Job Order Contracting Best Practices: Contractor Relationships

Job Order Contracting Best Practices: Contractor Relationships

The Owner/Contractor Relationship

The structure of a Gordian Job Order Contracting (JOC) program creates a special relationship between owners and contractors. In a JOC program, contractors bid on a volume of construction tasks with preset prices and know up front that quality work may result in a steady stream of projects. These conditions incentivize contractors to change the dynamics of the typical, transactional JOC owner/contractor relationship. A Gordian JOC program creates an environment where owners and contractors become long-term allies, and that’s a great thing. When the owner/contractor relationship is strong, everyone wins. Contractors get a steady stream of business; owners pay a reasonable price for their projects; users enjoy a facility that meets their needs.

Reaching Out to Potential JOC Contractors

Since contractors play such a vital role in the success of a JOC program, it is important for owners to reach out to them effectively and educate them about the opportunity to bid on the JOC contract. Gordian helps our clients host contractor outreach events to explain the ins-and-outs of their Job Order Contracting programs, discuss the steps of a JOC project, present expectations of contractors and answer any questions they have about the bidding process. Even seasoned contractors might be unfamiliar with Job Order Contracting, so it is important for owners to be as transparent and as detailed as possible when conducting an informational meeting.

Building mutually beneficial contractor relationships is just one aspect of running a best-in-class Job Order Contracting program. For more info about running an efficient and cost-effective program, visit Gordian’s Job Order Contracting Best Practices page.

Awarding JOC Contractors

Ensuring contractors understand how to bid is vital to the success of a Job Order Contracting program. Unlike traditional bid environments, with JOC a contractor competes for a Job Order Contract by applying an adjustment factor (sometimes called a coefficient) or group of adjustment factors to the costs in a unit price book – at Gordian we call our unit price book a Construction Task Catalog©. The adjustment factor could reduce the prices, or it could increase the prices, whatever is the appropriate adjustment for the local market.

The easiest way for a contractor to understand an adjustment factor is to see it in application. Let’s say the cost for a certain construction task is $10,000 and all other factors are equal.

Contractor A: Applies an adjustment factor of 1.1215. That makes the total cost for the task $11,215.

Contractor B: Applies an adjustment factor of 1.1000. That make the total cost for the task $11,000.

In this example, Contractor B is the lowest responsive, responsible bidder. In a typical contracting environment, Contractor B would be awarded the contract. At the end, a project owner has a contractor or a pool of contractors as part of their program.

However; participation in the pool of contractors is no guarantee of work. A Gordian JOC contract is based on performance. A contractor must meet the owner’s expectations in terms of quality work and help them meet their MWBE participation goals if they want to continue being awarded projects. It also helps to be an open, transparent business partner.

Interested in growing your construction contracting business by participating in a Gordian Job Order Contracting program? Visit this page to take the first step.

Mutually Beneficial Contractor Relationships

A Gordian Job Order Contracting program creates a win-win for owners and contractors. Owners receive quality construction work from contractors who know their facilities and have incentives to work as partners. Contractors have the potential for a steady stream of work that could enable them to expand their business. This combination results in communities with better facilities and a thriving construction contracting community.

Interested in starting a Gordian Job Order Contracting program with a custom Construction Task Catalog? Contact to us to get started.

About Gordian

Gordian is the leader in facility and construction cost data, software and services for all phases of the building lifecycle. A pioneer of Job Order Contracting, Gordian’s solutions also include proprietary RSMeans data construction costs and Facility Intelligence Solutions. From planning to design, to procurement, construction and operations, Gordian’s solutions help clients maximize efficiency, optimize cost savings and increase building quality.