This Job Order Contacting Overview provides the basics for establishing a best value and fully compliant JOC Program.
Unfortunately, most JOC Programs are not optimized to achieve best value.
While traditional construction delivery methods are fraught with problems, Job Order Contracting can consistently deliver quality repair, renovation, maintenance, and new construction projects on-time and on-budget.
Here are a few JOC Program Do’s and Don’ts
DO – Use locally researched detailed construction cost data that is regularly updated for your JOC unit price book (UPB).
DON’T – Do not UPB using an economic factor from year to year or quarter to quarter.
DON’T – Do not use a national average cost book and attempt to create a UPB, with or without factors or construction cost indices (CCIs)
DON’T – Do not pay for JOC Program tools and services by paying a percentage of JOC construction volume. While it may seem “easier” to pay for these tools/services from project or operational funds, it is generally 3x to 10x more expensive, and per establish financial audit criteria, the practice may set the stage for potential fraud (see references below and associated link).
DO – Approach JOC as a journey. Implement JOC in phases and grow the program over time.
DON’T – Do not select JOC if you sole motivation is to speed project delivery times. While faster delivery time is a significant JOC benefit, collaboration toward mutually beneficial outcomes for all participants and stakeholders is equally important. Furthermore, simply speeding up inefficient and ineffective processes should never be a goal. JOC requires a focus upon change management. Day to day decision-making and workflows significantly vary from traditional construction planning, procurement, and project delivery.
DO – Consider JOC and an integrated construction planning, procurement, and project delivery environment within which early and ongoing communication and collaboration the norm.
Efficiently maintaining and repairing tens to thousands of buildings isn’t rocket science. All that is needed is a bit of owner leadership, competency, and commitment. Commitment to a collaborative and fully transparent environment inclusive of an agreed-upon database of local construction. The latter used for estimating, negotiating, project control and closeout.
Referenced Information:
“Restructure Payment Terms in JOG Consultant Services Contracts – (JOC Consultants) fees are currently based on a percentage of total project costs. Therefore, (JOC Consultant) directly benefits when proposal costs are higher (or inflated), including instances when contractors use products outside the catalog which can also result in higher project costs. To reduce the appearance of a conflict of interest and to ensure contractor proposal costs are appropriate, the Countywide work group, in conjunction with County Counsel and the JOC consultant, should consider restructuring payment terms for JOC consultant services to ensure the County’s interests are protected. The Departments’ attached responses índicate that they will participate in the work group to consider restructuring the JOC consultant’s payment terms.” – Excerpt from, COUNTY OF LOS ANGELES
DEPARTMENT OF AUDITOR.CONTROLLER, COUNTY DEPARTMENTS’ USE OF JOB ORDER CONTRACTS REVIEW (June 14,2016, Board Agenda ltem 2) . Note the term “JOC Consultant” has been substituted for the actual provider.