The following is intended to introduce the basics of job order contracting (JOC).
What is Job Order Contracting?
Job Order Contracting (JOC) is a LEAN, integrated, construction project delivery method. It is competitively bid, firm fixed price and involves an indefinite delivery indefinite quantity (IDIQ) and best value procurement process contract for a specified time. Most JOC Programs have a one year term, with up to four option years. Awarded JOC contractors bid individual JOC projects using a JOC unit price book (UPB). Minimum and maximum values are established for each project as well as each program term. The location, scope, and duration of each individual JOC project is determined under the guidelines of the JOC Program and its association JOC Operations Manual and/or JOC Execution Guide.
Why do owners and contractors use Job Order Contracting?
Job Order Contracting is perfect for owners that need to efficiently and effectively address the numerous, diverse, and ongoing renovation, repair, and minor new construction projects associated with their real property portfolios.
The main advantage of JOC is the availability of on-demand construction services that are delivered on-time, on-budget, and satisfactorily 90%+ of the time. In addition, overall project delivery times and procurement times are significantly reduced.
From a JOC contractor perspective, benefits include longer term, positive, mutually beneficial relationships with owners and more predictable revenue streams.
How and when do you use JOC?
JOC leverages a predefined, consistent, and proven workflow, early and ongoing information sharing, and a unit price book. The unit price book provides predefined tasks in the form of unit price line items. Each line item includes a description, a standardized data architecture (CSI Masterformat), unit of measure, and detailed pricing, inclusive of labor, material, and equipment as appropriate.
Sample Workflow for a JOC Project
JOC can be used for any situation where the contracting process needs to be streamlined and service delivery optimized. JOC is most appropriate for common, repetitive projects, ranging in size from $50,000+ to $2M+.
Owners can take advantage of a JOC via a Cooperative if they are learning about JOC, or have annual renovation, repair construction volumes of less than $2M/$3M in total yearly expenditures. If annual JOC expenditures exceed this level, the owner is best served by developing and managing their own internal JOC Program.
