Job Order Contract Coefficient – Training 101

UNDERSTANDING a Job Order Contract COEFFICIENT

A JOC Coefficient is numerical factor that represents costs (generally indirect costs) not considered to be included in the associated JOC Unit Price Book, UPB.    Which costs many or may not be included in the coefficient should be clearly spelled out in the JOC Request for Information, Request for Proposal, and/or Solicitation.   Examples of costs that may be included in the coefficient include:

• General and administrative and other overhead costs
• Employee payroll taxes, insurance and fringe benefits
• Business taxes, contributions, memberships,
• corporate headquarters support (legal, financial, etc.)
• All waste and excess material
• Sales tax on material and equipment costs
• insurance costs
• bonding and alternative payment protection costs
• protective clothing
• equipment rental
• contractor’s profit
• subcontractor’s overhead and profit
• (Contingent costs, such as labor rate changes and inflation in option years, may also covered in the coefficient when an Economic Price Adjustment or annually updated UPB are not used.)
• Mobilization and close out for the total contract and each task order
• Compliance with environmental laws (overhead {indirect} costs associated with performing work in compliance with EPA/OSHA regulations, including obtaining any necessary licenses and permits, reporting requirements, etc.)
• Compliance with protection and safety laws (i.e., safety rails, face and clothing protection, etc.)
• Traffic and work site signs and barriers
• Project management and supervision
• Protection of and/or moving of government property
• Quality control
• Office management and equipment
• Depreciation of mobile office(s)
• Interest associated with funding of equipment and payroll
• Submittal preparation
• As built drawings
• Permits, licenses and fees
• Other risks of doing business (i.e., risk of a lower than expected contract dollar value; risk of a high inflation cost if factors are bid for option years; risk of poor subcontractor performance and re-performance)

JOC coefficient(s) proposed by the offeror and accepted by the owner are incorporated in the JOC contract.  On an overall average, JOC coefficients range from 0.80 to 1.20 for work done during normal business hours.