Job Order Contracting
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What Is JOC Why Use JOC How It Works What Is Required Who Uses JOC Recognition Where Can I Get Help

How It Works?

A JOC system is a great deal more than just a unit price book and some pre-packaged software. JOC is a comprehensive procurement system for construction and construction related services. It was specifically designed to help facility owners complete routine construction services rapidly and at a significantly lower cost.

A Job Order Contract is a specially designed indefinite quantity contract that is awarded on a periodic basis to one or more contractors.

Each Job Order Contract is awarded through a competitive process using either a sealed bid or a Request for Proposal. The contract value is expressed as a range from a pre-established minimum amount to a maximum dollar amount. Work is accomplished by issuing a series of individual Job Orders to the contractor. The prospect of additional work keeps the contractor motivated to provide timely, responsive, high quality construction.

The Job Order Contract package consists of three major documents:

  • A location specific Construction Task Catalog® containing up to 260,000 construction tasks. Each task contains a task description, unit of measurement, and a unit price. Each unit price contains locally developed direct costs for material, equipment and labor. The construction tasks are specifically tailored for the individual facility owner and include all the tasks appropriate for that owner’s construction work.
  • A set of detailed Technical Specifications for each of the construction tasks. The Technical Specifications incorporate the facility owner’s standard specifications.
  • The Contract and General Conditions which contain the specific contract language concerning the execution of the contract. The facility owner’s standard contract terms and conditions are merged with the required JOC language.

No specific project or task is identified during the bid process.

The general guidance given to potential contractors during the competitive procurement process is that the facility owner cannot provide any specific information about individual projects or types of projects. The facility owners do not commit to using specific tasks or quantities of tasks, but only provide general information about the type of facilities that they have. Contractors are told that the value of the contract will range from a nominal minimum amount to a maximum amount, that the volume of work they receive will depend on their performance, and that the owner is only obligated to give them the minimum amount of work during the first term of the contract.

Bidders typically bid or propose 2 adjustment factors

Bidders “bid” on work contained in the Construction Task Catalog® by quoting one Adjustment Factor to be applied to tasks performed during normal working hours and one Adjustment Factor to be applied to tasks performed during other than normal working hours. These two Adjustment Factors represent the contractor’s adjustment to the unit prices published in the Construction Task Catalog® and include all indirect costs such as overhead, profit, bonds, insurance, design and contingency costs.
For example, an Adjustment Factor of 125% would be bid as 1.25. During the execution of the contract, the unit price of a specific construction task is multiplied by 1.25 to obtain the final price to be paid for that task.
JOC is a competitively bid contract since all the prices and the Adjustment Factors are established before the contract is awarded.

Developing the Job Order

The JOC execution process begins with a Joint Scope Meeting where the contractor and the owner meet at the site to review the proposed work. The contractor is invited to ask questions and make suggestions. After the Joint Scope Meeting, the owner provides the contractor with a written Detailed Scope of Work. The level of detail and design included in the Detailed Scope of Work is a function of the difficulty and type of the particular project. The contractor then breaks the work down into individual items of work and prepares a pricing Proposal by selecting the unit price tasks contained in the Construction Task Catalog® to accomplish the Detailed Scope of Work. The total price is calculated by multiplying each unit price by the required quantity and then multiplying that result by the appropriate Adjustment Factor. Along with the Proposal the contractor also develops a schedule, a list of subcontractors, and any required drawings or sketches. The Proposal is then compared to the owner’s in house estimate and reviewed to make sure the contractor selected the correct tasks and appropriate quantities. If the owner is satisfied that the Proposal is accurate and the price is reasonable then a firm fixed priced, lump sum Job Order can be issued to the contractor. The Job Order is the contractor’s notice to proceed. The contractor is required to complete the Detailed Scope of Work for the lump sum price within the agreed upon schedule. Inspection and acceptance of work are completed according to the facility owner’s standard practice and procedures.

Continuing Incentive

The major advantage of a JOC program is that the potential for additional Job Orders gives the contractor a continuing incentive to do timely and high quality work. Each Job Order represents only a small portion of the total volume of work that the contractor could receive. To receive additional Job Orders, the contractor must complete each Job Order to the owner’s satisfaction.

What Is JOC Why Use JOC How It Works What Is Required Who Uses JOC Recognition Where Can I Get Help