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All JOC Programs should require early and ongoing communications, standardized locally research cost data, and collaboration to drive productivity, quality, and overall construction outcomes.
Job Order Contracting (JOC), the use of the OpenCost Approach can consistently deliver over 90% renovation, repair, and construction projects on-time, on-budget, and to the satisfaction of all participants and stakeholders. This level of performance is virtually unattainable using traditional methods.
It’s long been accepted that Owners need to increase their levels of competency and leadership.
Efficient facilities management can only become a reality under the direction of competent and experience teams of professionals and the associate use of appropriate LEAN Construction Delivery Methodology, Life-cycle Asset Management Strategies, appropriate supporting tools, technology, and information/data. Current, locally researched, and detailed construction cost data is a requisite element in this process.
The 4BT OpenCost Methodology specifically leverages the detailed knowledge of decades of line item cost estimating experience to create actionable OpenCost commercial construction cost databases support by an open collaborative cloud platform, and then combines both with LEAN collaborative best management practices. The result is high data quality and availability.
Traditional methods of seeking bids from construction contractors will generally result in a variance of +/- 25%. That said, if one looks at individual trades and associated labor costs, the variation can easily be +/- 50%. The OpenCost Methodology significantly reduces this variation to +/- 5% through an integration of locally researched labor, material, and equipment detailed line item costs and attention to crew composition and productivity.
OpenCost Methodology drives collaboration, information sharing, transparency, and continuous improvement to mitigate cost variation and enable information validation.
The continued use of inexperienced facilities management, project managers, construction cost estimators, etc., will only add to the problems cause by the use of erroneous data, and unproductive processes.
On the other hand, assuring the use of common, standardized terms, definitions, construction task, and costs data measurable improves the chances of greater overall success.
JOB ORDER CONTRACTING ( JOC ) FUNDAMENTALS
What is Job Order Contracting?
Job Order Contracting is a collaborative construction delivery method, also termed an alternative project delivery method, and a type of Integrated Project Delivery, using an Indefinite Delivery, Indefinite Quantity (IDIQ) contract for a specified period. Based upon LEAN management practices, a Job Order Contract …
- provides an “on-call” contractor.
- targets renovation, repair, sustainability, maintenance, and “minor” new construction projects,
- has specified term, generally up to five years (one year, plus option years),
- establishes project and/or task order pricing based a coefficient and locally research Unit Price Book (UPB), and
- relies upon existing owner construction specifications or may have a set of specifications linked specifically to the UPB.
Job Order Contracting Users
- Federal Government
- Transportation/Mass Transit
- State/County/Local Government
- Private Sector
Glossary – Job Order Contracting
- JOC – Acronym for Job Order Contracting (also called TOC -task order contracting and DOC-delivery order contracting)
- IDIQ – Indefinite Delivery/Indefinite Quantity
- UPB – Unit Price Book
- UPG – Unit Price Guide
- Coefficient – Multiplier applied to a construction cost estimate derived for the JOC UPB, generally ranging from 0.80 to 1.20. Generally, includes contract overhead and profit, though specific items to be included in the coefficient are noted in the Job Order Contract. There may be separate coefficients for normal / non-normal hours and other conditions.
- Task Order, Delivery Order or Job Order – Individual construction projects performed under the umbrella Job Order Contract.
- Non-prepriced item (NPP) – A construction task item not within the UPB. Generally, limits are imposed to the use of NPP items to a level of 10% or less of the total value of any specific JOC task order.
Job Order Contract Considerations
- Primary goal(s)
- Term (Generally 1 year with additional options years, up to five years total)
- Maximum contract value (annual and overall total)
- Maximum individual project size
- Minimum payment to contractor
- Available Owner resources and level of competence to manage
- Deployment method: Owner-managed, Cooperative, or Outsourced
- Best value selection/procurement capability
- Availability of experienced JOC contractors
- Key performance indicators (KPIs)
- Availability of ongoing training
- Supporting technology
- Selection of UPB
- Provisions for updating the UPB
- Management of non-prepriced items (NPP) to cover unforeseen requirements
- Regular JOC program audits
- Items to be included in the co-efficient
- Number and type of co-efficients
- Provisions for bonding, liquidated damages, change orders, progress payments, warranties, and payment withholding.
Uses for Job Order Contracting
- Projects that are time sensitive
- “Minor” construction projects (generally under $1-2 Million)
- HVAC and Electrical
- Routine repairs
- Renovations of all types
- Upgrades to ADA standards
- Emergency repairs
- Site work and utilities
- Parks and playgrounds
- Upgrade landscaping
- Classroom additions
- Complete new buildings
- Replace flooring
Benefits Job Order Contracting
- 90%+ of projects on-time, on-budget, and delivered per expectations
- Greater satisfaction among participants and users
- Access to on-demand construction services
- Significant reduction in change orders and legal disputes
- Long term owner-contractor relationships
- Improved productivity
- Greater cost transparency
- Cost visibility
- Less “down-time” and fewer disruptions to building/asset users
- Reduced risk and variance
- Higher WBE/MBE participation
- Greater percentage of dollars spend upon contruction versus administration/waste
Job Order Contract Workflow
- Initial Concept / Scoping Session
- Internal Budgeting / Estimate
- Contractor Proposal Request
- Joint Site Visit
- Contractor Estimate
- Estimate Preparation
- Owner/Contractor Estimate
- Proposal Review / Negotiations
- Notice to Proceed (or Cancellation)
- Project Kickoff Meeting / Job Start
- Regular Owner/Contractor Progress Meetings
- Final Inspection / Punchlist
- Close Out
- Assure all interested parties, participants, stakeholder are present
- Funding availability and compliance
- Establish project goals
- Determine Level of design services required
- Review existing plans or estimates
- Building systems and quality of materials
- Identify client, contractor, and building user responsibilities
- Evaluate potential impacts to existing operations, including life/safety
- Determine project schedule and major milestones
- Safety, security and hazardous material issues
- MBE/WBE goals
- Review qualification and assumptions
- Revise the scope as necessary
- Confirm start/completion
- Select UPB – unit price book
- Contractor and Owner jointly scope and provide quantities of
- Contractor creates an estimate, and Owner prepares internal estimate or Internal Government Estimate (IGE) – for all projects or for projects over an established dollar value).
- The totaled UPB line item estimates in the estimate are multiplied by the coefficient(s) designated and accepted.
- A localization factor and/or economic index factor may also be applied, if applicable, though not recommended. Unit price line items should be locally researched.
- Contractor applies approved coefficient to estimate total
|Total of UPB Line Items||$45,328.10|
|Multiply by Coefficient (1.05)||$47,594.51|
|Cost to Owner||$47,594.51|
Job Order Contacting & LEAN Construction Delivery – KEY CHARACTERISTICS
- Focus is upon OUTCOMES
- BEST VALUE procurement
- Shared RISK/REWARD
- Mutual TRUST/RESPECT
- Skilled, competent TEAMS
- Financial TRANSPARENCY – Unit Price Book
- Common TERMS, DEFINITIONS
- LEAN management practices
- Metrics – Key performance indicators – KPIs
- Regular AUDITS
- Continuous IMPROVEMENT
- Ongoing (annual) TRAINING
- Written OPERATIONS/EXECUTION MANUAL as part of CONTRACT
- Supporting TECHNOLOGY
Job Order Contacting & LEAN Construction Delivery
- Focus upon outcomes
- Owner must understand JOC and provide leadership – owner has a lot involvement in the job
- Not simply another price quote for the work
- Not a free estimating service
- Allow adequate time for the process
- Contractor invests a lot of front end effort
- Owner can expect excellent execution of the work
- Ensure that all owner & contractor stakeholders have had sufficient input into the job
- Ensure owner & contractor consensus on scope, schedule and cost
- Owner & contractor must each holdup its end of the bargain
- Successful JOC is a non-adversarial relationship
- JOC virtually eliminates legal disputes and change orders