4:21pm: MLB.com's Bill Ladson tweets that Hernandez received an incentive-laden contract with a $1MM base salary. If he can come anywhere near his 2010 performance, he'll be a steal at that price. Livan's been a 2.7 WAR pitcher so far, and Fangraphs values his performance at $10.7MM.
Hernandez has been a pleasant surprise for the Nationals in 2010, to say the very least. Expected to be a marginal innings eater at best, he's instead posted a 3.49 ERA through 175.1 innings. His minimal strikeout totals (4.7 K/9) are expected, but complemented with Hernandez's usual strong control (2.8 BB/9).
The Nationals can use all the rotation help they can get, on the heels of the news that phenom Stephen Strasburg has a significant tear of his ulnar collateral ligament and will likely undergo Tommy John surgery.
It may be unfair to expect an encore performance of the reborn Hernandez in 2011; he's allowing his fewest number of hits (almost exactly one per inning) since his All-Star campaign in 2004 with the Washington franchise when they were still based in Montreal. Still, if he can continue to limit the walks and home runs, he's a low-risk option to be a serviceable rotation arm at a reasonable price.