Integrated Project Delivery – IPD, Job Order Contracting – JOC, BIM, and Efficient Project Delivery


Project delivery methods set the tone and largely dictate the relative success of any facility construction, renovation, repair, or sustainability project.  Project delivery methods must therefore be a component of BIM, a fact many/most 3D visualization software vendors appear to have ignored.

It is the project delivery method that is largely responsible for the fact that productivity within our AEC sector is abysmal compared to any other.

Below is are related article that I hope you find of interest.

Integrated Project Delivery and JOC by Rick Farrag (CJE Newsletter, 2010)

In the last few years, Integrated Project Delivery (IPD) has emerged as an accepted delivery method along with
Design/Build, CM, CM@R and, of course,Job Order Contracting. Recently, several organizations collaborated together and published a white paper titled Integrated Project Delivery for Public and Private Owners. The paper was authored by NASFA, COAA, APPA, the Association of Higher Education Facilities Officers, AGC and AIA, and described the IPD delivery method and explained that it is a collaborative alliance among project stakeholders – owners, designers, contractors and other participants – to optimize the project results.

During the Construction Owners Association
of America Fall Conference last November, I had the opportunity to attend a one-hour breakout session dedicated to IPD. Two case studies were presented on projects executed by the Corps of Engineers.

So what is IPD? Numerous papers and articles have recently been published about IPD detailing this delivery method. In summary, IPD advocates pulling together the owner, contractor, designer, and others to achieve higher project results, which in turn increases the overall value to the owner. It promotes collaboration and partnership; it is about integrating design excellence with a constructor’s expertise during the conceptual stage of a project life cycle. Accordingly, the risk profile and allocation change significantly from other traditionaldelivery methods. It is intended for large-size projects.
IPD and Job Order contracting (JOC) have several things in common (JOC is actually a form of “IPD-lite”, created for renovation, repair, sustainability, and minor new construction projects). Aside from the typical size of IPD projects, one may find several similarities between the two delivery methods.
For example, JOC is also based on close collaboration between all stake holders. Just as partnering is a prelude to IPD, it is the foundation that a successful JOC program is built on. Traditional construction delivery methods typically have an adversarial relationship. JOC, on the other hand, is a longterm contract of three to five years which promotes a close and effective working relationship between contractor, client and subcontractors. A JOC contract is inherently
built on partnering for the long-term relationship to succeed.

Early involvement of the construction manager and the contractor with the owner and the designer in the conceptual phase of the project is another similarity with IPD that brings value to the owners. Joint scope of work development
under the JOC program is a typical feature as the starting point for each project (task order) under the contract. Bringing the JOC contractor together with the owner and the designer, when applicable, provides a higher level of common understanding of the scope of work. This helps to eliminate potential disputes and change orders that traditional construction delivery methods are known to experience.

Another advantage that early involvement brings under a JOC contract is the ability of the contractor to provide input
about the potential cost, constructability, and value engineering that aids the designer in making more efficient and cost-effective decisions.
Common processes are yet another similarity between JOC and IPD. Establishing shared processes that govern the flow of information and communication between all project participants is critical in both delivery methods.
These processes develop an effective and transparent transfer of information in all directions with the goal of creating and building trust. After all, a JOC program is only as successful as the ability of all participants to trust each
other. An effective and successful JOC contractor focuses its efforts onbuilding and maintaining
the trust with his clients and subcontractors. Lastly, risk sharing is another advantage both
delivery methods bring to the owner. As scopes of work are jointly developed, discussed, agreed upon and finalized, a JOC contract is much less likely to have claims, change orders, and disputes than other traditional delivery methods.
Granted, JOC is not intended for multimillion dollar projects; and in most cases is limited to renovation, rehabilitation and minor new construction projects. However, this does not detract from the fact that JOC, if implemented
properly, is a great example of Integrated Project Delivery that has proven to be successful for over 25 years.

Second article:

JOC – The Stimulus Ready Delivery Method
By Robert Gair, RS Means  (CJE Newsletter 2010)

On August 22 CJE Member 4Clicks-Solutions sponsored a webinar on Job Order Contracting – The Stimulus Ready Delivery Method. The webinar was hosted by Reed Construction Data / RS Means moderated by Robert Gair, Principal Means Business Solutions with distinguished speakers Allen Henderson, consultant, formerly Facilities,
Manager Texas State University; John Murray, Director of Facilities Management, State of Missouri; Mark Bailey, President & CEO Centennial Contractors.

The intent of the webinar was to provide a broad perspective on JOC and to identify the benefits of using the JOC
Delivery Method and the specific value it provides for the Federal Stimulus Bill.

Allen Henderson

Allen Henderson led the presentation providing quality information on the JOC process and the interaction that occurs between an Owner and Contractor. Allen pointed out that JOC is unique from other delivery methods as the bidding process is not project specific, but takes on an IDIQ approach by issuing a contract to the best qualified contractor based the contractor’s
coefficient applied to a fixed price book. The coefficient remains constant through the life of the contract that may be one year with renewable option years up to four additional years. Inflation factors most often are based on the
annual or quarterly adjusted prices as provided by the price book. The awarded contractor is then available to the Owner on an on-call basis to perform renovation and repair projects. The Texas State experience showed that the
types of projects ranged from (1) interior renovations, (2) exterior building rehab, such as door, window and roof replacement (3) hardscape and landscape, (4) mechanical, electrical and plumbing upgrades, and (5) routine
maintenance and emergency work. To start a program Allen suggested beginning with a small, specific type of project work that is readily accomplished to get a feel for the JOC program. It is critically important to select a contractor that
is service oriented, who is quick to respond to owners requests, can submit sufficiently accurate job order proposals, can meet budget and timelines, and that the contractor become familiar with the owners needs and expectations.
Allen further noted that JOC has proven to be a delivery method that supports local contractors
which can provide professional quality workmanship. There may be a nationally based general contractor in charge of the overall program, but local contractors are hired to perform the work. With a successful program, the contractor will be rewarded with a contract extension and will have a reliable book of business which becomes a winning formula for
owner and contractor.
Allen cautioned that not all JOC contracts are the same. Contracts with no price restrictions(usually related to Division 1 General Requirements of the price book) will have a lower coefficient bid than contracts with restrictions,
which will commonly have a higher coefficient bid. Allen noted that contracts with restrictions are more predictable. He also noted, for the contractor to understand, that change orders are kept to a minimum with JOC – thus, the contractor’s coefficient bid is very important for their long-term profitability success. Successful JOC programs promote and adhere to a partnering philosophy between Owner and Contractor. The ways for the Owner and
Contractor to partner includes:
• Examine the internal project planning process
• Examine the job order review and award process
• Generate a list of the commonly used material and equipment
• Bring contractor in early in the design phase
• Provide access to all applicable record documents
• Accommodate contractor access to proposed project site
• Assist with permitting process, if needed
• Discuss access and staging issues
• Address issues to minimize the impact on existing operations
Regarding JOC proposals, Allen strongly suggested that reviewers should be experienced and well trained in general contracting and should have walked the job with the contractor so they mutually understand the project scope. He noted that the owner and contractor should be using the same software to develop and compare cost proposals.
He also felt that in-house trades personnel can be useful in the review process. Allen concludes that JOC is an effective delivery method when used on the right type of projects with a committed partnering contractor.

State of Missouri

John Murray provided the attendees with some very interesting facts and results from the State
of Missouri JOC Program. The State of Missouri passed legislation in 2005 allowing JOC as a delivery method for project work orders up-to $100,000. John felt that it was a beginning, but might be a limiting work order
dollar value for the long-term success of the JOC program. In 2007 the State changed the Statute to
a maximum of $300,000 on small, relatively simple projects with design limited to design
development.
John pointed out that the success of the State JOC program has grown and was clearly helped by the Statute increase affected in 2007. During the first two years for the program, April 2006 to April 2008, 34 projects were completed with a total projects value of $3,029,593. Under the second two-year contract April 2008 to April 2010, 86 projects were completed with a total dollar value of $5,012,086. The current contact is for one year with four one-year renewable
options.
John pointed out that the process in place at the
State is:
1. Owner Scope and Design
2. Walk Through with the Contractor
3. Contractor proposal
4. Owner Review
5. Negotiation
6. Notice to Proceed
7. Performance of Work
John agreed with the earlier comments from Allen noting that the partnering philosophy and the importance of having the owner and contractor using the same software program have been strong attributes to the success of the State’s program. The State of Missouri and their contractor both use RS Means JOCWorks software.
John’s conclusion was that the State of Missouri is very satisfied with its JOC Program with key elements being a strong working relationship with the Contractor, responsiveness of the Contractor and trust that is developed with success.

Centennial Contractors

Mark Bailey provided the attendees with the contractor’s perspective on JOC. Mark noted that JOC requires a different contractor skillset and mindset from the traditional Bid/Build process. The contractor to be successful using
JOC needs to embrace a collaborative spirit and process that emphasizes partnering and teamwork that is focused on a long-term relationship that is responsive to the owners’ needs. These attributes are created by delivering quality results and showing improved performance over time. To the owner, Mark provided this incite; ensure that JOC is the right fit for your organization, ensure that there is an adequate program volume that will be attractive to a qualified JOC contractor and be sure to consider your JOC bandwidth that generally fits between the inhouse trades that handle T&M contracts and the larger capital projects. (The project/task order values in this bandwidth fall between $10,000 and $1M, with a few exceptions ranging to $45M). Mark also noted that the owners should select JOC ‘able’ projects (Allen provided a good list in his presentation) and select the right contractor on a “Best Value” or a qualificationsbased
process. Mark provided a valuable incite into a successful JOC
program start-up. He feels strongly that a higher level of investment needs to be put in the working
relationship insuring that the alignment between the owner and contractor is well established. The contractor needs to insure that the owner’s and contractor’s simple projects with design limited to design
development.
John pointed out that the success of the State
JOC program has grown and was clearly helped
by the Statute increase affected in 2007. During
the first two years for the program, April 2006 to
April 2008, 34 projects were completed with a
total projects value of $3,029,593. Under the
second two-year contract April 2008 to April
2010, 86 projects were completed with a total
dollar value of $5,012,086. The current contact
is for one year with four one-year renewable
options.
John pointed out that the process in place at the
State is:
1. Owner Scope and Design
2. Walk Through with the Contractor
3. Contractor proposal
4. Owner Review
5. Negotiation
6. Notice to Proceed
7. Performance of Work
John agreed with the earlier comments from
Allen noting that the partnering philosophy and
the importance of having the owner and
contractor using the same software program have been strong attributes to the success of the State’s program. The State of Missouri and their contractor both use RS Means JOCWorks software.
John’s conclusion was that the State of Missouri is very satisfied with its JOC Program with key elements being a strong working relationship with the Contractor, responsiveness of the Contractor and trust that is developed with success.
Mark Bailey provided the attendees with the contractor’s perspective on JOC. Mark noted that JOC requires a different contractor skillset and mindset from the traditional Bid/Build process. The contractor to be successful using JOC needs to embrace a collaborative spirit and process that emphasizes partnering and teamwork that is focused on a long-term
relationship that is responsive to the owners’ needs. These attributes are created by delivering quality results and showing improved performance over time.
To the owner, Mark provided this incite; ensure that JOC is the right fit for your organization, ensure that there is an adequate program volume that will be attractive to a qualified JOC contractor and be sure to consider your JOC bandwidth that generally fits between the inhouse trades that handle T&M contracts and the larger capital projects. The project/task order values in this bandwidth fall between $10,000 and $1M, with a few exceptions ranging to $45M). Mark also noted that the owners should select JOC ‘able’ projects (Allen provided a good list in his presentation) and select the right contractor on a “Best Value” or a qualificationsbased process.
Mark provided a valuable incite into a successful JOC program start-up. He feels
strongly that a higher level of investment needs to be put in the working relationship insuring that the alignment between the owner and contractor is well established. The contractor needs to insure that the owner’s and contractor’s structure. A contractor who is familiar with the federal paperwork requirements and utilizes small local business will help to support and meet the stimulus hiring goals. JOC gives the owners a “shovel readiness” tool to maximize
funding from any source.
In conclusion, Mark noted what he called the added value of JOC:
1. Flexibility-matching project scope/goals to available budget
2. Targeted design; the right level of design for the project needs
3. Helping owners think plan and find solutions
4. Building safety into the project
5. Ensuring the local small business community benefits from the project dollars
6. Creating a financial incentive for the contractor that aligns with the owners goals for contractor performance

One thought on “Integrated Project Delivery – IPD, Job Order Contracting – JOC, BIM, and Efficient Project Delivery

  1. Pingback: Integrated Project Delivery – IPD, Job Order Contracting – JOC, BIM, and Efficient Project Delivery – … | Target Value Design

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