Definition of a Job Order Contracting / Job Order Contract / JOC – Coefficient or Adjustment Factor

In short a JOC coefficient or adjustment factor includes any allowed item/consideration that is not in a specific unit price line item contained within the unit price book – UPB.  It a value typically is in the range of 0.80 to 1.20, though specific conditions or requirements can justify values outside of this range.  The JOC coefficient / adjustment factor is generally applied to the sum total of the construction cost estimate for the task order as developed from the UPB.

A localization factor is can also be applied to account for regional/local cost variances.

Examples of items that may be found in the JOC coefficient or adjustment factor, as allowed by the Job Order Contract Statement of Work:  Insurance, bonds, and indemnification, mobilization, management/supervision, office and equipment, permitting costs, profit, risk factors / contingencies, site clean up, specialized job site requirements ( security) and taxes.

Home > Regulations > FARS > Section 5117.9001 FARS Chapter 51: Department of the Army Part 5117: Special Contracting Methods Subpart 5117.90: Job Order Contracts Section 5117.9001: Definitions. As used in this subpart – “Coefficient” means a numerical factor that represents costs (generally indirect costs) not considered to be included in “Unit Price Book” unit prices (e.g., general and administrative and other overhead costs, insurance costs, bonding and alternative payment protection costs, protective clothing, equipment rental, sales tax and compliance with tax laws, and also contractor’s profit). Contingencies such as changes in wage rates and the effect of inflation in option years are also covered in the coefficient when Economic Price Adjustment is not used. Coefficients proposed by offerors are multiplied times the unit prices in the Unit Price Book to price a job or project on individual orders. The coefficient(s) proposed by the offeror and accepted by the Government are incorporated in the JOC. [AFARS Revision #15, dated February 17, 2005] “Job order contract” means an indefinite-delivery, indefinite-quantity contract which is awarded on the basis of full and open competition and effective competition and is used to execute sustainment, restoration and modernization projects at installation (post, camp, or station) level. The JOC includes a comprehensive collection of detailed repair, maintenance and minor construction task descriptions or specifications, units of measure and pre-established unit prices for each of these discrete tasks. Each project or job ordered under a JOC is normally comprised of a number of pre-described and pre-priced tasks.[AFARS Revision #15, dated February 17, 2005] “Non-prepriced task or item” means a necessary, but incidental, part of a job or project ordered or to be ordered under a JOC that is not susceptible to unit pricing using the pre-priced tasks in the Unit Price Book or database incorporated in the JOC. The coefficient developed for a prepriced task or item must not be applied to a non-pre-priced task or item. “Unit Price Book” means the compilation of sustainment, restoration, and modernization tasks, associated units of measure and unit prices that are used in job order solicitations and JOC. JOC unit prices include direct material, labor and equipment costs, but not indirect costs or profits which are addressed in the coefficient(s). Depending upon the source of the data base used, the Unit Price Base (UPB) may contain from 25,000-90,000 line items. [AFARS Revision #15, dated February 17, 2005]

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