DoD Awards $124M for Naval Digital Transformation, Delta Constellation Group Secures Contract

Contract Overview

Contract Amount: $12,420,816 ($12.4M)

Contractor: Delta Constellation Group, LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-16

End Date: 2027-09-15

Contract Duration: 1,094 days

Daily Burn Rate: $11.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: NAVAL DIGITAL TRANSFORMATION AND INTEGRATION SYSTEMS ENGINEERING AND PLANNING FOR NAVALX

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.4 million to DELTA CONSTELLATION GROUP, LLC for work described as: NAVAL DIGITAL TRANSFORMATION AND INTEGRATION SYSTEMS ENGINEERING AND PLANNING FOR NAVALX Key points: 1. Contract awarded for critical naval digital transformation and integration. 2. Delta Constellation Group, LLC, a private entity, is the awardee. 3. The contract falls under Research and Development in Physical, Engineering, and Life Sciences. 4. Significant taxpayer investment in modernizing naval systems.

Value Assessment

Rating: good

The contract value of $124.2M over three years for R&D services appears reasonable given the complexity of digital transformation. Benchmarking against similar large-scale systems engineering contracts is difficult without more granular data, but the cost-plus-fixed-fee structure allows for flexibility while managing contractor profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may impact price discovery compared to unrestricted full and open competition, potentially leading to higher costs if the excluded sources were capable and competitive.

Taxpayer Impact: Taxpayer funds are being used for a critical modernization effort. The limited competition raises questions about whether the best possible price was achieved.

Public Impact

Enhances naval operational capabilities through digital integration. Supports the development of advanced systems for the U.S. Navy. Potential for improved efficiency and effectiveness in naval operations. Contributes to the broader defense technological advancement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may not yield the best price.
Contract type (CPFF) can lead to cost overruns if not managed closely.
Small business participation is not indicated.

Positive Signals

Addresses a critical need for naval digital transformation.
Long-term contract duration allows for sustained development.
Awardee has a specific focus relevant to the contract.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on engineering and planning for digital transformation. Spending in this area is crucial for maintaining technological superiority but can be high-risk due to the inherent uncertainties in R&D.

Small Business Impact

The data indicates that small business participation was not a factor in this award (sb: false). This suggests the prime contractor is likely a larger entity, and opportunities for small businesses may be limited to subcontracting roles, if any.

Oversight & Accountability

The Department of the Air Force is the contracting agency, overseeing this award for the Navy. Oversight will be critical to ensure the project stays on track, within budget, and meets the defined objectives for naval digital transformation.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition may result in suboptimal pricing.
Lack of explicit small business participation.
Complexity of integrating new digital systems with legacy infrastructure.
Cybersecurity risks inherent in digital transformation initiatives.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.4 million to DELTA CONSTELLATION GROUP, LLC. NAVAL DIGITAL TRANSFORMATION AND INTEGRATION SYSTEMS ENGINEERING AND PLANNING FOR NAVALX

Who is the contractor on this award?

The obligated recipient is DELTA CONSTELLATION GROUP, LLC.

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 $12.4 million.

What is the period of performance?

Start: 2024-09-16. End: 2027-09-15.

What specific digital transformation capabilities are being developed, and how do they align with current and future naval operational needs?

The contract aims to provide systems engineering and planning for naval digital transformation and integration. This likely encompasses areas such as cloud migration, data analytics, cybersecurity enhancements, and the integration of new technologies into existing naval platforms. The alignment with operational needs would be detailed in the Statement of Work, focusing on improving command and control, logistics, intelligence, and combat effectiveness in a digitally connected environment.

What are the primary risks associated with this Cost Plus Fixed Fee contract, and how are they being mitigated?

The primary risk with CPFF contracts is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. Mitigation strategies include robust government oversight, detailed cost tracking, performance metrics, and clear definition of scope to prevent scope creep. The fixed fee incentivizes the contractor to control costs to maximize their profit margin.

How will the success of this digital transformation initiative be measured, and what are the expected long-term benefits for the Navy?

Success will likely be measured through key performance indicators (KPIs) related to system integration, data accessibility, cybersecurity posture, and operational efficiency improvements. Long-term benefits are expected to include enhanced situational awareness, faster decision-making, improved interoperability between naval assets, reduced maintenance costs through predictive analytics, and a more agile and resilient naval force capable of meeting future threats.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1100 NEW JERSEY AVE SE STE 400, WASHINGTON, DC, 20003

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,571,566

Exercised Options: $12,571,566

Current Obligation: $12,420,816

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807519D0022

IDV Type: IDC

Timeline