Job Order Contract Cooperatives serve a purpose, however, it’s important to know WHEN and HOW they should be used.
JOC Cooperatives enable organizations to speed the procurement of renovation, repair, maintenance, and new construction services (based upon applicable statutes) using a “Master Agreement” and within the basic structure/process of an “owner managed” JOC Program. The diagram below represents a process workflow within which a member organization (school, hospital, DPW, college, courthouse, city…) requests a proposal from an approved JOC contractor and then makes an award decision.
A few things organizations should know when considering or evaluating a JOC Cooperative…
#1. A JOC Cooperative is best used when the annual total “construction value” is anticipated to be less than $2-3M for all associated projects/workorders. If the annual total construction volume exceeds this level, and owned-management JOC Program is likely the most efficient method.
#2. Beware of the costs associated with using a JOC Cooperative. There also may be “hidden fees” being charged to the awarded JOC Contractors that nonetheless end up being owner costs. In most cases, if the total cost of the participating in the JOC Cooperative exceeds 2% of the total project value, the cost is too high and alternatives should be researched.
#3. Ensure that object, current, granular local market construction cost data is being used by the JOC Cooperative. Outdated cost information, or national average cost data and the use of local or economic factoring generally will not provide adequate cost visibility.
#4. JOC Cooperative policies and procedures are critical. Does the JOC Cooperative Program REQUIRE that a compliance audit be done for EVERY contractor estimate prior to award by an owner? Is there an optional service available to have a fully independent line item audit of a contractor estimate including quantities and line item content?
#5. Is the JOC Cooperative run buy a “for profit” enterprise or a government entity? For example, The Allied States Cooperative / ESC-19 is a national governmental purchasing cooperative which competitively bids and awards contracts to local, regional, and national vendors in compliance with local, state, and federal procurement laws and regulations. Contracts are available to public schools, charter schools, private schools, community colleges, universities, cities, counties, other governmental agencies, and non-profits. No fees are charged to the Allied States Cooperative members. As a member, your entity deals directly with the vendor who can provide the goods and/or services you may require. The savings for members are realized through dealing with vendors who have been evaluated and verified to provide a quality product or service at a competitively bid price in compliance with bidding requirements.