Job Order Contracting viable for Federal Preventive Maintenance – NJDOT

 

Based on the evaluation conducted, NJDOT believes Job Order Contracting is a viable alternative to the established, standard Federal Preventive Maintenance Contracting method. The quicker procurement process in general for JOC Contracts, as well as allowing for the addition of new structures throughout the term of the JOC Contract without the need for procuring additional contracts, are time and cost saving qualities beneficial to the Department. In addition, the increase in efficiency of the JOC Contracts does not compromise the quality of work or direct cost of work within the Contracts, as both are comparable to that of the established standard Federal Preventive Maintenance Contracts.
It is believed that for every new contractor that is awarded a JOC contract, there may be a learning curve in getting acquainted with new software and pricing methodology. However, once learned, NJDOT anticipates receiving from new contractors the same expediency and responsiveness of current JOC contractors.
NJDOT sees JOC as an efficient and effective procurement method that should be employed further.

Via http://www.4BT.US – Best Value, Independent, and Objective Job Order Contracting Solutions

Source – www.fhwa.dot.gov/programadmin/contracts/sep14nj2015eval.pdf

The 7 Basic Steps of Job Order Contract Program Implementation

The 7 basic steps involved in Job Order Contract Program implementation include;

1. Strategic evaluation of objectives, goals, and appropriateness
2. Development of an acquisition/procurement approach
3. Facility management/engineering/technical planning
4. JOC procurement/award process
5. Work execution and contract administration
6. Monitoring
7. Ongoing training/improvement

For independent, objective, and best value Training, Education, & Tools, visit http://www.4BT.US

Pros & Cons – Learn About Job Order Contracting

Job Order Contracting is a collaborative LEAN construction delivery method that can enable Owners to execute a higher percentage of quality facility renovation repair and renovation projects on-time and on-budget, IF implemented and management properly.

This video is important for anyone with a current Job Order Contract, or planning to participant in a JOC as an Owner, Contractor, Subcontractor, or Consultant.

 

Job Order Contracting Metrics – LA County June 2016

The Board of Supervisors routinely authorizes County departments and agencies to sign Job Order Contracts (JOCs) with contractors, which are used as an alternative to traditional procurement methods in order to expedite and competitively bid various construction and refurbishment projects.

In the last four months alone, the Board has authorized departments to sign 17 separate JOCs for $4.5 million each, totaling $76.5 million.

A recent article in the Long Beach Press Telegram reports that an audit of the City of Long Beach’s use of JOCs found “a significant lack of controls over all key areas of the process, creating an environment that is highly vulnerable to fraud.” The audit found that contractors would lowball their bid for a JOC in order be awarded the contract, and then proceed to charge the City for multiple change orders, unnecessary parts and labor, and specialty items that are not listed within the price book, for which the City must pay full value plus a 10 percent premium.

Over the 17- month period of the City’s use of JOCs that was reviewed in the City’s audit, 91 percent of JOC projects had change orders and cost overruns, and cost city taxpayers $1.9 million.

Given the County’s extensive use of JOCs and the large amount of public funds used to pay for them, it is imperative that the processes and procedures used by our County departments to administer their JOCs ensure that this type of abuse does not happen.

I, THEREFORE, MOVE that the Board of Supervisors instruct the CEO, in coordination with the Auditor-Controller and all departments that utilize JOCs, to report back in 45 days on:

1. The percent of JOC projects over the last year that exceeded the initial project cost estimate due to change orders or fees for specialty items not listed in the price book; and

2. The process by which departments evaluate requests by JOC contractors for change orders and fees for specialty items; and

3. The frequency with which contractors made unreasonably low bids for JOCs, and whether the County was warned about these low bids by The Gordian Group, with whom the County contracts to help administer JOCs;

4. A thorough review of the concerns raised in the audit released by the City of Long Beach’s Auditor on May 25, 2016, and identification if similar concerns exist within the County’s use of JOCs, with recommended corrective actions if any similarities are found.

(Source: MOTION BY SUPERVISOR DON KNABE June 14, 2016 )

Job order contracting performance metrics

Comprehensive Facility Maintenance Plan

Comprehensive Facility Maintenance Plan / CFMP

The cornerstone of any CFMP should be preventive maintenance.  A regularly-scheduled preventive maintenance,  mitigates the frequency of unplanned failures, extends the longevity of building systems beyond industry standards, and best suits organization needs for a safe and functional physical environment.

Commons CFMP objectives include:

1. Maintenance of the physical environment in support of the organization’s  mission
2. Extending the lifespan of building systems
3. Maintaining the asset value of the property
4. Mitigating catastrophic building system failures, fires, accidents, and other safety hazards.
5. Providing buildings that function at requisite efficiency
6. Providing continuous use of facilities without disruptions
7. Energy conservation
8. Regulatory compliance

Staffing,  delivery methodology,  standardized and timely information, and supporting technology are core aspects in the execution of;

1. Scheduled Maintenance – Description of activities that can be forecast and for which expenditures of parts and labor are based on a predictable time table or use schedule. Main components include: Preventive Maintenance, Modifications and Alterations, and Scheduled Replacement.
2. Unscheduled Maintenance – Description of activities that cannot be programmed or forecast, including emergency repairs and corrections of breakdowns.
3. Deferred Maintenance – Description of scheduled activities, delayed or postponed for reasons such as lack of funds or personnel, changes in priorities and change of use.

Staffing

Operations and maintenance departments, based upon size, may have multiple departments, each with an area of specialization, or a single department.  Examples of specialized areas include: 1. Environmental, Health, and Safety, 2. Central Maintenance Shops, 3. Cluster Maintenance Program, 4. Custodial Services, and 5. Energy and Recycling.

Tasks

Ongoing tasks associated with operations and maintenance departments vary widely, and may include:

• Preventive maintenance program execution for all facilities
• Work order service requests management
• Regular inspections of equipment and building systems, such as roofs, boilers, chillers, sprinkler systems, fire alarms, elevators, fire extinguishers…
• Repair services
• Maintain regulatory compliance for select building systems (e.g., elevators, fire suppression systems, pressure vessels)
• Computerized maintenance management system software operation.
• Administration of renovation, repair, and maintenance contracts
• General –  grounds maintenance program, custodial, etc.
• Utility-billing data collection and analysis (including electric, natural gas, heating oil, propone, water/sewer, solid waste, and recycling).
• Procurement of energy and solid waste services.
• Manage contracts associated with energy and solid waste services.
• Monitor the energy market to direct procurement decisions.
• Coordinate with State and local officials on issues associated with energy, water/sewer utilities, and solid waste management.
• Development and oversee energy reduction programs
• Manage resource reduction and recycling program
• Direct capital improvement projects related to lighting retrofits and solar power
• Provide energy audits

Key Performance Indicators

The typical key performance indicators may include the following:

• Top ten work order trouble codes
• Quantity of temperature complaints (“too hot”, “too cold”)
• Workforce productivity and utilization
• Preventive maintenance versus corrective (or “reactive”) maintenance
• Preventive maintenance schedule completion rate
• Percent of major building systems operating within industry standard lifespan
• System life-cycle performance
• Deferred maintenance backlog reduction

Execution

Best value procurement, LEAN collaborative construction delivery methods such as Job Order Contracting, standard terms, definitions, as well as standardized cost and data architectures, and a documented Operations & Maintenance Execution Guide all contribute to maximizing return-on-investment and improving outcomes.

System Life-spans

• Boilers (Steel, fire-tube) 25 years
• Boilers (Cast iron) 35 years
• Chillers (Air-cooled, reciprocating compressor) 20 years
• Chillers (Water-cooled, screw compressor) 25 years
• Chillers (Water-cooled, centrifugal compressor) 28 years •
• HVAC (Rooftop units) 20 years
• HVAC (Room unit ventilators) 25 years
• HVAC (Penthouse/Interior mounted air handlers) 40 years
• Flooring (Carpet) 15 years
• Roofs (Asphalt Built-Up Roof, sloped) 25 years
• Roofs (Metal) 30 years
• Paving 25 years

Improving Construction Productivity = Collaboration & Alternative Project Delivery

 

Eight Steps Toward Improving Construction Productivity

Partnering and collaboration must be a key performance metric by which real property owners and facility management professionals are measured.  Until this occurs, there is little hope for construction sector productivity improvement.

 

1. Owners Foster and Mandate Collaborative Construction
2. Best Value versus Lowest Bidder Procurement
3.  Full Financial Transparency
4.  Shared Risk / Reward
5.  Mutual Goals & Trust
6.  Common Terms, Definitions, and Data Architectures
7.  Continuous Education, Improvement and Monitoring
8. Adoption of LEAN Alternative Construction Delivery Methods – Job Order Contracting, JOC & Integrated Project Delivery (IPD)

BIM has stagnated, and the construction industry (Architecture, Engineering, Construction, Operations, and Real Property Owners) as a whole remains unproductive due lack of focus upon process change management.

While most of us are aware that early and ongoing communication among all renovation, repair, or new construction stakeholders is the path to success, its rare that a team is established that is both clear on objectives and working towards common objectives.

Successful outcomes should be the objectives of ALL participants and partnering must not only be encouraged but mandated by real property owners.

Partnering is can not be accomplished solely through the implementation of technology. Nor is excessive management and control the path to success.  Adopting and fostering of LEAN best management practices, specifically developed for construction and which focus upon outcomes, is the path to productivity improvement.

Job order contracting and integrated project delivery are two examples of LEAN construction delivery methods that share decades of successful implementation and enable higher quality and a higher percentage of projects to be completed on-time and on-budget.

The most important element to successful project delivery is an educated and capable Owner.  An Owner that understands collaborative construction delivery and is focused upon successful outcomes for ALL project participants and stakeholders.

Technology will do little to solving the construction industry’s productivity issues. Despite the marketing of software vendors, technology is simply an enabler for faster and lower cost consistent deployment.  The key to success is the best management practices and processes embedded within technology.

Real property owners required training and ongoing professional development.  This includes real property executives, facility management, technical/engineering teams, cost estimators, purchasing/procurement, and facility users.   Educational institutions must also alter their programs.   Examples of competencies and content include; life-cycle management of the built environment, total cost of ownership practices, LEAN best management practices, and collaborative and/or alternative construction delivery methods.

Mandatory Partnering

While mandatory partnering may seem contradictory, it is not.   All construction contracts, projects, and programs should include a operational manual.  The manual describes the roles, responsibilities, deliverables, and outcomes for all parties.  While each manual can, and should be tailored to each owner’s requirements, common components of the core framework are ever present.  The operations manual spells out all requirements, terms, etc., associated with the collaborative construction delivery process.  An example of a job order contracting process is shown below.

Common elements to any LEAN Collaborative Construction Delivery Method

Common elements to implementing a productive LEAN construction delivery methods include the following:

 

Owner Leadership of Team Collaboration

Best Value Procurement

Mutually Beneficial Goals and Outcomes

Performance-based Reward System

Shared Risk/Reward

Common Terms, Definitions, and Data Archtectures

Outcome-based Key Performance Metrics – KPIs

Continuous Monitoring, Improvement, and Education/Training

Global Oversight with Local Implementation

 

” Great care is taken to establish an IPD team where participants can work together as a collaborative unit. Team formation considers capability, team dynamics, compatibility, communication, trust building and commitment to an integrated process….Once a team is formed, it’s important to create a team atmosphere where collaboration and open communication can flourish.” – AIA

 

One of the most important life lesson that I have learned is that success or failure is generally not determined by a problem, issue, or even an opportunity, but rather by how we react and deal with the situation.   Whether it’s a construction project, or other situation,  if we react and act as a team versus as individuals, outcomes are ultimately improved.

“The goal of everyone in the industry should be better, faster, more capable project delivery created by fully integrated, collaborative teams. Owners must be the ones to drive this change, by leading the creation or collaborative, cross-functional teams comprised of design, construction, and facility management professionals.” – CURT

Job Order Contracting – 5 Things to Never Do

1.     Forget to understand the everyone’s perspective

It’s not enough know construction, or how to manage a project once it is mobilized. You must understand and respect everyone’s perspective and needs from concept thru negotiations, execution, and final close-out.

Whether you are an Owner, Contractor, or Subcontractor, it’s critical to demonstrate that you are reliable and trustworthy and not manipulative or underhanded.

2.     Think that Negotiation Starts Sitting Down with Contracting/Purchasing

Negotiation starts early and, in truth, never finishes.  All interactions, from initial conceptual meetings, to the site visit, and throughout all phases of a task order,  build your persona and ultimately define your long-term relationships.

3.     Talk too much. Listen too little.

Pay close attention to every project participant, and use the knowledge to find common understanding.  Needs,.desires,  and concerns defined the preferred solution.

Great team players are clear on their ultimate interests, and under those of all parties. Take the time to understand the most important and desired outcomes of engineering, procurement, and contractors,  and work toward that goal.

4.     Squeeze every last penny.

JOC is a value-based construction delivery method.  The goal is to achieve a quality and satisfactory result at a reasonable cost.   While it’s critical to generate detailed line item cost estimates and assure financial transparency,  reciprocity and fairness are the ruling factors.

Both Owners and Contractors need to feel that they are indeed partners working toward a common goal of delivering quality on-time and on-budget projects for a reasonable cost.

5.     Negotiate without Considering the Perspectives and Needs of Procurement/Purchasing, Engineering, and the Contractor

Procurement teams  handles key steps in a JOC process and do technical, and engineering personnel.  All have their jobs to do and roles to play.  Assure every one is aware of value and scope of the project.

 

 

The Life-cycle of a Job Order Contract

Job Order Contract Life-cycle

 

JOC is a LEAN collaborative construction delivery methods, and a form of Integrated Project Delivery – IPD.

The benefits of using JOC, such as reducing the total lead-time and cost for common construction, repair and renovation projects for  facilities and infrastructures, are achieved through the consistent application of proven best-management practices.

 

Concept

A “Pre-proposal meeting” is held between the “JOC Program Manager” (PM), user/client, and contractor to generally define a work need.   The PM should should have a meeting sign-in sheet and meeting agenda. At the  Pre-Proposal Meeting, the  PM  should  set up a  date  for  the pre-construction “site visit”.

A designated form with an appropriate amount of information requesting JOC work is completed and forwarded to the “Contract Specialist”.

Proposal Request

The Contract Specialist drafts the a “JOC Request for Proposal” , assigned a project number, and obtains appropriate approvals and signatures

The Contract Specialist  e-mails a copy of the RFP to the contractor and other stakeholders, and adds the project/”task order” to the “Active” status.  The Contractor has a specified period of time to complete and forward a proposal/contractor estimate.  The time period may vary based upon the size of the job.

Joint Site Visit

The “Contract Specialist” in coordination with the PM sets up a joint site visit with the JOC Contractor to further defined project/”task order” requirements and establish are joint “scope of work” (SOW).

Contractor Estimate

The contractor prepares a detailed line item estimate using the JOC “unit price book” (UPB).  Drawings, typically in PDF format, are included.

Owner Estimate

An independent owner estimate may also be prepared for projects/task orders above a specified dollar threshold as specified in the Job Contract and/or associated regulations.  Generally an independent estimate is required for task orders equal to, or above, $100,000 to $150,000.  In the government section, this may be called an independent government estimate (IGE).

Coordinator review the preliminary Scope of Work. Once the client approves the Scope of Work in writing (e-mail is acceptable) the clock starts on preliminary pricing.

Proposal Review

Owner (PM, Contract Specialist) reviews the contractor proposal and compares it to Owner estimate if applicable.

Negotiations

Any changes made by the Owner ( PM/Contract Specialist) are returned to the Contractor and discussed accordingly.   The Contractor makes any necessary changes and returns the revised Proposal to the PM/Contract Specialist.   The Proposal is “Approved”, or the decision may be made to “Reject” it.  If Approved, the Proposal becomes “Final” and it is now “firm/fixed price”.  The approval is usually made by email per designated form and a
“Notice to Proceed” (NTP) issued to the approved Contractor.  Upon receipt of all forms and signatures, the task order is “fully executed”.

Job Start Meeting

This meeting officially hands over the job site to the contractor (contractor puts up their signs – the contractor “owns” the job site.  PM will schedule/establish Progress Meetings .

Job Start

 

Construction phase.  Weekly reports are generally required and submitted to the PM. Change order are typically rare with JOC, however, may result due to client requests, or unforeseen site conditions.  Generally the same procedures are followed as those for the RFP.  The Change Order is recorded per appropriate form is approved, per the associated   Change Order Proposal submitted by the contractor,  and if sufficient funds are in place.

Owner Sign Off

Upon completion of the project/task order, the contractor will notify the PM and request a final inspection.   The PM will schedule the Final Inspection with all requisite attendees and stakeholders.  If complete, the Contractor will return the job site to the client (demobilize).   If their are remaining items to be completed, a “punch list” is created by the PM.    Project close-out occurs upon sign off and contractor submission of any required final documents.  As built documents, warranty documentation, service manuals, and request for final payment are provided as appropriate.