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Challenge Accepted: How to Win With Job Order Contracting

By Gordian

Battling budgets, ticking timelines and expanding to-do lists—sounds like you’re on American Ninja Warrior: Construction Procurement Edition. You’re expected to cross the thin budget line and dodge the unforeseen conditions all in record time to complete essential construction projects. Healthy relationships and partnerships are key driving forces in achieving project success, but traditional construction procurement models can make it feel like you’re a lone warrior. Gordian’s Job Order Contracting (JOC) solution helps to alleviate procurement challenges and allows you to build and maintain crucial facilities and infrastructure with less hassle.

Conquering the Clock

Meeting and maintaining timelines can be a source of pain for facilities managers. Construction, renovation and repair projects take a lot of time and everyone seems to need their projects completed yesterday. Wes Everett is the Director of Facilities for the City of Lubbock in Texas. Although his department is small, they assist a lot of other departments with the ultimate goal of providing the best service to the citizens of Lubbock. It’s very important for his facilities team to have the flexibility to react quickly to the city’s needs and deliver on high-priority projects in a timely manner.

Wes states, “We need to be able to get to projects quickly and react quickly and find forms of procurement—JOC is one of the best ones for us⁠—to be able to be accountable, be auditable and better control the quality of the project.”

The time savings is not only beneficial for the facilities manager or owner. Paul Hedin, President of general contracting firm Lobar Properties, has also experienced the benefits of JOC. “The time savings when using the JOC program is amazing. The project has already been competitively bid so you’re jumping right in on the Scope of Work of the exact project. Within two weeks, you can have the Price Proposal and the Job Order out.”

Because JOC is an Indefinite Delivery Indefinite Quantity (IDIQ) contract, it allows multiple projects to be completed through a single contract. This not only enables projects to start faster, it also encourages project owners and awarded contractors to become long-term partners, resulting in higher quality work and a better experience.

Battling Budgets

Sticking to a budget is a challenge that can be especially difficult during construction projects. Scope creep is common, as field personnel often want to maximize the opportunity to have a contractor on site to accomplish tasks that aren’t necessarily intended to be part of the project. That’s why Senior Account Manager at Gordian, Craig Wolford, says “It’s important for us as construction consultants to establish that the customer’s project manager has decision-making responsibility.”

Due to the tremendous flexibility of Job Order Contracting, Gordian account managers can work with customers and contractors to define a Detailed Scope of Work (SOW) that provides the best value to the customer. Low-bid scenarios do not offer the opportunity for customers to benefit from SOW adjustments for value engineering or life cycle costing⁠—which could significantly alter the budget. In addition, JOC allows for discussions around nuances in material costs and availability at the Joint Scope Meeting, allowing time for budget considerations.

Budgets are also affected by unforeseen conditions—rotted wood, leaking pipes, asbestos and mold are all examples of conditions that require additional work that isn’t known at the onset of the project. In a low-bid scenario, changes due to unforeseen conditions are priced using an arbitrary change order. With the demand for the work high and the project clock ticking, it can be difficult to determine if the change order price is appropriate for the additional work.

Job Order Contracting helps to control costs and reduce project delays by establishing Unit Prices up front. Each Unit Price is calculated using localized labor, material and equipment costs, meaning no more hidden charges and surprise costs. Contractors bid an Adjustment Factor to the catalog of Tasks with preset Unit Prices, called the Construction Task Catalog® (CTC). Once a contract is awarded, the contractor can perform a variety of projects, always using the preset prices in the CTC. This provides a transparent, verifiable cost for unforeseen conditions.

High-Quality Results

Getting construction projects completed on time and on budget is a significant challenge. To complete the challenge and build a stellar reputation, contractors must ensure high-quality work is being done and shortcuts are avoided.

Paul Hedin states, “One of the main concepts of JOC is that our next project is dependent on how well we do on our current project… The best thing about the JOC program is that we’re all working as a team up front. That communication is determining the Detailed Scope of Work and project details.” This level of communication and collaboration between project owner, contractor and Gordian account manager provides time- and cost-saving value as the project progresses.

From the users’ standpoint, Wes strongly agrees that the relationship between all parties in the JOC program ensures the best outcome at project completion. In addition, he points out that JOC’s auditable and transparent format allows for third parties to quickly review contracts.

Meeting Diversity and Inclusion Goals

The collaboration offered in the JOC process also promotes a diverse and inclusive culture, which is important for many organizations across the nation. Diversity goals and requirements are set for many public entities. Gordian Account Manager, John Castillo says, “When we talk about diversity and inclusion, it’s about coming together as a team and making decisions as a group to move forward and end up with a satisfactory result for each party and every project.”

How to Win With Job Order Contracting

Shrinking budgets and growing to-do lists are common obstacles in the construction world. It’s no simple feat to get essential projects completed when battling budgets and timelines and meeting transparency and inclusion goals—but Job Order Contracting can help.

Watch this on demand webinar “The One Where Everyone Wins: A Mutually Beneficial Contracting Method” for more of this panel discussion on how JOC overcomes traditional construction procurement challenges for tremendous results.

You can also discover more about the power of Job Order Contracting to ensure quality work and control project costs in this new eBook.

About Gordian

Gordian is the leading provider of Building Intelligence™ Solutions, delivering unrivaled insights, robust technology and expert services to fuel customers’ success through all phases of the building lifecycle. Gordian created Job Order Contracting (JOC) and the industry-standard RSMeans Data. We empower organizations to optimize capital investments, improve project performance and minimize long-term operating expenses.

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