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Honeywell Awarded $28.6 Million Contract to Reduce Energy Consumption, Costs at New Food and Drug Administration Headquarters

Posted on: Tuesday, 30 January 2007, 09:04 CST

Honeywell (NYSE:HON) today announced it has been awarded a $28.6 million contract by the U.S. General Services Administration (GSA) to upgrade building systems and reduce energy costs at the new Food and Drug Administration (FDA) headquarters in Silver Spring, Md. The upgrades at the White Oak office and research campus are expected to help the GSA cut energy costs by $3 million per year while improving comfort for building occupants and reducing the FDA's vulnerability to disruptions on the electric grid.

The 23-year contract, among the largest granted since the Department of Energy introduced the energy savings performance contract (ESPC) program in 1998, will be funded from the downstream energy and operational savings the upgrades produce. Honeywell guarantees the savings so the work will not increase operating budgets or require additional taxpayer dollars. This is the third major energy-conservation contract for Honeywell at White Oak.

FDA plans to consolidate most of its operations in the Washington, D.C. area to the 3-million-square-foot campus through new construction -- laboratories, office buildings and support facilities -- and upgrades to existing facilities. The latest Honeywell project focuses on the energy infrastructure to support the campus development. Specifically, the company will install new, efficient equipment in a central utility plant, as well as construct the distribution systems necessary to provide electricity, heating and air conditioning to the buildings.

This project expands the capabilities of the utility plant by installing: two natural gas-fired turbine generators; two 2,000-ton centrifugal chillers; a 1,130-ton absorption chiller that captures waste heat from the generators and recycles it to produce chilled water; and ancillary plant equipment and distribution systems. The onsite generation capacity will support critical facility loads, which improves energy security for the FDA by decreasing its reliance on the electric grid.

Honeywell also will provide operations and maintenance services for the seven additional campus buildings supported by the construction project.

Describing the ESPC development at White Oak, a GSA spokesperson said, "This has been a wonderful collaboration between the public and private sectors in making the FDA consolidation project a successful experience."

The current work will add to benefits from two previous contracts. In 2002, Honeywell was awarded a $24.6 million ESPC to construct a combined heat and power (CHP) utilities plant, and install photovoltaic solar panels to provide three buildings with a green, renewable energy source, among other improvements. The completed project saved more than $580,000 in energy costs in 2005. And it won a Federal Energy and Water Management Award from the Federal Energy Management Program (FEMP).

GSA also awarded Honeywell a $17.8 million ESPC in 2005. Under this contract, the company installed a turbine generator, chiller and additional solar panels at White Oak, which is expected to save the government more than $70 million during the 23-year term of the contract.

Additions like the CHP plant and solar panels will give GSA the flexibility to support the energy needs of all buildings through onsite power generation. Once both the campus and central plant construction is complete, GSA will be able to generate almost 30 megawatts of power, improving site reliability and helping reduce load on the utility grid in times of peak demand.

"The performance contracts with the GSA are an excellent example of how Honeywell energy experts work hand-in-hand with the government to be good stewards of taxpayer dollars," said Joe Puishys, president of Honeywell Building Solutions. "The savings from the latest contract -- along with the millions the prior work is generating each year -- will allow the FDA to focus more resources into fulfilling its research and regulatory missions."

Honeywell International is a $31 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York, London, Chicago and Pacific Stock Exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average and is also a component of the Standard & Poor's 500 Index. For additional information, please visit www.honeywell.com. Honeywell Building Solutions is part of the Honeywell Automation and Control Solutions business group, a global leader in providing product and service solutions that improve efficiency and profitability, support regulatory compliance, and maintain safe, comfortable environments in homes, buildings and industry. For more information about Building Solutions, access www.honeywell.com/buildingsolutions.

This release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on management's assumptions and assessments in light of past experience and trends, current conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by our forward-looking statements. Our forward-looking statements are also subject to risks and uncertainties, which can affect our performance in both the near- and long-term. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.

Source: Business Wire

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