Some suppliers of Job Order Contracting software and cost data use “Assemblies” within what is supposed to be a unit price book (UPB).

A fundamental element is Job Order Contracting (JOC) is line item estimating which involves breaking down the cost of  construction into discrete, granular tasks, each item representing a specific material, labor, and equipment components.  An example of a line item would be “0611162814000100 Framing- Walls- Studs- 8 ft High Wall- 2 in X 4 in”  This is in contrast to estimating based on assemblies, where pre-established sets of materials and labor units are used for common tasks, for example a “Structural or nonstructural interior partition wall Studs- 8 ft High Wall- 2 in X 4 in”  .  The latter includes studs, wiring, wallboard, etc.

Here are some key points to consider when using line item estimating for job order contracting:

1. Detailed Breakdown: Line item estimating requires a detailed breakdown of all the elements involved in a project. Each aspect, such as materials, labor, equipment, and overhead, should be itemized separately.
2. Unit Costs: Assign a unit cost to each line item. This could be the cost per unit of measurement (e.g., cost per square foot, linear foot, or unit) for materials, labor hours, or other resources.
3. Accurate Quantities: Ensure that the quantities associated with each line item are accurate. This requires a thorough understanding of the project scope and specifications.
4. Adjustments for Site Conditions: Consider any site-specific conditions that may affect costs and make appropriate adjustments. Factors such as site access, soil conditions, and local regulations can impact the cost of construction activities.
5. Labor Rates: Include current, local market labor rates for different types of work involved in the project. These rates may vary depending on the skill level and type of labor required.
6. Material Costs: Specify the cost of  materials for each line item based on current pricing for the local market.
7. Overhead and Profit: Factor in overhead costs and profit margins using the establish/accepted coefficient. These are essential for covering indirect costs associated with the project and ensuring a reasonable profit for the contractor.
8. Documentation: Clearly document each line item, including descriptions, quantities, unit costs, and any assumptions or considerations that went into the estimation using detailed notes.
9. Regular Updates: Regularly update the line item estimates contained within the unit price book/constructon task catalong.  Market conditions can fluctuate frequently.  (Note: 4BT recommend quarterly updating.)

Line item estimating provides a detailed and transparent breakdown of costs, making it easier to track expenses and communicate with stakeholders.  It is a fundamental element and requirement for Job Order Contracting. It allows for a more granular understanding of the project costs compared to estimating based on assemblies.

Four BT, LLC – Efficient, integrated construction planning, procurement, and project delivery solutions.

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information are fundamental requirements for the consistent delivery of quality repair, renovation, maintenance, and new build projects.

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information are fundamental to efficient project delivery.

Sustainability and Efficient Facilities Lifecycle Management go hand in hand.

While most of us are aware of the rampant economic and environmental waste associated with the repair, renovation, maintenance, and new construction of buildings and other physical infrastructure, few understand that solutions are readily available or have the will and commitment to deploy them.

Public sector facilities management is particularly wasteful due to the pervasive lack of capable, committed, and accountable leadership.

Most public sector organizations lack a holistic view and/or understanding of integrated planning, procurement, and project delivery.   They simply do not appreciate the fundamental requirement to apply apply collaborative principles to construction processes and activities.

Until there is significant improvement in professional and formal education, the barriers to the successful implementation of efficient repair, renovation, maintenance, and new construction will not be overcome.

Best value repair, renovation, maintenance, and new construction frameworks are readily available and include the following elements.

#1 Real property owner leadership via direct involvement, capacity, commitment, and accountability.

#2 Robust, integrated planning, procurement, and project delivery framework, processes, and workflows, with and associated multi-party contract and operations manual/execution guide.

#3 Common data environment inclusive of shared, local market, objective granular construction task data.

#4 Mandatory initial and ongoing training for all participants.

#5 Quantitative metrics and regular third-party independent audits.

#6 Enabling collaborative tech that embeds robust process and workflows.

Despite massive investments in physical infrastructure,  it will be impossible meet decarbonisation
requirements or conserve vital natural resources.   The current average waste invovle in facilities management “construction” ranges between 40% and 60%.

There is no shortage of solutions available to drive significant improvement in managment of the built environment.  The challenge remains adoption and proliferation.

Objective, reliable, and veriable Construction Cost Estimates are critical to best value outcomes for all repair, renovation, maintenance, and new build activities.

The estimating process begins with a comprehensive understanding of your project’s scope of work.  A knowledgeable and well-trained estimating team is a key component along with a robust  processes, procedures, a objective and granular local market construction task data.

#1 Pre-Estimate Stage

Reviewing Requirements 

Owner creates and initial Scope of Work.

#2 Joint Job Site Visit:

Owners and design-builders should always conduct a joint visit to the site to review existing/verify conditions.

#3 Building a Detailed Estimate

The best approach to completing is to create a detailed line item estimate via a quantity take-off and associating granular labor, material, equipment, and productivigy data for each line.   This will provide you with a clear technical and cost view of the project.

#4 Uniform and Consistent Quantities and Costs

A quantity take-off is a continuous list of items and measurements and leverage appropriate technology to enable information sharing, updating, and resue.  Quantities must leverage consistent, industry standard units of measure.   Costs must be current, objective, and locally reserached.   Both quanitites and costs should be presented in terms of a granular construction task.  Each construction task should be unique and identifed by using a standard data architecture (i.e. expanded CSI Masterformat).

#5 Understand Your Products, Material, and Labor Costs/Pricing

Factors that impact local market costs:

• Availability and demand for a product.
• Availability and demand for labor
• Availabiity and demand for equipment
• Delivery factors  (location, security…)
• Local market labor costs per trade (workers compensation, hourly rate, other “fringes”)

#5 Productivity

Calculation of individual or crew times to complete a task in hours should be represented in terms of a standard eight (8) hour day, and represent average local productivity factors.  Normal hour work productivity and cost can vary from non-normal work hours.

#6  Subcontractor Quotes

It is best practice to also require subcontractors to provide detailed line-item quotes.  Lump sum quotes, even if provided by multiple constractors, should never be considers sufficient. It is important to provide the same level of percision and same evaluation steps used for owner and constractor estimating.

#7 Addtional Cost Considerations

Mobilization

• Jobsite storage containers, required utilities, portable waste units
• Safety costs
• Dumpster
• Clean-up
• Other miscellaneous items, etc
• Fees (permits/insurance)

via 4BT.US – Objective, local market granular construction task data and robust construction planning, procurement, and project delivery frameworks.

The OpenBUILD(TM) Framework is a  standardized approach to construction data collection that collates data on all public sector projects across all locations in a common format.

Data is shared among both public and private sector audiences to leverage the latest methods and tools supporting optimal project planning, costing, procurement, delivery, and management. 

Learn more…. and request and informational session:

For over 30 years, the Department of Defense (DOD) has spent billions of dollars each year to acquire and modernize financial management, logistics, and other business systems.

“DOD is the largest federal agency, and the only one that has never achieved a “clean” audit opinion—which is when financial statements are presented fairly and are consistent with accounting principles. The challenge that DOD faces in modernizing its business and financial IT systems is a big hurdle to making its financial statements auditable.”

DOD’s financial management and business systems modernization have been on our (GAO) High Risk List since 1995.

This is just another example of poor leadership and failure to implement robust processes.

The lack of effective planning and oversight of itsbusiness and financial management systems are
critical challenges…  (GAO-23-106817 2023)

View Report https://4bt.us/wp-content/uploads/2023/09/DOD-Financial-Management-Improving-Systems-Planning-gao-23-106817.pdf

Defining a credible cost estimate is an important step towards improving construction outcomes.

The vast majority of “construction failures”, delays, cost overages, etc., are due to an inadequately defined Scope of Work and an associated lack cost visibility.

A credible cost estimate is one that has been derived using local market granular information.

CONSTRUCTION COST ESTIMATING via Unit costs / Bill of quantities 

A unit cost is assigned to each of the facility components or construction tasks as represented by the bill of quantities. The total cost is the summation of the products of the quantities multiplied by the corresponding unit costs. The unit cost method is straightforward and can be greatly aided by purchasing available a current locally researched granular construction cost database.  (Note: Individually developing and maintaining a local market line item cost database can be costly and time consuming for many owners and service providers.)

The initial step is to break down or disaggregate a project into a number of discreate tasks (demolition, repair, renovation, maintenance, new construction).

Collectively, these tasks represent all requirements listed in the project’s detailed Scope of Work (SOW) as mutually agree upon by the real property owner and the design-builder.

Once these tasks are defined and quantities representing these tasks are selected, a unit cost is assigned to each and then the total cost is determined by summing the costs incurred in each task.   Each unit cost task also must include individual labor, material, equipment, and crew/productivity data sets in order to ensure a high degree of confidence.

The level of detail in decomposing a “construction activity” into individual granular tasks and the validity of the core local market condition dataset jointly determine the level of credibility for the overall cost estimate total.

Learn more here…  

or ask a question.

Sustainability and Facilities Management in the Public Sector are critical issues from both environmental and economic perspectives.

Due to increasing concern about sustainability and productivity issues, there is a demand for public sector real property owners to significant boost productivity and overall stewardship of the built environment.

Any significant improvement, however, will require LEADERSHIP, COMMITMENT, CAPACITY, and ACCOUNTABILITY.   More specifically, pervasive inefficient processes common the the Federal, State, County, and Governmenet sectors require fundamental change.   Unfortunately, market context can reduce interest in innovative, yet proven solutions.

The integration and collaboration between all internal (0wner) and external (service provider) project parties, starting from the early phases of the building process is lacking and a fundametnal requirement for improving the ‘status quo’.    Traditional planning, procurement, and project delivery methods and associate legal frameworks are not conducive to improving productivity and support fragmented, wasteful activities.

The current environment of autonomous units focusing on their own interests and incentives simply generates  conflict and disputes and 80%+ of all projects being late, overbudget, or poorly completed, rather than collaboration and coordination which has proven to consistently deliver positive outcomes for all project participants.

Integrated planning, procurement, and project delivery models include but are not limited to Integrated Project Delivery (IPD),  Project Alliancing (PA), and LEAN Job Order Contracting, all of which  enable collaborative partnerships and work mechanisms based on trust, robust processes, and a common, shared data environment.

These methods support project stakeholders in working according to a risk-and-reward sharing principle and boost performance-based process management.   All project resource requirements, labor, material, equipment granular costs, productivity, and scheudle are available to all signatory parties.

• Alliance/Relationship based Construction Planning, Procurement, and Project Delivery
• Multi-party arrangement
• Integration operational goals of project participants/stakeholders
• Shared responsibility for planning, procurement, and project delivery
• Joint organization and management structure comprised of personnel from the services partner organization(s) and the owner.
• Joint decision-making and resource management
• Rewards are based on the overall project implementation and not on individual performance

IPD is ” project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste and maximize efficiency through all phases of design, fabrication and construction. (AIA, 2007)

Mandatory Requirements

#1 Owner leadership, capacity, commitment, and accountabilty to collaborative methodology

#2 Congruence with local conditions (current local market granular construction task and cost data)

#3 Collaborative decision-making

#4 Continous, transparent monitoring with respect to accountability, performance, and reliability

#5 Mutually beneficial outcome targets and performace-based and shared risk/reward

#6 Experienced Local Partners

#7 Integrated Design

#8 Early Partner Invovlement

#9 Mandatory Initial and Ongoing Training

#10 Use of robust framework for ALL Projects

Organizational Key Components1. Strategy, which determines the direction of the organization;
2. Structure, which determines the location of decision-making power;
3. Processes, which establish the flow of information and information
technologies;
4. Rewards, which influence the motivation of people to perform and address
organizational goals;
5. People, which influence and define employees’ mindsets and skills.”   (2016, Galbraith)

References:

American Institute of Architecture, (2007). Integrated Project Delivery: A Guide, AIA National and AIA California Council, Sacramento, CA.

American Institute of Architecture and Associated General Contractors of America, California, (2010). Integrated Project Delivery: Case Studies, AIA National and AIA California Council, Sacramento, CA.

Cheng, R., Allison, M., Sturts-Dossick, C., Monson, C., Staub-French, S., and Poirier, E., (2016). “Motivation and Means: How and Why IPD and Lean Lead to Success.” Lean Construction Institute

Galbraith, J. R., (2016). The Star Model™.

Arditi, D., Nayak, S., and Damci A., (2017). “Effect of organizational culture on delay in construction,” International Journal of Project Management

Ballard G., Dilsworth B., Do D., Low W., Mobley J., Phillips P., Reed D., Sargent Z., Tillmann P., and Wood N., (2015). “How to Make Shared Risk & Reward Sustainable, ” Proc. 23rd Ann. Conf. of the Int’l. Group for Lean Construction, Perth, Australia

Miller, J., Garvin, M., Ibbs, C., and Mahoney, S., (2000). “Toward a New Paradigm: Simultaneous Use of Multiple Project Delivery Methods,” Journal of Management in Engineering

Zaghloul, R., and Hartman, F., (2003). “Construction contracts: the cost of mistrust,” International Journal of Project Management

Facilities Management and Entropy –  Left unchecked disorder increases over time.  Energy disperses, and systems dissolve into chaos.

 

Entropy, Facilities Mangement, and the AECOO sector have more in common than they should.  

It’s well beyond time to stop running with the pack.  Where has that gotten us?

Certifications, traditional formal education, and professional training related to facilities life-cycle management and AECOO practices and practices have done little to address “Understanding and dealing with the concept of value.”

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Organizational facilities management excellence is essential to realising value through managing risk and opportunity to achieve the desired balance of benefits, costs, risk and performance.

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Characteristics of Best Value JOB ORDER CONTRACTING…

1. Real proper owner capability, leadership, commitment, and accountability
2. Integrated internal and external planning, procurement, and project delivery teams within a standardized programmatic process
3. Clear set of objectives and workflows for the all aspects of the programmatic process – (Written Operations Manual/Execution Guides part of the multi-party agreement)
4. Common data environment, inclusive of objective, current, granular local market construction task and cost data
5. Initial and ongoing training for all participants
6. Quantitative metrics
7. Regular independent third-party audits

What’s involved in creating detailed line item construction cost estimate?

At the most detailed level; each granular construction task is usually related to and performed by a crew. The contruction cost engineer/estimator develops or selects a task description defining the type of effort or item to be constructed.

Task descriptions are as complete and accurate as possible to lend credibility to the cost estimate and aid in later review and analysis.  Unit prices and quantities include individual LOCAL MARKET labor, material, and equipment information and cost breakdowns as well as crew and productivity information.

4bt.us

Relationship-based Job Order Contracting – Enabling commitment based upon a  mutual set of  expectations and an understanding of  acceptable behaviors of  each partner and shared, objective, and actionable information.

Move from a single transaction/project mentality where both sides attempt to gain maximum financial advantage to a program mentality, where teams work towards mutually beneficial long-term outcomes.

• • Innovative, market tested solution
  • Cost effective
  • Leverages experience of design-builders
  • Empowerment and collaborative individualism
  • Direct Owner/Design-Builder communication and collaboration – Owner PM & Design/Builder PM
  • Comprehensive detailed scope of work
  • construction proceeding prior to completion of the design documentation;
  • Reduced confrontation between owners and design/builders
  • Early and ongoing involvement of all stakehholders
  • Performance-based reward systems
  • Fewer change orders
  • Full accountability
  • Defined roles, responsibilities, workflow, and documentation.
  • Mechanism for sharing risks and benefits
  • Higher levels of service
  • Focus upon training and development
  • Lowest JOC Program adminstration cost

Benefits

• Fewer contract variations
• Organisational learning and team learning via sharing the diversity of independent collaborative individuals with unique skills
• Reduced exposure to litigation due to enhanced communications, workflows, and defined issue resolution strategies
• Lower risk of cost overruns  because of siginficantly enhanced cost visibility
• Lower risk of time delays due to improve Scope of Work granularity
• Higher quality
• Lower administration costs
• Compliant
• Non- adversarial attitudes

Partnership is the benchmark for other Owner-Design/Builder relationships

Cooperation + commitment to achieve shared goals

 Trust, cooperation, commitment, and accountability

Written roles and responsibilities for the paticipant across all organisation

Measurable quantitiative objectives relating  to each requirements

Mutually beneficial outcomes

Defined process to orient new team members and enable continuous improvement

Focus upon commitment and trust

Regular formal partnering meetings and subcontractor meetings

Daily information meetings

Monitoring against mutually agreed goals

Periodic workshops  focused on unresolved  issues and problems

Design/Builder Requirements

(1)    Demonstrated ability  to help define and complete the full detailed scope of works

(2)    Demonstrated ability to minimize project capital and operating costs without sacrificing quality.

(3)   Demonstrated ability to achieve outstanding quality results.

(4)    Demonstrated ability to provide the necessary resources for the project and meet the project program requirements.

(5)    Demonstrated ability to add value and bring innovation to the project.

(6)    Demonstrated ability to achieve outstanding safety performance.

(7)    Demonstrated ability to achieve outstanding workplace relations.

Learn more about…

• Defining project goals;
• Identifying resources required to provide the partnering infrastructure;
• Knowing how to evaluate potential project partners; and
• Understanding relative benefits of different types of relationship arrangements.

via Four BT, LLC – Proven construction management solutions that drive continuous improvement based on trust, cooperation, commitment, actionable information, and robust processes. www.4bt.us

1. Long-term  focus on accomplishing the strategic goals of involved  parties
2. Multi-project agreement: long-term relationships without guaranteed workload
3. Common measurement  system for the projects and the relationship
4. Improved  processes and reduced duplication
5. Relationship-specific measures tied to team incentives
6. Shared authority
7. Openness, honesty, and increased risk sharing

Construction Cost Data Integrity is one of the most overlooked items in preparing a detailed Scope of Work.

Construction Cost Data Integrity Requirements

#1 Objectivity

#2 Current, Local Market Information

#3 High Granularity

#4 Standardized Terms, Definitions, and Data Architecture

#1 Objectivity

Cost data must be professionally researched with source including, but not limited to,  local, regional, and national materials suppliers as appropriate, prevailing wage rates for all associated trades,  local contractors/subs, equipment rental services, local market productivity, relevant, third-party databases.

#2 Current, Local Market Information

All construction cost data should be researched per the associated cite.  (Note: The use of national average cost data, location factors, economic factors, area cost factors, or historical data do not provide adequate cost visibility.)

#3 High Granularity 

Line item discrete construction tasks represent the only methods from which quanities can be applied to then create an cost estimate ready for procurement analysis.

#4 Standardized Terms, Definitions, and Data Architecture

All cost data should be include industry standard terms and definitions written in plain English, without the excessive use of abbreviations or acronyms.  Line item tasks should also have an associated expanded and unique CSI MasterFormat coding.   A standardized data architecture vastly improves the efficiency of information use, sharing, reuse, expansion/customization, and updating.

The exclusive source of granualar, current, local market construction cost data and also preventive maintenace task and cost for associated frequencies/checklist, in excess of 90,000 line items and updated using over 1.2 million data elements is Four BT, LLC.  www.4bt.us

Many in the public sector are unaware of the construction cost estimating issues caused by the use of national average cost data and location factoring.

Here’s short summary of those problems noted by independent third parties.

• “Location factors are used during preliminary project evaluations. They are not intended to be used when preparing appropriation-quality estimates. They often are applied to conceptual estimates for identifying “go/no-go” projects at an early stage.”

(Peitlock, B.A., ccc, Developing Location Factors Using a Factoring Method, International Cost Engineering Council, ICEC International Cost    Management Journal (ICMJ), 1998.)

• Location factors are primarily used in class 4 and 5 estimates and are not intended to be used for higher quality estimates, such as class 3, 2, or 1. The RSMeans city cost index (CCI) and the Department of Defense area cost factor (ACF) index are two primary examples of location factor publications.

(Martinez, A., Validation of methods for adjusting construction cost estimates by project location , University of New Mexico UNM               Digital Repository, 2010)

• “Despite its potential weaknesses, estimation by adjustment factors is a very common approach for all types of construction. A very common approach for performing quick-order-of-magnitude estimates is based on using Location Cost Adjustment Factors (LCAFs). The accuracy of cost estimates in the early phases varies within an expected range that spans from -100% to +200% ” “Using the results of this study, various commercial entities (e.g., RS Means) could enhance their online tools by uploading publicly available socio-economic variables and allowing users to perform geostatistical analysis. As a result, a cost engineer could input the location of a project and obtain the most accurate location adjustment factor through a mix of interpolation and geostatistical prediction techniques.”

               (Migliaccio, G., Empirical Assessment of Spatial Prediction Methods for Location Cost Adjustment Factors, J Constr Eng Manag. 2013)

• “Problems within the methodology, unfortunately, will continue to arise as standardized estimation tools (CCI) simply cannot account for the unique characteristics of individual states.  Unfortunately, the accuracy of program-wide CCIs occasionally led to swings of ±20 percent after projects had gone through the bidding process. Additionally, no direct application of market or economic conditions existed in this conventional CCI process, which was theorized by FHWA to potentially be a significant influence on resulting project estimate accuracy. ”

(University of Colorado Denver College of Engineering and Applied Science Department of Civil Engineering, Validation of Project-level           Construction Cost Index Estimation Methodology, 2017

• In the United States, RSMeans and other published construction cost data are useful for estimating the overall cost of a project. However, these are typically nationally aggregated mean costs and intended to be used with a local multiplier. Prior studies have found that locally adjusted RSMeans costs vary from actual local material prices. For example, Estes (2016) found that for a slab-on-grade foundation assembly with 0.1 m (4 inches) thick slab, vapour barrier and welded wire fabric in Baton Rouge, Louisiana, United States, concrete was found to be underestimated by 18% and vapour barrier by as much as 67%. Additionally, assembly costs for 0.1 m (4 inches) thick concrete slab were found to differ significantly (p = 0.004, α = 0.05) when comparing locally sourced costs and adjusted RSMeans cost data (Estes, 2016). Published cost data also lack accuracy due to the type and manner of data collected and represented. For example, RSMeans data do not account for variations caused by local codes, productivity rates, climate conditions, labour quality and availability, or costs related to land prices and permit fees (Ontario Construction Secretariat, 2001).

(Kodavatiganti Y, Rahim MA, Friedland CJ, Mostafiz RB, Taghinezhad A and Heil S (2023), Material quantities and estimated construction costs for new elevated IRC 2015-compliant single-family home foundations. Front. Built Environ. 9:1111563. doi: 10.3389/fbuil.2023.1111563

Via Four BT, LLC – www.4bt.us – Exclusive resource for local market unit price repair, renovation, maintenance, preventive maintenance, and new construction cost data updated quarterly, without any location or economic factoring.

MOST Construction Cost Data is Useless due to archaic research methods and cannot provide cost visibility or enable cost managment capability for local markets.

Robust Construction Cost Data Research

1. Comprehensive, granular, line item tasks including a description, and individual data components for labor, material, equipment, and productivity (crews).

2. Specific local market research with zero use of location factoring (city cost indexing) or economic factoring (economic indexes)

3. Organization using expaned CSI Masterformat.

4. No inclusion of builder/contractor overhead or profit.

5. Timely updates – Data must be update quaterly at minimum.

There is only one source of objective, verifiable, and current line item construction cost data that is update both locally researched and updated quaterly, Four BT, LLC (4BT).

4BT updates 1.2+ MILLION data points to exclusively create objective, verifiable, and robust detailed line item construction cost databases for local markets.

Improving facilities lifecycle total cost of ownership asset managment one client at a time.

JOC contractor evaluation is an ongoing process, begining with their response to a Job Order Contract Request for Propsals for design-builders and continuing throughout the life-cycle of the JOC Program.

Here is a considerations for JOC contractor evaluation.

•Responsiveness of the contractor in terms of requests for site visits, requests for proposals, participation ins proposal evaluation, mobilization, daily site management, completion of required forms, and handover of required information post construction.
• Ability to collaborative work with owner staff in the scope of work definition.
• Timely creation of detailed line item proposals using locally researched construction cost data in compliance with Job Order Contract requirements.
• Ability to create and maintain a safe and clean work environment.
• Timely project mobilization and start.
• Efficient and collaboration crew and subcontractor mangement in a manner that maximizes the expertise of those doing the work.
• Projects are complete in a quality manner, per specfications, on time and on budget, without change orders.
• Ability to create a long term, mutually beneficial relationships with owner and subscontractor staff as well as material suppliers and other stakeholders.
• Acceptable levels with respect to defined, JOC quantitative performance indicators.

Learn more about the JOC Contractor Evaluation Process…

Developing an efficient JOC Program Framework requires a commitment to collaborative and integrated Planning, Procurement, and Project Delivery teams.

Unfortunately most JOC Programs outside of the DoD sector, simply use JOC as a means to speed procurement with little attention paid to JOC administration costs and the issues with the excessive use of “JOC Consultants”.  Mutliple independent third-party audits have clearly demonstated the pitfalls of this approach, common to the County, State, Local Government, and Educational Sectors. 

JOC Program success is dependent upon direct collaboration between Owners and Design-Builders as well as Subcontractors.    Developing and maintaining such a collaborative
environment requires initial and ongoing training, an unbiased JOC Framework, as well as continuous team assessment and improvement.  True collaboration and owner leadership, capability, commitment, and accountability are requirement, not choices.

Little focus has been give to JOC Program and collaboration assessement by trade associations or research to date.

Below are the requisite traits of collaboration within an efficient JOC Program as well as key aspects with respect to associated planning, procurement, and management activities.  This information cna be used to improve the overall effectiveness of any JOC Program.

#1  Educate organizational leadership and potential team participants on Job Order Contracting, and the need for “culture change” with respect of all aspects of procurement, planning, and project delivery (Note:  Implementing a JOC Program without altering traditional behaviors and levels of accountability will not enable realization of any measurable improvement in repair, renovation, maintenance, or new construction outcomes, and may actually result in excessive costs and conflict generation.  Initial and ongoing training for ALL participants must be mandatory.)

#2  Conduct diligent market researched on available JOC cost data, software, and services.  (Note: JOC has been used for decades, however, many traditional JOC tools and approaches are outdated.)

#3  Develop a JOC Program Strategy, Objectives, and Quantitiative Performance Metrics

#4  Select a JOC Program Administrator who is a consensus leader with appropriate management and technical skills.

#5  Do not procure any JOC Solution based upon a percentage of JOC contruction volume.  This approach may appear to be less costly at initial stages, however, easily results in 10x higher JOC administration costs.  Millions can be lost to JOC adminstration costs that could have gone to actual construction and deferred maintenance reduction activities.

#6  Use current, local market, unit price line item cost data.   Do not use general cost data books or national average cost data and location factoring.   Also do no use assembely level cost data.  The use of the latter will result in a lack of verificable cost visibility and failure to support effective cost management.

#7  Leverage collaborative cloud purposed-built JOC technology.  The use of generic project management software or spreadsheets is note recommended due to the inability to support requisite JOC program management activities and audit requirements.

#8  Develop and maintain focus upon OUTCOMES mutually beneficial to all JOC Program participants.

Learn more about , reducing documentation time and improving cost management and quality…

Here’s an example of a JOC Program workflow.

Objective, current, and verifiable data and a robust collaborative workflow form the foundation of a successful JOC Program.   For example, cost analysis, a critical component of any JOC Program Workflow becomes  meaningless if the unit price book is not locally researched, or simply wrong.   A locally researched, current unit price book is a prerequisite to a good estimating outcome and associated review and approval process.

Objective, quantitative cost data that represent local market conditions cannot be found within national average cost data books, city cost indexes, or historical cost data.

via 4BT.us – Best value JOC Program solutions.

UPB = Unit Price Book, i.e. 4BT JOC Unit Price Book
General Conditions = Indirect Costs
OHP =  overhead and profit
Coefficient = Adjusted UPB + general conditions/OHP %

National Average Cost Data inaccurately estimates project costs and the use of location factoring or economic factoring are insufficient to rectify the issue.

The traditional use of national average cost database and location factors has resulted in significant lack of cost management across the public sector.

Facilities sustainment and repair as well as new construction costs have not been well represents of managed for decades across the Federal, State, and Local Government levels.

Current, actionable, and verifiable local market detailed unit price costs are now available.

National Average Cost Data inaccurately estimates project costs and waste billions of dollars annually. Leverage local market cost data.

The ONLY cost estimating solutions with CURRENT, LOCAL MARKET, LINE ITEM construction cost data!

$1500/Year.

Estimate FASTER and with CONFIDENCE!

Work scope visibility is critical to efficient construction outcomes.

A well defined and well communicated scope of work is a fundamental requirement in order to consistently acheive quality outcomes on time and on budget.

“A detailed, well communicated Scope of Work enables teams to have complete visibility of the requirements and the issues of the project on an early and ongoing basis.”

“You need fully transparent, objective information in order to create an accurate detailed Scope of Work response.   That’s traditionally been elusive in the construction design, and engineering sector because  information is completely fragmented and disparte professionals all think we have unique abilities and processand and full information sharing is taboo!  So sharing actionable, current data and then consistently describing it was virtually impossible.   A common data environment (CDE) inclusive of expanded MasterFormat organized detailed labor, material, equipment, and productivity information,  ensures everyone has access to apples to apples information.”

An objective, verifiable, and current local market unit price cost database is a critical tool in developing a detailed SOW.

Systems thinking and Job Order Contracting can be integrated to achieved significant improvement is repair, renovation, maintenance, and new construction outcomes.

Reach out to learn…

What is Systems Thinking?

The Scope of Job Order Contracting with a Systems Thinking Structure

Asset Value Optization Strategies, Policies, Objectives

Implementation Requirements

Team Members Behaviors and Relationships

Quantification of Organization Outcomes

Maintaining Alignment, Sustainability, Leadership, and Governance

Reinforce detail unit line-item construction cost estimating today with CURRENT LOCAL MARKET DATA.

Professional teams,  processes, collaboration, and standardized information drive higher productivity.   Cost visibility and transparency are critical to overall project success.

Accurate construction cost estimates based upon industry standards and produced in a timely manner can now be the norm with 4BT’s local market line-item construction cost databases.

Our verifiable cost data technology can be leveraged to equip estimators at any design stage – from concept through close out.

We can also help manage Programs,  Contracts, Proposals, Projects, Workorders, and Contractors within a single application, all using proven collaborative construction planning, procurement, and delivery methods.

Join the growing number of savvy Owners, Contractors, and AEs who engage in collaborative construction programs from planning, programming, design, construction, and close-out.

This common approach depends upon information sharing within a common data environment.

Unit Price Book – Actionable Construction Cost Data

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Robust process integrating multi-stakeholder engagement enables consistent delivery of quality repair, renovation, maintenance, and new build projects on time and on budge.

The effectiveness is dependent upon the successful implementation of core collaborative systems-thinking based principles.

#1 Process integrating Planning, Procurement, and Project Delivery Teams with established workflows.

#2 Long term mutually beneficial contracts between Owners and Service Providers (i.e. Design/Builders), inclusive of a Operations Manual/Execution Guide.

#3 Granular line item locally researched construction cost data organized using expanded CSI MasterFormat, and updated quarterly.

#4 Quantitative metrics supporting continuous improvement.

#5 Required initial and ongoing training for all participants.

#6 Owner leadership, direct involvement, capacity, commitment, and accountability

Realtime multi stakeholder engagement increases the effectiveness of collaboration and significantly improves outcomes for all forms of construction projects.

Creating a detailed scoped of work is critical to achieving consistent best value outcomes for all repair, renovation, maintenance, and new construction activities.

The assigned Owner project manager is responsible for the creation of a detailed SOW.  The SOW drives project time, cost, quality and associated project objectives, goals, and final results.   The SOW, in concert with the owner PM’s ability to lead a team to completion, ultimately determine overall project “success”.

An unclear scope directly leads to confusion among project participants, scope creep, and change orders.  Associated robust processes are needed for both scope creation and overall project planning, procurement, and project delivery.    Without both a detailed SOW and a robust process,  efficient project management is impossible.

Scope of Work Creation  – Address the most common failure point in construction.

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Leveraging JOC as a SYSTEM not simply a Procurement Tool provides significantly greater benefits while also reducing costs.

Many, if not most, current Job Order Contracting Programs simply use JOC to speed the procurement of repair, renovation, maintenance, or new construction activities.  This practice not only limits benefits possible from JOC  negatively impacts cost management capabilities, and even sets the stage for potential fraud.

#1 Job Order Contracting is a form of Integrated Project Delivery (IPD) and should integrate planning, procurement, and project delivery teams in an early and ongoing basis throughout project lifecycles.  Far too often, procurement uses the tool to simply push projects through faster and even outsource the management of the JOC Program.   Owner planning, procurement, and project teams should be involved in every JOC activities.

#2 Paying a percentage fee related to construction volume is very costly presents several conflict of interest.   For example, a “JOC consultant” is being paid a fee based upon a dollar value of a project that they are recommending for approval.

#3 JOC Program should be fully collaborative and financially transparent, and not pit Owners against Contractors.

Reduce Rework,  Optimize Jobsite Productivity, and Lower Costs with Systems thinking-based JOC.

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Any organization can measurable improve repair, renovation, maintenance, and new build outcomes by integrating People and Robust Process with Standardized LOCAL MARKET Construction Task Data.

FACTS with knowing….

#1    Objective studies have shown that using national average cost data, location factors, historical data, area cost factor, or economic factors do NOT provide adequate visibility in local market costs.

#2    Granular line item estimating with full visibility into labor, material, equipment, and productivity details is the ONLY way to obtain reliable, objective,  and verifiable costs and proceed to procurement with a sufficient level of cost control.

#3    4BT is the exclusive source of local market line item construction cost data that is updated quarterly and organized using expanded CSI MasterFormat, while also providing local market preventive maintenance cost data and checklists for all frequencies organized using TriServices expanded UNIFORMAT.

#4    A poorly defined and poorly communicate Scope of Work is the #1 cause of “construction” project failure.

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4BT (Four BT, LLC) is the sole source for current, objective, verifiable, and granular local market cost data that does not rely upon location or economic factoring of national average cost information.

Construction cost data is available for for Small Projects, Operations & Maintenance, and Major Renovations and Alterations, as well as Preventive Maintenance.

Poor Construction Estimates – Root Cause

The are two primary root causes of poor construction cost estimates:

1. Lack of early and ongoing communication between all relevant parties.
2. Failure to use granular, current, and well organized construction cost data specific to the local market.

via 4BT.us – Verifiable local market granular construction cost data and support program and estimate management technology.

Better estimates.

1. Verifiable. current local market labor, material, and equipment costs – updated quarterly.
2. Detailed line item data organized with expanded CSI MasterFormat
3. 2X+ faster than manual or spreadsheet estimating
4. Complete audit trail
5. Remove data sharing barriers – Copy, paste, share estimates securely
6. Mitigate errors and omissions
7. Export to spreadsheet or PDF
8. Cloud, SQL technology

SIGNIFICANTLY IMPROVE your JOB ORDER CONTRACT

#1 Put People First: Center your JOC Program around integrating your Planning, Procurement, and Project Delivery Teams and enabling internal and external professionals to reach their full potential and perform their best sets up your organization for best value achievement.
#2. Apply Systems Thinking: Take the time to understand your internal requirements and those of our JOC contractors.
#3. Do not pay a percentage of JOC construction value for JOC tools or services. While the cost impact seems low at first, hundreds of thousands of dollars to millions are wasted.
#4. Do not rely heavily on a “JOC Consultant”. A core benefit of JOC is improving owner and contractor relationships and jointly building knowledge and capabilities. Encourage rapid learning, reuses of existing knowledge, and capture new knowledge to make it easier to use in the future to accelerate overall efficiency.
#5. Remember JOC is a TEAM Sport: Support a deliberate process to engage internal and external team members across the enterprise from initial ideas to delivery. This will ensure that you maximize value creation.
#6. Define Consistent Workflows: Organizing and managing the work concurrently and consistently maximizes available resources. Properly developed and implements workflows and tools reduce administrative burden as well as overall project delivery times and costs.
#7 Use current, verifiable, granular cost data for the JOC unit price book. Do not use national average cost data, even with location factors.

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