DoD's $38M Engineering Services Contract for Torpedo Depot Operations Awarded to Delphinus Engineering

Contract Overview

Contract Amount: $37,987,409 ($38.0M)

Contractor: Delphinus Engineering, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-10-20

End Date: 2022-12-28

Contract Duration: 1,895 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MAINTENANCE, ENGINEERING, AND INDUSTRIAL OPERATIONS SUPPORT SEVICES - THE MAINTENANCE, ENGINEERING AND INDUSTRIAL OPERATIONS DEPARTMENT PLANS, ORGANIZES, DIRECTS AND CONTROLS THE TORPEDO DEPOT, INTERMEDIATE MAINTENANCE, AND INDUSTRIAL OPERATION FUNCTIONS IN SUPPORT OF FLEET CUSTOMERS.

Place of Performance

Location: KEYPORT, KITSAP County, WASHINGTON, 98345

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $38.0 million to DELPHINUS ENGINEERING, INC. for work described as: MAINTENANCE, ENGINEERING, AND INDUSTRIAL OPERATIONS SUPPORT SEVICES - THE MAINTENANCE, ENGINEERING AND INDUSTRIAL OPERATIONS DEPARTMENT PLANS, ORGANIZES, DIRECTS AND CONTROLS THE TORPEDO DEPOT, INTERMEDIATE MAINTENANCE, AND INDUSTRIAL OPERATION FUNCTIONS IN SUPPORT OF FLEET CUSTO… Key points: 1. Contract supports critical torpedo depot and industrial operations for the Navy. 2. Delphinus Engineering, Inc. is the sole awardee under this delivery order. 3. The contract utilizes a Cost Plus Fixed Fee pricing structure. 4. This award falls under Engineering Services (NAICS 541330).

Value Assessment

Rating: fair

The Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not closely managed. Benchmarking CPFF contracts for similar engineering services is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific award mechanism (delivery order) implies it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, which could limit direct competition for this specific task order.

Taxpayer Impact: Taxpayer funds are being used for essential fleet support services. The CPFF structure necessitates robust oversight to ensure cost efficiency and prevent unnecessary spending.

Public Impact

Ensures readiness of torpedoes and related systems for naval operations. Supports fleet maintenance and operational capabilities. Provides specialized engineering and industrial services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee pricing can incentivize higher costs.
Lack of detailed cost data makes precise value assessment challenging.
Potential for scope creep in engineering services contracts.

Positive Signals

Awarded under full and open competition.
Supports critical national defense functions.
Long-term contract duration (5 years) indicates sustained need.

Sector Analysis

This contract falls within the Engineering Services sector, which is crucial for maintaining complex military equipment and infrastructure. Spending in this sector is often driven by defense needs and technological advancements, with significant government investment.

Small Business Impact

The data indicates this contract was not awarded to a small business (ss: false, sb: false). There is no information provided on subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight from the Department of the Navy to monitor costs, ensure performance, and prevent contractor overcharges. Regular audits and performance reviews are essential for accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee structure can lead to higher costs.
Limited transparency on specific cost components and profit.
Potential for contractor-initiated changes impacting cost.
Reliance on contractor's internal controls for cost management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.0 million to DELPHINUS ENGINEERING, INC.. MAINTENANCE, ENGINEERING, AND INDUSTRIAL OPERATIONS SUPPORT SEVICES - THE MAINTENANCE, ENGINEERING AND INDUSTRIAL OPERATIONS DEPARTMENT PLANS, ORGANIZES, DIRECTS AND CONTROLS THE TORPEDO DEPOT, INTERMEDIATE MAINTENANCE, AND INDUSTRIAL OPERATION FUNCTIONS IN SUPPORT OF FLEET CUSTOMERS.

Who is the contractor on this award?

The obligated recipient is DELPHINUS ENGINEERING, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $38.0 million.

What is the period of performance?

Start: 2017-10-20. End: 2022-12-28.

What is the typical profit margin for Cost Plus Fixed Fee contracts in defense engineering services, and how does Delphinus Engineering's fee compare?

Profit margins for CPFF contracts in defense engineering can vary but often range from 7-15% of the total cost. Without specific details on Delphinus Engineering's fixed fee and the total contract cost, a direct comparison is not possible. However, the Navy's oversight should ensure the fee is reasonable and reflects the level of risk and effort involved.

How effectively does the Department of the Navy manage the Cost Plus Fixed Fee structure to mitigate risks of cost overruns and ensure value for taxpayer money?

Effective management of CPFF contracts relies on stringent oversight, detailed cost tracking, and performance monitoring. The Navy must implement robust auditing processes and require transparent reporting from Delphinus Engineering. Regular reviews of incurred costs against the fixed fee and contract milestones are crucial to identify potential overruns early and ensure the contractor is delivering value.

What specific performance metrics are used to evaluate Delphinus Engineering's support services, and how do these ensure the operational readiness of torpedo systems?

Performance metrics likely include timeliness of repairs, quality of engineering assessments, adherence to maintenance schedules, and successful completion of industrial operations. The Navy should have established Key Performance Indicators (KPIs) tied to torpedo system availability and readiness. Evaluating Delphinus's performance against these KPIs ensures their services directly contribute to maintaining the operational effectiveness of critical naval assets.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002416R3381

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 650 BALDWIN TOWER BLVD, EDDYSTONE, PA, 19022

Business Categories: Category Business, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,460,711

Exercised Options: $39,460,711

Current Obligation: $37,987,409

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $6,131,473

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4033

IDV Type: IDC

Timeline