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”.

How NOT to run a Job Order Contract – JOC

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:

  1. 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.
  2. 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.
  3. Do not use JOC for projects under or over established dollar thresholds per contract.
  4. Do not make JOC awards to contractors solely bases upon price and/or coefficient.
  5. Do not allow any JOC task order to be approved without a detailed review of the contractor’s construction cost estimate.
  6. Do not start a JOC project without a joint site visit (with the contractor) and a project kick-off meeting.
  7. 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.
  8. Do not omit to conduct internal JOC line item estimates for project over a specified threshold.
  9. Do not conduct a JOC Program without regular audits.
  10. Do not conduct a JOC Program without annual training for all participants.
  11. Do not approve or implement a JOC Contract wihout a comprehensive written JOC Operations Manual and its mandated use as part of the contract.
  12. Do not create or implement a JOC without a thorough review of applicable law / regulations.
  13. Do not expect a contractor to be able to create a construction estimate without provide a sufficient statement of work – SOW.
  14. Do not approve a JOC without a project timeline.
  15. 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.
  16. Do not approve coefficients outside of a range of 0.80 to 1.20 unless there are mitigating factors.

 

JOC, SABER, IDIQ – Efficient Construction Project Delivery – Job Order Contracting

Early and ongoing information sharing, from concept thru warranty and beyond, is the single most important aspect to achieving optimal construction outcomes.

Few experienced architects, engineers, contractors, or owners would disagree with the above statement.  Yet, the importance of the construction delivery method in enabling the above and driving greater productivity and satisfaction is rarely understood.

Collaboration, transparency, communication, actionable & current information, and skilled teams are fundamental requirements for renovation, repair, maintenance, or new construction projects.   All, however, require robust, LEAN best management practices and technology for appropriate support and consistent implementation.

While design-built (DB) and integrated project delivery (IPD) are suitable LEAN delivery methods for major new construction, they are not properly scaled for the numerous and ongoing renovation, repair, sustainability, and minor new construction projects that account for the bulk of real property management activities.

Fortunately collaborative construction delivery methods for smaller projects have been implemented and proven for over a quarter of century.  They go by various names, such as JOB ORDER CONTRACTING – JOC, SABER, IDIQ, TOC, etc.    All may be implemented is varying manners tailored to Owner requirements and market sectors, however, all stand ready to support the increased focus upon maintaining existing buildings and other forms of physical infrastructure.

Despite the availability of LEAN construction delivery methods for renovation, repair, and maintenance, few real property owners outside of the Federal Government sector apply them on a widespread and/or appropriate basis.  The negative result of lack of education, awareness, and best practice implementation on a widespread basis is a continuance of waste and low productivity endemic to the construction sector.

All real property owners and oversight groups, whether in federal/state/county/local government, education, healthcare, transportation, utilities, etc., would benefit from the cost and time benefits provided by collaborative construction delivery, especially JOB ORDER CONTRACTING – JOC.

The Federal Government developed and leads in the implementation of Indefinite Delivery Indefinite Quantity (IDIQ) construction delivery and procurement approaches, and specifically JOC.    JOC is a long-term contract (typically 3-5 years).  Work is delivered under multiple task orders, and the specific project needs are undefined at contract acquisition. A JOC does have a detailed, line item unit price book – UPB that is organized using industry standards such as CSI’s Masterformat.   The Contractor(s) is selected for the duration of the contract and is awarded work based upon performance and need.  A minimum and maximum dollar values is associated with the contract.  Benefits of this approach are clear.  The contractor(s) is more experienced with the owner’s buildings, requirements, and work methods/processes and both procurement and overall project delivery times are significantly reduced.   Higher quality and satisfaction also are benefits as both owners and contractors have a better understanding of actual job scope as well as mutual expectations.

Job Order contracting best supports ongoing renovation, repair, maintenance, sustainability, and minor new construction projects vs. other project delivery methods.

Individual JOC task orders average under $1 million, yet JOC contracts can range to $350M+.

The following graphic outlines a typical JOC process.

job order contracting

Owners request a contractor proposal, a joint site visit assures full understand of job scope, detailed line item costs are developed by the contractor and by the owner (based upon size of the job), owner issues a notice to proceed, and work is completed and approved.

Technology supports and embeds the JOC process and is mandatory for enabling optimal efficiencies. JOC-specific software versus spreadsheets drives collaboration, accuracy, transparency, information use and re-use, and assure appropriate reporting.

joc CERTIFIED

BIM – Getting it Right

A BIM is a digital representation of physical and functional characteristics of a facility. As such it serves as a shared knowledge resource for information about a facility forming a reliable basis for decisions during its lifecycle from inception onward.” – buildingSMARTalliance – NBIMS – NIBS

Early definitions which assert that BIM is simply a 3D model of a facility are far from the truth and do not adequately communicate the potential of digital, object-based, interoperable building information modeling processes and tools and modern communications methods.- buildingSMARTalliance – NBIMS – NIBS

If implemented, nearly every piece of information that an owner needs about a facility throughout its life can be made available electronically. – buildingSMARTalliance – NBIMS – NIBS

BIM STRATEGY – TOP TEN LIST
1.Coordinate and plan with all parties before you start – Efficient, collaborative project delivery methods ( IPD, JOC) are critical to success.
2.Ensure all parties have life cycle view – involve them early and often – Owners, AEs, Contractors, Facility Management, Users, Community, Stakeholders/Oversight Groups
3.Build the model then build to the model
4.Detailed data can be summarized (The reverse is not possible)
5.Enter data one time then improve and refine over life
6.Build data sustainability into business process – keep data alive.  Ongoing process – Continuous improvement!
7.Use information assurance and metadata to build trust – know data sources and users
8.Contract for data – good contracts make good projects
9.Ensure data is externally accessible yet protected
10.Use international standards and cloud storage to ensure long term accessibility

via http://www.4Clicks.com – premier cost estimating and efficient project delivery software for JOC, SABER, IPD, IDIQ, SATOC, MATOC, MACC, POCA, BOA

BIG DATA = BIM
BIG DATA = BIM

Job Order Contracting – Integrated Project Delivery for Renovation, Repair, Sustainability, and Minor New Construction

Job Order Contracting is a high performance delivery method that delivers superior quality, schedule, and cost results over other traditional design-bid-build.

Quality is a combination of conformance to specifications combined with a relatively few number of related change orders, reworks, and service calls.
In addition there is the quality of the Owner/Contractor/AE/Building User relationship(s), inclusive of mutual respect and trust.

JOC enables optimization of quality across all areas.  It does so by offering  a proven process that pushes information sharing towards the front of the line in both focus and time.   JOC is one of the few construction delivery methods to  require joint “pre-construction”services by the Contractor and Owners.  Contractors provide upfront project support spans constructability review and value engineering as part of the proposal process.


The above are just some of the reasons that JOC projects endure a change order rate  of less than 1%.  Furthermore, this stat is for renovation/repair  work in existing  buildings.   What is your change order rate for similar projects….  10%? More?

Trust is critical to any successful business relationship, however, is lacking in many/most traditional construction projects.  JOC alters the paradigm.

As an Owner, ask yourself –

Did we have fewer changes than we would have experienced under other methods?

Did we have little or no non-conformances or rework?
Did we have low punchlist items and were they cleared promptly?
Did the contractor deliver other services which were essential in helping us get a good project?
Do I trust my contractors?

Additionally, Usually JOC yields lower Procurement and Design Costs and shorter timelines.
Source:  Above was adapted from the CJE Fall 2012 Newsletter

Via http://www.4Clicks.com – Premier cost estimating and efficient project delivery software for JOC – Job Order Contracting, SABER, IDIQ, SATOC, MATOC, POCA, MACC, BOA, and more!  Featuring exclusively enhanced 400,000 RSMeans line item cost database.

Job Order Contracting – JOC – Certificate Program

The Alliance For Construction Excellence

 

 

ACE Job Order Contracting (JOC) Certificate Program

Mondays,  4:30 – 8:00 p.m.

 October 29th – March 4th (15 weeks)
Four Monday classes will not be held due to the holidays
Location: To be Confirmed 

The ACE Job Order Contracting (JOC) Certificate Program is an in-person, 56 hour program that will result in attendees receiving their JOC Professional Certification upon completeion of the program and the passing of the Certification exam.
Sessions will cover:

  • Different Project Delivery Methods and their applications
  • Basic elements of JOC
  • Requirements of a Successful JOC Program and is it the right method
  • JOC Operations including how to set up a JOC Program
  • Roles and Responsibilities of those involved
  • Individual Job Order to include Preconstruction Services, Scope of Work, Price schedule and change orders
  • How to manage a JOC Program to include training, reporting, communication tools, relationship building techniques and audits
  • Job Order Pricing
  • JOC Selection Process
  • Legal considerations and contracts which are key to a successful JOC Program
  • JOC Operations Manual
  • Collaborative Thinking to ensure win-win-win results
  • Case Studies weaved throughout the 15 weeks take students into real-life experiences

Instructors to Include:

Gary Aller, Director, Alliance for Construction Excellence

Charlie Bowers, LEED AP, Centennial Contractors Enterprises

Hank Traeger, Retired, Alliance for Construction Excellence

Mark Powell, LEED AP, Kosten Technik International

 

ACE JOCCP is perfect course for:

Developers, Owners, Construction Managers, Project Managers, Architects, Engineers, Contractors, Subcontractors, and Residential, Civil, & Commercial Construction Professionals
There are no prerequisites to enroll in this program, but basic knowledge about the construction process will be assumed. A certificate of completion will be awarded for successful completion of the course and 5.6 noncredit CEU’s will be awarded for those who attend and successfully complete the 56 hours of instruction (3 absences are allowed to receive full CEU’s).

 


 

Registration Fee
ACE Members — $3295    l     Non-Members  — $3635
Register Online:

www.ace4aec.com/course/job-order-contracting-joc-certificate-program-10292012
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If you have any questions, contact the ACE office at 480-965-4246.

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 Definition of JOB ORDER CONTRACTING – JOC

Job order contracting – JOC –  is an innovative procurement technique designed to provide more responsive facility maintenance, repair, sustainability,  and minor construction.  It is intended to significantly reduce engineering and procurement lead-times by awarding a competitively bid, firm-fixed-price, indefinite-quantity, multitask contract (IDIQ)  to a single general contractor. The contract consists of detailed task specifications for a multitude of real property maintenance activities encountered within a specific geographic area.

Use of a job order contract (JOC) avoids separate design, specification, and construction contracting actions. Prepriced units of work are used to help streamline the process. The contracts are awarded by competitive procedures. Upon award, a contractor receives individual task orders, also called delivery orders, based on continued levels of high performance. This incentive mechanism is unique to JOCs.

JOCs are based on a proprietary or commercially available unit price book (UPB) that lists all tasks encompassed by a contract with a corresponding unit price. The vast majority of JOC contracts use RSMeans Cost Data in some manner.  4Clicks Solutions, LLC offers  exclusively enhanced 400,000+ line item RSMeans Cost Data access inclusive of full line item descriptions and modifiers.  This UPB can be localized and supplemented with client specific line items and place within a power, easy-to-use software solution that automates many aspects and helps to assure consistency of JOC implementations.
In making offers on the JOC contract, offerers propose multipliers  or coefficients  for work performed during normal working hours, and for work performed during other than normal hours.
Multiplying the UPBs unit prices by the appropriate coefficient determines the total price. Should the task order include supplemental items that the UPB does not identify, the contractor and the owner jointly determine a fair price for these items. These items are added to the UPB work for a total cost of completing a task order. The items that are not included in the UPB are called either non-prepriced items (NPIs) or non-prepriced work (NPP).

(above adapted from Logistics Management Institute – Improving the Army’s Job Order Contracting Program, via http://www.4Clicks.com)

Job Order Contracting – JOC ( Integrated Project Delivery for Renovation, Repair, Sustainability, and Minor New Construction)Requires Owner and Contractor Expertise, Commitment, Trust, and More.

Of the two dedicated Job Order Contracting Solutions available in the United States, one provides and recommends an open, transparent, and mutually collaborative approach, including an independent, nationally recognized and vetted cost database, developed and customized as required to client requirements, from RSMeans Company LLC.

A recent Audit Report by the New York City Comptroller on a non-RSMeans based system, highlights some critical aspects of any JOC – Job Order Contracting – program.

(Report Beginning)

Audit Report on Job Order Contracting by the Department of Design and Construction (note: This is one of many audits over the past several years, with few problems resolved).
JUNE 28, 2012

AUDIT REPORT IN BRIEF

Download the Complete Report (pdf 214 KB)

The Department of Design and Construction (Department) manages the design and construction of more than $6 billion new and renovated City facilities such as firehouses, libraries, courthouses, sewers, and water mains.  The Department uses job order contracting (JOC), a construction procurement method, for performing small- or medium-sized construction projects.  Under a job order contract, the Department’s Job Order Contracting Unit (JOC Unit) can direct a contractor to perform individual tasks as needed rather than awarding individual contracts for each small project.  The cost of JOC work is based on previously established unit prices for specific items (e.g., roofing, drywall, etc.).  Using the established unit prices, the JOC Unit will issue a job order to a job order contractor to carry out the work based on specific tasks.

The Department’s use of JOC began in 1996 when the Department employed a consultant, The Gordian Group, to develop and implement the Department’s JOC program that included creating a catalog of unit prices, software (PROGEN), and training and ongoing management throughout the life of the contract.

In Fiscal Years 2009 and 2010, the Department utilized 19 job order contracts authorizing  up to $74 million in construction expenditures.  Under these contracts, the Department executed   139 specific job orders totaling $24,549,827.

Audit Findings and Conclusions

The Department is unlikely to attain between $2 million and $3.7 million in cost savings from the JOC program because the program is not being administered as effectively as it should be.   Had the program been administered more effectively, the Department might have achieved a cost saving that, according to the Department’s JOC Training and Reference Manual, could  “save a typical facility owner 8-15% [highlighted in the manual] in overall project costs as compared to traditional contracting methods.”  Specifically, we found that job orders are not developed in a timely manner, cost estimates are not reliable indicators of the actual cost of work, and construction work is not carried out in a timely manner.  Moreover, there is a lack of guidelines that spell out the circumstances and monetary threshold for job order work and a lack of standards for measuring whether the JOC program is, in fact, achieving anticipated cost savings.

Furthermore, when job order work was delayed, the Department did not impose liquidated damages totaling more than $450,000.  Additionally,  problems with the Department’s PROGEN database impede the Department’s ability to effectively monitor the status of JOC project work and ensure that projects are proceeding expeditiously.  Finally, our observation of sampled job order projects and a review of file documentation leads us to conclude that the quality of work overall was satisfactory. 

Audit Recommendations

This report makes a total of 12 recommendations, including that the Department:

  • Formulate measurement criteria to assess whether the JOC program is attaining its goal of achieving savings in overall project costs.
  • Complete development and submit job orders for registration within the required 45-day timeframe.
  • Provide independent estimates for job order work.
  • Ensure that JOC contractors complete work on schedule.
  • Develop and implement written guidelines that stipulate the circumstances and monetary threshold under which the use of job order contracts would be appropriate.
  • Ensure that all job orders contain provisions for liquidated damages.  Determine whether liquidated damages should be assessed for the cases noted in this report.
  • Ensure that accurate and complete information is recorded in the PROGEN system.

(Report End)

What JOC should be….

“Job Order Contracting (JOC) is a method of managing multiple details of renovation, rehabilitation, repair, and other construction projects on a predetermined set of pricing and standards. By using JOC customers take advantage of a process that is fast and responsive to their needs while providing excellent quality construction.”

–Center for Job Order Contracting Excellence (www.jocexellence.org)\

Benefits that could be realized by implementing a robust job progam:

Faster project delivery (3-9 months less), Streamlined engineering and design, Cost visibility/transparency, Better contractor performance, Integrated Team – Partnering/collaborative owner/contractor relationship, More opportunities for local business, Effective use of year-end funds, Higher overall satisfaction

Items to Consider for a Robust, Transparent, and Successful JOC Program:

Assess in-house capabilities
   Project Management Capacity
   Skillsets
      Line-item estimating, or ability to review  estimates, Proactive definition of scope, In-house maintenance crews
Training Plan
How will JOC interface with your design professionals?
Flowcharting how JOC process will interface with purchasing, management and board approvals
Contractor Requirements{
  Company culture of high performance needed to succeed in JOC?
  Ability and capacity to create productive teams?
  Proactive rather than reactive?
  Line item estimating capabilities?
Additional items for consideration for implementing or improving a JOC – Job Order Contracting or SABER Program:
o Your specific requirements, implementations, responsibilities, level of involvement, and rules for youre JOC or SABER Project Delivery Program
o Basic elements of JOC
o Requirements of a Successful JOC Program and is it the right method
o JOC Operations including how to set up a JOC Program
o Roles and Responsibilities of those involved
o Individual Job Order to include Preconstruction Services, Scope of Work, Price schedule and change orders
o How to manage a JOC Program to include training, reporting, communication tools, relationship building techniques and audits
o Job Order Pricing
o JOC Selection Process
o Legal considerations and contracts which are key to a successful JOC Program
o JOC Operations Manual
o Collaborative Thinking to ensure win-win-win results
o Review of past experiences / case studies of others
o Role of Technology and selecting appropriate JOC Program Partners
o The Value / Importance of Objective third-party cost data / UPBs
via http://www.4Clicks.com – Premier providers of cost estimating and project management software for efficient project delivery – Job Order Contracting – JOC, SABER, IDIQ, SATOC, MATOC, MACC, POCA, BOA.