History of Job Order Contracting – JOC, The LEAN Collaborative Construction Delivery Method

Early 1980’s – U.S. Military Academy, West Point, facility engineers realized the disadvantages of the design-bid-build construction delivery system, and implemented an a new indefinite delivery- indefinite quantity (IDIQ) facility maintenance contract which was first used by the Supreme Headquarters Allied Powers Europe (SHAPE) in Belgium.

West Point managed to accomplish the following:

1. Minimized the response time for facility construction.
2. Reduced the workload on in-house design staff.
3. Enhanced quality control.
4. Lowered the contract administration costs.
5. Reduced construction costs.
6. Reduced the backlog of maintenance and repair.

[1999, Journal of Construction Education, Development of the Job Order Contracting (JOC) Process for the 21st Century, Dean T. Kashiwagi and Ziad Al Sharmani, Arizona State University, Tempe, Arizona]

Timeline (please comment/suggest additions and/or modifications)

1981  -“ Existing in federal procurement since 1981, and only recently making its way down to state and municipal levels, Indefinite Delivery (ID) contracting is a procurement mechanism designed to streamline the competitive bidding process for governmental owners. Invented by the Department of Defense for use by the North Atlantic Treaty Organization, ID contracts have been used routinely and effectively by the DOD for installation maintenance, minor repair, and construction projects since its inception in 1981.” “Whether classified as an ID, JOC, or TOC contract, each shares certain similarities.” (2006, IDIQ Contracts, Denise Farris | March 30, 2006 | Construction)

1985 – West Point Academy

1986 – Air Force bases – SABER

1987 – Navy JOC

1988 – JOC  Implemented Army-wide (1997 – Improving the Army’s Job Order Contracting ProgramCE704R1, September 1997, Jordan W. Cassell, Linda T. Gilday)

1988 – When job order contracting was first developed in 1988, MCACES was the only estimating system available to JOC users. Since that time, the JOC concept has changed somewhat; contracting officers now have a choice of estimating systems. Current Army policy requires that all Army installations use the MCACES UPB as the estimating system under JOC. The Air Force uses the R.S. Means estimating system. The Navy uses both the R.S. Means and the MCACES UPB estimating systems.  (Improving the Army’s Job Order Contracting Program CE704R1 September 1997)

1990 – U.S. Navy publishes Job Order Contracting P068B, September 1990

1992 – Assistant Secretary of the Army for Installations, Logistics, and Environment, and the Assistant Secretary of the Army for Research, Development, and Acquisition establish a Job Order Contracting Steering Committee to develop recommendations for policies, guidance, procedures, and training for the U.S . Army JOC Program

1995 – Army’s JOC policy manual, Job Order Contracting Guide, is published.

1996 – U.S. Army’s Center for Public Works (USACPW) Humphreys Engineer Center published the Job Order Contracting Directory (October 1996), and  supports a telephone hotline for JOC installations through a private contractor, U.S. Cost, Inc., and publishes a newsletter called “JOCkey”.

What is Job Order Contacting – JOC ? Efficient Project Delivery Methods

JOC is about performance!
•Faster delivery of projects
•Overall higher quality
•Maximizing construction budgets
•Making contractors and owners more efficient
•Controlling costs

What is JOC? – Job Order Contracting (also known as SABER, TOC, DOC, and a form of  IPD):

1. A long-term, indefinite delivery indefinite quantity (IDIQ) contract
2. Reliant on a Unit Price Book (UPB) and competitively-bid coefficient to establish pricing structure
3. Executed through a series of project-specific delivery orders using a well-defined process
4. A way to enable a facilities partnership focused on repetitive upgrade tasks and continuous improvement

Advantages of Job Order Contracting – JOC – for OWNERS

1. ability to focus internal staff on mission critical and priority needs while outsourcing normal, routine tasks
2. improved quality of project delivery and end results
3. achieve small and disadvantaged business goals
4. work with a contractor partner who knows your facility as well as you do
5. flexibility and ability to match scope to budget
6. fewer change orders, increased response to warranty issues, virtually no legal disputes
7. overall project time savings
8. a more cost-effective, value-added service

Advantages of Job Order Contracting – JOC – for CONTRACTOR

1. move away from the low capture ratios and low profit world of traditional design-hard bid-build and achieve reasaonble payment for your effort and service
2. develop a cooperative, long-term relationship with your customer
3. achieve a predictable work flow
4. weather downturns in construction economic cycles

JOC Features:

•Integrated team
•Early collaboration
•Best value or QBS
•Pricing transparency
•Performance incentives
•Inherently LEAN

•Pricing structure relies on a Unit Price Book
•Competitively-bid coefficient is applied to the UPB and establishes pricing at the outset of the contract
•Coefficient includes all costs for installed unit of measure including materials, labor, overhead, profit and sometimes bond and tax
•Establishes contractual unit pricing for a broad range of construction activities at procurement
•Location modifier is also typically applied

JOC Best Practices
1.Owner should adequately scope the project before issuing a Notice of Work Requirement

2.Carefully consider and define what level of design will be required in delivery order proposals, given your organization’s requirements and needs

3.Owner should ideally conduct an independent estimate, but at a minimum must be trained in the cost database and take responsibility for reviewing delivery order proposal and estimate

4.Owner should be actively engaged in project management to avoid scope creep, in project development and execution phases

5.Owner should review contractor performance after every delivery order or at specified intervals to achieve continuous improvement

6.Use Best Value selection if you can

7.Utilize Bare Cost column in RSMeans to provide alignment with a larger database for broader use

8.Craft contract terms that leverage the transparency, flexibility and granularity of RSMeans data within JOCWorks (e.g., demolition, application of CCI, etc.)

9.Don’t bid contractors against each other at the delivery order level

10.Recognize that it is a people business

 

Information republished/edited from “Using RSMeans Cost Data for Job Order Contracting”, via http://www.4Clicks.com – Premier cost estimating and efficient project delivery software solutions for JOC, SABER, IDIQ, MATOC, SATOC, MACC, POCA, BOA, BOS … featuring an exclusively enhanced 400,000 line item RSMeans Cost Database, visual estimating/automatic quantity take off ( QTO),  and collaborative contract/project/document management, all in one application.   Our technology is currently serving over 85% of United States Air Force bases and rapidly growing numbers of other DOD and non-DOD (United States Army Corps of Engineers,  Army, GSA, Homeland Security, VA..) federal departments/agencies, as well as state/county/local governments, colleges/universities, healthcare,  and airports/transportation.  RSMeans Strategic Partner.