DoD Awards Honeywell $37.8M for 348 GPS/Inertial Navigation Systems, Raising Competition Concerns
Contract Overview
Contract Amount: $37,761,828 ($37.8M)
Contractor: Honeywell International Inc.
Awarding Agency: Department of Defense
Start Date: 2020-08-09
End Date: 2022-07-31
Contract Duration: 721 days
Daily Burn Rate: $52.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 348 EACH EMBEDDED GLOBAL POSITIONING SYSTEM/INERTIAL NAVIGATION SYSTEMS (EGIS) PART NUMBER: HG9927E01-001
Place of Performance
Location: CLEARWATER, PINELLAS County, FLORIDA, 33764
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $37.8 million to HONEYWELL INTERNATIONAL INC. for work described as: 348 EACH EMBEDDED GLOBAL POSITIONING SYSTEM/INERTIAL NAVIGATION SYSTEMS (EGIS) PART NUMBER: HG9927E01-001 Key points: 1. High unit cost for advanced navigation systems. 2. Sole-source award to Honeywell limits competitive pricing. 3. Potential risk of overpaying due to lack of competition. 4. Sector: Defense - Navigation Systems.
Value Assessment
Rating: questionable
The average unit price is approximately $108,511. This appears high compared to similar advanced navigation systems, especially given the lack of competitive bidding which typically drives down costs.
Cost Per Unit: $108,511
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Honeywell, was solicited. This significantly limits price discovery and competitive pressure, potentially leading to a higher price for taxpayers.
Taxpayer Impact: The sole-source nature of this award raises concerns about whether the government secured the best possible price for these critical navigation systems, potentially resulting in unnecessary expenditure of taxpayer funds.
Public Impact
Military readiness may be impacted if advanced navigation systems are procured at inflated prices. Taxpayers may be overpaying for essential defense equipment due to a lack of competitive bidding. Dependence on a single supplier for critical components can create long-term supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High unit cost
- Lack of competition
- Potential overpayment
Positive Signals
- Critical defense technology
- Established supplier
Sector Analysis
The Department of Defense frequently procures advanced navigation and guidance systems. Spending in this sub-sector can vary widely based on technological advancements and specific military needs, but competitive bidding is standard practice to ensure value.
Small Business Impact
This contract was awarded directly to Honeywell International Inc. and does not indicate any subcontracting opportunities for small businesses. The sole-source nature further limits potential for small business involvement.
Oversight & Accountability
The sole-source justification for this award should be thoroughly reviewed to ensure it was appropriate and that all avenues for competition were explored. Post-award monitoring of performance and cost is crucial.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competition
- High unit price raises value concerns
- Potential for taxpayer overpayment
- Limited transparency in pricing
- Risk of vendor lock-in
Tags
search-detection-navigation-guidance-aer, department-of-defense, fl, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.8 million to HONEYWELL INTERNATIONAL INC.. 348 EACH EMBEDDED GLOBAL POSITIONING SYSTEM/INERTIAL NAVIGATION SYSTEMS (EGIS) PART NUMBER: HG9927E01-001
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 $37.8 million.
What is the period of performance?
Start: 2020-08-09. End: 2022-07-31.
What is the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For this contract, the specific justification from the Department of the Army needs to be examined to understand why Honeywell was the only viable option and if any efforts were made to foster competition or explore alternative solutions before resorting to a sole-source procurement.
How does the unit cost of these EGIS systems compare to similar systems procured competitively by other government agencies or allies?
Benchmarking the unit cost of $108,511 against comparable systems acquired through competitive processes is essential. If similar, less complex systems are procured at significantly lower prices, or if comparable advanced systems are obtained competitively for less, it indicates potential overpayment. A detailed cost analysis comparing this sole-source award to market data and competitive procurements is warranted.
What are the long-term risks associated with relying on a sole-source provider for critical navigation systems, particularly concerning future upgrades and maintenance?
Sole-source reliance creates significant long-term risks, including potential price escalation for future orders, limited access to technological advancements from other vendors, and vulnerability to supply chain disruptions if the sole provider faces issues. The government may also face challenges negotiating favorable terms for upgrades and maintenance, potentially increasing lifecycle costs and impacting operational readiness.
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: INSTRUMENTS AND LABORATORY EQPT
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 (UEI: 139691877)
Address: 13350 US HIGHWAY 19 NORTH, CLEARWATER, FL, 33764
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $37,761,828
Exercised Options: $37,761,828
Current Obligation: $37,761,828
Subaward Activity
Number of Subawards: 31
Total Subaward Amount: $4,059,816
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Parent Contract
Parent Award PIID: FA857620D0001
IDV Type: IDC
Timeline
Start Date: 2020-08-09
Current End Date: 2022-07-31
Potential End Date: 2022-07-31 12:07:00
Last Modified: 2021-02-11
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