Gordian, as a pioneer in Job Order Contracting (JOC), has implemented and supported hundreds of programs across the country, serving thousands of owners. Every JOC program is unique in its own way, but all successful programs follow a few best practices that maximize the output of the procurement office, support the efforts of the facilities team and enhance the user experience.
Job Order Contracting (JOC) is an Indefinite Delivery/Indefinite Quantity (IDIQ) construction project delivery method that can help project owners reduce the time to construction and supplement their in-house staff. Instead of preparing bid documents and enduring the time-consuming process of putting every individual construction project out to bid, JOC empowers owners to complete many projects with one competitively-awarded contract that satisfies local procurement statutes. Perhaps best of all, JOC establishes prices for construction Tasks up front, ensuring owners maintain budget control.
At the heart of every JOC program is a Unit Price Book, the document that will be used as the basis to competitively award JOC contracts and price every Job Order once the contract is in place. The quality of the Unit Price Book will make or break a JOC project. A comprehensive and accurate Unit Price Book allows the parties to focus on completing projects instead of negotiating prices. Conversely, generalized or generic Task descriptions, inaccurate pricing and missing Tasks can put a strain on the owner-contractor relationship if the parties need to negotiate details instead of collaborating in pursuit of the same goal: a successful construction project.
All Task descriptions should be specific and accurate, so projects are done exactly to the owner’s liking. The Task description should contain specifics about the material, such as size or thickness, and use the recognized industry-standard terminology; gypsum board instead of drywall, for instance. For other materials, the Task description should reference the salient features of the product and reference industry standards or a manufacturer’s serial number or model number.
It is a best practice to use only local labor, material and equipment costs in a Unit Price Book for a Job Order Contracting program. Doing so will result in more accurate Unit Prices, instill confidence in bidders and result in more competitive pricing. Unit Price Books that feature national average pricing and adjust to the local market by applying an area cost index will not result in accurate Unit Prices for all Tasks.
When Unit Prices are not calculated using local costs, some Unit Prices will be too high, and some will be too low. To avoid losing money on the lower-priced Tasks, contractors may bid a higher coefficient or Adjustment Factor. An accurate Unit Price Book, based on local costs, makes for more competitive Price Proposals.
Getting high-performing contractors to bid on JOC contracts is essential to the success of a program. In addition to the required contract advertisement, Gordian recommends that owners notify high-performing contractors about the contract if local procurement laws allow for such notification. To be clear, the details of the contract cannot be discussed with individual contractors. However; alerting them to the advertisement will deepen the pool of potential, qualified bidders, even those with no JOC experience.
Bear in mind that many contractors have never participated in a JOC program, and their unfamiliarity may cause them to hesitate to bid. A detailed explanation of the JOC process and the benefits of your Job Order Contracting program may convince a contractor, experienced in construction but unfamiliar with JOC, to participate.
Gordian considers it a best practice to conduct a comprehensive and informative pre-bid conference for your local contracting community. This conference is an excellent opportunity to explain the contract and the JOC process and to encourage new contractors to submit a bid. Be sure to discuss key contract terms and the steps of developing a Job Order, and leave plenty of time for questions.
It’s common to have many JOC projects going at one time. That’s why it is considered a best practice to administer your contracts via a comprehensive program management software built specifically for Job Order Contracting. A robust and reliable software application will serve as your program’s command center, centralizing all communications, documents and information to give you greater control over every project.
Building a strong, well-rounded community means creating equitable opportunities for all businesses. To meet that end, many local governments have put in place participation and inclusion goals for its various departments and agencies. Gordian’s secure software provides quality control measures to ensure contract compliance. Our software also tracks your KPIs, you know how your program is performing at all times.
A well-run JOC program needs a formal set of written procedures. The procedures should detail each step in the process, from project selection and initiation to issuing a Job Order. The procedures will likely be different for each program and should, at minimum answer some standard questions.
Training is a key component of any successful JOC program. All parties involved in the process should be trained thoroughly regarding documented program procedures and the use of program management software. The main goal of training is to make sure everyone knows each step in the process.
Gordian recommends testing knowledge and conducting situational reviews to confirm procedures are being followed. Refresher training courses should be provided as needed. It is a best practice to hold regular meetings to discuss issues that may arise or have arisen, and the solutions that will resolve those issues.
Believe it or not, there are best practices for deciding when to use Job Order Contracting. Gordian recommends Job Order Contracting for the following types of construction work:
Once a project is identified for JOC, it should follow a proven, time-tested process for developing the Job Order. Just like with construction itself, cutting corners in the process will yield unsatisfying results.
The purpose of the Joint Scope Meeting is for the owner, contractor and other project stakeholders to meet at the site to see the project conditions, discuss the proposed work, consider Value Engineering options and agree on the work to be performed. Before the Joint Scope Meeting, owners should develop a preliminary Scope of Work and share it with the contractor, along with any documents concerning the site and the proposed work. Giving the contractor enough time to review the information allows them to prepare questions and concerns, and to invite subcontractors if need be. In addition to the contractor, it may be wise for owners to invite the architect, engineer, HazMat representatives — anyone whose input will be valuable.
It is the Detailed Scope of Work that will govern the work the contractor is obligated to perform. The contractor will be paid the Job Order Price for completing the Detailed Scope of Work within the Job Order Completion Time.
The goals for the Detailed Scope of Work are:
The Detailed Scope of Work answers important questions such as:
Sometimes it is helpful to write down the steps the contractor will perform moving through the project sequentially. The Detailed Scope of Work can also be broken down into categories, phases or areas, such as 1st Floor, 2nd Floor, by Room or by phases.
After the Detailed Scope of Work in finalized, the contractor will prepare the Price Proposal. The Price Proposal should include only the Tasks required to complete the Detailed Scope of Work, the accurate quantities for each Task and the correct Adjustment Factors.
The contractor should also provide quantity calculations and explanations for why certain Tasks were selected. When the Price Proposal is complete, the contractor submits it to the owner for review.
Reviewing Price Proposal is a key step in the Job Order development process. Accurate Price Proposals ensure the owner is paying the competitively-bid price for the correct Tasks, quantities and Adjustment Factors.
Once the Price Proposal is approved, the owner issues the Job Order. The contractor can then schedule and proceed with the work in accordance with the owner’s standard process.
Before implementing a Job Order Contracting program, an owner should have a clear picture of what success looks like. Measuring that success means establishing key performance indicators (KPIs) to keep your JOC program healthy and help prove program effectiveness. KPIs can be created for the program, for individual projects and even for contractors.
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