How NOT to run a Job Order Contract
Job order contracting can delivery a significantly higher number of quality renovation, repair, and maintenance construction projects on-time and on-budget.
There can be major issues, however, if an Owner is not fully involved and doesn’t have the ability to create and manage a JOC Program per best management practices.
Here are few items that should NOT be done in a Job Order Contract:
- Do not use Job Order Contracting as means to bypass the procurement/purchasing department, or to execute construction jobs that otherwise would not normally have been approved.
- As an Owner, do not pay a fee to a JOC consultant based upon the amount of construction associated with the JOC program, if the consultant project approval authority. This can create a potential, if not overt conflict of interest.
- Do not use JOC for projects under or over established dollar thresholds per contract.
- Do not make JOC awards to contractors solely bases upon price and/or coefficient.
- Do not allow any JOC task order to be approved without a detailed review of the contractor’s construction cost estimate.
- Do not start a JOC project without a joint site visit (with the contractor) and a project kick-off meeting.
- Do not approve any JOC project/task order that has nonprepriced items (line item not obtained directly from the approved JOC Unit Price Book) totaling more than 10% of the total project cost.
- Do not omit to conduct internal JOC line item estimates for project over a specified threshold.
- Do not conduct a JOC Program without regular audits.
- Do not conduct a JOC Program without annual training for all participants.
- Do not approve or implement a JOC Contract wihout a comprehensive written JOC Operations Manual and its mandated use as part of the contract.
- Do not create or implement a JOC without a thorough review of applicable law / regulations.
- Do not expect a contractor to be able to create a construction estimate without provide a sufficient statement of work – SOW.
- Do not approve a JOC without a project timeline.
- Do not assume a JOC unit price book is static. At a minimum the UPB should be updated annually, and adjusted quarterly via an economic factor.
- Do not approve coefficients outside of a range of 0.80 to 1.20 unless there are mitigating factors.