The following is provided for those considering a job order contract solution, or who may wish to improve their current job order contract solution.
A Job Order Contract Solution should…
1. deliver 90% of repair, renovation, and minor new construction projects on-time, on-buget, and to everyone’s satisfaction,
2. treat both owners and contractors equally and support an atmosphere of mutual respect and trust,
3. NOT place an JOC consultant between the owner and the contractor (owner’s MUST provide leadership and be directly involved in all aspects of the JOC Program),
4. Use a locally researched, open, and transparent unit price book,
5. Mandate collaboration and the use of a written Job Order Contract Operations Manual / Job Order Contract Execution Manual,
6. NOT use a separate set of construction technical specifications. The Owners current technical specifications should be used, and if unavailable, then reference a standard set of commercial construction specifications, modified as needed to meet specific owner requirements,
7. NOT include an excessive number of construction cost line items (i.e. hundreds of thousands) if not required. Unduly large UPBs create confusion and can lower productivity.
Here’s what can happen if Real Property Owners don’t provide direct leadership and/or do not adhere to LEAN best management job order contract principles…
Audit Findings and Conclusions
“The Department is unlikely to attain between $2 million and $3.7 million in cost savings from the JOC program because the program is not being administered as effectively as it should be.
“Specifically, we found that job orders are not developed in a timely manner, cost estimates are not reliable indicators of the actual cost of work, and construction work is not carried out in a timely manner. Moreover, there is a lack of guidelines that spell out the circumstances and monetary threshold for job order work and a lack of standards for measuring whether the JOC program is, in fact, achieving anticipated cost savings.
Furthermore, when job order work was delayed, the Department did not impose liquidated damages totaling more than $450,000.
Additionally, problems with the Department’s (SOFTWARE) database impede the Department’s ability to effectively monitor the status of JOC project work and ensure that projects are proceeding expeditiously.
Audit Recommendations
This report makes a total of 12 recommendations, including that the Department:
- Formulate measurement criteria to assess whether the JOC program is attaining its goal of achieving savings in overall project costs.
- Complete development and submit job orders for registration within the required 45-day timeframe.
- Provide independent estimates for job order work.
- Ensure that JOC contractors complete work on schedule.
- Develop and implement written guidelines that stipulate the circumstances and monetary threshold under which the use of job order contracts would be appropriate.
- Ensure that all job orders contain provisions for liquidated damages. Determine whether liquidated damages should be assessed for the cases noted in this report.
- Ensure that accurate and complete information is recorded in the (JOC software) system. “
– Source for above information within quotations – State audit of a Job Order Contract Download full report
