JOC Consultants
Hiring JOC Consultants to basically outsource Job Order Contract Program management and providing payment to the JOC Consultant as a percentage of total construction volume is JUST PLAIN WRONG.
Here are the reasons why….
- Higher potential for conflict of interest and fraud. The JOC consultant is being paid based upon construction volume, thus the more money spent, the more money the JOC contractor makes. There is little, if any reason for the JOC consultant to save money/reduce costs. Secondly, if the JOC consultant has ANY impact upon approving JOC project the conflict of interest is clearly problematic.
- Lack of Owner involvement & leadership. A key benefit of JOC is early and ongoing collaboration and transparency information sharing between the real property owner technical and procurement teams and the awarded JOC construction contractor. The relationship and dynamic is key to a win-win relationship that enables over 90% of JOC project to be delivered on-time, on-budget, and to everyone’s satisfaction. This fundamental benefit of JOC can easily be lost if a JOC consultant is placed in the middle.
- Higher JOC Program Costs. Another major benefit of JOC is high productivity and more dollars spent on beneficial, best value renovation, repair, and construction projects versus on procurement costs and waste. With JOC consultant fees ranging from approximately 2.5% to 8.0% of construction volume, some owners literally are paying hundreds of thousands of dollars and millions of dollars in consulting fees. This just doesn’t make sense. Any competent owner could easily pay for their own staff and run a more efficient program internally at these levels and attained a significantly higher return on investment (ROI).
So who would hire a JOC consultant per the above and why?
In general County and State government engage in this practice. They do so for a variety of reasons.
First, County and State governments are generally not as savvy as other sectors with respect to facility management best practices. In terms of FM expertise, the DOD sector is recognized by many as a leading source of competence and best practices, followed by higher education.
Second, some public agencies are simply using JOC as a method to speed procurement by bypassing traditional procurement practices. In fact, multiple independent audits have noted both of these concerns, and virtually all involved County and State Government agencies.
Job Order Contracting can provide significant benefits and cost saving, IF designed, implemented, and managed properly. Outsourcing Job Order Contracting, just like outsourcing facilities management, however, is likely not a viable long term practice. Facilities are NOT commodities. Facilities and other forms of physical infrastructure are generally critical to the mission of organizations. We should all manage them properly.
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