Frequently Asked Questions about Job Order Contracting (JOC)

Frequently Asked Questions about Job Order Contracting (JOC)

What is Job Order Contracting?

Job Order Contracting is a unique, indefinite delivery, indefinite quantity (IDIQ) procurement process that helps facility and infrastructure owners complete a large number of repair, maintenance, renovation and straightforward new construction projects with a single, competitively awarded contract. Unlike traditional bidding where each project is identified, designed and then put out to bid, Job Order Contracting establishes competitively-bid prices up front and eliminates the need to separately bid each project. It is an easy and expedited construction sourcing option to keep in your procurement toolbox.

Job Order Contracting is sometimes referred to as JOC, SABER, TOC, WOC and DOC. Learn more in the Job Order Contracting 101 video series.

How long has Job Order Contracting been around?

Job Order Contracting was created in 1981 by Gordian’s founder, Harry H. Mellon, to tackle the demanding requirements, tight timeframes and stringent competitive bidding requirements at U.S. Army facilities in Europe. The purpose of Job Order Contracting was to simplify the process of completing routine, straightforward repair, renovation and alteration projects. Today, thousands of job order contracts are active and account for more than $2 billion in construction annually.

How does Job Order Contracting help ensure a higher quality of work?

While a single contract is in place for multiple projects, the contractor still must satisfy the owner’s standards of quality, timely construction to ensure future work. The owner is not obligated to give the contractor more projects. This motivates the contractor to meet and exceed expectations with quality, on-time work. A recent study found 96 percent of Job Order Contracting projects were rated satisfactory by respondents, while almost all (99 percent) owner participants said they would recommend Job Order Contracting to other owners. These high satisfaction marks derive from the time and cost saving benefits found with the Job Order Contracting process, as well as greater transparency, flexibility and efficiency compared to other procurement methods. Owners were 60 percent more satisfied with the Job Order Contracting process compared to Design-Bid-Build or Design-Build.*

How does Job Order Contracting save money?

Budgetary control and cost savings is a cornerstone of Gordian’s Job Order Contracting solutions. That same study found 91 percent of Job Order Contracting projects were delivered on budget. Additionally, owners estimated a 24 percent savings in administrative costs, while contractors estimated a 21 percent overall cost savings.*

The cost of procuring the projects is less because the owner does not have to repeat the entire procurement cycle for each project. The cost of construction is firm by the preset Unit Prices in Gordian’s Construction Task Catalog® (CTC), which prices more than 275,000 construction work tasks. Each Task includes a detailed description, unit of measurement, unit price and, where applicable, demolition cost. The Unit Prices contain locally-developed direct costs for material and labor. There are a set of technical specifications for each of the construction Tasks and general conditions that contain the contract language concerning the execution of the contract.

The awarded contractor has competitively bid an adjustment factor to the pre-established Unit Prices, so the owner is assured a competitive price for each element of a project’s Scope of Work. Because contractors are bidding on a series of projects instead of a single project, they may offer a volume discount.

How are change orders handled?

The Job Order Contracting process naturally reduces change orders because all project stakeholders (owner, contractor and Gordian representative) participate in a Joint Scope Meeting. This upfront, open communication eliminates the misunderstandings and mistakes that lead to most change orders. The owner has the right to change the Scope of Work at any time during the project. If changes are needed, they are priced directly from the Construction Task Catalog.

How does Job Order Contracting save time?

Traditional procurement cycles typically take months to complete and require a significant amount of administrative and technical resources. Once a job order contract is awarded, the owner can ask the contractor to perform a series of projects. There is no need to prepare, copy, advertise and distribute bid packages for each project. The time-consuming front-end process is completed one time, rather than repeated for each project. The procurement process takes weeks instead of months. The recent study revealed that 94 percent of Job Order Contracting projects are delivered on time, compared to only 63 percent for Design-Bid-Build and 73 percent of Design-Build.*

How does JOC help meet my organization’s diversity/participation requirements?

The Job Order Contracting construction procurement method has a history of attaining and exceeding participation goals. Local, minority/women and residency initiatives can be handled on a project by project or program-wide basis. The owner has the right to approve all subcontractors prior to issuance of the purchase order. Any specific conditions of the project, such as bonding or special insurance, is specified to the purchase order and provided to the owner. Most of these considerations will be handled up front in the initial customized bid documentation.

Contact us to discover how Job Order Contracting can benefit your organization.