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

#UnitCostEstimating

#TypesofEstimating

#estimating

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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.

Request the full presentation…

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.

Reach out to learns more.

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.

www.4bt.us

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.

www.4bt.us
#construction #job #work #team #learning #project #procurement #people #contractors #planning #building #future #joc #jobordercontracting #jobordercontracting

Public Sector Facilities Professionals – Reduce inefficiency, Streamline processes, Improve quality, Manage costs

Cost Visibility

Collaborative Process

Embrace the next generation of Construction and Sustainable Lifecycle Facilities Management!

Move all repair, renovation, maintenance, and new build projects forward with proactive, informed decisions.

Owners & Developers – Planners – Designers – Procurement Professionals – Builders

• Collaborate with internal and external teams to detail Scope of Work and validate local market construction costs.
• Know exactly how your request for proposals, projects, approvals, budgets, and work orders are progressing — from anywhere, anytime.
• Empower those doing the work and leverage their expertise.
• Mitigate risk and access a full audit trail.
• Dashboard and detailed reporting, as well as instant access to ALL data via upload.
• Manage IPD (integrated project delivery) and JOC (job order contracting) contracts and all activities.
• Full document management and version control.
• Exclusive locally researched granular line-item repair, renovation, maintenance, and new build cost data. (No national averaging or cost factoring)

Current, actionable information leads to better decision-making and best value outcomes.

Sustainable Facilities Management

Sustainable facilities management is the allocation of financial, environmental, and other organizational resources in the most efficient way possible.

Attainment of sustainable facilities management involves creating an environment for internal and external planning, procurement, and project delivery teams that fosters productivity, communication, collaboration, and innovation.

This requires building trust and respect among team members, a culture that promotes high performance, systems thinking, and a robust suite of processes, workflows, and tools.

People, Process, Information, and Technology are core development areas.  While they are all interrelated, People come first, then Process, and Information. Technology is last!  The role of Technology is to enable the consistent deployment and management of processes, workflows, and information to lower the cost of doing so.  Far too often Technology is viewed as a solution with the result typically being failure.

The quality of the outcome, defined by quantitative and qualitative metrics, is the measure of success.

If you are ready to provide leadership, commitment, and support to enable sustainable facilities management, let’s talk.

www.4bt.us – Sustainable FM Solutions

• Positive Culture
• Sufficient Capability, Capacity and Skills
• Equitable and Aligned Contractual Frameworks
• Fully Transparent, Shared, Common Data Environment (CDE)

Positive Culture

Adopt collaborative methods that enable the contribution and knowledge of those doing the work as well as the growing and retention of knowledge throughout internal and external planning, procurement, and project delivery teams.

Commercial Frameworks

Long-term, mutually beneficial contracts that focus all players on outcomes and are supported by operations manuals/execution guides.

Capability, Capacity Skills

A coordinated revamp of formal and professional education/training to address all aspects of lifecycle total cost of ownership asset management.  Focus upon understanding capability and capacity gaps, developing a coordinated approach to addressing knowledge gaps.

Common Data Environment

Mandated use of common terms and definitions writing in plain English without the use of confusing abbreviations and acronyms, as well as the use of tools such as locally researched current granular construction task unit price book databases to better communicate and validate cost and scope of work requirements.

A robust Construction Productivity Solution must include the ability to provide support for dealing with the conflicting interests of multiple stakeholders is CRITICAL to consistent achievement of best value construction outcomes.
The 4BT OpenJOC(TM) Solution and 4BT OpenBUILD(TM) Solution enables owners and design-builders to work collaboratively towards well-defined mutually beneficial outcomes.

Systems Enablers for Sustainable Facilities Management, Repair, Renovation, and Maintenance are critical considerations for any real property portfolio owner. In fact, they dictate how efficiently or how poorly an organization manages facilities stewardship requirements.
4BT OpenJOC and OpenBUILD solutions provide the following systems enablers:

– Greater collaboration and early engagement between all participants and stakeholders, resulting in integrated internal and external planning, procurement, and project delivery teams.
– Establish a common data environment inclusive of shared, local market granular cost data organized using expanded CSI Masterformat.
– Robust programmatic process with defined phases, workflows, approval, forms, etc., supported by a long-term multi-party agreement and integral operation manual/execution guide.
– Quantitative metrics/performance indicators.
– Mandatory initial and ongoing training for practitioners and decision-makers to ensure the necessary knowledge to be able to implement organization-wide systems thinking.

Learn more…

Systems Enablers for Sustainable Facilities Management, Repair, Renovation, and Maintenance are critical considerations for any real property portfolio owner. In fact, they dictate how efficiently or how poorly an organization manages facilities stewardship requirements.

The AECOO sector (Architecture, Engineering, Contruction, Operators, Owners) must transition for a linear to a circular system for managing the built environment.  Traditional planning, procurement, and project delivery methods are disparate and largely ‘ad hoc’.  Focus is simply upon simply accomplishing tasks (correctly or incorrectly) and passing the outcome (good or bad) to the next person/entity in line.  Little thought is given to holisitic impacts on the players or the final outcome.  In short, it’s a game of “passing the buck”.  We are aware that these practices end with extraordinarily poor results for the AECOO sector.

Systems thinking leads to the following systems enablers.

1. Greater collaboration and early engagement between all participants and stakeholders, resulting in integrated internal and external planning, procurement, and project delivery teams.
2.  Establishing a common data environment inclusive of shared, local market granular cost data organized using expanded CSI Masterformat.
3.  Robust programmatic process with defined phases, workflows, approval, forms, etc., supported by a long-term multi-party agreement and integral operation manual/execution guide.
4. Quantitative metrics/performance indicators.
5. Mandatory initial and ongoing training for practitioners and decision-makers to ensure the necessary knowledge to be able to implement organization-wide systems thinking.

A fundamental change in process and behaviors at all levels and all organizations associated with the built environment is required to acheive sustainable activities. All parties must rally behind the common goal to shift from our wasteful linear traditional methods economy towards regenerative lifecycle total cost of ownership asset management.  Many of the solutions required to deliver a sustainable methodology are available exist in today’s market and can be implemented immediately.

Army Job Order Contracts fail to meet critical AFARS requirements most of the time.

The JOCPB (JOC Price Book: reflects the current local costs in detail for construction tasks expected to be performed in the geographical area of the base contract with the primary use of developing a detailed line-item price.  (AFARS)

The above definition of a unit price book clearly notes the requirement that the JOC unit price book reflect both local and current costs for the work to be performed using JOC.   This is simply not happening and the failture to meet this requirement has cost the Government and taxpayers to waste hundreds of millions of dollars.   Most Army and DoD JOC Program specify “RS Means” cost data.  This is a national average cost book that DOES NOT REFLECT LOCAL COSTS.  Instead, the Government applies “area cost factors” or “location factors” to attempt to localized the cost information.  This practice does not work for material, labor, equipment, nor does it account for local market productivity in any effective manner.   Locally researched JOC Price Books are readily available to provide cost visibility, cost transparency, and therefore improve cost management.  Why is the Army using archaic and inefficient practices?

Army Job Order Contracts FAIL to meet AFARS requirements MOST OF THE TIME and waste millions of dollars and negatively impact mission needs.

But that’s not all, the DoD doesn’t leverage current system thinking and robust, integrated planning, procurement, and project delivery workflows to maximize utilization of resource.

Army Job Order Contracting per GENERAL SERVICES ADMINISTRATION DEPARTMENT OF THE ARMY, ARMY FEDERAL ACQUISITION REGULATION SUPPLEMENT (AFARS)

Subpart 5117.90 – Job Order Contracts
5117.9000 Scope of subpart.
A Job Order Contract (JOC) is an indefinite-delivery, indefinite-quantity contract and an alternative contracting method to fulfill repair, maintenance, and minor construction requirements on a variety of projects ranging from sustainment, restoration, and modernization, simplified acquisition of base repair requirements, civil works operations and maintenance, small renovations, real property repair and maintenance with an estimated value more than the micro-purchase threshold
for acquisitions of construction. A JOC includes a comprehensive collection of detailed repair, maintenance, and minor construction task descriptions or specifications, units of measure, and pre-established unit prices for discrete tasks. Each JOC order is comprised of several pre-described and pre-priced tasks. In general, proposed projects valued at or below the micropurchase threshold for acquisitions of construction are considered inappropriate for ordering under a JOC because of the administrative costs associated with processing JOC orders and the simplified purchase methods available for these actions.
5117.9001 Definitions.
As used in this subpart –
“JOC Price Book” (JOCPB) means the compilation of repair, maintenance, and minor construction tasks, associated units of measure and unit prices that are used in job order solicitations and a JOC. JOC unit prices include direct material, labor and equipment costs, but not indirect costs or profits which are addressed in the coefficient(s). The use of labor-only line items is appropriate for use when proper internal controls are in place and incidental to construction. Labor line items are not to provide services, typically performed under a separate service or requirements contract. The JOCPB reflects the current local costs in detail for construction tasks expected to be performed in the geographical area of the base contract with the primary use of developing a detailed line-item price. For CONUS, the JOCPB shall be developed using commercially available pricing tools to ensure consistent and comprehensive pricing of tasks unless the contracting officer determines the use of a commercially available pricing tool is not in the best interest of the government.
“Coefficient” means a numerical factor that represents costs (generally indirect costs) not included in JOCPB unit prices (e.g., general and administrative and other overhead costs, insurance costs, bonding and alternative payment protection costs, protective clothing,
5117.9002 Applicability.
(a) A JOC may be used to execute repair, maintenance, and minor construction requirements for the requiring activity and
are subject to the requirements in other parts of the FAR, DFARS, and this regulation.
(b) A JOC must only be used for the projects covered at 5117.9000. The requiring activity’s reoccurring facilities
engineering support services, such as utility plant operation, custodial, grounds maintenance, refuse collection and disposal,
and similar work shall not be acquired using a JOC. Architect-engineer services as defined in FAR 36.102 and Design-Build
requirements as defined in FAR 36.3 shall not be acquired under a JOC. However, informal (shop) and as-built drawings,
incidental to the job, reflecting the plan of action and the completed project, are anticipated under a JOC.
5117.9003 Use of job order contracts.
5117.9003-1 Planning and coordination.
(a) A JOC should be considered when the workload is anticipated to be of such a yearly volume that benefits derived from a JOC utilization are greater than the costs of the Government resources and contractor overhead associated with establishing and using a JOC. These costs include the total Government resources required to award, use, monitor, and administer the JOC and JOC orders, and management oversight and functional support of the entire JOC process. The calculated workload for a potential JOC should exclude –
(1) Work normally reserved for 8(a) or set aside for small businesses; and
(2) Work that can be effectively and economically accomplished by in-house resources.
5117.90-1
Revised August 4, 2022
5117.9004 DOD FEDERAL ACQUISITION REGULATION SUPPLEMENT
5117.9004 Procedures.
5117.9004-1 Presolicitation.
(a) To solicit for a JOC, the Government must develop task specifications and a JOCPB tailored to the needs of the
requiring activity to be supported. Any special range pricing (to get quantity discounts) of units associated with the requirements of known JOC projects to be ordered must be specified.
5117.9004-2 Solicitation.
(a) The contracting officer must ensure that the specifications and the JOCPB have undergone technical review and validation and are tailored to meet the projected requirements of the requiring activity and local economic conditions.
(b) The JOC solicitation must include realistic and reasonable annual minimum and maximum dollar amounts for projected requirements to encourage competition and lower coefficients. Generally, the higher the minimum is, the lower the coefficient proposed will be.
(c) The solicitation must explain the make-up of the Government unit prices and specify what types of costs, as a minimum, must be covered by the coefficient. Offerors may have multiple coefficients and must specify what additional types of costs are included in their coefficients in their proposal. These additional costs may be incorporated in the contract, if appropriate, and may preclude later disagreements over non-pre-priced tasks. Multiple coefficients may be used for normal working hours and other than normal working hours.
(d) The solicitation must explain that there will be no separate repayment(s) for bond premiums because the bond premium is repaid through the coefficient, and the coefficient is paid as an indirect cost under progress payment or other standard payment provisions.
(e) JOC solicitation and contracts must use either annual coefficient adjustments or an annually updated JOCPB, but not both. Clause 5152.237-9000, Adjustments to Contractor’s Coefficient for Option Years, can be used in JOC contracts in accordance with this paragraph when annual coefficient adjustments are used.
5117.9004-3 Ordering.
(a) Except as otherwise specified in this subpart, orders must be executed in accordance with FAR 16.505(a).
(b) Statement of work.
(1) The SOW for the proposed order must contain sufficient detail to enable the Government to develop an independent government estimate (IGE), in accordance with FAR 36.203 and to ensure that the contractor can properly prepare a responsive and cost-effective proposal with a minimum of non-pre-priced tasks.
(2) The SOW must be updated before issuing the order to reflect the negotiated agreement’s details and to include significant quantities, methods of construction, quality levels, and the number of days to complete the work.
(c) Limitations.
(1) Except as provided in paragraph (2), the value of non-pre-priced work under an order must not exceed 10 percent of the value of the pre-priced work.
(i) The value of the pre-priced work must be computed by multiplying the coefficient(s) times the appropriate unit price(s) in the JOCPB.
(ii) When the contract allows, indirect costs and profit for non-pre-priced work may be attributed by the application of a solicited and pre-agreed rate to be applied to the unburdened labor, equipment, and material costs of the non-pre-priced work.
(iii) Description of non-pre-priced work must not be manipulated or forced to fit under a pre-priced line item, either
to avoid including non-pre-priced line items in the order or to reduce the value of non-pre-priced line items in an attempt to
circumvent the limitation in (c)(2).
(2) Normally, if the value of the non-pre-priced work exceeds 10 percent, then the non-pre-priced work should be
reduced, eliminated, performed in-house, or the job must be acquired using other contracting methods. However, contracting
officers may exceed the 10 percent if justified and approved in accordance with FAR 6.302. The contracting officer shall
negotiate the modification and make a determination that the price is fair and reasonable.
(d) Distribution. A copy of all JOC orders must be sent to the contracting office appointing ordering officers, the Finance
and Accounting Office, the office or individual assigned responsibility for inspection and technical administration of the
contract, and any appointed COR. The contracting officer must maintain the permanent record of each transaction, and
administration shall be done in accordance with the contracting activity procedures.
5117.90-2
Revised August 4, 2022
SUBPART 5117.90 – JOB ORDER CONTRACTS 5117.9005
5117.9005 JOC ordering officers.
(a) Appointment. A “JOC ordering officer” appointment is authorized, but is only required when the contracting officer
will not be executing all task orders. Appointments of ordering officers under each JOC must be minimized. The JOC
ordering officer shall be obtained in accordance with AFARS 5101.603-1, The contracting officer is the appointing authority
for each individual job order that is within the JOC ordering officer authorities. The requiring activity may recommend JOC
ordering officers. The JOC ordering officer shall be appointed by letter similar to that in 5153.303-2 Sample ordering officer
appointment. (see 5101.602-2-92 Ordering officer appointments.), tailored for JOC.
(b) Training. All JOC ordering officers must receive specific training and orientation from the responsible contracting
office at least annually. This training must cover policy and procedures for the operation of a JOC and shall specifically
address the ordering officer’s authority, limitations, and responsibilities, including ethics, conflict of interest, and potential
pecuniary liabilities. JOC ordering officers shall, at a minimum, meet contracting activity COR training requirements.
(c) Authorization and limitations.
(1) JOC ordering officers are authorized to sign task orders on behalf of the Government between the micro-purchase
threshold for acquisitions of construction and the Simplified Acquisition Threshold (SAT) as long as the value of the non-prepriced item(s) does not exceed five percent of the total order to include contract modifications.
(2) The HCA may authorize JOC ordering officers to sign task orders of greater value than SAT. However, the
delegated authority may not exceed the thresholds specified in 10 U.S.C. 2805(c) and may only be authorized when the HCA
determines it is necessary to realize the benefits of a JOC, and provided that –
(i) adequate management controls are in place (e.g., contracting officer oversight);
(ii) adequate training is provided;
(iii) the contracting officer approves; and
(iv) the value of any non-pre-priced item(s) does not exceed five percent.
(3) JOC ordering officers may execute modifications to existing task orders provided that –
(i) the contracting officer delegates explicitly this authority in the JOC ordering officer appointment letter;
(ii) the absolute value of the order as modified does not exceed the ordering officer’s authority; and
(iii) pricing is accomplished by using the JOCPB.
(iv) Modifications shall be limited to changing quantities of JOCPB items in the existing order unless the contracting
officer signs an in-scope determination.
(4) JOC Ordering Officers must notify the contracting officer immediately of any modifications. The contracting officer
shall execute any modification outside of paragraph 3 above.
(d) Responsibilities. JOC ordering officers–
(1) Are responsible for ensuring that all proposed JOC project descriptions and task orders express the Government’s
actual requirements, validated in accordance with the requiring activity’s procedures;
(2) Must obtain concurrence from the Contacting Officer that sufficient capacity exists on the JOC before issuing of a
task order;
(3) Must obtain a valid Purchase Request and Commitment (PR&C) from resource management to ensure that adequate
and proper funds are available for the project before issuing an order and/or modification;
(4) Must notify the contracting officer of any additional bonding requirements associated with new orders or changes in
the value of existing orders;
(5) As the principal point of contact for technical and engineering issues, must respond to requests for technical
clarification from the JOC contractor, documenting both the request and the response, and conduct the joint pre-proposal site
survey, assuring that the contractor is provided access to all required facilities, plans, and other documents required for full
knowledge of the scope and conditions of the required job;
(6) For orders estimated to exceed the JOC ordering officer’s signature authority, the JOC ordering officer shall conduct
an initial evaluation of contractor proposals; may be authorized to solicit such proposals and clarify and negotiate units and
quantities of pre-priced tasks; and shall assist the contracting officer, as requested, in negotiations, and resolution of variances
between the IGE and the contractor’s proposal;
(7) Must maintain an electroniccontract file and complete contract documentation for each order and modification
executed, including a record of all related correspondence and actions taken before award of the order and in the order
administration phase; and
(8) Is responsible, along with a COR, if appointed, for assisting the contracting officer in technical monitoring of the
contractor’s performance of orders issued under a JOC to include —
(i) Monitoring compliance with the SOW and schedule;
5117.90-3
Revised August 4, 2022
5117.9006 DOD FEDERAL ACQUISITION REGULATION SUPPLEMENT
(ii) Ensuring contractor or supplier compliance with the clause at FAR 52.225-5, Trade Agreements (Oct 2019);
(iii) Ensuring compliance with the Wage Rate Requirements (Construction) statute (40 U.S.C. Chapter 31,
Subchapter IV, formerly known as the Davis Bacon Act, subpart 22.4);
(iv) Assessment and validation of percentage of completion for progress payment purposes;
(v) Recommending to the contracting officer changes to existing orders, beyond the ordering officer’s authority;
(vi) Documenting and quickly reporting to the contracting officer systemic or recurring problems in contractor
performance;
(vii) Prioritization of orders when required (in coordination with the requiring activities), provided no increase in
cost is involved;
(viii) Submitting performance evaluation reports (see 5136.201), as applicable; and
(ix) Providing to the requiring activity documents required for continuing customer responsibilities (e.g., as-built
drawings and warranties).
5117.9006 Contracting officer responsibilities.
(a) At least once a year, the contracting officer must ensure that ordering officer files and procedures are reviewed and that
a representative sampling of orders is selected for tracking from initiation of the requirement to final payment and close-out
of the order.

via 4bt.u;s

The value of time and motion study is clear.  The process enables the accurate definition of labor, material, and equipment requirements to perform a specific task.

What is time and motion study? The evaluation of work performance, analysis of the time spent in going through the different motions of a job or series of jobs. Time-and-motion studies were first instituted in offices and factories in the United States in the early 20th century. These studies came to be adopted on a wide scale as a means of improving the methods of work by subdividing the different operations of a job into measurable elements. Such analyses were, in turn, used as aids to standardization of work and in checking the efficiency of people and equipment and the mode of their combination.

Locally researched construction task data uses the knowledge of both time and motion study as well as research of labor, material, and labor requirements.  When developed and kept current, locally research construction unit price book data is critical to enabling true cost visibility and cost management for any type of repair, renovation, maintenance, and new build activity.  Conversely, used alternative cost estimation techniques such as national average cost data, historical cost, building or system modeling, and/or location or economic factor are not capable of providing reliable and verifiable cost estimates or other information such as scheduling and material requirements.

Learn more?

Sustainable Public Sector Facilities Management is unattainable if current practices are not fundamentally changed.

The current mindset across all public sector organizations is not conducive to sustainable facilities management from either economic or environmental perspectives.   Until this fundamental fact is altered, there is zero chance of significant improvement from the ‘status quo’ of rampant waste and mismanagement.

A change in mindset is a prerequisite to the creation and adoption of Values, Principles, Practices, Tools, and Processes that will enable sustainable public sector facilities management.  

All the tools, processes, and support services required to consistently deliver quality projects (repair, renovation, maintenance, and new builds) on time and on budget and to the satisfaction of all participants and stakeholders have been available for some time.

Required components for a robust systemic FM solution include the following:

• Robust collaborative process integrating internal and external planning, procurement, and project delivery teams on an early and ongoing basis, supported by a long-term, mutually beneficial multi-party agreements and an operations manual/execution guide.
• Common data environment (CDE) with a set of terms and definitions as well as current, locally researched granular unit price book including labor, material, equipment, and productivity datasets.
• Clearly communicated written quantitative goals and performance indicators.

Learn more if your organization is ready for significant improvement.

Sustainable Facilities Management will require a fundamental change in mindset.

Even though tools and services are readily available to consistently deliver quality, on time and on budget repair, renovation, maintenance, and new build outcomes, real property owners and facilities management professionals have yet to adopt system thinking.

What is system thinking? – Simple, it’s the process of considering the whole and how the all the associated parts, people, actions, resources interrelate, and discovering ways of improvement.

Why does it matter? – The application of system thinking to facilities management (FM) and the AECOO sector, and associated tools and support processes, can consistently ensure the delivery of quality, sustainable outcomes, on time and on budget. (AECOO = Architecture, Engineering, Construction, Owners, Operators)

What are the barriers? – System thinking requires a fundamental change in mindset for current AECOO players. While the following may sound like “common sense”, the philosophies and concepts are rarely practiced. Care of People. – Innovation and improvement require that traditional adversaries find common ground. We all know that traditional planning, procurement, and project delivery practices are adversarial, and broken, yet we fail to address this basic issue. Owners must lead a change in mindset and provide a consistently safe, welcoming, and collaborative environment. Everyone involved also must enable those doing the work, those with hands-on knowledge, to contribute to solutions in innovative ways.

Focus must shift from constantly seeking technology as a solution to the root cause of the AECOO sector’s problem, a bad process.

Examples of FM and construction philosophies, concepts, and tools that leverage system thinking? Lifecycle total cost of ownership (TCO) asset management, Alliance Contracting, Integrated Project Delivery (IPD), and LEAN Job Order Contracting all embody system thinking. While the degree to which these and other practices maximize the benefits of system thinking varies widely based upon actual implementation, significant, measurable benefit can be realized if ALL the following criteria are met. Total cost savings of 30%-40%, on time, on budget quality delivery, and satisfaction of all involved participants and stakeholders are just a few of benefits.

1. Real property owner leadership, accountability, and commitment
2. Multi-party, long term agreement with an integral operation manual and/or execution guide that clearly communicates roles, responsibilities, deliverables, processes, workflows, quantitative performance metrics, and shared risks/rewards.
3. Integrated internal and external planning, procurement, and project delivery teams that communicate and collaborate on an early and ongoing basis.
4. A common data environment (CDE) inclusive of 1. A common written set of terms and definitions using industry standards without confusing acronyms or abbreviations, and 2. a granular, line time construction task listing that is both locally researched, current, and organized using a standard data architecture (examples: expanded CSI Masterformat, expanded Uniformat).
5. Mandatory initial and ongoing training for all participants.

Even though tools and services are readily available to consistently deliver quality, on time and on budget repair, renovation, maintenance, and new build outcomes, real property owners and facilities management professionals have yet to adopt system thinking. Until this occurs, sustainable facilities management solutions will remain on the shelf.

Time for real change?

via Four BT, LLC – www.4bt.us  Sustainable FM solutions

Traditional JOC solutions focus exclusively on speeding project procurement, however, typically the result is higher overall construction costs and questionable oversight. OpenJOC(TM) LEAN Job Order Contracting is now readily available to assure the consistent delivery of quality projects on time and on budget, and with overall cost savings!

OpenJOC(TM) LEAN Job Order Contracting implements system thinking to address all aspects of planning, procurement, and project delivery.

System thinking addresses mindset in concert with processes, behaviors, tools and workflows to integrate our siloed industry into high-performing, success-oriented teams that foster collaboration between all project participants including owners, design-builders, trade partners, building users, and oversight groups.

Together we can empower everyone in our industry to create more efficient, safe, collaborative, innovative and more successful work.

So, if you…

• Care for People
• Want to Fix the Process, and
• Advance Our Industry,

reach out to learn more!

LEAN Job Order Contracting integrates system thinking within organizations to drive best value outcomes.

Construction costs increased an average of 8%-10% from 2022 to 2023

via Four BT, LLC – Verifiable, locally researched unit price cost data for repair, renovation, maintenance, and new builds.

4bt.us

In today’s economic environment it may be time to rethink Preventive Maintenance, lower costs 30%-40%, and extend system life up to 10x.

While most facilities management teams have a preventive maintenance program, there is only one source for PM tasks, checklists, AND locally researched costs for EVERY FREQUENCY (daily, weekly, monthly, annually….), and that is Four BT, LCC (4BT)!

January 2023 two climate requirements for new construction entered into force in the Building Regulations. If you are going to build a new heated building, you are responsible for complying with the requirements.

1. The climate impacts of new construction must be documented with a climate calculation (i.e. a life cycle assessment, LCA) in connection with the completion notification of the construction
2. New construction over 1000 m2 must comply with a limit value of 12.0 kg CO2 equivalent/m2/year.

Where is the United States?

via 4bt.us

Facilities Management Lacks a Body of Knowledge

Facilities Management and the full AECOO community have a fundamental flaw that is solely responsible for rampant economic and environmental waste; the lack of body of knowledge (BOK or BoK), the complete set of concepts, terms and activities that make up a professional domain.

Contact to learn more…

#facilitiesmanagement #environmental #community #aecoo #lean #leanconstruction #tco #totalcostofownership

Facilities management activities such as quality, on time and on budget repair, renovation, maintenance, and new construction require STAKEHOLDER CONTINUOUS PARTICIPATION AND INVOLVEMENT.

Who are the stakeholders?   Owners, design-builders, building users…

Learn more?

Uncertainty –  The inability to foretell consequences or outcomes because of a lack knowledge or basis on
which to make any predictions

Uncertainty fuels risk, excessive costs, and project failure.

Many real property owners are reluctant or incapable of qualifying and quantifying uncertainty, resulting in financial and environmental waste.

Learn more about robust processes for managing uncertainty. 

Leadership must be supportive and directly involved. LACK OF LEADERSHIP has led to rampant waste endemic to the AECOO sector (architecture, engineering, construction, owner, operator).

The FACT that real property owners have not taken responsibility for the DEVELOPMENT of their staff and external service providers has proven an impenetrable barrier to measurable improvement in economic and environmental outcomes.

LEADERS must ENABLE people doing the work to leverage their expertise to contribute to problem solving and continuously improve daily activities and processes.

It’s CRITCAL for people and organizations to understand that robust, integrated planning, procurement, and project delivery, so necessary for facilities management is not a project centric approach.  Measurable improvement requires a fundamental change in thinking and interacting with others daily. LEADERS must ENABLE people doing the work to leverage their expertise to contribute to problem solving and continuously improve daily activities and processes.

A robust facilities sustainment solution is critical to any real property owner.

#1. A current real property inventory of all critical facilities systems – Foundations, Floors, Exterior Walls, Exterior Windows, Exterior Doors, Roof Coverings, Interior Construction, Casework, Doors, Partitions, Interior Windows, Stairs, Wall Finishes, Floor Finishes, Ceilings, Elevators/Lifts/Conveying Systems, Plumbing, Domestic Water Equipment, Sanitary Waste, Specialty Piping Systems, Gas Monitors, Flow Monitors, Liquid Oxygen Source, Evacuation Systems, Compressors, Compressed Air Systems, Plumbing Fixtures, Surgical Vacuum Systems, Dust Evacuation Systems, Energy Supply Systems, HVAC, Terminal and Package, Solar Energy Systems, Generators, Steam Distribution Systems, Cooling Systems, Distribution Systems, Energy Supply Systems, Heating Systems, Controls and Instrumentation, Fire Suppression Systems, Fire Detection and Alarm Systems, Standpipes, Electrical Service and Distribution, Lighting, Communications and Security Systems, Institutional Equipment, Landscaping and Sitework…. to name a few.

#2. Implement a robust physical asset facilities maintenance process integrating scheduled, unscheduled repairs, and preventive maintenance tasks.

#3. Validate costs and operations using a current, locally researched line-item maintenance and repair cost database for all tasks and associated frequencies.

#4. Build and support collaborative internal and external planning, procurement, and project delivery terms.

#5. Monitor and continuously improve.

For All things JOC – Job Order Contracting click here….

Structuring a best value JOC Program requires far more than getting a certification, buying software, or hiring a ‘JOC consultant”.  

Few JOC Programs, especially within non-DOD Federal applications, are structured to provide BEST VALUE to Owners and Design-Builders.  They have been set up to simply procure construction/maintenance services faster, and in manner cases without traditional or proper oversight.  The net result, as shown by several independent third-party audits, has been problematic, including such poor outcomes as excessive costs, lack of cost transparency, and even fraud.

The benefits of a LEAN JOC Program are significant; however, owners must provide LEADERSHIP, COMMITMENT, and COMPETENCY.

Click here, or contact us, to begin to learn…

1.  What is a LEAN JOC Program
2.  How measure success (From Owner and Design-builder perspectives)
3.  How to integrate internal and external planning, procurement, and project delivery teams
4.  How to create an RFP for JOC software and support services (JOC Vendors)
5.  How to create an RFP for JOC contractors
6.  How to evaluate JOC vendors
7.  How to evaluate JOC contractors
8.  When to set up a JOC Program
9.  How to evaluate if a project is suitable for JOC
10.  The importance of locally researched cost data versus using factors or economic indexes
11.  How to evaluate a JOC Unit Price Book (UPB)
12.  How to line-time estimate
13.  How to evaluate contractor proposals
14.  How to create an independent government estimate (IGE) in JOC
15.  How to compare an IGE to a Contractor estimate
16.  How to “negotiate” with a Contractor
17.  When to use a JOC Cooperative
18.  JOC quantitative metrics / key performance indicators (KPIs)
19.  JOC Lessons learned
20.  ….

A Relationship-based Approach to Sustainable Facilities Management is needed to meet current and emerging economic and environmental requirements.

Traditional methods for planning, procuring, and delivery repair, renovation, maintenance, and new construction are incapable of consistently delivery of quality outcomes on time and on time.

Internal and external planning, procurement, and project delivery teams need to be integrated on an early and ongoing basis with a robust programmatic framework.  Existing tools and support services to mitigate waste/rework and enable consistent quality outcomes on time and on budget are readily available.

Contractual collaboration commitment from all parties

Realistic, valid cost and technical requirement planning

Initial and ongoing training

Quantitative metrics

Empowerment of those doing the work

How can you integrate internal and external teams?