Job Order Contract Audits

job order contract audits

Job Order Contract Audits

This listing is for reference only and may not be complete or current.  Last Revision 20170224


Arizona
City of Scottsdale City Auditor’s Office Audit Report No. 1409 – “Cost controls for the Job Order Contract are not evident” – Learn more…

 California

City of Long Beach – Job Order Contract Audit Report May 25, 2016 Laura L. Doud City Auditor ““Overall, the city had very little oversight over JOC project costs or project quality…The city created an environment where speed of project completion, contractors’ unrealistic, low bids, and lack of controls over the program resulted in projects no longer being competitively priced.” – Laura Doud, City Auditor

We found a significant systemic lack of controls over all key areas of the process, creating an environment that is highly vulnerable to fraud. The lack of formality over processes and procedures, the extensive use of outside consultants for project management, and relatively no internal program reporting, all contribute to creating the high risk environment. Contractor’s percentage has declined 31% since program inception, significantly decreasing the likelihood contractors are able to make a profit. The current JOC contractor percentages range from .50 to .71, meaning the contractor is contractually obligated to perform work at 50-71% of catalog pricing. .The City’s lack of structure and oversight in the JOC program creates multiple opportunities for program manipulation to occur. Vague Project Requirements – Beginning with the project proposals, we found scopes of work (SOW) that were vague and lacked sufficient detail to determine if contractor pricing was appropriate. When the detailed work to be performed is not clear, it is difficult for the City to identify when cost have been inflated or are unrealistic. In other JOC programs, proposals are reviewed and priced by an independent source aside from the project manager and contractor, creating a mechanism to gauge whether the contractors’ proposals are reasonable. The City has not established such a control. The poorly designed SOWs have resulted in numerous change orders and cost overruns, occurring in 91% of the projects we reviewed during our 17-month audit period. Approximately $1.9 million in savings possible if limits had been placed on use of non-catalog items. Excessive use of non-catalog items – Most JOC programs cap the amount of non-catalog items that can be used in a project. This is because non-catalog items are priced at 110% versus catalog items priced using the JOC contractors’ lower bid percentages (50% – 71%). Long Beach does not have a cap on how much non-catalog items can be used as a percentage of project cost. As a result, 42% of total project costs identified during our audit period were non-catalog items priced at 110%. Limited City involvement -P roject managers are responsible for all aspects of a project, including approval of work performed and payments to all parties. Due to staffing shortages caused by budget cuts, the Department relies heavily on consultants to fill the role of project manager. Of the projects reviewed during the audit, 64% of the project managers were consultants, which is higher than other JOC programs we surveyed. In addition, some of the contracts for which the consultants are working under allow for the firm to provide a variety of services, creating potential conflicts of interest. Overall, oversight by City employees is limited. There are no formal policies, procedures or guidelines over the program, creating inconsistencies in project management and documentation. During our audit, we found no required or comprehensive reporting of key project information to the JOC program supervisor or other Department management. As a result, the City has very little oversight or control over JOC project costs or the quality of work. One major benefit of using a JOC program is that it decreases the time to initiate a project. This is because the traditional procurement method is replaced with bids based on a pre-priced catalog. However, we found the time required to move City JOC projects through the design and proposal phase is significantly longer than the industry standard. The vendor overseeing the pre-priced catalog for JOC programs reports the average industry time to complete project initiation and start a JOC project is 25 days without design and 55 days with design. While it is unclear how many projects during our audit period included design, to be conservative we measured all projects against the 55 day benchmark. Projects costing $4.4 million (34% of total project costs) did not fall within the 55 day time frame. ….seven projects consisting of $3.3 million in costs took more than 90 days to initiate. Due to inadequate project file documentation, it was impossible to determine why the City’s projects took longer. However, project manager workload and negotiating pricing outside the catalog are two potential reasons for some of the delays.
Issue #1. Program Capacity Unknown – There does not appear to be any analysis on the number and type of projects the JOC staff can handle at any one time to ensure projects are managed timely and appropriately. The pressure to complete projects quickly has resulted in project cost and adequate oversight being of lesser importance. We heard a consistent concern from the project managers that there is pressure to get projects done quickly, reducing the time to deal with JOC contractors during proposal review.
Issue #2. No Project Prioritization – A list of all pending infrastructure needs or a formalized process for prioritizing the pending projects does not exist. This results in the Department of Public Works (Department) reacting versus strategically planning which projects should be completed next. Political pressures involving the City Council’s annual discretionary funding allocations contribute to the poor planning. These monies are required to be spent within the fiscal year, giving priority primarily based on funding and not necessarily need.
Issue #3. Projects Do Not Fit Criteria – Industry best practices indicate JOC should be used for routine and minor construction tasks and not large, complex projects that require extensive design or are likely to encounter changes and revisions during construction, … The City’s JOC program is being used to bypass the lengthy traditional procurement process so that projects can be pushed along quickly, regardless of size or type,
and without considering if JOC is the best option. Although quick completion of a project is a benefit of JOC, it should not be the only factor taken into consideration. Cost and timing should also be considered to determine if using the JOC program is better than traditional procurement methods for that particular project.
Issue #3a – Large and Complex Projects JOC projects should not exceed $500,000, and currently average $100,000. However,we found examples of projects processed through JOC that exceeded $500,000, some with substantial change orders. Examples include the Belmont Pool Demolition valued at $2.6 million, the Harbor Department’s remodel of new administrative offices totaling $14 million, and the Traffic Management Center relocation costing close to $500,000. These projects appear to be assigned to JOC solely to ensure quicker implementation.
Issue #3b “Saving” Projects The program is being used to “save” projects that initially started outside the JOC program but then developed issues. Instead of ensuring proper oversight and problem resolution with the original contractor, the project is moved into the JOC program so it can be pushed quickly along without adhering to usual City procurement or contract amendment policies.
Issue #4. No Process or Policy – Even though the JOC program has been in place for 13 years, formal policies, procedures, or guidelines have not been established. Without formal policies and procedures, staff who managed or operated within the program did not have guidance on their roles or responsibilities, resulting in inconsistent handling of projects and incomplete documentation.
Issue #5. Poor Program Management
Oversight and management of the JOC program by City employees is limited. The City relies on outside consultants to fill many of the project manager positions, but provides little direct oversight to their activities. This is particularly risky given project managers are responsible for all aspects of the project, from selecting the contractor to approving payments, with little accountability … As such, the City would not know if the consultan was personally benefiting or if inappropriate activities were taking place.
Issue #6. No Formalized Reporting – Comprehensive reporting of key project information, such as status, budget/costs, milestone dates, or outstanding issues from the project managers to JOC program management or other Department management did not exist during our audit. This results in very few individuals within the Department being aware of how the program is operating and any potential problems. For example, the supervisor over the JOC program retired at the beginning of our audit and no one else in the Department was adequately knowledgeable of how the program operated.
Issue #7. Bid Percentage Factors at All-Time Low – Since the inception of the JOC program in 2003, contractor’s bid percentage factors have declined 31%. The current JOC bid percentage factors range from .50 to .71, meaning they are contractually obligated to perform work at 50-71% of the catalog price. It is highly unlikely contractors can earn a profit using these low percentages. Many of the contractors have held JOC contracts since 2003. Their long-term relationship with the City and experience with the JOC program likely influenced the decline in bid percentage factors.
Issue #8. Warning of Risk Ignored – In December 2014 (just before the last JOC contracts were approved), the JOC program manager received a letter from The Gordian Group (Gordian Group)2, warning the City to reject all bids because the factors bid by the contractors were too low for the program to operate as intended.
Issue #9. Lowest Percentage Factors in Survey – We surveyed five agencies in Southern California that also use a JOC program and found the City’s current bid percentage factors are the lowest among the agencies surveyed. While the other agencies also have concerns over low factors (in addition to non-catalog items and proposal review), they are more pro-active finding solutions to mitigate or lower the risks. This is different from the City, which appeared to be unaware of the significance of the problems and was not looking to change the risky situation.
Issue #10. Contract Amount Exceeded – The JOC contractors are awarded a spending authority limit, which is then established in blanket purchase orders (BPOs) so payments can be processed. During the audit, we found that the BPO amounts exceeded the spending authority by $13.6 million. A separate BPO for $13.6 million was established by the Harbor Department (Harbor) when it received approval to use the JOC program for improvements for the interim Port headquarters building; however,the City erroneously added the same $13.6 million to the non-Harbor BPO, thereby doubling the authority amount granted to the contractors. With this additional authority, the City paid a JOC contractor approximately $1 million more than the approved JOC contract amount. Further review found that the $1 million was charged to the JOC program, although costs did not actually relate to JOC projects. The payments were for costs associated with another separate contract the JOC contractor had with the City and should not have been paid through the JOC BPO. This situation is an example of the City’s poor contract administration and lack of adequate program reporting that should have captured this error.
Issue #11. Lack of Transparency
Communication to Council regarding contract terms and contract extensions has not always been clear and transparent. For example, the former JOC program manager chose to renew the contracts early, before his retirement, even though there was still $3.9 million of spending authority remaining on the current contracts. The early renewal awarded the JOC contracts an additional $17.5 million in spending authority and created an overlap in terms causing some contractors to have two contracts in place at one time. It is unclear if Council understood they were creating an overlap in contract terms and spending authority, because this issue was not adequately discussed in staff report to the City Council.
Issue #12. Contract Terms Not Updated
We found conflicting language within the contract and bid specifications. The audit clause language within the JOC contract documents is inconsistent and outdated,,.. The audit language in the bid specifications is similar to the standard audit clause language used in current contracts. However, the audit clause in the contract is restricting and states the City only has the right to audit if the contract is funded with federal, state or county funds. We expressed our concern over the conflicting language, however, the City stated the terms were not conflicting and there was not a problem. Not only does the conflicting language create confusion but could be problematic if the right to audit were challenged.
Issue #13. Training Needed for Project Managers The JOC program does not provide training for project managers to ensure they maintain sufficient controls necessary for the program to operate as designed. This includes the critical function of properly reviewing contractor proposals to ensure the City is paying a fair price for projects. Agencies we surveyed recognize the importance of the project manager role and have developed specific training academies or programs providing skills needed specifically for managing JOC projects.
Issue #14. Vendor Did Not Provide Required Training
Services included in the City’s contract with Gordian Group require the vendor to provide the City with ongoing training regarding JOC program management. However, training was not provided even though Gordian Group account manager during the audit period was aware of the program issues and the challenges faced by the project managers.
Issue #15. Poor Scope of Work PreparationThe City prepares a project’s detailed scope of work (SOW), which should serve as the roadmap for the JOC contractor to build an accurate and thorough cost proposal that meets the City’s needs. Based on projects we reviewed, the SOW did not always contain comprehensive information of project requirements. We saw instances where the SOW had only a general description and did not detail the necessary components of the project. Vague SOWs create an opportunity for the contractor to manipulate project costs to their advantage as the City appears not to have clarity of project requirements or expectations.
Issue #16. Project Cost Overruns
Inadequate project planning and poorly designed SOWs led to numerous change orders and cost overruns. Table 5 illustrates the significance of change orders in a sample of projects over $100,000.
Issue #17. Manipulation of Catalog Items During the audit, we heard a recurrent concern from project managers that JOC contractors regularly inflate proposals, since it is impossible for them to make a profit with the low bid percentage factors. This requires the project managers to spend additional time negotiating with the JOC contractors to arrive at a reasonable price agreed to by both parties. However, there is no guarantee the negotiated prices accurately reflect the catalog items or quantities
needed to perform the work. Ultimately, this means the project costs are no longer competitively bid, and the City is paying more than contractually obligated.
In April 2013, a former City project manager issued a letter to a JOC contractor, New Creation Builders. The letter alleged New Creation Builders was padding proposals by manipulating the catalog and quantities to inflate proposal costs. The JOC program manager at the time was copied on the letter; however, the City, through other project managers, continued to give $3.8 million in work to the contractor, with $15.7
million paid to them since inception of the program in 2003. The City accepted New Creation Builders’ bid percentage factor of .50, which was the lowest contractor bid in January 2015. Issue 17a. Better use of Catalog Pricing
The catalog was originally developed specifically for the City using local market pricing and contains over 100,000 task items. Given the volume of the catalog, i trequires someone with a level of expertise within the construction industry to properly break down projects to a level of detail where the catalog can be used appropriately. Some agencies we surveyed tend to “bundle” items that are used together frequently to make it easier to use the catalog. However, the City does not currently bundle catalog items, making it very time consuming to use the catalog correctly. Because there is a strong emphasis on quick project implementation, the extra time needed to price items correctly is a deterrent for all parties.
Issue #18. Excessive Non-Catalog Items
….Other JOC programs we surveyed institute a cap or maximum of non-catalog items that can be used in any project. However, the City places no cap on the quantity or frequency of use o fnon-catalog items.percentage. Issue #18a. No Independent Quotes
Issue # 18b. Vague Product Descriptions #18c. Poor Management of Catalog Issue #19. City Preferred Vendors and Items….Issue #20. Insufficient Project Files
The Department does not specify what documentation or information should be retained in the project files, leaving it solely up to the project manager. We found inconsistent and often insufficient documentation within project files.
Issue #21. No Formal Project Close Out
A formal close out process helps to ensure that project quality meets City standards and
appropriate close-out documentation is performed, such as a Notice of Completion.
Unfortunately, a formal and consistent close-out process did not occur for JOC projects during our audit period. The City defers to the project manager to decide what is appropriate for each project, which results in significant inconsistencies in handling project close outs.
Issue #22. No Cost or Time Evaluation
A post-project evaluation of costs and time would assist project managers with improving
efficiency and cost effectiveness of future projects. However, this type of analysis did not occur with projects we sampled. Issue #23 No Evaluation of Subcontractors
Subcontractors perform the majority of the work on JOC projects. However, the City currently does not perform a post-project evaluation of subcontractor performance to ensure work was done with quality and to the City’s satisfaction. Instead of just assessing how quickly work was performed, an effective evaluation or scoring of subcontractors would include multiple areas, such as communication, responsiveness, and quality of work.
Issue #24. Excessive Access to Files
A web-based software, eGordian (formally ProGen), is used by project managers to access
the catalog and develop project SOWs. The data in eGordian serves as the City’s official list of JOC projects. During our audit, 33 individuals had access to delete and edit data within the
system. However, eight of these individuals are no longer City employees,including one who left the City over 5 years ago. It is apparent that the Department is not monitoring access levels or assessing whether it is appropriate for the user to have access at all. Issue #25. Numerous Parties Involved
It is common practice for JOC projects to have several parties involved in the project, including numerous layers of subcontractors. With no mechanism to detect potential excessive costs or inappropriate relationships between the parties, the risk of fraud is very high. Issue

#26. Subcontractor Information Not Disclosed The contracts require the JOC contractor to perform at least 20% of the maximum contract amount, including all work in the contractor’s designated trade. JOC contractors essentially function as job brokers performing a small percentage of the actual work.

Issue #27. Vendor Conflict of Interest
During the audit, the City’s Gordian Group account manager held a contractor’s license which was being used by a local construction company. This information was held in secrecy and was not disclosed by the account manager to the City or to his employer. Given the lack of information and documentation held by the City on subcontractors, it is unknown if this company was functioning as a subcontractor within the JOC program. If this was the case, there would have been the potential for this person to personally benefit from increased project costs.
Issue #28. Use of Consultants
Project managers are responsible for all aspects of a project, including approval of work
performed and payments to all parties working on the project. Due to budget cuts, the
Department has turned to the use of consultants as project managers. The City maintains a
number of “as-needed” contracts for consultant services. The use of consultants in the City’s
program was higher than that of other agencies surveyed, which ranged from 25%-50%. Of
the projects we reviewed, 64% of project managers were consultants, many of them former
City employees.

Issue #28a. Consultants Reporting to Consultants
While use of consultants may be necessary, there are risks associated with allowing
consultants to have total control over a project with little to no City oversight. We
noted a project where the consultant acting as project manager reported directly to
another consultant instead of reporting directly to the JOC program manager.

Issue #28b. Consultant Role Not Defined The project manager has a high level of authority over the decisions and management of the project. However, that role has not been sufficiently defined… his creates a gray line between the roles of the project manager and the contractor.

Issue #29. There are a wide range of consulting services that can be provided via the City’s “as-needed” contracts and use on JOC projects, such as project management, design, inspection, engineering services and construction management. There are no JOC program controls to monitor or prevent multiple consultants from one consulting firm working in different capacities on the same project. Allowing this to occur could create a potential conflict of interest… While we understand the need to occasionally supplement City staff, allowing consultants from the same firm to function in different roles on a single job creates the opportunity for the firm to have multiple ways to benefit from increased project costs.

 

Orange County Report No. 427 December 2012 Report by the Office of County Comptroller

” Based on the results of our testing, we found the County Divisions reviewed did not comply with contract provisions for issuing purchase orders under the job order contract. Specifically, we noted that work was not priced in accordance with contract terms and dollar limits were exceeded. … In our opinion, the controls over the review and approval of price proposals, including whether the items proposed were needed to perform the agreed-upon scope of work and whether the price proposed and paid represented an appropriate amount for the actual work performed, were not adequate. “- Office of the Comptroller  Learn more…

Office of the Inspector General 0 Los Angeles Unified School District – 2015

Los Angeles Unified School District Office of the Inspector General Contract Audit Unit -October 30, 2015  – Special Review Job Order Contracting Program – Contractor Prequalification and Selection Processes –

“Conclusion Our review found that the JOC contractor prequalification and selection policies and procedures are not operating effectively. As a result, the contractor prequalification scores (CPS) do not accurately reflect the performance of the bidders and the JOC master contracts are not always awarded to the most qualified prequalified bidders as required by the Public Contract Code. ” Learn more…

CA 09-865 October 17, 2011

Annual Report Fiscal Year 2012, CA 15-1044 October 30, 2015,Office of the Controller, City and County of San Francisco Audit report, July 18, 2013 April 6, 2015

The audit found that some SFPUC practices are inconsistent with the intent of the JOC program and that SFPUC’s administration of the program has some weaknesses. Further, the JOC program inadequately assesses contractors’ qualifications, resulting in a heavy reliance on lowest bid criteria when awarding JOC contracts; and inadequately monitors the quality and performance of contractors’ work. The program also does not consistently and promptly inspect JOC projects and ensure that project managers submit contract evaluation forms on time.
Some SFPUC practices undermine the intent of the JOC program and make it vulnerable to abuse. SFPUC could better administer the program and better assess the quality and performance of JOC contractors.
The audit found that:
• SFPUC’s JOC program lacks a policy establishing the program’s purpose that could provide staff guidance when determining which projects to authorize for implementation under JOCs.
• SFPUC’s use of JOCs for some projects undermines the intent of the JOC program. The Administrative Code indicates that repair, maintenance, and minor construction projects with costs less than $400,000 should be completed under JOCs. However, four of SFPUC’s JOC projects were not for repair or maintenance and exceeded the $400,000 limit. Also, some evidence indicates that SFPUC may have divided some larger projects into smaller projects and executed them under JOCs.
• Despite prepricing of construction materials and tasks being a practice that helps ensure that the City and County of San Francisco (City) receives competitive pricing for JOC projects, 14 (35 percent) of 40 sampled task orders contained non-prepriced tasks. In eight cases, the non-prepriced tasks represented the majority of the total project costs.
Heavy reliance on non-prepriced tasks reduces the effectiveness of the competitive solicitation process for JOCs.
• SFPUC lacks procedures for choosing among JOC contractors when assigning projects and does not document project assignment decisions.
• The JOC program inadequately assesses contractors’ qualifications, resulting in a heavy reliance on lowest bid criteria when awarding JOCs.
• The JOC program inadequately monitors the quality of contractors’ work. The program does not consistently and promptly inspect JOC projects and ensure that project managers submit contractor evaluation forms on time. Some SFPUC practices undermine the intent of the JOC program and make it vulnerable to abuse. SFPUC’s use of JOCs for some projects undermines the intent of the JOC program. The Administrative Code indicates that repair, maintenance, and minor construction projects with costs less than $400,000 should be completed under JOCs. However, four of SFPUC’s JOC projects were not for repair or maintenance and exceeded the $400,000 limit. SFPUC could better administer the program and better assess the quality and performance of JOC contractors.The Job Order Contract Program Lacks Sufficient Oversight to Ensure Program Effectiveness. JOC program lacks a policy establishing the program’s purpose that could provide staff guidance when determining which projects to authorize for implementation under JOCs. JOC projects were not for repair or maintenance and exceeded the $400,000 limit. Also, some evidence indicates that SFPUC may have divided some larger projects into smaller projects and executed them under JOCs. Despite prepricing of construction materials and tasks being a practice that helps ensure that the City and County of San Francisco (City) receives competitive pricing for JOC projects, 14 (35 percent) of 40 sampled task orders contained non-prepriced tasks. In eight cases, the non-prepriced tasks represented the majority of the total project costs. Heavy reliance on non-prepriced tasks reduces the effectiveness of the competitive solicitation process for JOCs. …lacks procedures for choosing among JOC contractors when assigning projects and does not document project assignment decisions….The JOC program inadequately assesses contractors’ qualifications, resulting in a heavy reliance on lowest bid criteria when awarding JOCs. The JOC program inadequately monitors the quality of contractors’ work. The program does not consistently and promptly inspect JOC projects and ensure that project managers submit contractor evaluation forms on time.


Florida
City of Miami Capital Improvements Program ITB Number: 08-09-043, Brevard County, Internal Audit Review of Facilities Construction, July 15, 2003

In October 2002, the County implemented JOC as one of their continuing contracting methods to provide construction services for smaller projects ($2,500 – $250,000). During our testing, we noted the following:

‰ Although Facilities Construction utilizes a system provided checklist, there are no formal written policies or procedures over JOC.

‰ Two out of the three JOC contractors had expired insurance certificates for the general liability, automobile and workers compensation coverage’s. The third JOC contractor had an expired workers compensation insurance certificate.

‰ Due to a software limitation the system does not allow for change orders. In order to process a change order, a new JOC order number has to be generated and a separate file setup.

‰ Although we noted no exceptions during our testing, there is no documented process to reconcile the fees charged from the Gordian Group (consultant) to the amount of “Notice to Proceed projects” in the JOC system. Impact

‰ Clear, concise and standardized processes and procedures help minimize inconsistencies, misunderstandings and inadvertent oversight of obtaining proper documentation.

‰ In the event of employee turnover, lack of clearly defined procedures may lead to inefficiencies, possible discrepancies, and potential non-compliance with laws or policies. ‰ Because change orders have to be setup as separate jobs in JOC, when the entire project is not tracked in the same file, the potential exists that the individual project components costs could exceed required management approval levels. The current system also has the potential to circumvent timely management monitoring of contract progress and total project costs.

‰ A lack of documented procedures to reconcile invoices received from the Gordian Group to the Notice to Proceed projects within the JOC system in a timely manner could result in discrepancies and possible over charges.


Kansas
District Inspector General for Audit, Great Plains District, Report: 98-KC-204-1001 March 10, 1998

We concluded the JOC program was developed with internal control weaknesses, implemented with management deficiencies, and abused by a contractor. In addition, the JOC consultant, The Gordian Group (Gordian), did not fulfill all its responsibilities under its contract. As a result, the HAKC was not adequately prepared to administer its JOC program.Inadequate Scopes of Work. Inadequate Independent Cost Estimates. Inadequate Review of Contractor Cost Proposals. Inadequate Staffing.


New York
City of New York Office of the Comptroller, Audit Report on Job Order Contracting by the Department of Environmental Protection, FR07-121A June 30, 2008

“We found significant weaknesses in the Department’s administration of the JOC program. Specifically, the Department does not have adequate procedures to ensure that required project documentation was submitted and approved. Moreover, the Department lacks any written policies or guidelines that spell out the circumstances—including a monetary threshold—under which the use of job order contracting is appropriate. Further, the Department has not ensured that inspections of proceed order work are adequately conducted and documented by reports, daily logs, and photographs. These weaknesses have led to contractors being assigned work outside their contract locations and contractors not completing all required work, not performing work satisfactorily, and not completing work on time.” “We found problems with the Department’s mainframe computer system PASSPORT and the Division’s PROGEN databases.” “The Department’s response attempted to obfuscate the serious issues raised in the report by speculating that the auditors do not understand the job order contracting program; by contending that the opinions expressed in the audit were predicated on the auditors’ “philosophy”; by submitting information that contradicts documentation in its files; and by providing irrelevant information. Clearly, the Department has failed to understand the salient conclusion of this audit report—that the Department has not properly managed the administration of the JOC program. In addition, the Department does not have a system in place to review “Construction Task Catalog” prices that are used to determine the cost of JOC work. Our own independent review found a wide fluctuation in those prices. While some work cost up to 41 percent more than industry standard pricing, other work cost up to 47 percent less. Consequently, we cannot conclude with certainty that the cost of JOC work is reasonable.

City of New York Office of the Comptroller, Audit Report on Job Order Contracting by the Department of Design and Construction, 7e11-120A June 28, 2012

The Department is unlikely to attain between $2 million and $3.7 million in cost savings from the JOC program because the program is not being administered as effectively as it should be.  Specifically, we found that job orders are not developed in a timely manner, cost estimates are not reliable indicators of the actual cost of work, and construction work is not carried out in a timely manner.  Moreover, there is a lack of guidelines that spell out the circumstances and monetary threshold for job order work and a lack of standards for measuring whether the JOC program is, in fact, achieving anticipated cost savings.


 Texas
Attorney General of Texas Opinion No. GA-1028 City of Austin Website Job Order Contracting Related Documents University of Houston Job Order Contract – Guidelines & Procedures July, 2010
Houston Independent School District – Internal Audit of the Design and Selection Process of Job Order Contracts – May 10, 2015 – “

Overall Conclusion and Recommendation Based on our evaluation of the overall design and effectiveness of the JOC process, we recommend the Procurement Department cease the execution of future JOC contracts awarded by CSP project number 14-11-05 and re-bid the project after implementing the audit recommendations in the report detail…”-Audit Report Learn more…