Transitioning managed JOC Programs

Transitioning managed JOC Programs (e.g. Gordian) to an “Open JOC” model (like 4BT) invovles shifting from a volume-based “percentage fee” consultant model to an owner-managed program supported by transparent data and software. 

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Transitioning managed JOC Programs involves a multifaceted approach that requires careful planning and execution. In this section, we will explore the various strategies that organizations can employ to ensure a smooth transition. Examples of successful transitions will also be discussed, highlighting key factors that contributed to their success.

Understanding the transition strategy is crucial for organizations aiming to optimize their project delivery through managed JOC Programs. This strategy must include a well-defined roadmap that outlines the steps and best practices necessary for a successful implementation. By examining case studies of organizations that have effectively transitioned, we can gain valuable insights into the common pitfalls and effective solutions.

1. 1. Contract Audit and Termination: Review your current Gordian agreement for termination-for-convenience clauses. Note that if you are using Gordian’s proprietary Construction Task Catalog (CTC), you may not be able to use that data for all prior purposes once the contract ends.

Contract audits are not merely a formality; they can reveal hidden costs and inefficiencies within existing contracts. For instance, a thorough review may uncover outdated clauses that no longer serve the organization’s interests, thus providing grounds for renegotiation or termination. Organizations should document these findings to inform future contract strategies.

1. 1. Establish an Independent Unit Price Book (UPB): Move away from construction task catalogs to a locally researched UPB. 4BT OpenCOST provides objective, verifiable, local labor, material, and equipment rates that do not rely on national averages or location factors.  Data is organized by expanded CSI Masterformat.

Establishing an Independent Unit Price Book (UPB) can significantly improve cost management in JOC Programs. This UPB should be tailored to reflect local market conditions, which can vary widely even within short geographical distances. For example, a construction project in an urban area may require different pricing structures than one in a rural setting due to labor availability and material costs.

1. 1. Adopt a SaaS/Flat-Fee Software Model: Select a JOC management platform that charges a flat annual fee or SaaS subscription rather than a percentage of construction volume. This decouples the provider’s revenue from your project costs, eliminating the incentive for “scope creep.”

The adoption of a SaaS/Flat-Fee Software Model can also play a pivotal role in managing project costs effectively. This model allows organizations to predict their software expenses accurately, removing the uncertainty associated with fluctuating project volumes. By avoiding percentage-based fees, organizations can allocate more resources to essential areas such as quality control and project management.

1. 1. Update Procurement Documents: Your new RFP must define the new UPB and software requirements. Ensure it specifies that contractors will bid Adjustment Factors against the new, locally-researched price guide.

Updating procurement documents is a vital step that sets the stage for successful bidding. These documents should clearly articulate the expectations and requirements based on the new UPB. For instance, specifying that contractors will bid against the local price guide will create a level playing field and promote competitive pricing.

1. 1. Internal Capacity Building: Since you will be moving from a managed service to an owner-led model, focus on training your facilities and procurement staff on JOC best practices, such as validating that line items match the scope of work. Department of Enterprise Services (DES) 

Internal capacity building cannot be overlooked during this transition. Training programs should focus on developing the skills necessary for staff to manage JOC contracts effectively. This includes understanding pricing strategies, project management principles, and best practices for contractor evaluation.

As organizations transition to 4BT, they must also consider how this change affects their strategic goals. Aligning the transition process with the organization’s long-term vision can help ensure that all team members are working towards a common objective, which contributes to smoother implementation.

When analyzing why organizations choose to transition to 4BT, it’s essential to consider the long-term benefits that can arise from this shift. Beyond immediate cost savings, organizations often find that their overall project delivery timelines improve significantly, leading to enhanced satisfaction among stakeholders.

• • Cost Savings: Avoiding Gordian’s 2%–5%+ administrative fee on every project can save hundreds of thousands of dollars in large programs.

Cost savings extend beyond mere administrative fees. By analyzing project expenditures holistically, organizations can identify areas where operational efficiencies can be realized. For instance, re-evaluating supplier contracts and renegotiating terms can lead to substantial discounts.

• • Data Accuracy: Replacing location-factored data with locally researched market rates reduces the error rate associated with national average databases and associated location factoring (e.g. RSMeans, BNI…)

Data accuracy is paramount in any construction project. By using local market rates, organizations can minimize discrepancies that often arise from national averages. This accuracy not only helps in budgeting but also ensures that stakeholder expectations are managed effectively.

• Auditability: Standardized, cloud-based workflows ensure every job order is fully documented, reducing the risks of fraud highlighted in independent audits of legacy programs. 
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  In conclusion, transitioning managed JOC Programs is a comprehensive process that requires careful planning, execution, and ongoing assessment. Organizations that take the time to understand the implications of these changes and invest in training and development will be better positioned to reap the benefits of improved project delivery and cost efficiency.

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