DoD awards $24.4M for shipboard food service equipment replacement, with a 4-year performance period

Contract Overview

Contract Amount: $24,423,839 ($24.4M)

Contractor: Delphinus Engineering, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-30

End Date: 2026-05-12

Contract Duration: 1,685 days

Daily Burn Rate: $14.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FOOD SERVICE EQUIPMENT (FSE) REPLACEMENT ON CVN 74 USS JOHN C. STENNIS

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.4 million to DELPHINUS ENGINEERING, INC. for work described as: FOOD SERVICE EQUIPMENT (FSE) REPLACEMENT ON CVN 74 USS JOHN C. STENNIS Key points: 1. Value for money appears fair given the specialized nature of naval equipment. 2. Competition was full and open, suggesting a competitive pricing environment. 3. Risk indicators are moderate, primarily related to the complexity of shipboard installations. 4. Performance context involves critical infrastructure maintenance for a major naval asset. 5. Sector positioning is within naval shipbuilding and repair, a specialized industrial segment.

Value Assessment

Rating: fair

The contract value of $24.4 million for food service equipment replacement on a carrier is substantial. Benchmarking against similar naval modernization efforts is challenging due to the unique operational environment of aircraft carriers. However, the cost-plus-fixed-fee structure allows for some cost control while accommodating potential unforeseen issues inherent in shipboard repairs. The duration of the contract suggests a phased approach to replacement, which can help manage costs and operational impact.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were likely solicited and allowed to bid. The presence of 4 bids suggests a reasonable level of competition, which should have contributed to price discovery. The specific exclusion of sources might relate to unique capabilities or prior performance requirements, but the overall framework was competitive.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging cost-effective solutions for essential military equipment.

Public Impact

Sailors aboard the USS John C. Stennis will benefit from modernized and reliable food service equipment. This contract ensures the continued operational readiness of a key naval asset. The services delivered include the procurement and installation of specialized galley equipment. The geographic impact is primarily on the USS John C. Stennis, a naval vessel. Workforce implications may include specialized technicians for installation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not closely managed.
Complexity of integrating new equipment into an operational warship environment.
Delays in delivery or installation could impact crew morale and operational readiness.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Contract includes a fixed fee component, providing some cost certainty.
Long performance period allows for phased implementation and reduces immediate disruption.

Sector Analysis

The shipbuilding and repairing sector, particularly for naval vessels, is highly specialized and capital-intensive. This contract falls within the broader defense industrial base, focusing on the maintenance and modernization of critical fleet assets. Spending in this area is driven by the need to maintain operational readiness and extend the service life of aging platforms. Comparable spending benchmarks are difficult to establish due to the unique nature of aircraft carrier maintenance.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, and the prime contractor, Delphinus Engineering, Inc., is not exclusively a small business. Subcontracting opportunities for small businesses may exist within the broader scope of the work, particularly for specialized components or services, but this is not detailed in the provided data. The overall impact on the small business ecosystem is likely indirect unless specific subcontracting plans are mandated.

Oversight & Accountability

Oversight will be provided by the Department of the Navy, likely through contracting officers and technical representatives. Accountability measures are embedded in the cost-plus-fixed-fee structure and performance requirements. Transparency is facilitated by the contract award process being public, though detailed cost breakdowns and performance metrics may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair
Fleet Modernization Programs
Defense Logistics and Supply Chain Management
Shipbuilding and Repair Contracts
Military Base Operations Support

Risk Flags

Cost-Plus-Fixed-Fee contract type requires close monitoring to prevent cost overruns.
Integration of new equipment into an operational warship presents technical and logistical challenges.
Performance period extends over several years, increasing exposure to potential schedule delays.
Specific exclusion of sources in competition warrants understanding the rationale to ensure fairness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.4 million to DELPHINUS ENGINEERING, INC.. FOOD SERVICE EQUIPMENT (FSE) REPLACEMENT ON CVN 74 USS JOHN C. STENNIS

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 $24.4 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-05-12.

What is Delphinus Engineering, Inc.'s track record with similar naval contracts?

Delphinus Engineering, Inc. has a history of performing various services for the Department of Defense, including ship repair, maintenance, and technical support. While specific details on prior food service equipment replacement contracts on aircraft carriers are not readily available in this summary, their experience in naval environments suggests a foundational understanding of the operational complexities. Further investigation into their past performance ratings, contract history with the Navy, and any past performance issues or commendations would provide a more comprehensive assessment of their suitability for this specific task. Their ability to manage complex projects within the demanding constraints of a naval vessel is a key factor in evaluating their track record.

How does the pricing of this contract compare to similar naval modernization efforts?

Directly comparing the pricing of this $24.4 million contract for food service equipment replacement on the USS John C. Stennis to similar naval modernization efforts is challenging due to the unique nature of aircraft carrier operations and the specific scope of work. Aircraft carriers are complex, high-cost platforms, and upgrades to critical systems like galleys involve specialized equipment, integration challenges, and stringent safety and operational requirements. The cost-plus-fixed-fee (CPFF) contract type allows for flexibility but requires diligent oversight to ensure value. Benchmarking would ideally involve analyzing the cost per square foot of galley space modernized, the cost per sailor served, or the cost of specific equipment types relative to their naval specifications, but such granular data is not provided here. However, the fact that it was awarded under full and open competition with four bids suggests a degree of market validation on the pricing.

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

The primary risks associated with this contract include potential cost overruns due to the CPFF structure, integration challenges of new equipment into the existing ship infrastructure, and potential delays impacting operational schedules. Mitigation strategies likely involve robust project management by the Navy, detailed technical specifications, phased implementation to minimize disruption, and close monitoring of contractor performance and expenditures. The fixed fee component provides some incentive for the contractor to manage costs efficiently. Furthermore, the long performance period (over 4 years) allows for a structured approach, potentially mitigating risks associated with rushing complex installations. The exclusion of sources in the competition, if it relates to specific technical requirements, might also be a mitigation strategy to ensure only qualified vendors capable of handling the technical risks are involved.

How effective is the competition level in ensuring value for taxpayers?

The contract was awarded under 'full and open competition after exclusion of sources' with four bids received. This level of competition is generally considered healthy and is effective in ensuring value for taxpayers. It allows multiple vendors to propose solutions and prices, fostering a competitive environment that drives down costs and encourages innovation. The exclusion of sources, if based on specific technical requirements or security clearances, ensures that only capable bidders participate, preventing a race to the bottom on quality. The presence of four bidders suggests that the market has sufficient capacity and interest to compete for this type of work, providing a solid basis for price discovery and ensuring that the selected contractor's offer represents a reasonable value proposition compared to alternatives.

What are the historical spending patterns for food service equipment replacement on naval vessels?

Historical spending patterns for food service equipment replacement on naval vessels are not detailed in the provided data. However, it is understood that such procurements are periodic, driven by the lifecycle of equipment, technological advancements, and the overall maintenance and modernization schedules of naval fleets. Major overhauls or service-life extensions of vessels often include significant upgrades to onboard systems, including galleys. Spending can vary widely based on the class of vessel (e.g., aircraft carriers versus destroyers), the extent of the replacement (partial vs. full), and the prevailing economic conditions and defense budgets. This $24.4 million contract for the USS John C. Stennis represents a significant investment, typical for major upgrades on a capital ship.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6449821Q3108

Offers Received: 4

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: $24,423,839

Exercised Options: $24,423,839

Current Obligation: $24,423,839

Subaward Activity

Number of Subawards: 41

Total Subaward Amount: $5,358,839

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6449821D4033

IDV Type: IDC

Timeline