Job Order Contracting Best Practices
Gordian, as a pioneer in Job Order Contracting (JOC), has implemented and supported hundreds of programs across the country, serving thousands of owners. Every JOC program is unique in its own way, but all successful programs follow a few best practices that maximize the output of the procurement office, support the efforts of the facilities team and enhance the user experience.
What is Job Order Contracting?
Job Order Contracting (JOC) is an Indefinite Delivery/Indefinite Quantity (IDIQ) construction project delivery method that can help project owners reduce the time to construction and supplement their in-house staff. Instead of preparing bid documents and enduring the time-consuming process of putting every individual construction project out to bid, JOC empowers owners to complete many projects with one competitively-awarded contract that satisfies local procurement statutes. Perhaps best of all, JOC establishes prices for construction Tasks up front, ensuring owners maintain budget control.
JOC has its own terminology. If you’re unfamiliar with any of the language, check out our JOC glossary.
Gordian is here to help put these JOC best practices into place for your program.
JOB ORDER CONTRACTING BEST PRACTICE
Develop an Accurate and Comprehensive Unit Price Book
At the heart of every JOC program is a Unit Price Book, the document that will be used as the basis to competitively award JOC contracts and price every Job Order once the contract is in place. The quality of the Unit Price Book will make or break a JOC project. A comprehensive and accurate Unit Price Book allows the parties to focus on completing projects instead of negotiating prices. Conversely, generalized or generic Task descriptions, inaccurate pricing and missing Tasks can put a strain on the owner-contractor relationship if the parties need to negotiate details instead of collaborating in pursuit of the same goal: a successful construction project.
View the Details in a Gordian Task Description
Creating Accurate Task Descriptions
All Task descriptions should be specific and accurate, so projects are done exactly to the owner’s liking. The Task description should contain specifics about the material, such as size or thickness, and use the recognized industry-standard terminology; gypsum board instead of drywall, for instance. For other materials, the Task description should reference the salient features of the product and reference industry standards or a manufacturer’s serial number or model number.
The Importance of Local Pricing
It is a best practice to use only local labor, material and equipment costs in a Unit Price Book for a Job Order Contracting program. Doing so will result in more accurate Unit Prices, instill confidence in bidders and result in more competitive pricing. Unit Price Books that feature national average pricing and adjust to the local market by applying an area cost index will not result in accurate Unit Prices for all Tasks.
When Unit Prices are not calculated using local costs, some Unit Prices will be too high, and some will be too low. To avoid losing money on the lower-priced Tasks, contractors may bid a higher coefficient or Adjustment Factor. An accurate Unit Price Book, based on local costs, makes for more competitive Price Proposals.
Calculating an Adjustment Factor is a process with its own set of best practices. Read about them here.
JOB ORDER CONTRACTING BEST PRACTICE
Create A Pool of Quality Contractors
Getting high-performing contractors to bid on JOC contracts is essential to the success of a program. In addition to the required contract advertisement, Gordian recommends that owners notify high-performing contractors about the contract if local procurement laws allow for such notification. To be clear, the details of the contract cannot be discussed with individual contractors. However; alerting them to the advertisement will deepen the pool of potential, qualified bidders, even those with no JOC experience.
Bringing Contractors Up to Speed
Bear in mind that many contractors have never participated in a JOC program, and their unfamiliarity may cause them to hesitate to bid. A detailed explanation of the JOC process and the benefits of your Job Order Contracting program may convince a contractor, experienced in construction but unfamiliar with JOC, to participate.
Gordian considers it a best practice to conduct a comprehensive and informative pre-bid conference for your local contracting community. This conference is an excellent opportunity to explain the contract and the JOC process and to encourage new contractors to submit a bid. Be sure to discuss key contract terms and the steps of developing a Job Order, and leave plenty of time for questions.
JOB ORDER CONTRACTING BEST PRACTICE
Use a Robust Program Management Software
It’s common to have many JOC projects going at one time. That’s why it is considered a best practice to administer your contracts via a comprehensive program management software built specifically for Job Order Contracting. A robust and reliable software application will serve as your program’s command center, centralizing all communications, documents and information to give you greater control over every project.
A Best-in-Class Job Order Contracting
Program Management Software Should:
- Generate formatted Price Proposals
- Offer a module to review, comment and record changes to Price Proposals
- Track key project dates
- Store project documentation, record budgets and create management reports
- Prevent the contractor from altering the Unit Prices or Adjustment Factors after the contract is awarded
- Verify the calculations appearing in the Price Proposal (Unit Price x Quantity x Adjustment Factor)
- Create a transparent, auditable record of each project and each dollar spent by the owner
Tracking Subcontractors Participation Goals
Building a strong, well-rounded community means creating equitable opportunities for all businesses. To meet that end, many local governments have put in place participation and inclusion goals for its various departments and agencies. Gordian’s secure software provides quality control measures to ensure contract compliance. Our software also tracks your KPIs, you know how your program is performing at all times.
Gordian is here to help put these JOC best practices into place for your program.
JOB ORDER CONTRACTING BEST PRACTICE
Document Program Procedures and Train Staff
A well-run JOC program needs a formal set of written procedures. The procedures should detail each step in the process, from project selection and initiation to issuing a Job Order. The procedures will likely be different for each program and should, at minimum answer some standard questions.
Training Documentation
Must Explain
- Who can initiate a project?
- What should be discussed at the Joint Scope Meeting?
- Who must sign a Job Order?
Training Your Staff in Job Order Contracting Best Practices
Training is a key component of any successful JOC program. All parties involved in the process should be trained thoroughly regarding documented program procedures and the use of program management software. The main goal of training is to make sure everyone knows each step in the process.
Gordian recommends testing knowledge and conducting situational reviews to confirm procedures are being followed. Refresher training courses should be provided as needed. It is a best practice to hold regular meetings to discuss issues that may arise or have arisen, and the solutions that will resolve those issues.
JOB ORDER CONTRACTING BEST PRACTICE
Strategic Project Selection
Believe it or not, there are best practices for deciding when to use Job Order Contracting. Gordian recommends Job Order Contracting for the following types of construction work:
Flip the Cards for More Info About When to Use Job Order Contracting
Routine, Straightforward Projects
Projects that can be scoped, priced and completed quickly.
Time-Sensitive Projects and Emergency Work
Work that must be done immediately.
Backlogged
Projects
Complete backlogged projects or team JOC contractors with in-house staff.
Maintenance, Repair and Operations (MRO)
Keep up with MRO requests like equipment and systems maintenance.
Projects with a Fixed Budget
Complete projects with a fixed budget, like a state or Federal grant.
Replacement-In-Kind Projects
Replacement of an item without needing to change design specs.
JOC is not the right delivery method for every project. Selecting the right construction work for JOC will help make your program a success. Read this blog post,“When is Job Order Contracting a Right Fit for Your Project,” to learn more.
Gordian is here to help put these JOC best practices into place for your program.
JOB ORDER CONTRACTING BEST PRACTICE
Follow a Proven Process
Once a project is identified for JOC, it should follow a proven, time-tested process for developing the Job Order. Just like with construction itself, cutting corners in the process will yield unsatisfying results.
All Gordian Job Order Contracting Projects Follow This Proven Process
STEP ONE
Conduct a Joint Scope Meeting
The purpose of the Joint Scope Meeting is for the owner, contractor and other project stakeholders to meet at the site to see the project conditions, discuss the proposed work, consider Value Engineering options and agree on the work to be performed. Before the Joint Scope Meeting, owners should develop a preliminary Scope of Work and share it with the contractor, along with any documents concerning the site and the proposed work. Giving the contractor enough time to review the information allows them to prepare questions and concerns, and to invite subcontractors if need be. In addition to the contractor, it may be wise for owners to invite the architect, engineer, HazMat representatives — anyone whose input will be valuable.
Here is a recommended list of topics to
be discussed at the Joint Scope Meeting:
- The work to be performed
- Presence of hazardous materials and testing required
- Permits – including drawings for permits
- Identify long lead time materials
- Protocol for workers entering the site
- Staging areas, signage and temporary fencing or partitions
- Construction schedule and work hours – with critical milestones and phasing requirements
- Controlled inspections, testing requirements
- Value Engineering suggestions
- Organization of Price Proposall – CSI, floor, room, phases, etc.
- Due Date for Detailed Scope of Work and for the Price Proposal
- Open issues and those responsible for addressing them
Never conducted a Joint Scope Meeting before? No problem. We’ve got you covered with these tips.
STEP TWO
Prepare a Detailed Scope of Work
It is the Detailed Scope of Work that will govern the work the contractor is obligated to perform. The contractor will be paid the Job Order Price for completing the Detailed Scope of Work within the Job Order Completion Time.
STEP THREE
Prepare the Price Proposal
After the Detailed Scope of Work in finalized, the contractor will prepare the Price Proposal. The Price Proposal should include only the Tasks required to complete the Detailed Scope of Work, the accurate quantities for each Task and the correct Adjustment Factors.
The contractor should also provide quantity calculations and explanations for why certain Tasks were selected. When the Price Proposal is complete, the contractor submits it to the owner for review.
STEP FOUR
Review the Price Proposal
Reviewing Price Proposal is a key step in the Job Order development process. Accurate Price Proposals ensure the owner is paying the competitively-bid price for the correct Tasks, quantities and Adjustment Factors.
For each Task, the reviewer should ask:
- Is this Task required to complete the Detailed Scope of Work?
- Is this Task the most appropriate Task in the CTC for the item of work?
- Is this Task part of another Task?
- Is the quantity correct? Best practice: Ask for calculations, conversions and/or sketches to clarify and confirm quantities.
- Have all appropriate modifiers been selected?
- Has the correct Adjustment Factor been selected?
STEP FIVE
Issue the Job Order
Once the Price Proposal is approved, the owner issues the Job Order. The contractor can then schedule and proceed with the work in accordance with the owner’s standard process.
JOB ORDER CONTRACTING BEST PRACTICE
Establish and Track Key Performance Indicators
Before implementing a Job Order Contracting program, an owner should have a clear picture of what success looks like. Measuring that success means establishing key performance indicators (KPIs) to keep your JOC program healthy and help prove program effectiveness. KPIs can be created for the program, for individual projects and even for contractors.
