How to Select a JOC Unit Price Book

How to Select a JOC Unit Price Book– WHITE PAPER

 

A Common Data Environment in the form of a locally researched detailed Unit Price Book, UPB, significantly improves renovation, repair, maintenance, and new construction outcomes.

 

INTRODUCTION

A Unit Price Book – UPB – is very important to the quality, integrity, productivity, and transparency of a Job Order Contract.

That said, not all JOC Unit Price Books are the same, and the selection benefits greatly from a strategic review of the goals and objectives of your JOC Program.

 

Here is a listing of initial considerations when selecting a JOC Unit Price Book.

Is the UPB locally researched for the cities, counties, states, and/or regions for the JOC area, or does it depend upon location factors? The use of location factors, even if applied separated for material, equipment, and labor, can introduced gross errors.

What labor rates are being used and how detailed is the information? All federal JOCs and a growing number of state/county/local JOCs require Davis-Bacon wage rates. Davis-Bacon wage rates are applied differently depending on the location, and the researcher. Some are dependent upon mileage from a central location, others by region, etc. The UPB should incorporate the highest level of details available and the most recent cost data. Labor generally represents 60% of the total cost of construction project, thus accurate labor information is very important.

Do crews represent real world construction practices? Many of the commonly used price books, even the “leading cost books”, do not have crews that represent current work practices. This easily leads to the wrong productivity rates and significant errors in construction costs.

Are tasks described in plain English and are terms common to the trade used? Using a UPB can be extremely difficult if tasks are not easily and fully understood. Abbreviations should be limited to units of measure, and even then, used in a consistent manner.

Is a common data architecture used for line item organization? The use of CSI Masterformat data aggregation assures efficient distribution, modification/updating, and proper use of the UPB in concert with JOC procedures and goals. The cost database and associated projects and estimates can only be cost effectively created, stored, maintained, and used within a common data environment and JOC-specific technology.

Is the size of the UPB manageable? Some UPB providers market hundreds of thousands of line items. An excessive number of UPB line items can actually be a detriment. Most JOCs involve common renovation and repair tasks and consistently use less than 30,000 line items. Excessive numbers of line items can slow productivity, introduce errors, and case confusion

Are line item modifiers used? Modifiers are important as they add or deduct costs from the “parent” line item based upon variables such as quantity, material qualities, etc. Modifiers, on average, account for 30% of the cost a a JOC task order.

Are demolition line items present? As JOC involves renovation and repair, demolition line item costs are generally an important component of a JOC estimate.

Are full training and support services available in multiple levels (introductory, advanced) and formats (on-site, regional, virtual)? Ongoing training and support by senior JOC professionals are critical to program success.

Is the UPB vendor independent from your JOC program? It is critical that any JOC consultant involved in approving individual JOC task orders be totally independent form any JOC products or services.

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Glossary and Supplementary Notes:

Collaboration – Collaboration among construction project participants and/or stakeholder is critical to assuring a proper definition of the scope of services, and thus mandatory if the estimate is to reflect the expectations of the owners, design, contractor, etc. Achieving the best possible outcome for the estimate and the overall construction project, is dependent upon the processes involved in gathering accurate information in a timely manner. Employing the actions and philosophies associated with continuous improvement and LEAN best management practices adds to the overall success as well.

Contractors – Detailed, unit price, line item estimates are used to bid jobs and also done by general contractors and construction managers to validate bids from sub-contractors.

Detailed cost estimate – A forecast of construction cost, prepared on the basis of a detailed analysis of materials and labor for all items of work.”– 13th edition of the Architect’s Handbook of Professional Practice

Material, Equipment, & Labor – A detailed, unit cost, line item construction cost estimate involves a review and understanding of the scope of work of the associated project, including all possible factors and risks. Materials, labor, and equipment costs are provided in the highest level of granularity.

Owners – Real property owners and/or facilities managers responsible for life-cycle management of the built environment. Detailed, unit price, line time estimates are required by public agencies for most JOC/IDIQ construction projects. If the project exceeds a specified dollar threshold, an independent owner estimate must also be created (also called an independent government estimate – IGE). Line item estimates are also used to create and validate construction budgets.

Productivity – Earned value work accomplished, generally represented as a percentage. Construction productivity can be affected by multiple variables; labor composition, skill level, weather, work flow, site access, materials availability, etc.

Required Skills – Field experience at construction sites is extremely important, as is the only way to gain a true appreciation of processes, risk factors, and other variables that can impact a construction project. The ability to review and interpret construction drawings, work with cost estimating formulas and technologies, and the ability to communicate information to disparate disciplines and audiences are also vital.

Process Tasks – Processes associated with creating a line item construction cost estimate include the following:

Full definition of the scope of services requires several considerations, such as:

  • Estimate preparation
  • Validation of contents and assumptions
  • Estimate reconciliation (if multiple estimates are required for a project)
  • Documenting and presenting the estimate
  • Identifying inclusions and exclusions
  • Defining the basis to be used for pricing (construction cost databases and/or unit price books – UPB, unit price guides, subcontractor quotes)
  • Presentation of line items as bare costs or inclusive of overhead and profit
  • Classification system to be used, i.e. CSI MasterFormat, Uniformat II, WBS, etc.
  • Format of the estimate (summary level, detailed level, price vs. non pre-priced items, associated formulas, source of each line item).

The above information is via Four BT, LLC – Best value provider of JOC solutions: Unit Price Books, Technology, support, training, and professional JOC servcies – 4BT.US

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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

 

 

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.

 

 

 

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