Overview – The United States Army Corps of Engineers (USACE) was approached to establish a Job Order Contracting (JOC) program to assist in construction projects associated with ongoing Sustainment, Restoration, and Modernization (SRM) work. As a result, USACE awarded a JOC to an 8(a) Contractor.
Problem/Need – Approximately eighty (80) potential JOC projects were identified subsequently narrowed done to forty two (42). The problem was clear: How could the USACE estimate, negotiate, and award all of these projects, valued at approximately $3.96 million in work, before the close out of the fiscal year?
The JOC process is a high performance delivery system for facility SRM work. The process is more efficient and timely than conventional construction and acquisition methods.To increase the level of the District’s JOC performance and teamwork, the JOC program must have a dedicated Project Delivery Team (PDT), clear lines of communication, and provide adequate training to personnel involved.A seasoned JOC contractor coupled with efficient and effective JOC delivery process and PDT will provide complete customer satisfaction, quality construction, and timely execution.
In the long history of humankind, those who learned to collaborate and improvise most effectively have prevailed.
– Charles Darwin
BIM, the life-cycle management of the built environment supported by digital technology, requires a fundamental change in how the construction (Architects, Contractors, Engineers) and facility management (Owners, Service Providers, Building Product Manufactures, Oversight Groups, Building Users) sectors operate on a day-to-day basis.
BIM, combined and Cloud Computing are game changers. They are disruptive technologies with integral business processes/practices that demand collaboration, transparency, and accurate/current information displayed via common terminology.
The traditional ad-hoc and adversarial business practices commonly associated with Construction and Facility Management are changing as we speak. Design-bid-build and even Design-Build will rapidly go by the wayside in favor of the far more efficient processes of Integrated Project Delivery – IPD, and Job Order Contracting – JOC, and similar collaborative programs. (JOC is a form of integrated project delivery specifically targeting facility renovation, repair, sustainability, and minor new construction).
There is no escaping the change. Standardized data architectures (Ominclass, COBie, Uniformat, Masterformat) and cost databases (i.e. RSMeans), accesses an localized via cloud computing are even now beginning to be available. While historically, the construction and facility management sectors have lagged their counterparts (automotive, aerospace, medical, …) relative to technology and LEAN business practices, environmental and economic market drivers and government mandates are closing the gap.
The construction and life-cycle management of the built environment requires the integration off several knowledge domains, business “best-practices”, and technologies as portrayed below. The efficient use of this BIG DATA is enabled by the BIM, Cloud Computing, and Integrated Project Delivery methods.
The greatest challenges to these positive changes are the CULTURE of the Construction and the Facility Management Sectors. Also, an embedded first-cost vs. life-cycle or total cost of ownership perspective. An the unfortunate marketing spotlight upon the technology of 3D visualization vs. BIM. Emphasis MUST be place upon the methods of how we work on a daily basis…locally and globally − strategic planning, capitial reinvestment planning, designing collaborating, procuring, constructing, managing and operating. All of these business processes have different impacts upon the “facility” infrastructure and construction supply chain, building Owners, Stakeholders, etc., yet communication terms, definitions, must be transparent and consistently applied in order to gain greater efficiencies.
Some facility life-cycle management are already in place for the federal government facility portfolio and its only a matter of time before these are expanded and extended into all other sectors.
BIM, not 3D visualization, but true BIM or Big BIM, and Cloud Computing will connect information from every discipline together. It will not necessarily be a single combined model. In fact the latter has significant drawbacks. Each knowledge domain has independent areas of expertise and requisite process that would be diluted and marginalized if managed within one model. That said, appropriate “roll-up” information will be available to a higher level model. (The issue of capability and productivity marginalization can be proven by looking a ERP and IWMS systems. Integration of best-in-class technology and business practices is always support to systems that attempt to do everything, yet do not single thing well.)
Fundamental Changes to Project Delivery for Repair, Renovation, Sustainability, and New Construction Projects MUST include:
- Qualifications Based or Best Value Selection
- Some form of pricing transparency and standardization
- Early and ongoing information-sharing among project stakeholders
- Appropriate distribution of risk
- Some form of financial incentive to drive performance / performance-based relationships
BIM is not about software or technology but about CULTURE CHANGE and CHANGE MANAGEMENT.
BIM is about simplifying and adding visibility to the life-cycle management of the built environment. You are either “on-board” or “not”. It’s up to you.
BIM and FM are synonymous. Unfortunately there are very few instances of BIM.
The biggest mistake made by most people new to BIM is to assume that BIM is all about technology, and so focus all their efforts on mastering the technology rather than considering the impact that the application of this technology will have on the processes among Owners, AEs, Contractors, Subs, Business Product and Service Providers.
IFMA BIM Lifecycle Operations Community of Practice (BIMLO COP) Kickoff Meeting Video – http://www.gosee.tv/bimlco/
- Organizational Commitment
- Collaborative, Efficient Project Delivery Methods (IPD- Integrated Project Delivery, JOC – Job Order Contracting …)
- Standards (OMNICLASS, COBie, IFC), Common Terms, Definitions, Metrics, Cost Data (Standardized Cost Data, example-RSMeans)
- Life-cycle Information
- Open digital technology supporting the above
- Continuous Training and Improvement
via http://www.4Clicks.com – Premier software and services for construction cost estimating and efficient project delivery – IPD, JOC, SABER, IDIQ, SATOC, MATOC, MACC, POCA, BOA…featuring the best representation of RSMeans Cost Data, exclusively enhanced 400,000 line item database.
Dos and Don’ts for your Job Order Contracting Consultant RFP
I’ve had lots of inquiries about my last blog post, and lots of owners have asked specifically what provisions they should avoid to ensure healthy competition on their JOC Consultant RFPs. So, inspired by the Do and Don’t section of a popular fashion magazine, here’s my version for the Job Order Contracting world. All of these contract provisions come from actual RFPs in my files. Names have been changed to protect the innocent.
Unit Price Book: Don’t
“Contractor must prepare a Unit Price Book containing unit prices covering material, equipment and labor costs for various units of construction, and adjusting these costs to current market conditions. The use of generic factors to localize prices is not acceptable. Unit prices for demolition shall be provided for each construction task. “
Unit Price Book: Do
“Bidders may propose their own unit price books, propose to create their own books, or propose the use of unit price books from a third party source, or combination of any of the foregoing. Tasks and prices in unit price book(s) must reflect the local prevailing and other wage requirements of applicable local laws. Books must be updated at least annually. Premiums for restricted area (e.g. prison, airport, courthouse) work and after-hours work will need to be included in the books, or otherwise provided for. The Unit Price Book must contain material, equipment and labor costs for various units of construction, and a mechanism for adjusting these costs to current market conditions.
Describe the research approach of the unit price book, including:
- Number and qualifications of personnel conducting pricing research;
- Anticipated number of material, labor, and equipment line items to be researched and included;
- Price collection methodology;
- Approach to localizing prices;
- Other factors (quantity, conditions, etc.) that are used to modify unit prices;
- Organization of the UPB in both print and electronic form, including demolition tasks; and
- Frequency and methodology for updating unit prices through the life of the contract.”
How to determine JOC consulting and implementation contract provisions
Why: Because there are a limited number of Unit Price Books, this is the place where constrictive language can literally result in NO competition. Price books have in recent years come in two versions—a national pricing book that uses a researched city cost index to adjust costs for a local market, and customized books which assimilate localized research into the deliverable, physical price book. The lines are blurring since current software products automatically apply the city cost index, and line item customization has been introduced to national pricing books to meet specialized client needs. But language barring the use of factors to localize prices can still limit responses to your RFP. A much better approach is to request information in the RFP that helps you understand the methodology and research that goes into creating the UPB, and then evaluating the merits of the deliverable based on that information.
“The JOC Contract Implementation Services agreement will be a performance-based contract with no fees are paid up-front to the consultant, but a percentage fee is paid for successful issuance of construction task orders resulting from the consultant’s preparation of unit price books and contract bid documents.”
“Consultant’s Annual Fee: For the satisfactory performance of all required services hereunder, the Consultant shall be paid an Annual Fee, the amount of which shall be calculated as a percentage of the dollar amount of task orders which are (a) issued to construction contractors utilizing the JOC System, and (b) registered by the Comptroller during the specified year.”
The Contract will be set up on a task order basis, using the prices, licensing fees, and rates established in the Pricing Response Form. Individual tasks will be authorized in advance by [owner] along with an agreed upon scope of work, budget, and schedule. Pricing flexibility to accommodate the possible desire on the part of [owner] to perform some services more economically with agency in-house staff or other Consultants will also be weighed. [Owner] may request clarifying pricing information after the proposals have been submitted in order to make fair comparisons between the proposals.
Why: This is another place where the options tend to be mutually exclusive, so if you want to evaluate multiple options, you need to build some flexibility into your pricing portion of the RFP. Pricing goes to the heart of strategic planning for your JOC, and what level of outsourcing vs. internal management and control you desire. You may not have full clarity on those decisions until you have your consultant on board so a menu of pricing options can be appealing.
One effective approach I have seen recently is to carefully outline all acceptable pricing structures and populate the pricing form with all of them. Then, an offeror can fill out the pricing structure they desire, and zero out the others. Such a flexible pricing form might include a % of volume, burdened hourly rates with estimated hours, or lump sum figures for scope of services. We’ll play with some possible structures in a future posting. While evaluating mutiple RFPs with different pricing structures can be challenging, as owners develop lifecycle costing capabilities these can be applied to JOC programs.
“There shall be no limit on the number of installations of the software. Software must be accompanied by the following: (i) documentation demonstrating that the Consultant either owns or has a perpetual license to use, and to license others to use, the software, and (ii) a written, non-exclusive license granting [owner] and the JOC contractors unlimited use of the software, including all upgrades thereto, throughout the term of the Contract. Such software must be internet based.”
“Detail the pricing structure and options for the electronic support systems, including licensing agreements, volume discounts, and additional services including technical support and recommended training.”
Why: The former provision is not a typical pricing scenario in the software industry. Typically software is paid for as a perpetual license with additional fees for maintenance, support, upgrades, etc., or on an annual subscription basis which includes the above ongoing services. Most software is priced on a per-user or per concurrent-user basis. To have the maximum number of options presented in the RFP process, an owner really needs to allow the most common software pricing structures. Microsoft Excel wouldn’t be a viable competitor if you wrote the first clause into an RFP for spreadsheet software! Regarding internet access, virtually any software can be hosted in the cloud to provide internet-based service, but there may be advantages to having software installed on your own servers and network. The more open-ended language on requirements for a JOC electronic support system will allow you to consider a variety of licensing and pricing approaches.
“The Consultant is not permitted to enter into any subcontract(s) for consulting services for the JOC System.”
“The Proposer shall clearly indicate what portions of the scope of work will be subcontracted. Provide an organizational chart of prime and subcontractors to illustration contractual relationships, and clearly indicate in proposal response which entity is responsible for which portions of work.”
Why: Just as you would not prohibit a general contractor from subcontracting specialty work if it was more effective or efficient, you don’t want to constrain a consultant’s means and methods. You want the most knowledgeable, efficient and professional resources working on your project. Some providers do everything in house, some work with partners to provide domain expertise for the full scope of services. You do want to have a clear idea of how the work will be accomplished, who is doing what, and how quality control will be managed, but don’t prohibit partnering approaches that may meet your needs without having a clear reason for doing so.
Are there any other JOC Consultant or JOC System provisions that have tripped you up or led to lack of competition?
via http://www.4clicks.com – Premier cost estimating and project management software solutions for job order contacting – JOC, SATOC, IDIQ, SABER, MATOC, MACC, POCA, BOA, and more.
What is an IDIQ?
Indefinite delivery/indefinite quantity (IDIQ) contracts has been a useful tool in federal government acquisition for many years.
IDIQ contracts had historically been used only as single award contracts to procure services or supplies until the Federal Acquisition Streamlining Act (FASA) of 1994, noting the value of multiple award contracts. Additionally the court system determined that IDIQ contracts were applicable to construction and architect-engineering services, provided the selection of contractors and placement of orders are consistent with the Federal Acquisition Regulation Part 36.
Multiple forms of both multiple and single award construction IDIQ contracts are available as well as software to enable rapid implementation and consistent deployment. Examples of multiple awards are multiple award construction contracts (MACC) and multiple award task order contracts (MATOC). Single awards include job order contracts / job order contracting (JOC) and simplified acquisition of base engineer requirements (SABER). SABER is the US Air Force implementation of JOC.
Multiple awards result in individual job tasks for which all awardees compete and are negotiated and priced per the specific requirement. Single awards and multiple awards are typically priced using detailed line item cost estimating provided specific to the IDIQ. Commercial, industry standard unit price books may be use, such as RSMeans Cost Books or “custom” IDIQ price books. Both may be referred to a Unit Price Book (UPB), or an IDIQ price book/guide. It is important that both the Owner and the Contractor have unit line item cost estimating capability. It is generally regarded as “best practice” and may even be a regulatory requirement that the Owner does their own internal estimate (sometimes referred to as an Independent Government Estimate – IGE). Some Owners for specific forms of IDIQ, such as JOC for example, may elect to “outsource” or subcontract the JOC program to a third party for a fee (typically a percentage of the overall JOC program annually). In this instance the third party acts as an “owner’s agent” and works with the Contractors directly, vs. Owner “hands-on” participation. The latter is not recommend, nor consistent with “pure” JOC program implementation. It may however be the only option for Owners with limited technical estimating and/or project/program management capabilities.
Additionally, multiple awards are forms of design-build for complex projects, typically $750,000 to $5 million. Single awards involve minimum design for non-complex projects that typically range from $2,000 to $750,000. However multi-year JOC/SABER programs can easily exceed $300 million. Many JOC/SABER and IDIQ contacts involve a base year and three or four year options. This means that the owner/contractor relationship is long term, with no need to re-solicit for five years, a potential benefit for all parties.
Construction IDIQ contracts provide a streamlined means to complete projects with benefits for both the government ‘/ public agency (DOD, non-DOD Federal Government, State/County/Local Government, Airports, Education, Healthcare, and the commercial business (Contractor/AE).
NBS National Construction Contracts and Law Survey 2012
by Adrian Malleson
Research and Analysis Manager, RIBA Enterprises (Source: http://www.thenbs.com/topics/ContractsLaw/articles/nbsNationalConstructionContractsLawSurvey2012.asp?utm_source=eNews-Weekly&utm_medium=email&utm_campaign=2012-07-09)
From March to April 2012, NBS a survey about contracts and legal issues within the UK construction industry. to understand, among other things:
- The different contracts and procurement methods being used
- At what point in the process contracts are signed
- The number and kinds of disputes taking place
- How frequently partnering or collaborative working are used in construction projects.
To help the survey get industry wide representation more than 20 industry bodies, including the RIBA, assisted by getting their members to take part. Over 1,000 responses from across the industry were received. This cross industry participation has meant that, for the first time, the UK now has had a broad based, independent survey of these areas. The responses weren’t just from architects and other consultants: clients and contractors took part too and the report breaks down responses by each group.
The findings give a full and at times startling picture of the UK construction industry’s relationship with contract and law.
In some ways, the industry remains rather traditional. Collaboration, team integration and partnering have, at best, only been partially realised.
When we look at the contracts the industry uses, we see that traditional forms of contract still dominate. Sixty per cent of respondents tell us that the JCT Contracts are the ones they use most often, and 72 per cent of people used JCT Contracts at least once in the last year. That said, the NEC Contracts, associated more with non-traditional, collaborative working and procurement, have a firm place in the industry. Sixteen per cent tell us they use them most often and 29 per cent have used them at least once in the last year. For standard forms of contract, JCT and NEC dominate; together they are used more than all other standard contract types combined.
That said, “bespoke” contracts are widely used too; almost one quarter of respondents had used them in at least one project in the last year. Twenty years ago, the Latham Report concluded: “Endlessly refining existing conditions of contract will not solve adversarial problems. Public and private sector clients should begin to phase out bespoke documents“. That “phasing out” is turning out to be a long process – but one we’ll be able to track with subsequent surveys.
The adoption of electronic working also shows the traditional ways of working still remain. While we continue to envisage an electronic future of BIM orientated, collaborative working, more than 40 per cent of consultants and clients are still not using electronic tendering at all. There’s work to be done.
The report also gives an understanding of the number of disputes: both the perceived trend in the number of disputes in the industry and the number of disputes actually gone into by respondents.
Ninety-two per cent of the respondents agreed that the number of disputes in the sectors had either increased or stayed at the same level, with the current state of the economy being most often described as the cause. This somewhat dark assessment is borne out by almost one quarter of those taking part in the survey having been involved in a dispute during 2011.
It’s significant that 49 per cent of contractors who completed the survey tell us that “poor specification” is a “most difficult or recurrent issue” leading to dispute.
Together, the issues people gave as the causes of dispute make clear the need for jointly owned, standardized information. A clear information model including tight specification and variance tracking can help prevent legal action later.
So, the overall picture that emerges is one of an industry that still makes use of traditional methods but which sees the place for more innovation.
In many of the comments people made when completing the survey we could see a real desire for construction to be a collaborative, team-based enterprise where extra value is generated through cooperation. We hope to be moving towards a more collaborative industry. This move towards collaboration goes hand in hand with the move towards shared, co-owned information as well as in the choices of contracts and working methods.
One of the most, if not the most, significant impediments to true team working and collaboration is legal dispute whether actual, threatened or envisaged. The survey uncovered these disputes are disruptive, expensive and not uncommon. That’s why from the outset, projects need standardized, shared information models that are easy to update, maintain and act upon. These need to clearly delineate where risk and responsibility lie. That’s not to say the solution is just a technical one, or one of keeping records, though doing these things well can only help. Any information model, any discharge of a contract, can only be as successful as the team that creates and uses it.
Hope you enjoy reading the full report.
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1. Link built environment to organizational mission and efficiently manage all physical and functional aspects.
2. Move from being 80% Reactive 20% Preventative to 80% Preventative 20% Reactive (or less)… and reduce overall cost and environmental impact.
Key Considerations for a Successful BIM Strategy
- Organizational Resources
- Economic Fit
- Cultural Fit – Collaboration, Communication, and Transparency are REQUIRED, Involve all Shareholders (Owners (senior management, FM, capital planning, procurement, building users…), AE’s, Contractors, BPMs (business product manufacturers), Oversight Groups, Community …)
- Phasing – Impossible to Implement BIM all a once
- Identify and Rank Problems and Opportunities – Inventory, Physical and Functional Conditions, Deficiencies and Costs and Associated Impacts vs. Time
- Generate and Assess Alternatives – Corrections
- Develop Implementation Plan
- Implement Projects – Integrated Project Delivery (Job Order Contracting – JOC – renovation, repair, sustainability, minor new construction, IPD – new construction)
- Ongoing Management and Reassessment – Continuous Improvement / LEAN
- Always remember – “You can’t manage what you don’t measure”.
‘Building Information Modelling (BIM) is digital representation of physical and functional characteristics of a facility creating a shared knowledge resource for information about it forming a reliable basis for decisions during its life cycle, from earliest conception to demolition.”
“BIM provides a common environment for all information defining a building, facility or asset, together with its common parts and activities.This includes building shape, design and construction time, costs, physical performance, logistics and more. More importantly, the information relates to the intended objects (components) and processes, rather than relating to the appearance and presentation of documents and drawings.More traditional 2D or 3D drawings may well be outputs of BIM, however, instead of generating in the conventional way ie. as individual drawings, could all be produced directly from the model as a “view” of the required information.” – RICS
“Building information modeling (BIM) is a process involving the generation and management of digital representations of physical and functional characteristics of a facility. The resulting building information models become shared knowledge resources to support decision-making about a facility from earliest conceptual stages, through design and construction, through its operational life and eventual demolition.” – Wikipedia 12/25/2011
“The future of BIM modeling is to expand the information model to include more of the life cycle phases (ie: real property commerce, maintenance and operations, environmental simulation, etc.), to standardize life cycle process definitions and associated exchanges of information, and to standardize information content so that meanings and granularity are clear and consistent.” – NIBS, 6/25/2012
“Building Information Modeling (BIM) is the process of generating and managing building data during its life cycle. Typically it uses three-dimensional, real-time, dynamic building modeling software to increase productivity in building design and construction. The process produces the Building Information Model (also abbreviated BIM), which encompasses building geometry, spatial relationships, geographic information, and quantities and properties of building components.” – Free Dictionary, 6/25/2011
“Building Information Modelling (BIM) is the process of generating and managing data about the building, during its life cycle. Typically BIM uses three-dimensional, real-time, dynamic building modelling software to increase productivity in the design and construction stages. ” – NBS, 6/25/2012
“A Building Information Model (BIM) is a digital representation of physical and functional characteristics of a facility. As such it serves as ashared knowledge resource for information about a facility forming a reliable basis for decisions during its life-cycle from inception onward. A basic premise of BIM is collaboration by different stakeholders at different phases of the life cycle of a facility to insert, extract, update or modify information in the BIM process to support and reflect the roles of that stakeholder. The BIM is a shared digital representation founded on open standards for interoperability.” – NIBS, buildingSMART, NIBS, 2006
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Unfortunately it is a present fact that Capitol Hill has let the Country down. Republicans, Democrats… it doesn’t matter… the sole clear focus of the Senate and Congress is upon self interest, party politics vs. doing their duty… serving the Country and the People.
One of the several roles of government is to maintain, preserve, and help to manage our buildings, roadways, bridges, and utility systems. Due to the shear scope involved, Federal, State, County, and Local Governments must collaborate to simply plan for and fund the immense costs of managing the built environment.
It likely that more that 2.2 trillion dollars (American Society of Civil Engineers reports) is needed to bring current infrastructure up to date… and this figure is likely understated. What better way is there to actually grow our economy and secure our future than to invest here? Furthermore the costs of not doing this work range from nearly $100 billion dollars in increase motor vehicle costs due to poor roadway systems, continued pollution and energy depletion from outdated building systems.
Unless we act now to make the investments we need, jobs and wealth will move away from the United States at an ever-increasing pace, wages here will be depressed at an even greater rate, and the social strain on families and communities will increase. Furthermore, from a global competitiveness perspective, virtually every other nation is moving faster than the U.S. relative to infrastructure investment.
On the other side of the equation, our construction sector remains unproductive and rampant with waste due to antagonistic and out dated construction project delivery methods. Design-bid-build does little but fund greed and fill our courtrooms. Even “newer methods” such as design-build, are only partial solutions.
Integrated project delivery (IPD) and job order contracting (JOC) are examples of proven construction delivery methods that focus upon collaboration, transparency, and performance. These types of processes should be mandated and enhanced.
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First and foremost BIM is the life-cycle management of the built environment supported by digital technology. While the industry is currently fixated upon 3D visualization tools, aka Revit, Archicad, Bentely… they only represent components of a BIM solution.
Construction cost estimating, and facility life-cycle cost estimating are critical components of any facility design, project delivery, repair, renovation, sustainability, or planning function.
Here’s a list of BIM Construction Cost Estimating Requirements:
1. Collaboration – involvement of all stakeholders – Owners, AE’s, Contractors, Oversight Groups, Community …
2. Transparency – Appropriate access to cost information, and associated comparison to published independent third-party costs such as RSMeans Cost Data.
3. Consistent Format and Terminology – Use of a standard set of terms and data architectures such as Uniformat, Masterformat, Omniclass.
4. Metrics and Benchmarks – Time, Accuracy, Cost
5. Proper allowances for local conditions – geographic, weather, productivity of labor, …
6. Appropriate level of technology to assure productivity, collaboration, security, audit trail.
7. Robust Process – The application of a robust process and business “best-practices” with a focus upon continuous improvement.
8. Appropriate knowledge of all “levels” of construction cost estimating and their potential accuracy – Square Foot / Conceptual / Building Level Construction Cost Estimating, Assembly / System Level Construction Cost Estimating, Unit Line Item Construction Cost Estimating.
9. Knowledge of the impact of the Construction Cost Delivery Method upon construction costs and life-cycle costs – Design-Bid-Build, CM@Risk, Design-Build, Job Order Contracting, Integrated Project Delivery
10. Fundamental understanding of Total Cost of Ownership and Facility Life-cycle Management – Physical and functional conditions, Operations, Sustainability, Renovation, Repair, Efficient Project Delivery Methods ( IPD-Integrated Project Delivey, JOC – Job Order Contracting )