Comparing Construction Procurement Methods: JOC and VOR

Before commencing the planning process for any construction project, evaluating the various types of construction procurement methods available to your organization is an absolute must. Each offering their own merits, selecting the right procurement method ultimately boils down to the needs and preferences of your company.

Two highly effective construction procurement methods available to industries in Ontario are Job Order Contracting (JOC) and Vendor of Record (VOR). Learn more about the differences between JOC and VOR, as well as how to choose the method that best suits your organization’s unique needs.

What is Job Order Contracting (JOC)?

Developed in 1982 by Gordian founder Harry H. Mellon, Job Order Contracting is a procurement process that enables owners of facilities and infrastructures to accomplish numerous maintenance, repair, renovation and simple new construction projects with one contract. JOC is an indefinite delivery, indefinite quantity (IDIQ) contract obtained through competitive bidding, with verified, independently priced rates set in advance. This process removes the need for organizations to send out individual bids for every operational project, saving significant time and resources. It also eliminates ambiguity in terms of construction costs, making budgetary control significantly easier.

Job Order Contracting is a legal construction procurement method in Canada and has been used in the country since 2009. For those concerned with whether JOC satisfies the competitive bidding process, federal and provincial legislations either endorse or do not comment on alternative procurement strategies and the legal status of group purchasing organizations.

What is Vendor of Record (VOR)?

Utilized throughout Ontario, a Vendor of Record (VOR) arrangement provides a roster of pre-qualified vendors from which buyers can choose. These lists are established by public sector owners through a procurement procedure that adheres to the guidelines of the government procurement directive. It enables one or multiple pre-approved vendors to provide certain products or services to purchasers.

Unlike JOC, VOR contracts are typically established on a per project basis and typically cannot be used for multiple jobs. Construction cost estimates are competitively priced, as vendors must compete during the pre-qualification period before being added to the list of approved providers.

Learn more about the various construction procurement methods that are available to organizations.

Advantages of JOC for Construction Procurement

Job Order Contracting is trusted by public and private organizations across a wide range of industries. Below is a list of some of the benefits of using this procurement method:

• Superior cost control: JOC makes cost management easy thanks to pricing transparency. All Price Proposals are built using a Unit Price Book that sets verified, pre-determined costs for construction activities. This allows for more precise cost prediction and budget management throughout the project’s duration.
• Streamlined administrative process and quick timelines: This method streamlines and accelerates the construction process, enabling work to begin and finish sooner. A study conducted by NIGP and Gordian found that construction project delivery with JOC happens three weeks faster than it does with traditional project delivery methods like Design-Bid and Design-Bid-Build.
• Deliver multiple projects with one contract: Instead of having to establish separate contracts for each project needing completion (as with traditional procurement methods), JOC offers owners the flexibility to ask vendors to complete multiple projects under the same contract.
• Potential for long-term vendor relationships: Thanks to the quality of the work provided, many companies have gone on to establish long-term relationships with JOC vendors. NIGP and Gordian confirmed this in their research.

Advantages of VOR for Construction Procurement

Vendor of Record arrangements also provide unique advantages for those who select this delivery method:

• Ease of finding reliable vendors: Rather than having to use internal resources to find and vet local contractors, owners can save time by selecting vendors from a list of pre-approved providers.
• Competitive pricing: As part of the pre-qualification process, vendors bid with competitive prices, which ultimately benefits customers who work with these providers in the future.
• Encouragement of innovation and improved service: Due to the competitive nature of VOR, where owners can work with multiple vendors, each provider must strive to deliver top-tier services. This spirit of constant improvement helps foster innovation and enhanced offerings.

Explore the benefits of Job Order Contracting as a construction procurement method for your organization’s upcoming projects.

JOC Versus VOR: What Construction Procurement Method is Right for Your Organization?

In general, the decision between Vendor of Record (VOR) and Job Order Contracting (JOC) hinges on the requirements and priorities of your organization. Both offer their own advantages, so selecting between the two should be based on your organization’s unique needs and preferences. VOR offers a simplified vendor selection process for each project, whereas JOC provides superior cost management, accelerated timelines and the ease of completing multiple projects under a single contract. When chosen properly for the circumstances and goals of the procurement procedure, the results can be successful for both delivery methods.