The paperwork went through Monday to officially extend Honeywell [HON] Federal Manufacturing and Technologies for another year as the management and operations contractor of the National Nuclear Security Administration’s (NNSA) nuclear-weapons components hub.
A notice about the modification that picked up the Honeywell subsidiary’s option appeared on the federal government’s online hub
for acquisition and procurement documents, sam.gov. The NNSA is the semi-autonomous part of the Department of Energy that owns U.S. nuclear warheads and bombs.
This is the first of five one-year options on the pact, which the NNSA awarded in 2015. Honeywell is now in the final month of the final year of the contract’s five-year base, which wraps up Sept. 30. Honeywell has more than $30 million in management and operations award fees available to it, under the option just triggered. The NNSA holds options that could stretch the pact through the Sept. 30 end of fiscal year 2025.
Honeywell received some stern words from its customer in its fiscal 2019 performance evaluation, with NNSA saying that “multiple weapon program components [at the Kansas City plant] are not on track to meet full rate production requirements.” Among many other parts, Kansas City is responsible for making the new custom capacitors needed for major refurbs of the B61 gravity bomb refurb, and the W88 submarine-launched, ballistic-missile warhead.
In May 2019, the NNSA acknowledged that commercial capacitors intended for the weapons would not last as long as the military required. Making custom capacitors to plug in to the refurbished weapons added a total of about $850 million to the cost of the programs, and pushed the first-production units of B61-12 to November 2021, and W88 Alt 370 to July 2021.
That puts both programs between one and two years behind schedule, compared with earlier estimates. Further delays at Kansas City could cause logjams at the Pantex Plant, which assembles the refurbished units. That could have a cascading effect on future life-extension programs.
Still, Honeywell nabbed 80% of the available award fees in the penultimate year of the base period, netting them about $25.5 million. There were just under $17.5 million in fixed fees in fiscal 2019, too, meaning the company earned $42.8 million of a possible $48.7 million in fees last year. The company also got high marks for safety, in the latest performance review.
The first option year of the Honeywell’s contract will also mark the first full year in which Eric Wollerman runs the plant. Wollerman, who had been in Honeywell’s aerospace division for the past decade, replaced John Ricciardelli, who had been president of the management and operations contractor since it took over the campus.