DoD's $11.8M renovation contract for PM507 awarded to Herman Construction Group, Inc

Contract Overview

Contract Amount: $11,797,804 ($11.8M)

Contractor: Herman Construction Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-24

End Date: 2028-01-03

Contract Duration: 831 days

Daily Burn Rate: $14.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE PURPOSE OF THIS PROJECT IS TO DESIGN AND RENOVATE APPROXIMATELY 7,400 SQ FT FOR THE SECOND FLOOR OF PM507.

Place of Performance

Location: POINT MUGU NAWC, VENTURA County, CALIFORNIA, 93042

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.8 million to HERMAN CONSTRUCTION GROUP, INC. for work described as: THE PURPOSE OF THIS PROJECT IS TO DESIGN AND RENOVATE APPROXIMATELY 7,400 SQ FT FOR THE SECOND FLOOR OF PM507. Key points: 1. The contract focuses on designing and renovating 7,400 sq ft of space. 2. Herman Construction Group, Inc. secured this contract. 3. The project is managed by the Department of the Navy. 4. The contract type is Firm Fixed Price, indicating predictable costs. 5. The duration of the contract is 831 days. 6. The project is located in California. 7. This is a significant investment in facility upgrades for the Department of Defense.

Value Assessment

Rating: fair

The total contract value is $11,797,803.86 for the renovation of approximately 7,400 sq ft. Benchmarking this against typical commercial construction costs per square foot, which can range from $150 to $500 depending on complexity and location, this contract falls within a plausible range. However, without more detailed specifications on the scope of renovation (e.g., structural changes, specialized systems), a precise value-for-money assessment is challenging. The fixed-price nature provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple interested parties had the opportunity to bid. This method is generally preferred as it fosters a competitive environment, potentially leading to better pricing and quality. The number of bidders is not specified, but the 'full and open' designation implies a robust bidding process.

Taxpayer Impact: Full and open competition typically benefits taxpayers by encouraging a wider range of offers, which can drive down costs and improve the overall value received for public funds.

Public Impact

The Department of the Navy will benefit from modernized facilities. The renovation will improve the functionality and potentially the working environment of the PM507 building. The project is geographically located in California. The construction industry and its workforce in the local area will be impacted through job creation and business opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during renovation, despite fixed-price contract.
Schedule delays could impact the intended use of the renovated space.
Quality of work may vary, requiring diligent oversight.
Limited transparency on specific renovation details impacting full value assessment.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process.
Award to an established construction group implies experience.
Clear project scope for renovation of a defined space.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. Federal spending in this sector supports infrastructure development and facility modernization across various government agencies. Comparable spending benchmarks would involve analyzing other large-scale renovation or construction projects undertaken by the Department of Defense or other federal entities for similar square footage and complexity.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a specific set-aside criterion for this contract. While Herman Construction Group, Inc. may engage small businesses as subcontractors, there is no explicit requirement or indication of a small business set-aside in the provided information. This means the primary award was not directed towards small businesses, and their inclusion would depend on the prime contractor's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Navy contracting office. Accountability measures are inherent in the firm fixed-price contract, which obligates the contractor to deliver the specified work within the agreed price. Transparency is generally maintained through contract award databases and reporting requirements, though specific project oversight details are not provided.

Related Government Programs

Department of Defense Facility Modernization Programs
Naval Facilities Engineering Command Projects
Federal Building and Renovation Contracts
Commercial and Institutional Construction Spending

Risk Flags

Potential for cost overruns if scope changes
Risk of schedule delays impacting operational readiness
Need for diligent quality assurance oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.8 million to HERMAN CONSTRUCTION GROUP, INC.. THE PURPOSE OF THIS PROJECT IS TO DESIGN AND RENOVATE APPROXIMATELY 7,400 SQ FT FOR THE SECOND FLOOR OF PM507.

Who is the contractor on this award?

The obligated recipient is HERMAN CONSTRUCTION GROUP, 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 $11.8 million.

What is the period of performance?

Start: 2025-09-24. End: 2028-01-03.

What is the track record of Herman Construction Group, Inc. with federal contracts, particularly within the Department of Defense?

Herman Construction Group, Inc. has a history of securing federal contracts, including those with the Department of Defense. Analyzing their past performance, including contract values, types of projects, and on-time delivery rates, is crucial for assessing their capability to execute this renovation project successfully. A review of their federal contract history would reveal their experience with similar scope and scale, as well as any past performance issues or commendations. This information helps gauge the risk associated with awarding this significant contract to them and provides context for their pricing and proposed approach.

How does the cost per square foot for this renovation compare to similar federal building projects in California?

The contract value of approximately $11.8 million for 7,400 sq ft translates to roughly $1,600 per square foot. This figure appears high when compared to typical commercial construction costs, which often range from $150 to $500 per square foot, depending on the complexity and finishes. However, federal projects, especially those involving specialized security, IT infrastructure, or specific military requirements, can incur higher costs. A detailed comparison would require analyzing the specific scope of work, materials, and any unique government-mandated specifications for this particular renovation. Without this granular detail, it's difficult to definitively assess if the price represents excellent value or is inflated.

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

Key risks for this renovation project include potential schedule delays due to unforeseen site conditions, material availability issues, or contractor performance. Cost risks, while somewhat mitigated by the firm fixed-price structure, could still arise from change orders if the scope expands. Mitigation strategies likely involve robust project management by the Navy, detailed site assessments prior to and during construction, clear communication channels with the contractor, and performance bonds. The contractor's experience and the competitive bidding process also serve as risk-reduction factors, assuming thorough vetting occurred.

What is the expected impact of this renovation on the operational effectiveness of the PM507 facility?

The renovation of 7,400 sq ft on the second floor of PM507 is intended to modernize and improve the facility's functionality. This could lead to enhanced operational effectiveness by providing updated workspaces, improved infrastructure (e.g., HVAC, electrical, IT), and potentially better security features. The specific impact depends on the original condition of the space and the nature of the renovations. For instance, if the current space is outdated or inefficient, the upgrades could significantly boost productivity, accommodate new technologies, or improve the working environment for personnel stationed there.

How has federal spending on building construction and renovation in the Department of the Navy trended over the past five years?

Federal spending on building construction and renovation within the Department of the Navy has historically been substantial, driven by the need to maintain and modernize a vast global infrastructure. Over the past five years, trends have likely reflected priorities such as readiness, technological upgrades, and resilience against environmental factors. While specific figures fluctuate annually based on budget allocations and project pipelines, there's a consistent demand for such services. Analyzing historical spending patterns would reveal whether this $11.8 million contract is in line with typical project sizes or represents a significant investment in a particular facility upgrade.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2060 WINERIDGE PL STE A, ESCONDIDO, CA, 92029

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,797,804

Exercised Options: $11,797,804

Current Obligation: $11,797,804

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247324D5213

IDV Type: IDC

Timeline