DoD Awards Honeywell $42.3M for HVAC Equipment, Facing Potential Price Concerns
Contract Overview
Contract Amount: $42,332,821 ($42.3M)
Contractor: Honeywell Inc
Awarding Agency: Department of Defense
Start Date: 2008-07-08
End Date: 2026-07-09
Contract Duration: 6,575 days
Daily Burn Rate: $6.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: HONEYWELL PROPOSAL DE-AM 01-99EE73683
Place of Performance
Location: FORT DIX, BURLINGTON County, NEW JERSEY, 08640
Plain-Language Summary
Department of Defense obligated $42.3 million to HONEYWELL INC for work described as: HONEYWELL PROPOSAL DE-AM 01-99EE73683 Key points: 1. The Department of Defense awarded a significant contract to Honeywell Inc. for HVAC equipment. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (over 18 years) raises questions about long-term value and potential price escalation. 4. The sector is manufacturing of commercial and industrial refrigeration and HVAC equipment.
Value Assessment
Rating: questionable
The contract value of $42.3M over 18 years is substantial. Without specific unit cost data or benchmarks for similar long-term HVAC contracts, it's difficult to definitively assess pricing. The extended duration may lead to price increases over time.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, which typically promotes competitive pricing. However, the long duration of the delivery order might obscure the true price discovery for individual components or services over the contract's lifespan.
Taxpayer Impact: Taxpayer funds are being used for this significant award. While competition is intended to ensure fair pricing, the extended term warrants scrutiny to ensure value for money.
Public Impact
Military bases and facilities will receive essential climate control equipment, impacting operational readiness and personnel comfort. The long-term nature of the contract could affect budget predictability for the Air Force. This award supports a major defense contractor, potentially impacting the broader industrial base for HVAC manufacturing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (18+ years)
- Potential for price escalation over time
- Lack of specific unit cost benchmarks
Positive Signals
- Awarded under full and open competition
- Supports critical operational needs (HVAC)
Sector Analysis
The manufacturing of air-conditioning, warm air heating, and commercial/industrial refrigeration equipment is a mature sector. Spending benchmarks for long-term service and equipment contracts in this area can vary widely based on technology and scale.
Small Business Impact
The data indicates the award went to a large business (Honeywell Inc.). There is no explicit indication of small business participation in this specific delivery order, which is common for large prime contracts.
Oversight & Accountability
The Department of the Air Force is responsible for oversight. The long duration necessitates ongoing monitoring to ensure performance standards are met and pricing remains competitive throughout the contract term.
Related Government Programs
- Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Long contract duration may not reflect current market prices.
- Potential for price escalation over 18 years.
- Lack of specific unit cost data for benchmarking.
- Risk of technological obsolescence.
- Dependence on a single large contractor for an extended period.
Tags
air-conditioning-and-warm-air-heating-eq, department-of-defense, nj, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.3 million to HONEYWELL INC. HONEYWELL PROPOSAL DE-AM 01-99EE73683
Who is the contractor on this award?
The obligated recipient is HONEYWELL INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $42.3 million.
What is the period of performance?
Start: 2008-07-08. End: 2026-07-09.
What is the average annual spending on HVAC equipment and services by the Department of Defense, and how does this $42.3M award compare?
Average annual spending on HVAC equipment and services by the DoD can fluctuate significantly based on modernization efforts, base closures/expansions, and repair needs. Without specific historical data for the Air Force or comparable agencies, it's challenging to benchmark this $42.3M award precisely. However, a contract of this magnitude over nearly two decades suggests a substantial, long-term requirement for climate control infrastructure.
What are the specific risks associated with a contract of this length (18+ years) for HVAC equipment, particularly regarding technological obsolescence and maintenance costs?
The primary risks of an 18+ year contract for HVAC equipment include technological obsolescence, as newer, more efficient systems emerge. Maintenance costs can escalate due to aging components and potential difficulties in sourcing parts for older models. Furthermore, unforeseen changes in environmental regulations or energy efficiency standards could necessitate costly upgrades or replacements, impacting the long-term value proposition.
How effectively does 'full and open competition' ensure value for money over an 18-year contract period for complex equipment like HVAC systems?
Full and open competition is effective at establishing a competitive baseline price at the outset. However, for an 18-year contract, its effectiveness in ensuring long-term value is diminished. Market dynamics, technological advancements, and inflation can significantly alter the cost landscape. Mechanisms for price adjustments, performance reviews, and potential re-competition of certain elements would be crucial to maintain value over such an extended period.
Industry Classification
NAICS: Manufacturing › Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing › Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Parent Company: Honeywell International Inc
Address: 101 COLUMBIA RD, MORRISTOWN, NJ, 07960
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $44,231,443
Exercised Options: $44,231,443
Current Obligation: $42,332,821
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DEAM3699EE73683
IDV Type: IDC
Timeline
Start Date: 2008-07-08
Current End Date: 2026-07-09
Potential End Date: 2030-07-09 00:00:00
Last Modified: 2025-12-12
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