Job Order Contracting Solutions

OpenJOC Soutions

OpenJOCTM LEAN JOB ORDER CONTRACTING SOLUTIONS

The OpenJOC approach drives maximum productivity by leveraging proven LEAN construction delivery processes.

1. Process – A written Job Order Contract Operations Manual / JOC Execution Guide plays a central role by fully documenting roles, responsibilities, business practices, means, methods, and outcomes.

2. Information – A shared common data environment, CDE, assures a mutual understanding of all project requirements. Industry standards terms and definitions, in plain English, and a standardized, detailed listing of locally researched construction tasks inclusive of labor, material, and equipment costs (organized using CSI MasterFormat).

3. Uses – On-demand renovation, repair, maintenance, sustainability projects and minor new construction are supported within the OpenJOC environment.

4. People – Real property owners and/or facilities management provide leadership, without excessive management and control. All participants contribute to project success within and atmosphere of collaboration, mutual respect, and shared risk/reward.

5. Technology – The role of technology is one of enablement. Cloud technology provides a secure method for all participants to create, view, and share current actionable information. Communications, tasks, and documents are all maintained in a common digital environment.

6. Assessment & Training – Key performance indicators, KPIs, and regular audits, as well as required ongoing training, assure proper JOC Program implementation, management, and continuous improvement.

OpenJOC LEAN JOB ORDER CONTRACTING SOLUTIONS

www.4bt.us

OpenJOC – Job Order Contracting the Way it’s Supposed to be!

OpenJOC is a standardized, independent, objective, and defensible method for organizing, describing, pricing, procuring, and managing renovation, repair, and minor new construction activitivies.

OpenJOC, a LEAN construction delivery method  associated levels of higher productivity,  requires an OPEN common data environment (CDE).     A locally researched unit price book, UPB,  provides a common data environment for JOC and other LEAN construction delivery methods.

standardized cost data

The 4BT OpenJOC Unit Price Book (approximately 60,000 line items) provides a significant benefits to owners, contractors, and subcontractors in the following ways…

  1. Davis-Bacon labor data, locally research and properly applied, providing 30%+ greateer accuracy than traditional sources.
  2. Locally researched labor, material, and equipment – cost localization factors are not used (Cost localization factors introduce gross error)
  3. Line item modifiers for quantity, material, and location – Line item modifiers can significantly (10$-50%) impact cost.
  4. Fraction of the cost of alternative sources.
  5. Standard data architecture – CSI Masterformat is the North American standard data format for construction.
  6. Description in plain English using industry standard terms with limited use of abbreviations – Promotes higher levels of productivity, collaboration, and communication , and mitigates errors and omissions.

The 4BT OpenJOC Unit Price Book provides transparent, locally research, detailed construction cost estimates for repair, renovation, repair, maintenance, sustainability, and/or new construction projects.

The use of standardized data formats and descriptions which can easily be understood by project participants is central to any successful construction project, and currently an industry void.

Construction cost unit price books should provide consistent clear descriptions of each line item in common terms that all parties can easily understand.  Abbreviations should be avoided whenever possible.

Each line item task, in addition to being clearly defined in “plain English” should include any associated details such as material, equipment, and labor requirements.

Best Value Job Order Contracting Solutions

Job Order Contracting viable for Federal Preventive Maintenance – NJDOT

job order contracting case study

 

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

The 7 basic steps of job order contract program implementation

job-order-contract-task-order-life-cycle

Unit Price Books & Other Things JOC

Unit Price Books – UPBs & Other Things JOC

A Job Order Contract requires the use of a unit price book, UPB, and an associated co-efficient.  Contractor bid one, or multiple co-efficients and then apply the co-efficient to the unit price line items when preparing an estimate for specific JOC project (task order).

In many cases, an area location factor may also be be applied to the estimate, in addition to the construction co-efficient.

Line items from the current UPB are called “priced”, or “prepriced” line items.  Any line item used in a JOC  estimate is called a non-prepriced, NPP line items.  JOC contracts typically limit the total value of NPP line times to be no more than 10% of the total cost of the project estimate.

2015 optimized facility renovation and repair

Historically, most Job Order Contracts have used the  Facilities Construction Cost Data publication from the RSMeans Company, LLC as the UPB.   This was likely because the RSMeans Company, LLC was recognized at an objective national resource for cost data. With the acquisition of the RSMeans Company, LLC by The Gordian Group, the types(s) of unit price books used, and their prevalence, may change.

Most job order contracts, at least in the public sector, require the use of “bare cost” line items, i.e. costs that do not include contractor overhead and profit.  Contractor overhead and profit and other costs are generally expected to be accounted for within the contractor’s JOC co-efficient.

standardized cost data

Any selection of a unit price book for a Job Order Contract should consider the following:

  1. Detailed descriptions for each line item in common industry terms, and with a minimum of abbreviations.
  2. Cost data research and provided by an independent and objective source.
  3. Ease of use
  4. Full search capability
  5. Annual updates
  6. Area cost location factors, with quarterly availability

 

 

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

job order contracting

LEAN Construction & Selecting a Unit Price Book

LEAN Construction & Selecting a Unit Price Book – UPB

LEAN construction delivery drives increased productivity and quality.  Common terms, definitions and financial transparency, however,  are two of several requirements for implementing LEAN collaborative construction delivery.

Job Order Contracting, one of several LEAN construction delivery methods,  standardizes cost information through the used of a Unit Price Book, UPB (also sometimes referred to at a Unit Price Guide, UPG).

Superior unit price guide guides share the following characteristics:

  1. Detailed line item descriptions using commonly shared industry terminology.
  2. Material, Labor, and Equipment breakdowns.
  3. Sufficient information to create cost estimates for 90% or more of project work commonly encountered. (90% by value)
  4. All line items reviewed updated annually at a minimum.
  5. Quarterly labor, material, and equipment adjustment factor updates.
  6. Standardized data architecture – Masterformat
  7. Costs that reasonably reflect construction tasks at your specific location (cost location factors/localized labor rates, etc.)
  8. The ability to add and track custom line items, as well as convert custom line items to standard UPB line items per contract requirements/procedures.

 

 

 

job order contracting

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)

JOB ORDER CONTRACTING

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.

job order contracting

OpenJOCcycle

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 – Education, Training, Best Practices

Job Order Contracting – Education, Training, Best Practices

Strategy – Foundations – Collaboration – Standards – People – Process – Technology – Enabling Tools – Resources

 

Job order contracting provides distinct advantages to traditional design-bid-build, design-build, or CM@R.

Job order contracting is a LEAN collaborative construction delivery method that enable numerous renovation, repair, and construction projects to be completed on-time and on-budget, as well as to the satisfaction of all participants.

Job order contracting is NOT for everyone as it requires a shift is Culture and Behavior as well as a minimum set of capabilities on the part of the Owner, Contractor, and other stakeholders.   In point of fact, many/most Owners are not capable of deploying Job Order Contracting as they require additional education in the areas of LEAN, total-cost-of-ownership, and life-cycle management of the  built environment.   Similarly many contractors may not have the necessary skills and/or mindsets of transparency, collaboration, and shared/common goals.

job order contracting

A best practice job order contacting framework incorporates a JOC contract and an associated job order contracting operations manual.   Roles, responsibilities, and deliverables are clearly defined.   A unit price book, UPB is used by Owners and Contractors to provide line item detail and cost estimates for all construction projects / task orders.

A best practice Job Order Contract is also one that is Owner developed, deployed, and managed.  While outsourcing a Job Order Contracting Program to a third party may provide a way to become familiar with job order contracting, both it and the use of Cooperatives do not provide the full capabilities and benefits associated with Job Order Contracting.

Learn more about Job Order Contracting best management practices…