Air Force awards $17.7M for Hangar 711 repair, highlighting construction sector activity

Contract Overview

Contract Amount: $17,730,491 ($17.7M)

Contractor: Herman/Jcg CO JV

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2026-01-09

Contract Duration: 834 days

Daily Burn Rate: $21.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR HANGAR 711

Place of Performance

Location: DOVER AFB, KENT County, DELAWARE, 19902

State: Delaware Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to HERMAN/JCG CO JV for work described as: REPAIR HANGAR 711 Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a healthy market for hangar repair services. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of 834 days indicates a significant scope of work. 5. The award falls within the broader category of facility maintenance and repair. 6. Geographic location in Delaware may influence labor and material costs.

Value Assessment

Rating: good

The $17.7 million award for Hangar 711 repair seems aligned with typical costs for major facility maintenance and construction projects within the Department of Defense. Benchmarking against similar hangar repair contracts would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator, as it shifts cost risk to the contractor and encourages efficient project execution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple bidders were likely considered after an initial exclusion period. While the exact number of bidders isn't specified, this procurement method generally fosters competitive pricing and encourages contractors to offer their best value. The exclusion of sources might suggest specific technical requirements or prior relationships that were considered.

Taxpayer Impact: This competitive approach is beneficial for taxpayers as it is expected to drive down costs and ensure the government receives high-quality services at a fair market price.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel and operations at the Delaware facility, who will gain access to a safely repaired and functional hangar. The contract delivers essential repair and maintenance services for critical aviation infrastructure. The geographic impact is localized to the specific Air Force base in Delaware. The project will likely create or sustain jobs in the construction sector within the Delaware region, including skilled trades and project management roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if unforeseen structural issues are discovered during repair.
Dependence on specialized construction labor which may be subject to availability and wage fluctuations.
Risk of delays due to weather or supply chain disruptions impacting material delivery.

Positive Signals

Firm fixed-price contract limits the government's exposure to cost increases.
Full and open competition suggests a robust bidding process likely resulting in competitive pricing.
The contractor, HERMAN/JCG CO JV, has experience in large-scale construction projects.
The project duration is clearly defined, allowing for structured planning and execution.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports critical infrastructure maintenance and upgrades for government facilities. Comparable spending benchmarks would involve analyzing other large-scale repair and construction contracts awarded by the Department of Defense or other federal agencies for similar types of facilities.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. Therefore, the direct impact on small business set-asides appears minimal for this specific award. However, the prime contractor, HERMAN/JCG CO JV, may engage small businesses as subcontractors to fulfill portions of the work, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and engineering divisions. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified repairs within the agreed-upon budget and timeline. Transparency is generally maintained through contract award databases and reporting requirements, though specific day-to-day oversight details are not provided.

Related Government Programs

Military Base Infrastructure Maintenance
Airfield Facility Construction
Department of Defense Construction Contracts
Large-Scale Building Renovation Projects

Risk Flags

Potential for unforeseen conditions impacting cost and schedule.
Contractor performance risk.
Labor availability and cost fluctuations.
Supply chain disruptions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to HERMAN/JCG CO JV. REPAIR HANGAR 711

Who is the contractor on this award?

The obligated recipient is HERMAN/JCG CO JV.

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 $17.7 million.

What is the period of performance?

Start: 2023-09-28. End: 2026-01-09.

What is the track record of HERMAN/JCG CO JV with the Department of Defense?

HERMAN/JCG CO JV is a joint venture that has likely been involved in various construction projects. To assess their track record specifically with the Department of Defense, one would need to examine their past performance on similar contracts. This would involve reviewing contract databases for previous awards, performance evaluations (like Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract modifications. A positive history of timely delivery, adherence to budget, and quality work on prior DoD projects would indicate a lower risk for this current award. Conversely, a history of issues could raise concerns about their capability to execute this Hangar 711 repair effectively.

How does the $17.7 million cost compare to similar hangar repair projects?

Benchmarking the $17.7 million cost requires comparing it to similar hangar repair projects awarded by the Department of Defense or other federal agencies. Factors influencing cost include the size and complexity of the hangar, the extent of repairs needed (e.g., structural, roofing, electrical, HVAC), the geographic location (affecting labor and material costs), and the specific competition level. Without access to a database of comparable projects with detailed cost breakdowns, a precise comparison is difficult. However, for a major repair of a large aviation facility, $17.7 million is within a plausible range, especially considering the firm fixed-price nature which often includes contingency for the contractor.

What are the primary risks associated with this firm fixed-price contract?

While firm fixed-price (FFP) contracts are generally favored for shifting cost risk to the contractor, potential risks remain. The primary risk for the government is that the contractor may cut corners on quality or materials to maintain profitability if unforeseen issues arise or if their initial cost estimates were too low. Another risk is contractor default or poor performance, which could lead to significant delays and require contract termination and re-solicitation, incurring additional costs and time. For this specific project, risks could include discovering hidden structural damage during the repair process that was not fully anticipated in the initial scope, potentially leading to change orders if not managed carefully within the FFP framework.

How effective is 'Full and Open Competition After Exclusion of Sources' in ensuring value for taxpayers?

This procurement method aims to balance ensuring broad market participation with potentially addressing specific requirements. 'Full and Open Competition' is generally the most effective method for taxpayers as it maximizes the number of potential bidders, driving down prices through robust competition. The 'After Exclusion of Sources' clause suggests that certain entities might have been initially excluded, possibly due to specific qualifications or prior work, before the remaining pool was opened to full competition. If the exclusion criteria were justified and the subsequent competition was indeed robust with multiple capable bidders, this method can still yield good value. However, if the exclusion significantly limited the number of viable bidders, it could potentially reduce competitive pressure and impact price discovery.

What is the historical spending trend for facility repair and construction by the Air Force?

Historical spending by the Air Force on facility repair and construction is substantial, reflecting the vast infrastructure required to support its global operations. Annual budgets for maintenance, repair, and construction (often categorized under Military Construction, Defense-Wide or similar appropriations) typically run into billions of dollars. This spending fluctuates based on modernization needs, aging infrastructure, and strategic priorities. The $17.7 million for Hangar 711 repair represents a single project within this larger spending context. Analyzing trends would involve looking at aggregate spending data over several fiscal years to identify patterns in investment in facility upkeep and upgrades across different types of installations and infrastructure.

What are the potential workforce implications of this $17.7 million construction contract?

A contract of this magnitude, valued at $17.7 million for hangar repair, will have notable workforce implications, primarily within the construction sector. It is expected to create or sustain numerous jobs in the Delaware region, including skilled trades such as electricians, plumbers, carpenters, heavy equipment operators, and general laborers. Project management, engineering, and administrative support roles will also be required. The duration of the project (834 days) suggests a sustained demand for labor over an extended period. The specific skill sets needed may also influence local labor markets, potentially leading to increased demand for specialized construction expertise.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10366 ROSELLE ST STE A, SAN DIEGO, CA, 92121

Business Categories: Category Business, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $17,730,491

Exercised Options: $17,730,491

Current Obligation: $17,730,491

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA890317D0029

IDV Type: IDC

Timeline