Navy awards $36.2M contract for shipbuilding and repair services to Delphinus Engineering, Inc

Contract Overview

Contract Amount: $36,248,613 ($36.2M)

Contractor: Delphinus Engineering, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-05-17

End Date: 2021-07-30

Contract Duration: 1,170 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: HOLDING CLIN - NO FUNDING

Place of Performance

Location: EDDYSTONE, DELAWARE County, PENNSYLVANIA, 19022

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $36.2 million to DELPHINUS ENGINEERING, INC. for work described as: HOLDING CLIN - NO FUNDING Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The contract duration of 1170 days indicates a significant, long-term need for these services. 4. The award was made by the Department of the Navy, a major defense spender. 5. The North American Industry Classification System (NAICS) code 336611 points to shipbuilding and repairing activities. 6. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more data on the scope of work and comparable services. The Cost Plus Fixed Fee (CPFF) structure means the final cost is not fixed upfront, making direct price comparisons difficult. However, the total award amount of $36.2 million over approximately three years suggests a substantial investment in shipbuilding and repair capabilities. Further analysis would require understanding the specific deliverables and comparing them to industry standards for similar naval repair and maintenance tasks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Navy sought bids from all responsible sources. The presence of 3 bidders (as suggested by 'no': 3) implies a moderate level of competition for this specific delivery order. While more than one bidder is positive, a higher number would typically lead to more robust price discovery and potentially better value for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, potentially driving down prices and ensuring the government receives competitive offers.

Public Impact

The primary beneficiaries are the U.S. Navy fleet, which will receive essential maintenance and repair services to ensure operational readiness. Services delivered include shipbuilding and repairing activities, crucial for maintaining naval assets. The geographic impact is likely concentrated around naval shipyards and bases where Delphinus Engineering, Inc. operates or is contracted to perform work. Workforce implications include job creation and utilization of skilled labor in the shipbuilding and repair sector, potentially in Pennsylvania where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost overruns if not meticulously managed and monitored by the contracting agency.
The specific scope of work for this delivery order is not detailed, making it difficult to assess if the awarded amount is fully justified.
Limited information on the number of bidders (3) makes it hard to definitively state if maximum competitive pressure was achieved.

Positive Signals

Awarded through full and open competition, indicating a broad search for qualified contractors.
The contractor, Delphinus Engineering, Inc., has secured a significant contract, suggesting a level of capability and trust from the Department of the Navy.
The contract duration implies a stable, long-term requirement, which can foster specialized expertise and efficiency.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval operations and national security. This contract falls under the broader manufacturing industry, specifically related to the construction and maintenance of large vessels. Spending in this sector is often substantial due to the complexity and high cost of naval assets. Comparable spending benchmarks would typically involve analyzing other contracts for ship maintenance, overhaul, and construction awarded by the Navy and other maritime agencies.

Small Business Impact

There is no indication from the provided data that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. The contractor, Delphinus Engineering, Inc., is not explicitly identified as a small business in this data snippet. Therefore, the direct impact on the small business ecosystem is unclear without further details on subcontracting opportunities or the size status of the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the terms and conditions of the Cost Plus Fixed Fee contract, requiring detailed cost reporting and performance metrics. Transparency is facilitated by the contract award data being publicly available, but detailed performance reports and cost breakdowns may be less accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Shipbuilding and Repair Services
Defense Contract Management Agency (DCMA) Oversight
Department of Defense Maintenance and Repair Contracts

Risk Flags

Cost Plus Fixed Fee contract type may lead to cost overruns.
Limited number of bidders (3) may not represent maximum competition.
Lack of detailed scope of work makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.2 million to DELPHINUS ENGINEERING, INC.. HOLDING CLIN - NO FUNDING

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 $36.2 million.

What is the period of performance?

Start: 2018-05-17. End: 2021-07-30.

What is the track record of Delphinus Engineering, Inc. with the Department of Defense, particularly in shipbuilding and repair?

Delphinus Engineering, Inc. has a history of securing contracts with the Department of Defense, including significant awards related to ship repair and maintenance. Their portfolio often includes work on various naval vessels, demonstrating experience in this specialized field. Analyzing their past performance on similar Cost Plus Fixed Fee contracts would be crucial to assess their ability to manage costs effectively and deliver quality services within the agreed-upon parameters. A review of past performance evaluations and any documented issues or successes would provide deeper insight into their reliability and competence as a contractor for the Navy.

How does the $36.2 million award compare to other similar shipbuilding and repair contracts awarded by the Navy?

The $36.2 million award for shipbuilding and repair services over approximately three years is a substantial sum, indicative of significant work. To benchmark this value, one would need to compare it against other Delivery Orders or contracts for similar vessel classes and repair scopes awarded by the Department of the Navy or other maritime agencies. Factors such as the type of vessels, the complexity of the repairs (e.g., routine maintenance vs. major overhauls), and the specific services included (e.g., labor, materials, shipyard access) heavily influence contract values. Without detailed scope information, direct comparison is difficult, but this amount suggests a significant undertaking.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risk with a CPFF contract of this magnitude ($36.2 million) is the potential for cost overruns. While the contractor receives a fixed fee, the government bears the cost of all allowable expenses. If the contractor's actual costs exceed estimates, the government pays more. This necessitates robust oversight from the Navy to ensure costs are reasonable, allocable, and allowable. Risks also include potential scope creep, inadequate performance monitoring, and the contractor's incentive to control costs being potentially weaker compared to fixed-price contracts. Effective management and clear performance metrics are critical to mitigate these risks.

How effective is full and open competition in ensuring value for money in the shipbuilding and repair sector?

Full and open competition is generally considered the most effective method for ensuring value for money, as it allows the widest possible pool of qualified contractors to bid. This competition drives down prices and encourages innovation. In the shipbuilding and repair sector, where specialized facilities and expertise are required, ensuring a robust competitive environment is crucial. While 'full and open' is the ideal, the actual number of bidders (3 in this case) influences the degree of price discovery. A higher number of bidders typically leads to better value, but even with three, competition is present and likely yielded more favorable terms than a sole-source award.

What is the historical spending trend for shipbuilding and repair services by the Department of the Navy?

The Department of the Navy historically represents one of the largest components of federal defense spending, with a significant portion allocated to shipbuilding, repair, and maintenance. Annual spending in this category can fluctuate based on fleet modernization programs, maintenance cycles, and geopolitical demands. Trends often show consistent, high-level investment in maintaining and expanding the naval fleet. Analyzing historical data from sources like the Federal Procurement Data System (FPDS) or agency budget reports would reveal specific spending patterns, identify major contractors, and highlight the sustained importance of this sector to the Navy's operational capabilities.

Are there specific performance metrics or deliverables tied to this $36.2 million contract?

While the provided data does not detail specific performance metrics or deliverables, contracts of this nature typically include detailed statements of work (SOW) outlining the required services, quality standards, and delivery schedules. For shipbuilding and repair, these could include milestones for dry-docking, hull maintenance, system overhauls, and final inspections. Performance is usually assessed against these requirements, with potential penalties or incentives tied to meeting or exceeding them. The Cost Plus Fixed Fee structure implies that the government pays for allowable costs incurred in performing the SOW, making adherence to the defined scope and quality paramount.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6554013R0052

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1510 CHESTER PIKE STE 380, EDDYSTONE, PA, 19022

Business Categories: Category Business, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,449,909

Exercised Options: $36,449,909

Current Obligation: $36,248,613

Actual Outlays: $-40,626

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $1,587,714

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6554015D0004

IDV Type: IDC

Timeline