A UPB, unit price book, is a required component of any “best practice” Job Order Contract.That said, using a standardized method of organizing and describing tasks is critical to LEAN construction delivery becoming the norm. In fact, the concept of a common data environment (CDE) is expending to all areas of the AEC sector.
JOC unit price book line items allow all detailed costs associated with a renovation, repair, maintenance, or minor new construction project to be addressed and mutually understood.
The use of detailed line item unit costs significantly helps to communicate information among all project participants, beneficiaries, and oversight groups as well as focus attention upon specific requirements and intended outcomes. Real Property Owners, Contractors, Facility Managers, and Facility Users can share and understand detailed task descriptions and costs.
The use of unit cost methodology promotes and requires responsibility and accountability for decisions throughout the project life-cycle.
Job Order Contracting (JOC), a LEAN Integrated Project Delivery Method has required the use of unit price books (UPB) since its origin over twenty-five years ago. JOC’s combination of standardized terms, line item descriptions, data architectures (CSI MasterFormat), and detailed labor, equipment, and material breakdown, and LEAN business practices (shared risk/reward, required collaboration, service orientation, etc.) routinely delivers well over 90% of projects on-time, on-budget, and to everyone’s satisfaction. Compared to most the poor outcomes associated with traditional construction delivery, it’s clear that detailed unit cost information, shared among participants earlier in the project life-cycle, is a viable route to major overall productivity improvement.
Benefits of Unit Cost Line Item Estimating
- Total Cost Visibility/Awareness
- More Efficient Allocation of Resources
- Improved Best Value Decision-making
Reference Commercial Price Books versus Job Unit Price Books
While “Reference” commercial unit price books care commonly used to assist in developing approximate costs where specific domain knowledge may not be available in a timely manner, JOC UPBs go even further. Reference popular commercial unit price books publish national average price data and localize costs using cost factors. This approach is fine for high level estimates, however, locally researched labor, material, and equipment delivers far more accurate information. Best practice JOC Unit Price Books contain locally researched cost data.
While contractors traditionally have used internally developed cost books and/or relied upon subcontractors, this approach typically doesn’t provide a transparent and common “language” to communicate a detailed job scope to Owners. The latter is required in order for an Owner to appropriately approve a JOC project.
Line item construction cost estimates provide the greatest detail, however, also require the greatest skill. Construction field and estimating experience on the part of the estimator is required, as well as a full understanding of the actual UPB. Unit price estimating can be a time consuming process, however, with the assistance of dedicated software, it provides an optimal result for the time expended.