Navy awards $11.99M contract for aircraft carrier modernization to Delphinus Engineering

Contract Overview

Contract Amount: $11,991,337 ($12.0M)

Contractor: Delphinus Engineering, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-12-16

End Date: 2027-01-31

Contract Duration: 776 days

Daily Burn Rate: $15.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE NAVAL SURFACE WARFARE CENTER PHILADELPHIA DIVISION (NSWCPD), SPONSORED BY THE PMS 312 IN-SERVICE AIRCRAFT CARRIER MODERNIZATION PROGRAM MANAGER, REQUIRES THAT SCD 1207 & 12397 TO BE INSTALLED ON USS RONALD REAGAN (CVN-76).

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE CITY County, VIRGINIA, 23320

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to DELPHINUS ENGINEERING, INC. for work described as: THE NAVAL SURFACE WARFARE CENTER PHILADELPHIA DIVISION (NSWCPD), SPONSORED BY THE PMS 312 IN-SERVICE AIRCRAFT CARRIER MODERNIZATION PROGRAM MANAGER, REQUIRES THAT SCD 1207 & 12397 TO BE INSTALLED ON USS RONALD REAGAN (CVN-76). Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, indicating ongoing program needs. 3. The duration of the contract (776 days) suggests a significant scope of work for the modernization effort. 4. The contract type is Cost Plus Fixed Fee (CPFF), which can present cost control challenges if not managed closely. 5. The work is for the Naval Surface Warfare Center Philadelphia Division, a key entity for naval modernization. 6. The specific task involves installing SCD 1207 & 12397 on the USS Ronald Reagan (CVN-76).

Value Assessment

Rating: fair

The contract value of $11.99 million for modernization work on a specific aircraft carrier system appears reasonable given the complexity of naval vessel upgrades. Benchmarking against similar modernization efforts for aircraft carriers would provide a clearer picture of value for money. The CPFF contract type necessitates close monitoring to ensure costs remain within expected parameters and do not escalate beyond the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The specific number of bidders is not provided, but this approach generally fosters price discovery and allows the government to select the most advantageous offer. The competitive nature should theoretically lead to more favorable pricing for the government.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that a broad range of qualified contractors have an opportunity to bid, potentially driving down costs.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, specifically for the USS Ronald Reagan (CVN-76). The services delivered involve critical modernization and installation of specific systems (SCD 1207 & 12397) essential for the carrier's functionality. The geographic impact is localized to the ship's location, but the modernization contributes to the broader U.S. naval presence and defense capabilities. Workforce implications include skilled labor in shipbuilding and repair, potentially supporting jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not meticulously managed and monitored by the government.
The specific nature of the SCD installations requires specialized expertise, and any delays or technical issues could impact the overall modernization schedule.
Reliance on a single delivery order under a potentially larger IDIQ contract means future needs and costs are not fully defined at this stage.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
The contractor, Delphinus Engineering, Inc., is performing work for a critical naval modernization program, indicating a level of trust and capability.
The work is being performed for the Naval Surface Warfare Center Philadelphia Division, a reputable entity within the Navy's technical command structure.

Sector Analysis

The contract falls within the Ship Building and Repairing sector (NAICS 336611), a critical component of the U.S. defense industrial base. This sector is characterized by large, complex projects requiring specialized engineering and manufacturing capabilities. Spending in this area is often driven by military readiness requirements and the need to maintain and modernize aging fleets. Comparable spending benchmarks would involve other major ship overhauls and modernization programs for naval vessels.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SB is false). Delphinus Engineering, Inc. is likely a large business. There is no explicit information on subcontracting plans for small businesses within this specific delivery order. However, large defense contracts often include subcontracting goals, and the overall impact on the small business ecosystem would depend on the broader IDIQ contract's provisions and Delphinus's subcontracting practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Surface Warfare Center Philadelphia Division (NSWCPD) and the Program Executive Office for Aircraft Carriers (PEO(C)). The Department of Defense's Inspector General would also have jurisdiction for audits and investigations. Transparency is facilitated through contract award databases, but detailed project progress and cost breakdowns may be less publicly accessible due to national security considerations.

Related Government Programs

Aircraft Carrier Modernization Programs
Naval Ship Maintenance and Repair
Naval Surface Warfare Center Contracts
Defense Logistics Agency (DLA) Support Services
Shipbuilding and Repair Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Potential for schedule delays due to technical complexity or integration issues.
Scope definition and management are critical for CPFF contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to DELPHINUS ENGINEERING, INC.. THE NAVAL SURFACE WARFARE CENTER PHILADELPHIA DIVISION (NSWCPD), SPONSORED BY THE PMS 312 IN-SERVICE AIRCRAFT CARRIER MODERNIZATION PROGRAM MANAGER, REQUIRES THAT SCD 1207 & 12397 TO BE INSTALLED ON USS RONALD REAGAN (CVN-76).

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 $12.0 million.

What is the period of performance?

Start: 2024-12-16. End: 2027-01-31.

What is the track record of Delphinus Engineering, Inc. with the Department of Defense, particularly in aircraft carrier modernization?

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 their involvement in major aircraft carrier modernization projects beyond this award are not immediately available in this dataset, their selection for this significant delivery order suggests they possess the necessary qualifications and past performance recognized by the Navy. A deeper dive into their contract history, including past performance reviews and any prior work on similar naval platforms, would provide a more comprehensive understanding of their capabilities and reliability in this specialized domain.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar naval modernization projects?

Cost Plus Fixed Fee (CPFF) contracts are common in complex, high-risk projects where the scope may evolve, such as major defense acquisitions and modernizations. In a CPFF arrangement, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set upfront, offering more cost certainty to the government but potentially higher risk for the contractor if costs escalate. Cost Plus Incentive Fee (CPIF) contracts, another alternative, allow for fee adjustments based on performance against targets. For naval modernization, CPFF can be advantageous when precise cost estimation is difficult, but it requires robust government oversight to manage costs effectively and prevent contractor inefficiencies from driving up the final price.

What are the potential risks associated with the installation of SCD 1207 & 12397 on the USS Ronald Reagan?

The primary risks associated with installing specific systems like SCD 1207 & 12397 involve technical complexity, integration challenges, and schedule delays. These systems may involve intricate wiring, software, and hardware components that require specialized knowledge for installation and testing. Integration with existing ship systems is crucial; any incompatibility could lead to significant rework or performance issues. Furthermore, the USS Ronald Reagan is an operational asset, meaning that modernization work must be carefully scheduled to minimize downtime and impact on its deployment readiness. Delays in installation or testing could cascade, affecting subsequent maintenance availabilities and operational commitments.

What is the historical spending pattern for aircraft carrier modernization by the Department of the Navy?

The Department of the Navy historically allocates substantial funding towards the modernization and sustainment of its aircraft carrier fleet, which represents a significant portion of its capital investment. Spending patterns are influenced by the service life of existing carriers, the development and procurement of new carriers (like the Ford-class), and evolving technological requirements. Modernization efforts typically focus on upgrading combat systems, propulsion, electronics, and habitability to extend the carriers' operational lifespan and enhance their capabilities. Annual spending can fluctuate based on the number of carriers undergoing major overhauls or refuels, and the specific technological upgrades being implemented across the fleet. This contract represents a specific instance within that broader, consistent investment.

How does the duration of this contract (776 days) compare to typical timelines for similar naval modernization tasks?

A contract duration of 776 days (approximately 2 years and 1.5 months) is substantial and aligns with the complexity and scope typically involved in major naval modernization efforts. Aircraft carrier availabilities, which include modernization work, are often lengthy processes, sometimes spanning over a year or more, depending on the extent of the upgrades, refueling schedules, and shipyard capacity. This duration suggests that the installation of SCD 1207 & 12397 is not a minor task but rather a significant component of a larger modernization or maintenance cycle for the USS Ronald Reagan. Shorter durations might be associated with smaller, more focused repair or upgrade tasks on less complex vessels.

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: N6449825Q3001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3803 WEST CHESTER PIKE STE 190, NEWTOWN SQUARE, PA, 19073

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: $11,991,337

Exercised Options: $11,991,337

Current Obligation: $11,991,337

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $1,497,163

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6449821D0018

IDV Type: IDC

Timeline