Job Order Contracting – Best Management Practices

Job order contracting (JOC) is a collaborative construction delivery method that provides significant advantages vs. the traditional design-bid-build process for the numerous renovation, repair, and maintenance projects facing facility owners.

JOC benefits Owners and Contractors alike in that it provide a means to expedite projects and assure better mutual understanding of work scope and costs. JOC is performance-based, it features a level of shared risk-reward and positive incentives to drive program and project success.

Technology and training are both critical to JOC.  As transparency, process, and a unit price book (UPB) are central to a JOC program’s success, JOCs should not be run out of spreadsheets or generic cost estimating programs.   JOC-specific tools and software provide core functionality, reduce deploy cost, and aid in consistent program deployment, monitoring, and self-improvement.   Training should be provided at all levels, ranging from an introduction to the unit price books (example: RSMeans Facilities Cost Book), Introductory and Advance Training with respect to the UPB and associated cost estimating and project management, and specialized training such as Architectural or Electrical Cost Estimating.

JOC should not be used to bypass Procurement/ Contracting.   In fact, Contracting/Procurement should be integrally involved in establishing the JOC program, implementation, managing and continuously improving the JOC.   Contracting/Procurement should work hand-in-had the Owner’s Engineering and Technical staff, Facility Managers, PMs, and their supporting construction Contractors.

Owners have a responsibility (a regulatory requirement in the Federal Sector per FAR) to conduct internal government estimates (IGEs) on individual JOC projects/task orders over a certain dollar value (typically $100,000 – $150,000).  Appropriate JOC technology can automatically compare Government to Contractor estimates and enable comment at the line item level.  Any Owner should, at minimum regularly audit their JOC project to assure consistent deployment and requisite compliance with establish business rules and relevant regulations.

The Unit Price Book (UPB) is a core component of any JOC program.   These should be unit price line items with both parent line item costs and line item modifiers and associated labor, material, and equipment costs.   At a minimum, the UPB costs should be updated annually during the JOC contract period (typically 3-5 years), and also update quarterly via a localized construction cost index (CCI). This practice will help to account for any major cost fluctuations due to material shortages, labor issues, or other potential impacts.

In situations where buildings are critical to an organization’s mission (government, education, healthcare, manufacturing, process sector, etc.), Owners, Contractors, and Subs must work together and assure adequate knowledge about the built environment, priorities, and resource allocation.  In these instances outsourcing is not recommend as Owners would no longer have the requisite information and ability to efficiently allocate resources and assure mission readiness.

Note:  JOC is also knows as SABER in the United States Air Force.  Both are forms of IDIQs.  The United State Air Force is one of the most skilled and progressive users of SABER/JOC, and it’s CE’s are well respected in both the public and private sectors.

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