: $7.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200509!004177!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0227 !A!N! !N! ! !20050614!20080331!188459929!188459929!139691877!N!HONEYWELL INTERNATIONAL INC !9201 SAN MATEO BLVD NE !ALBUQUERQUE !NM!87113!02000!001!35!ALBUQUERQUE !BERNALILLO !NEW MEXICO!+000003637143!N!N!000000000000!7030!ADP SOFTWARE !S1 !SERVICES !278 !CH-47F !334419!E! !3! ! ! ! ! !20200930!B!F!N!B! !D!N!J!1!001!N!1G!Z!Y!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!A!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87113, UNITED STATES OF AMERICA

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $24.6 million to HONEYWELL INTERNATIONAL INC. for work described as: 200509!004177!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0227 !A!N! !N! ! !20050614!20080331!188459929!188459929!139691877!N!HONEYWELL INTERNATIONAL INC !9201 SAN MATEO BLVD NE !ALBUQUERQUE !NM!87113!02000!001!35!ALBUQUERQUE !BERN… Key points: 1. Contract awarded for critical components of the CH-47F Chinook, a vital heavy-lift helicopter for the U.S. Army. 2. The contract value of $188.5 million reflects the specialized nature and high cost of aerospace manufacturing. 3. Sole-source award raises questions about potential lack of competition and its impact on pricing. 4. Contract duration of over 9 years suggests a long-term need for these components. 5. The award is concentrated in New Mexico, indicating potential regional economic impact. 6. The specific component, identified by NAICS code 334419, falls under 'Other Electronic Component Manufacturing'.

Value Assessment

Rating: fair

The contract value of $188.5 million for components over a 9-year period appears substantial. Without specific per-unit cost data or benchmarks for similar CH-47F components, a definitive value-for-money assessment is challenging. However, the sole-source nature of the award suggests that competitive pricing may not have been fully leveraged, potentially leading to a higher cost than if multiple bidders were involved. Further analysis would require comparing pricing with historical data for similar components or alternative suppliers if available.

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 approach is typically used when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially resulting in less favorable pricing.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government's ability to negotiate the best possible price was limited, as there was no alternative supplier to compare against.

Public Impact

The U.S. Army benefits directly through the continued supply of essential components for its CH-47F Chinook fleet. This ensures the operational readiness and sustainment of a critical military asset used for troop transport, cargo, and special operations. The contract supports advanced aerospace manufacturing capabilities within the United States. The workforce at Honeywell International Inc., particularly in New Mexico, benefits from sustained employment and specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
Long contract duration (over 9 years) may reduce flexibility to adapt to technological advancements or market price changes.
Lack of transparency in the sole-source justification could obscure potential alternatives or cost savings.
Concentration of award to a single large business may limit opportunities for smaller, innovative suppliers in this specific component area.

Positive Signals

Ensures continued supply of critical components for a vital military helicopter.
Leverages established expertise of Honeywell International Inc. in aerospace manufacturing.
Provides long-term stability for a key defense supply chain element.
Award supports a significant defense contractor, contributing to national defense industrial base.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on electronic components for aircraft. The market for such specialized components is often characterized by high barriers to entry due to technological complexity, stringent quality requirements, and long development cycles. Honeywell International Inc. is a major player in this industry. The total addressable market for Chinook helicopter components is tied to the size and operational tempo of the Army's fleet, as well as sustainment and upgrade programs.

Small Business Impact

This contract was awarded to a large business, Honeywell International Inc., and there is no indication of a small business set-aside. Consequently, there are no direct subcontracting opportunities for small businesses mandated by this specific award. The impact on the broader small business ecosystem is likely minimal unless Honeywell actively seeks small business partners for lower-tier components or services, which is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and auditing functions, including the Defense Contract Management Agency (DCMA) and potentially the Department of Defense Office of Inspector General (DoD OIG) for audits or investigations into fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but contract modifications, performance reports, and payment data would be subject to internal DoD oversight and potentially public reporting through systems like FPDS. Accountability rests with Honeywell to deliver components meeting specifications and with the Army to ensure proper contract administration.

Related Government Programs

CH-47 Chinook Helicopter Production
Aerospace Component Manufacturing
Defense Logistics and Sustainment
Avionics and Electronic Systems
Department of Defense Procurement

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.6 million to HONEYWELL INTERNATIONAL INC.. 200509!004177!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0227 !A!N! !N! ! !20050614!20080331!188459929!188459929!139691877!N!HONEYWELL INTERNATIONAL INC !9201 SAN MATEO BLVD NE !ALBUQUERQUE !NM!87113!02000!001!35!ALBUQUERQUE !BERNALILLO !NEW MEXICO!+000003637143!N!N!000000000000!7030!ADP SOFTWARE !S1 !SERVICES !278 !CH-47F !334419!E! !3! ! ! ! ! !202

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 $24.6 million.

What is the period of performance?

Start: 2005-06-14. End: 2014-07-31.

What is Honeywell International Inc.'s track record with the Department of Defense, particularly concerning CH-47 Chinook components?

Honeywell International Inc. has a long-standing and extensive track record as a major defense contractor, supplying a wide array of systems, components, and services to the Department of Defense across various platforms, including aircraft. For the CH-47 Chinook program specifically, Honeywell has historically provided critical components such as engines, avionics, and other integrated systems. Their involvement suggests a deep understanding of the platform's requirements and a proven ability to meet the stringent quality and performance standards demanded by the military. Past performance reviews and contract histories would provide a more granular view of their specific contributions and reliability related to CH-47 components, but their general standing as a key supplier indicates a strong existing relationship and capability.

How does the $188.5 million contract value compare to historical spending on similar CH-47F components?

Comparing the $188.5 million contract value requires detailed historical spending data for the specific components procured under NAICS code 334419 for the CH-47F. Without access to granular historical contract data broken down by component type and vendor, a direct comparison is difficult. However, given the contract's duration of over 9 years (from initial award date to estimated completion), the annual spending averages around $20.9 million. This figure needs to be contextualized against the overall sustainment costs of the CH-47 fleet and the complexity of the components. The sole-source nature of this award might suggest that competitive pricing benchmarks are not readily available, potentially making direct value comparisons challenging without further investigation into prior sole-source awards or sole-proprietorship justifications.

What are the primary risks associated with this sole-source contract for the CH-47F components?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive bidding. Without competing offers, Honeywell International Inc. may have less incentive to offer the lowest possible price, and the government loses the benefit of price discovery through market competition. Another risk is vendor lock-in; the long duration of the contract and the specialized nature of the components could make it difficult and costly to switch suppliers in the future, even if better alternatives emerge. Furthermore, sole-source awards can sometimes mask inefficiencies or a lack of proactive market research by the procuring agency to identify potential competitors or alternative solutions. Dependence on a single supplier also introduces supply chain risk if Honeywell faces production issues or disruptions.

How effective is the CH-47F Chinook helicopter program, and how does this component contract contribute to its effectiveness?

The CH-47F Chinook is widely regarded as a highly effective and indispensable heavy-lift helicopter for the U.S. Army and allied forces. Its capabilities include transporting troops, artillery, ammunition, fuel, and other battlefield supplies, as well as performing humanitarian aid and disaster relief missions. The program's effectiveness hinges on the reliability and availability of its components. This contract, by ensuring a steady supply of critical electronic components manufactured by Honeywell, directly contributes to the operational readiness and sustainment of the CH-47F fleet. Without these essential parts, the helicopters could face grounding, reduced operational capacity, or mission failures, thereby diminishing the overall effectiveness of this vital military asset.

What are the historical spending patterns for CH-47F components and related services from Honeywell International Inc.?

Historical spending patterns for CH-47F components and related services from Honeywell International Inc. would likely show a consistent and significant investment over the lifecycle of the Chinook program. As a primary supplier of key systems like engines and avionics, Honeywell has been a substantial recipient of Army funds allocated for Chinook sustainment and upgrades. While the specific data for NAICS 334419 is $188.5 million over approximately 9 years, broader spending on Honeywell's contributions to the CH-47 platform would encompass numerous contracts for different component categories, maintenance, repair, and overhaul services, and potentially upgrades. These patterns typically reflect the long operational life of major weapon systems and the ongoing need for parts and support to maintain fleet readiness, often involving multi-year contracts and substantial cumulative expenditures.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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, 87113

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline