Job Order Contracting 2021 is a competitively bid, firm, fixed-price, indefinite quantity contract, and integrated planning, procurement, and project delivery program for as-needed construction services.
It functions like an “as-needed”, “on-demand” repair, renovation, maintenance, and new construction program, and is based upon proven LEAN principles.
Rather than bidding out projects separately, as typically done for public sector construction projects, a Job Order Contracting 2021 allows a public sector organizations to construct a series of projects over time, using a competitively bid contract awarded before the projects are identified.
Job Order Contracting 2021 contract use a locally researched detailed unit price book (UPB) based upon associated commercial construction specifications. The UPB is organized using the CSI MasterFormat data architecture and includes separate line items for demolition as well as line item modifiers (the latter are cost adds or deducts to account for project size or other variables). Labor for each construction task described in a line item is based upon local prevailing wages (or Davis-Bacon Wage Rates as determined by the contract/client), materials, and equipment rates, associated crews, and productivity.
The UPB reflects Contractors bid an adjustment factor (coefficient) that is applied to all construction tasks listed in the UPB. If a UPB is properly created it consists of “bare costs” only (no contractor overhead or profit). Thus, coefficient typically range from 1.10 to 1.20 for normal work hours. Factors for non-normal work hours or other conditions (high security areas, etc.) may also be required. Job Order Contracts should ALWAYS be awarded upon best value, however, and not lowest costs.
Typically, contract terms range from one to five years depending on the client and/or applicable statutes. Individual JOC project may range up to $1M+ and annual contract volume can range into the tens or even hundreds of millions of dollars.
The award of a master Job Order Contact to contractors eliminates the need to go through long traditional procurement processes for each individual projects. RFPs issued by the owner can be responded to within a couple of weeks or less. RFPs are issued by the owner on an as needed basis.
The owner provides a detailed scope of work, enabling the contractor to create a detailed line item proposal. A joint site visit it typically mandatory part of a dedicated JOC workflow.
Post award of individual projects, one or more work orders or tasks orders are issues to execute, manage, and complete the project.
When properly designed, procured, implemented, and managed, JOC is superior to “design-bid-build”, design-build”, and other less collaborative processes. That said, all implementations of JOC are not the same, nor do they all offer optimal benefits. It is important the owners conduct appropriate due diligence. For example, procuring JOC services as a percentage of construction costs is less efficient and opens the door to potential conflicts of interest and even at risk to the “fraud triangle”. Similarly, implementing JOC to simply speed procurement and/or proceed with projects that otherwise may not have been approved is equally problematic and costly.
Therefore, owner should investigate the differences between “traditional JOC” and LEAN JOC. Job Order Contracting leverages lean principles, systems, and process provide the following benefits, where as “traditional JOC” may not. Tools and services are readily available to support LEAN Job Order Contracting.
• Reduce time to construction by shortening the duration for design, bid and award as compared to design-bid-build and most other methods
• Reduce costs by lowering administrative and design costs as well as errors, omissions, change orders, and unverifiable cost estimating
• Significantly increased cost visibility and transparency
• Increases transparency and certainty in pricing
• Higher productivity due to partnership, collaboration, and leverage of local experience and decision-making
• Higher quality and satisfaction levels achieved through performance-based contracting
• Greater opportunities to use local, smaller, and disadvantages contractors
• Faster response times and greater flexibility • More efficient reduction of deferred maintenance
