For sauce, in a medium saucepan bring water to boiling. Add onion, garlic, and chili powder. Reduce heat. Simmer, covered, for 5 minutes or until tender. Stir in tomato sauce, vinegar, honey, salt, and pepper. Return to boiling, stirring constantly. Boil for 5 minutes or until slightly thickened.

Meanwhile, trim fat from meat. Score both sides of steak in a diamond pattern by making shallow diagonal cuts at 1-inch intervals. Brush lightly with some of the sauce. For a charcoal grill, place steak on the rack of an uncovered grill directly over medium coals. Grill for 17 to 21 minutes or until medium doneness (160 degrees F), turning once halfway through grilling and brushing with the sauce during the last 5 minutes of grilling. (For a gas grill, preheat grill. Reduce heat to medium. Place steaks on grill rack over heat. Cover and grill as above.)

In a small saucepan reheat the remaining sauce until bubbly. To serve, thinly slice steak across grain. Pass warmed sauce. Makes 6 servings.