Job Order Contracting Training Note – JOC Coefficient
A JOC coefficient is a factor, typically ranging from 0.80 to 1.20, that is applied to the TOTAL of a detailed line estimate for a JOC Project/Job Order, as created from the approved and current JOC Unit Price Book (UPB).
The items to be considered when a contractor creates a JOC coefficient vary according to the specific JOC Program. The following is a list of items that are generally considered when a contractor is developing a JOC coefficient.
- home office overhead;
- insurance, bonds, and indemnification;
- project meetings, training, management and supervision;
- mobilization and close-out for the contract and each Project/Job Order;
- project office staff and equipment;
- profit;
- subcontractor’s overhead and profit;
- all taxes for which a waiver is not available including material sales tax and equipment rental;
- employee or subcontractor’s wage rates; fringe benefits, payroll taxes, worker’s compensation, insurance costs and any other payment mandated by law in connection with labor (typically this SHOULD be already including within the locally researched JOC UPB, and therefore only included if this is not the case);
- cost of financing the work,
- business risks such as the risk of a lower than expected volume of work, smaller than anticipated Job Orders, poor Subcontractor performance:
- inflation…
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