Dos and Don’ts for your Job Order Contracting Consultant RFP

(reprinted from http://lisacooleyassociates.com/job-order-contract-consulting-rfp-dos-and-donts/)

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.

Pricing: Don’t

“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.”

or

“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.”

Pricing: Do

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.

Software: Don’t

“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.”

Software: Do

“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.

Subcontracting: Don’t

“The Consultant is not permitted to enter into any subcontract(s) for consulting services for the JOC System.”

Subcontracting: Do

“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.

The Definition of Job Order Contracting – What is JOC?

Job Order Contracting is a collaborative construction delivery method, a type of integrated project delivery (IPD) that specifically targets renovation, repair, sustainability, and minor new construction.

Characteristics  and/or components of JOC program include the following;

1. Qualifications Based or Best Value Selection
2. Some form of pricing transparency- Typically a Unit Price Book (UPB)  containing preset unit prices for construction tasks.  Note: Most JOC programs leverage RS Means cost data to some degree.
3. Early and ongoing information-sharing among project stakeholders
4. Performance-based structure – Some form of financial incentive to drive performance
5. Appropriate distribution of risk
6. A long term relationship (3-5 years) between Owner and Contractor/AE
7. Standard specifications established in a master contract with a summary of work, also   including any specific or client-driven conditions.
8. Facility owner issues a request for qualifications (RFQ), evaluating firms using best-value, performance-based criteria, or an invitation to bid awarding to the lowest responsive and responsible bidder.
9. A guarantee of minimum amount of work for the contractor. This is usually a small amount for consideration – a requirement in most states for contracts.
10. Issuance of contractor’s work orders based on owner’s requirements.
11. Costs for individual work orders are calculated by multiplying the preset unit prices by the quantities multiplied by the contractor’s coefficient.
12. Open communication between facilities team and JOC contracting team, including a kick-off partnering session between everyone utilizing the contract.

 

Advantages typically associated with  JOC – Job Order Contracting Programs:

§    Fast and timely delivery of projects.

§    Low overhead cost of construction procurement and delivery.

§    Development of a partner relationship based on work performance.

§    Virtual elimination of legal disputes.

§    Reduction of change orders.

§    Standard pricing and specification utilizing a published unit price book (UPB),       resulting in efficient and effective estimating, design, and fixed price construction.

via http://www.4Clicks.com – Premier cost estimating and efficient project delivery software – JOC, SABER, IDIQ, SATOC, MATOC, MACC, POCA, BOA ….

 

BIM – Job Order Contracting – Integrated Project Delivery

Integrated design increasingly is recognized as a potential method to assure all performance criteria are considered and optimized in the design and construction of buildings. As indicated above, the participating disciplines must trust the validity of the information provided by other collaborators. – NIBS

It couldn’t be stated any clearer, though certainly could be broadened in context.  The efficient life-cycle management of the built environment, otherwise know as BIM, relies upon an integrated, collaborative process based upon accurate information and mutual trust.

Oddly, Integrated Project Delivery and Job Order Contracting both offer proven collaborative process supported by digital technology, yet are decades old.   Job Order Contracting, an integrated project delivery method specifically targeting facility renovation, repair, sustainability, and minor new construction projects has been practiced widely and to the highest degree by the United States Air Force.  While some may argue that JOC was developed by the Army, it is the USAF that recognized its value and deployed JOC (know as SABER in the USAF) in a widespread and robust manner.   Today, software (e4Clicks Project Estimator) and  robust cost databases (RSMeans – enhanced by 4Clicks Solutions, LLC) support almost all USAF bases in the US (over 90%) each and every day.  Thousands of contractors, AEs, and Government personnel engage in long term, mutually beneficial business relationships to complete virtually all projects in a quality manner on-time and on-budget.

The AECOO (Architecture, Engineering, Construction, Operations, and Owner) industry could learn a lot from this example.   Perhaps then, BIM might have a chance of greater success… sooner than later.

See the technology in action.

Job Order Contacting = Integrated Project Delivery for Renovation, Repair, Sustainability, and Minor New Construction

JOC Cost Estimating Class – Job Order Contracting

JOC Cost Estimating Workshop – JOB ORDER CONTRACTING

Job Order Contracting (JOC) Estimating Workshop August 22 & 23, 2012

8:00a.m – 4:30 p.m – Check in at 7:30 a.m
Location- To be Confirmed– Phoenix, AZ

Program Description

WHY IS JOC ESTIMATING SO IMPORTANT?
Owners have a fiduciary duty to assure that there is a value for every dollar spent on Job Order Contracting (JOC).   The Job Order Contractor has no other way to receive payment for work other than the accurate & complete estimate.  In order to be successful estimating an accurate, complete and fair job order, it is essential that the Job Order Contractor and Owner work in a collaborative estimating process.

CLASS OBJECTIVES:
Combining classroom instruction with practical workshops, this two-day program will drill down into Job Order pricing, including the role of the Job Order document, the Owner’s fiduciary duty to obtain a fair and reasonable price, the scope of work, the price estimate, and cost data. It will also explore the criteria for usable and valid cost data bases. It will explore the components of Job Order pricing, including coefficients, contractor overhead and fee, and price escalation and de-escalation. You will learn when and how to use the various pricing methods and review typical alternatives for setting the Job Order price. Bring your laptop for use during the Hands-on practice sessions

WHAT’S IN IT FOR ME?
This course offers a wealth of practical knowledge, hands-on exercises that build and hone your estimating skills, and provides practice sessions in solving real-life estimating problems.

Instructors:
Mark Powell, LEED AP, Kosten Technik International
Michael Brown, 4Clicks Solutions LLC
ACE JOC is perfect course for:

Owners, Facility Managers, Construction Managers, Project Managers, Estimators, Architects, Engineers, General Contractors, JOC Contractors, Superintendents, Planners

---

Registration Fee
ACE Members — $650    l     Non-Members  — $715

Register at: http://www.ace4aec.com/course/job-order-contracting-joc-estimating-workshop

For more information on group discounts, please contact Jacki Houchens at 480-965-9359
If you have any questions, contact the ACE office at 480-965-4246.

VIA WWW.4CLICKS.COM – PREMIER COST ESTIMATING AND EFFICIENT PROJECT DELIVERY SOFTWARE FOR JOC, JOB ORDER CONTRACTING, IDIQ, SABER, SATOC, MATOC, MACC, POCA, BOA AND MORE!

A New Resource for JOC – Job Order Contracting Services

Flexible, scalable implementation and management support for owners standing up or improving Job Order Contracting programs.

Lisa Cooley Associates was recently launched to help Owners implement Job Order Contracting and other solutions to the big problems that small projects can present. The new company has been established to help Owners bring sophisticated thinking and efficient, scalable processes ongoing renovation, maintenance, sustainability, and minor new construction programs.

Job Order Contracting was a delivery method ahead of its time when it was introduced a quarter century ago. But with construction industry changes swirling around us, Job Order Contracting will continue to evolve and adapt to stay relevant, becoming a part of newer technologies and processes like BIM and collaborative cloud computing, and forward-thinking processes like LEAN, to make JOC even better.

The construction industry is the only US industry to lose productivity over the last 30 years. Job Order Contracting presents a path to greater efficiency, but only when implemented correctly.  Lisa Cooley Associates and its Partners can help Owners make the decisions and set up  JOC programs in a way that improves staff efficiency and that of your contractors. Reiterative LEAN processes can help drive greater efficiency and cost savings.

Strategic Planning for JOC

The road to JOC begins with a careful assessment of your potential program. Historic and budgeted volume and project type are reviewed. Internal staff skillsets and resources are evaluated. Existing project management systems and styles are assessed for their applicability to and interface with JOC. Procurement requirements, including small business requirements and governing body mandates, are researched in conjunction with your staff. The goal of this planning phase is to understand how JOC will work within your organization and establish a framework for success.

UPB and Software Selection

The selection of a Unit Price Book can be confusing amid industry rhetoric and lack of clarity around the options available. We can help advise you on standardized and customized pricebooks, periodic update options, customization of line items, and integration of specifications. Contract provisions which govern the use of line items can also be critical, and we can help you craft requirements that bring you the greatest value.

RFP Development

With our extensive knowledge and database of RFP provisions, we can help you craft a procurement document that will drive the results that you desire. Your standard general conditions will be reviewed and modified to the JOC environment as necessary. JOC-specific requirements will be incorporated to clearly communicate contractor expectations. We can guide you on potential selection criteria and weighting to ensure selection of the contractor that meets your needs.

Procurement Assistance

If JOC is a new process for your organization, it may be new for your contracting community, too. We can help orient and prepare your existing contractor base for responding to your RFP, or we can garner interest from leading Job Order Contractors around the nation. We can serve as a technical advisor to your selection committee.

Training

Training begins in the Strategic Planning phase, with Introduction to JOC sessions for internal staff as we work to define your program. More in-depth training occurs in the implementation phase, when we make sure that your staff is well-versed in the use of your software and line item estimating takes place.

Program Alignment, Partnering, and Leaning

JOC is relational contracting. JOC programs suffer when there is a lack of alignment among team members. Our approach to partnering is different. It is based on data collection and oriented to process improvements using LEAN principles. We lead you and your JOC contractor in a series of meetings to map processes, clarify communications, and drive your program towards greater efficiency.

Independent Estimates and Line Item Proposal Review

The unit pricing structure of JOC has real value from a procurement and process point of view, but it can cause consternation among personnel that aren’t familiar with it. It is critical that your staff be empowered with an understanding of your unit price book, and our first goal is always to empower you with the skills to effectively review line item proposals for accuracy through in-depth training and support. But some owners lack the skill or the time to develop independent estimates (as the federal government does) or conduct a full line item review. We can help with a range of support from telephone help line support to full proposal review, reporting, and negotiation with contractors.

Ongoing Assessment

To maximize the effectiveness of your JOC, you need to continuously assess internal processes and gridlocks, contractor performance, user satisfaction, timeliness, and cost. We can help you design assessment tools and surveys to track progress, and generate reports for governing bodies.

Program and Project Management

 

 

THE HISTORY OF JOC

Intro to JOC

Job Order Contracting is an indefinite-quantity, performance-based delivery method for small- to medium-sized construction projects (the typical “sweet spot” for projects under a JOC program is $25,000 to $1.5 million, though projects can certainly fall outside of this range). The fundamental feature of a Job Order Contract is the use of a Unit Price Book (UPB) and competitive pricing through a coefficient (sometimes called a multiplier or factor) applied to all line items within the UPB. With a long-term contract in place and pricing agreed to up front, owner and contractor can turn their focus to the efficient execution of projects.

The beauty of JOC is a streamlined design and procurement process that right-sizes pre-construction work for smaller project. Scoping and design can be completed in days or weeks instead of months, with design at the level of detail that brings greatest value to the project. And while the unit pricing structure provides flexibility for emergency work, this well-defined scoping process more typically provides a clear scope of work for the contractor and a firm fixed price for the owner. Finally, the long-term contract with a low guarantee of work incentivizes a contractor to perform at a high level to maximize project volume.

Key features of JOC:

• A long-term (3-5 years) umbrella contract
• Competitive pricing through the use of a competitively-bid coefficient applied to a unit price book (UPB)
• Individual delivery orders are firm fixed price (based on defined scope of work and contractual pricing)
• A contract structure and contractor selection process that drive performance

 

History of JOC

JOC was developed in the US Army in the mid-80’s to address the big challenges faced in the execution of small projects. The Army found that these smaller projects were taking up to a year to procure, with 8-22% of the project budget consumed in design and procurement costs. Change orders were increasing final costs by as much as 50%, and claims and litigation were diverting the attention of project management staff. Ultimately, the Army determined that low bid procurement of these projects was driving low quality results. The impact was a large backlog of small projects and a negative impact to the Army’s mission.

So the Army crafted JOC to meet their needs for performance, efficiency, and procurement compliance. The results were clear. Early studies done on JOC in the Army clearly demonstrated that JOC provided faster delivery of projects, higher quality construction, fewer change orders and warranty issues, for a fair price. The study also showed that the contracting tool helped to maximize construction budgets and provided increased opportunity for small and disadvantaged business through subcontracting opportunities. Most importantly, the Army found that JOC transformed their adversarial contract relationships into productive partnerships.

Soon after the Army rolled out JOC at a number of pilot installations, other military branches followed suit (with the Air Force christening it SABER, or Simplified Acquisition of Base Engineering Requirements) and public owners outside of the federal government started to take notice. Early adopters included the National Institutes of Health, Spring Branch ISD and municipalities. From 2000 on, JOC saw widespread use in areas of high growth like Arizona, Texas, and the DC beltway. Around this time, the first cooperative purchasing JOC was implemented, and many owners began to access JOC by this means.

 

VIA http://www.4Clicks.com – Premier cost estimating and efficient project delivery software of JOC – Job Order Contracting, IDIQ, SABER, SATOC, MATOC, MACC, POCA, BOA.

BIM, Big Data, and Efficient Life-cycle Management of the Built Environment

Efficient life-cycle management of the built environment comes down to  analyzing large data sets— big data—from several knowledge domains.   3D visualization software products currently promoted as BIM (Building Information Modeling)  are not solutions for this task.

Next generation cloud-computing and knowledge-based solutions will enable new levels of innovation, productivity, collaboration, transparency, competition,  and growth.

Owners, Contractors, AE’s, Facility Managers… all stakeholders of the built environment ( facilities and infrastructure) will need to integrate multimedia and social media with dedicated digital tools/applications to manage all phases of collaborative facility life-cycle management, from concept thru deconstruction.

Organizations  that can best harness “Big data” in within the AECOO sector (Architecture, Engineering, Construction, Operations, Owner) will hold a distinct competitive advantage.  They will be able to drive new levels of efficiency and quality with respect to planning, design, procurement, construction project delivery, utilization, repair, maintenance, sustainability, renovation, adaptation, and deconstruction.

Operative elements associate with leveraging big data for BIM (BIM defined as efficient life-cycle management of the built environment supported by digital technology) include:

– Transparency

– Collaboration

– Frequency

– Accuracy

-Evidence-based Management

-Granularity
The barriers to big-data and BIM are largely cultural vs. technology oriented, with  intellectual property information/data sharing leading the list.   Talent, technology, and associated processes and workflows are considerations, however, relatively trivial if big-data and BIM are supported by management.

Since data access  and data sharing are are the most critical aspects of big data and BIM, collaborative construction project delivery methods are required elements of success.   Collaborative construction delivery methods set the tone of any construction project and directly impact overall success.

Examples of collaborative construction delivery methods  include Integrated Project Delivery – IPD – and Job Order Contracting – JOC.

The former for new construction and the latter for renovation, repair, sustainability, and minor new construction.

Big Data for BIM / Efficient Facility Life-cycle Management

Access to standardized and current BIM information is critical and organizations will  need to integrate information from multiple data sources, often from third parties.   This requires robust business processes supported by, and integrated with technology frameworks.

via http://www.4Clicks.com – Premier software for cost estimating and efficient project delivery – JOC – Job Order Contracting, SABER, SATOC, IDIQ, MATOC, MACC, POCA, BOA.

What is Job Order Contracting? What is IDIQ?

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).

Job Order Contracting – The Premier Industry Solution for Facility Renovation, Repair, Sustainability and Minor New Construction

4Clicks – Job Order Contracting Process and Software Overview

An introduction to Job Order Contracting best practices and technology.  Including e4Clicks Project Estimator, premier software for job order contraction (JOC) program management – cost estimating, visual cost estimating, project management, document management, and contract management.  For Owners, Contractors, Sub-Contractors, and AEs and efficient and transparent JOC program deployment and ongoing management and reporting.

 

Design-bid-build is a problem for everyone!   The low-bid system is particularly poor.  Both contractors and owners are rolling the dice when it comes to projects outcomes.  Contractors are forced to shave their profits to razor-thin margins and gamble on their ability to compensate with change orders and claims on the back end.  Owners have no idea what their final project costs are going to be, or the quality of the work. The result is commonly an adversarial relationship and even litigation.

“Job Order Contracting (JOC) is a method of managing multiple details of renovation, rehabilitation, repair, and other construction projects on a predetermined set of pricing and standards. By using JOC customers take advantage of a process that is fast and responsive to their needs while providing excellent quality construction.”

–Center for Job Order Contracting Excellence (www.jocexellence.org)

All of the branches of the military use some form or variation of JOC.   Though some, including the Air Force and Army apply more vigorous programs.

University campuses are probably the most geographically-similar to the military installation model and have been adopting JOC very successfully.

JOC penetration of healthcare is a little more recent, but there are some good examples in public healthcare entities.

Airports with security requirements are a natural fit for a long-term contract like JOC, but we also see public transit agencies using JOC for miscellaneous upgrades that their heavy infrastructure contractors may not be well-suited to complete.

Several states have also adopted JOC and they tend to do it in a very thoughtful, strategic way that serves as a model for other public entities in the state.

Municipalities use JOC for a variety of projects, and larger K-12 Independent School Districts who are often understaffed and need to deal with summer work surges use JOC very effectively too.

As in most business dealings, strong relationships are a key to success.

The long-term nature of JOC contracts (3-5 years) requires and allows contractors and owners alike to really dedicate themselves to making the relationship work.  They are not a single project and then you can walk away.  A lot of time is typically invested in early stages of a relationship—learning how our customers/contractors like things done, what their internal review process looks like, how they like to be communicated with, what their organizational structure is, etc.  JOC is a PROGRAM rather than a single project.

 

The pricing structure of JOC is very different from most other contract and/or construction project delivery methods.

Central to JOC pricing is a unit price book ( UPB ) and these come in two versions.  There is a standardized option, which is the most common, and is typically the RS Means Construction Cost Books, and represents a single nationwide price book / cost average, and commonly viewed as a North American standard.  RSMeans also provides local cost factors/indices (CCI/City Cost Index) to account for local pricing variations (available to zip code level as averages or  independently for material, equipment and labor).  City cost index information is updated quarterly, although “best practice” for JOC Contracts is typically considered to be annual updating of UPB information.  The importance of dynamic cost data, aka annual cost updating, vs. using static costs (same UPB data throughout the 3-5 year life of JOC program can not be overstated.

There are also customized UPBs for the owner and already has localized or specialized pricing applied, and/or a combination of both.

These UPBs contain contractual pricing for many if not most components of construction.  Any item not in the UPB is considered a non-priced item and is noted accordingly and can be added to the UPB in the future based upon the contract structure.

The competitively pricing component is accomplished by asking contractors to bid a coefficient (also called a multiplier or factor) which is applied to the unit price book throughout the term of the contract.  It can be a markup (+) or a discount (-), depending upon the UPB, the geographic location and other contract factors.

Project Management is more efficient, but new skillsets may need to be applied such as line item estimating  and definition of scope (planning function).  That said, line item estimating can be done very productively and with a significantly reduced learning, using advanced software programs such as e4Clicks Project Estimator.

Introductory and Advanced Software training is part of the services by 4Clicks Solutions, LLC.

Methods/Process will continue to evolve with changes in the industry.

Renewed focus on true pricing transparency through JOC.  Unit price/line items should provide full transparency, but only if owners fully understand the line item estimating process.

Connection to Capital Construction, FM—lines blurred

A lot of that is being driven by technology including BIM.  As we build a BIM database of the built environment JOC will have to absorb and leverage that, and new technology systems will emerge to do just that.  Imaging a day when you will not walk a job and then look up line items by CSI code, but will be given an electronic model and will pluck off 3-d items for demolition, and then choose from a selection of BIM items, already connected to a UPB, for reinstallation—updating the model as you build your estimate.  4Clicks is already working towards this type of system with its visually-based estimating systems, incorporating eTakeoff, etc.

JOC is very well suited to incorporating owner’s social responsibilities into its process—SBE and sustainability.

As this blog notes—the evolution and integration of JOC with the built environment and BIM is here.

 

 

 

BIM Just Isn’t Happenning

Read the below.  Several arguments can be made as to why BIM is not gaining any real traction –
– Lack of confidence that BIM as an ongoing  program will succeed.
– Costs are considered too high
– Too technical
– Anticipated loss of control
– Limited understanding of all BIM-related knowledge domains and associted technologies
– No preceived personal benefit
– Human resource problems

For BIM take hold… “big BIM” that is ( efficient facility life-cycle management supported by digital technology), will require a virtual CULTURAL REVOLUTION across the Architecture, Engineering, Owners, Operations (AECOO) sector (s).   Collaboration, transparency, productivity, accuracy, and associated robust business process will become common place.  The catalyst for this chagne is already upon us, and the below article provides some excellent insight on the topic.

Want to build a business? You need an IT ecosystem. (Source GIGAOM.COM)

By Mark Thiele

Just thirty years ago, innovation in almost any category was measured in years, but today it’s measured in weeks or months. If you were to focus on information technology specifically you could even argue that change can occur in days — and that cycle will continue to accelerate.

But adapting and innovating in IT requires that you have a platform strategy that allows for heterogeneous adoption of technology at each layer of infrastructure. You also need simplified, cost-effective, real-time access to a wide range of partners and solution providers, otherwise known as your technology ecosystem. This group of providers will be a veritable marketplace of vendors that are proprietary and open source, but whom together create a combination of technologies and services that allow the buyer to mix and match for any solution requirement.

The technology ecosystem has always been important. Even in the days when a minority of companies had a single mainframe, you still needed parts, skills, power, data centers, tools, and ideas, etc. But that ecosystem was smaller and moved more slowly. The technology ecosystems of the 60s through the 90s tended to change over months or years, and our systems from then were more likely to be from a small handful of vendors. This simplified provider environment reduced dependence on an ecosystem of otherwise unrelated partners and vendors, but guaranteed your dependence on the one.

That was then, this is now.

The difference today, and going forward, is that technology is rapidly moving to a much more agile adoption, development, operating and use model. Buyers today can identify and use cloud-based infrastructure or obtain a few licenses of a Software-as-a-Service delivered application in a matter of hours. Aside from cloud-based services, there are virtual platforms, appliances, internally developed applications and myriad customer devices that all need to interact, but can change almost overnight.

Some would argue that the sheer complexity of the ecosystem today screams for CIOs to try to create homogenous infrastructure environments. However, the very fact that we’re making IT solutions more portable and readily adaptable means that we must plan for the ability to support multi-vendor solutions at any layer of the technical infrastructure, from the CPU, through to platform as a service.

The rapid delivery of new solutions means that companies will no longer wait patiently for “their” provider to catch up to major innovation leaps. The only way to stay in front of your competition is to grease the technical infrastructure skids with strong management platforms and clear adoption, ownership, and orchestration strategies.

Many software, cloud, and hardware providers in today’s market would argue that they offer a strong ecosystem of partners, but I think the future ecosystem will be as open as possible and also offer the customer access to a wide variety of cloud, network and other services within the confines of a single data center.

Think of your IT ecosystem as the local shops near your downtown flat, easy to access and well understood. However, if you’re downtown ecosystem was like the technology ecosystem you would have five coffee shops, three butchers, six shoe stores and so on from which to select goods and services. .

The open ecosystem

An open ecosystem allows for you to select the technology or service provider you like when the opportunity presents itself. It’s an environment where the customer has broad access to vendors and services related to any portion of the infrastructure stack, including wide area networking services and the data center capacity.

Under the old way of building IT, managers built it once, built it to last, and then got fired when it didn’t last. The new IT calls for managers to build it fast, possibly fail fast, and then build it again.

An open ecosystem means that in most cases you shouldn’t be spending years putting in a new technology architecture or solution. If it’s that complex or limited in its ability to adapt new technology you should be using a partner’s infrastructure such as an IaaS or PaaS provider solution.

There are also many options for building private cloud infrastructure, especially for larger businesses, but the focus should be on making it as open as possible. If you can’t taste test an application or new platform environment in a matter of days or weeks, you’re doing something wrong. Openness also helps if you need to move your work, because you want to have as many destinations to choose from as you can.

Many providers under one roof.

But even among open ecosystems there are important differences to be aware of. Ideally you will find an open ecosystem with a large number of different network, cloud, software and hardware providers under one umbrella. This allows the customer to make decisions around adoption of new technology quickly and efficiently. So instead of providing access to one or two bandwidth providers, the ideal ecosystem provides access to big and small players, and can play them against each other to get the best price and services for customers. In reality bringing together the combined customer and supplier community creates greater opportunities for both sides, in effect, a win-win.

It shouldn’t stop with bandwidth, either. An ecosystem should have not only the option of different hardware, and support services, but also different cloud service providers. If a customer wants to get cloud computing from a vendor, the ecosystem provider should invite that provider in. And if someone wants to build their own cloud, the ecosystem provider and data center provider should have an array of choices available for a customer to choose from.

The ideal delivery platform for this ecosystem is a data center provider who can create an environment that supports the needs of enterprise computing, while also lowering the costs and barriers to entry for ecosystem partners. This is an environment that removes all your risks associated with disaster avoidance, regulatory concerns, capacity and security. That location should have access to national freeways and airports as well as local government support that will help facilitate worker relocation and education, while also providing considerations for your hardware taxation risks.

It’s tough to find one place where all the above are available to the customer, but they are out there. Having these resources readily available is like having a Home Depot and a Lowes move in next to your house the day before you start a big home project. No matter what tool or resource you need, it’s all right there, immediately available, with competition, quantity and variety.

In this environment building a business that requires IT – or rethinking your existing IT doesn’t seem so daunting: With all these resources available, you virtually eliminate the risk of being forced into a “pragmatic” (read: bad but necessary) decision. You are free to experiment once, twice, three times, and then put it into production, without most of the historical baggage like “high network costs”, “no skilled staff” or a data center that is “out of capacity,” which have traditionally driven IT decisions.

So the increasing complexity and speed at which IT is moving doesn’t have to be something to worry about, instead look at it as an opportunity to roll with the technological changes without becoming too invested in a closed ecosystem.

Mark Thiele is executive VP of Data Center Tech at Switch, the operator of the SuperNAP data center in Las Vegas. Thiele blogs at SwitchScribe and at Data Center Pulse, where is also president and founder. .He can be found on Twitter at @mthiele10.

Image courtesy of Flickr user john-norris.

 

via www.4Clicks.com – Premier software for efficient project delivery – cost estmating, visual estimating, contract/project/document management, cloud-based solutions – job order contracting – JOC, SABER, IDIQ, POCA, MATOC, SATOC, BOA, MACC ….

BIM Construction Cost Estimating – Top Ten List

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 )