DOD awards $21.3M for USDA Children's Nutrition Research Center Renovations in Houston, Texas

Contract Overview

Contract Amount: $21,326,146 ($21.3M)

Contractor: Herman Construction Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-03-10

End Date: 2026-04-06

Contract Duration: 1,123 days

Daily Burn Rate: $19.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: U.S. DEPARTMENT OF AGRICULTURE CHILDREN'S NUTRITION RESEARCH CENTER RENOVATIONS, HOUSTON, TEXAS

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77030

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $21.3 million to HERMAN CONSTRUCTION GROUP, INC. for work described as: U.S. DEPARTMENT OF AGRICULTURE CHILDREN'S NUTRITION RESEARCH CENTER RENOVATIONS, HOUSTON, TEXAS Key points: 1. Contract awarded to Herman Construction Group, Inc. for building construction services. 2. Project duration is 1123 days, indicating a significant renovation scope. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Awarded under full and open competition, suggesting a competitive bidding process. 5. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework. 6. The project is located in Houston, Texas, impacting local construction workforce and economy.

Value Assessment

Rating: fair

The contract value of $21.3 million for building renovations appears to be within a reasonable range for a project of this scale, though specific benchmarks for research facility renovations are not readily available. The firm fixed price structure provides cost certainty for the government, but the final value is dependent on the contractor's ability to manage costs effectively. Without detailed cost breakdowns or comparisons to similar renovation projects at other federal research facilities, a precise value-for-money assessment is challenging. The duration of over three years suggests a complex scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 3 bidders suggests a moderate level of competition for this project. While multiple bidders are positive, the exact number does not definitively indicate the intensity of competition without knowing the number of solicitations or proposals received. A higher number of bidders typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of contractors to bid, potentially driving down prices and ensuring the government receives competitive offers.

Public Impact

The primary beneficiaries are the researchers and staff at the U.S. Department of Agriculture's Children's Nutrition Research Center, who will gain updated and functional facilities. The project delivers essential renovation and construction services to modernize a critical research infrastructure. The geographic impact is concentrated in Houston, Texas, providing economic stimulus and employment opportunities within the local construction sector. Workforce implications include job creation for construction laborers, tradespeople, and project management professionals in the Houston area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during renovation, despite the firm fixed price contract.
Delays in project completion could impact the research activities at the center.
Ensuring the quality of construction meets the specific needs of a research facility.

Positive Signals

Firm fixed price contract provides cost certainty for the government.
Awarded under full and open competition, suggesting a competitive bidding process.
The project aims to improve critical research infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. The Department of Defense's involvement suggests a need for specialized construction services, potentially meeting stringent government standards. The market for federal construction projects is significant, with agencies like the DOD and USDA frequently undertaking infrastructure upgrades and new builds. Benchmarking this specific renovation against other federal research facility upgrades would provide further context on its market positioning.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities offered by the prime contractor, Herman Construction Group, Inc. The extent of these subcontracting opportunities is not detailed in the provided data, but larger construction projects often involve a network of specialized subcontractors, some of which may be small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army, which awarded the contract on behalf of the Department of Defense. Accountability measures are inherent in the firm fixed price contract type, which places the onus on the contractor to deliver within budget. Transparency is facilitated by the contract award being publicly available, though detailed project progress reports and specific oversight mechanisms are not provided in this summary.

Related Government Programs

Department of Agriculture Research Facilities
Department of Defense Construction Projects
Federal Building Renovations
Children's Nutrition Research Centers

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions
Ensuring quality of construction meets research facility standards
Contractor financial stability for long-term project

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.3 million to HERMAN CONSTRUCTION GROUP, INC.. U.S. DEPARTMENT OF AGRICULTURE CHILDREN'S NUTRITION RESEARCH CENTER RENOVATIONS, HOUSTON, TEXAS

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 Army).

What is the total obligated amount?

The obligated amount is $21.3 million.

What is the period of performance?

Start: 2023-03-10. End: 2026-04-06.

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

A review of federal contract databases would be necessary to fully assess Herman Construction Group, Inc.'s track record. Key metrics to examine would include the number of previous federal awards, their value, performance ratings (if available), and any history of contract disputes or terminations. Specifically, their experience with similar-sized construction projects, renovations of institutional or research facilities, and adherence to firm fixed price contracts would be crucial indicators of their capability and reliability for this USDA project. Without this specific data, the assessment remains general.

How does the $21.3 million cost compare to similar federal research facility renovation projects in terms of cost per square foot or per project phase?

To benchmark the $21.3 million cost, one would need to compare it against similar renovation projects for federal research facilities. This would involve identifying contracts with comparable scope (e.g., laboratory upgrades, building system modernizations) and location. Key metrics for comparison include cost per square foot, cost per specific upgrade (e.g., HVAC, electrical), and the overall project duration. Factors like the age of the facility, specific scientific equipment integration needs, and local construction market rates in Houston would influence cost variations. Without access to a database of comparable projects and their detailed cost breakdowns, a precise comparison is difficult.

What are the primary risks associated with a firm fixed price contract for a multi-year renovation project of this magnitude?

The primary risk with a firm fixed price contract for a large, multi-year renovation is the potential for the contractor to incur significant losses if unforeseen issues arise that increase costs beyond their initial estimates. This could include discovering structural problems, hazardous materials, or encountering unexpected site conditions. While the government is protected from cost overruns, the contractor might be incentivized to cut corners on quality or scope to maintain profitability, necessitating robust government oversight. Delays, which are common in long-term construction, can also strain the contractor's resources and potentially lead to disputes or project abandonment if not managed effectively.

What is the expected impact of these renovations on the operational effectiveness and research output of the Children's Nutrition Research Center?

The renovations are expected to significantly enhance the operational effectiveness and research output of the Children's Nutrition Research Center by providing modernized facilities. This could include updated laboratory spaces, improved environmental controls, enhanced safety features, and more efficient building systems (HVAC, electrical, plumbing). Such improvements can lead to a more conducive research environment, potentially attracting top talent, enabling the use of advanced equipment, and facilitating a wider range of nutritional studies. The specific impact will depend on the scope of the renovations and how well they align with the center's current and future research priorities.

How has federal spending on construction and renovation of research facilities trended over the past five years, and does this contract align with those trends?

Federal spending on construction and renovation of research facilities has generally seen fluctuations influenced by infrastructure initiatives, agency budget priorities, and economic conditions. Over the past five years, there has been a consistent need for modernization of aging federal research infrastructure across various agencies, including USDA, NIH, and DOD. This $21.3 million contract for the Children's Nutrition Research Center aligns with the ongoing trend of agencies investing in upgrading their scientific facilities to maintain research capabilities. The specific allocation would depend on the overall federal budget and the strategic importance placed on nutrition research by the USDA and Congress.

What are the specific performance metrics or milestones that will be used to evaluate the success of Herman Construction Group, Inc. on this project?

Performance metrics for this contract would typically include adherence to the project schedule, completion of work according to the specified quality standards and technical requirements, and compliance with safety regulations. Milestones would likely be tied to the project phases, such as completion of demolition, structural work, installation of building systems (HVAC, electrical, plumbing), interior finishing, and final inspections. The government's contracting officer's representative (COR) would monitor progress against these metrics and milestones. While not detailed here, a comprehensive contract would outline specific deliverables and acceptance criteria.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W518EA23R0004

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $22,942,680

Exercised Options: $21,326,146

Current Obligation: $21,326,146

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY17D0024

IDV Type: IDC

Timeline