Frequently Asked Questions about Vizient Job Order Contracting
What is Vizient Job Order Contracting?
Vizient Job Order Contracting is a construction project delivery solution designed to reduce the time and expense associated with construction work. Job Order Contracting (JOC) establishes local, competitively-awarded prices upfront and eliminates the need to bid each project separately. JOC utilizes local Vizient awarded contractors who have agreed to adhere to the program requirements and methodology to submit proposals when requested. Vizient Job Order Contracting also provides the data, software and capabilities of Gordian, the pioneer of Job Order Contracting.
What is the relationship between Vizient and Gordian?
Gordian entered into an exclusive joint-venture agreement with Vizient to provide services to members using Vizient contracts with local JOC contractors to initiate and manage the construction procurement process.
What is Job Order Contracting?
Job Order Contracting (JOC) is a unique, indefinite delivery, indefinite quantity (IDIQ) delivery method 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, JOC establishes competitively-bid fixed 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.
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 Gordian job order contracts are active and account for more than $2 billion in construction annually.
Why should I use Job Order Contracting?
Job Order Contracting provides a variety of benefits for project stakeholders, such as:
Time Savings: Traditional construction procurement cycles typically takes months to complete and require a significant amount of administrative and technical resources. JOC is a competitively awarded, fixed price procurement process. 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. Project delivery takes weeks instead of months. A 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.*
Cost Control and Savings: That same study found 91 percent of Job Order Contracting projects were delivered on budget. Additionally, facility owners estimated a 24 percent savings in administrative costs, while contractors estimated a 21 percent overall cost savings.*
Due to the elimination of the bidding process for all JOC projects during the life of the program, owners realize FTE savings. The cost of procuring the projects is lower because the owner does not have to repeat the entire procurement cycle for each project. Preset unit prices in Gordian’s Construction Task Catalog® (CTC), which prices more than 275,000 construction work tasks, ensures cost certainty. Each construction 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 construction task and general conditions that contain the contract language concerning the execution of the contract.
The awarded JOC 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. If any changes are needed throughout the project, they are priced directly from the Construction Task Catalog, virtually eliminating defaults, terminations and claims
Higher Quality of Work: While a single contract is in place for multiple projects, the contractor still must satisfy the facility 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. This also provides more transparency, contractor accountability and collaboration. 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. JOC also increases MWBE utilization (preferred contractor selection).
What about price fluctuations from year to year?
Adjustment factors are modified on the anniversary date of the contract award, based on the Construction Cost Index (CCI) and the Engineering News-Record. The average CCI for the current year is divided by the average CCI for the base year and equals the increase or decrease in the construction costs. The percentage is multiplied by the original adjustment factor and thus equals the adjustment factor for the next 12 months. These contractors are ready to begin work immediately at a predetermined, firm price. Job Order Contracting will save time and money, allowing owners to complete more projects.
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* 2015 Job Order Contracting Performance Study by the Performance Based Studies Research Group at Arizona State University
