Controlling the Costs of Job Order Contract
Work Orders
While Job Order Contracting can provide significant benefits over traditional construction services procurement and project delivery methods, controlling Job Order Contract Costs is a key consideration. Full benefits from a JOC Program should not involve excessive administrative costs, or a fee schedule based upon a percentage (%) of total annual JOC construction value.
At a minimum, the following are important responsibilities for contracting entities using JOB ORDER CONTRACTS / JOB ORDER CONTRACTING.
- Assure that a compliant LEAN Job Order Contracting methodology and associated tools are used, including a locally researched detailed unit price book.
- Unit pricing should be comprehensive, site specific, recent, detailed, clearly state in plain English what is included and excluded, include labor, material, and equipment subtotals where appropriate, and organized by CSI Masterformat.
- Perform detailed review of work order costs proposed by contractors, including regular independent third party audits.
- Ensure that proper unit price line items are selected and quantities of unit prices match the work order scope and specifications for each project and work order.
- When the unit price book is not appropriate for certain work orders, and the contract requires contractor to obtain quotes, the owner should review the quotes to ensure: work requested precisely matches the work order. Lowest quote was selected or reasons for not doing so were provided. Contract should specify the level of monitoring expected by those charged with overseeing work orders.
- Owner should review ALL contractor proposals in detail and perform independent owner estimates for ALL work orders over a specified dollar amount.
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