Repair and Renovation Projects
- By Mike Coberley
- December 1st, 2009
Today's educational facility planners face the daunting task of doing more with less. With costs for new construction escalating, refurbishing existing facilities becomes an ever more attractive, if not necessary, prospect. Unfortunately, traditional procurement methods don’t always provide facility planners with the quick response and budget control required. There is an alternative procurement vehicle that has the potential of providing a more responsive and cost-effective solution — Job Order Contracting (JOC).
When the district Facilities Services Division of one southeast U.S. school decided to renovate district schools, a JOC contract processed more than 40 delivery orders one spring for $22M, saving the district considerable time on procurement and getting all the districts’ schools opened on time. The JOC contractor renovated thirty-six classrooms and eight bathrooms in 35 days. Furthermore, over the five-year life of the contract, 76 percent of the contracts, representing $26M, were awarded to local small businesses, benefitting the local economic community.
For a Texas school district, 30 delivery orders were executed simultaneously, with 100 percent of all delivery orders completed on time. Quick response resulted in 50 portable classrooms being erected in just 68 days, the first time portable classrooms had been ready for the start of the school year.
Competitive Price, One Point-of-Contact
Job Order Contracting (JOC) provides school districts with an onsite construction manager to accomplish concurrent multiple repair, renovation and construction projects under one competitively bid, fixed-price contract. A JOC is a fixed-unit price, indefinite delivery, indefinite quantity, long-term contract with rates pre-established by a recognized source, such as RS Means. While most contracts are base year with multiple option years, through JOC, multiple construction projects can be delivered simultaneously or as needed through on-call work orders. The long-term relationship associated with JOC encourages a level of cost control, flexibility and responsiveness that other types of contracts don’t.
Under JOC, projects spending are always under your control. Here’s how it works. When you determine which projects need to be undertaken, you simply request a proposal. The JOC contractor produces a line-item estimate specific to the scope. Each mutually agreed upon task order is priced at a guaranteed fixed price. Any change orders after the agreement are initiated by the customer, and follow the same mutual review using the selected price book.
You don’t have to chase down an architect, engineer, plumbing contractor, painter and carpenter when a pressured water pipe breaks. Or, track down everyone it takes to move portable facilities. You make one call to one point of contact for your project needs.
If you’ve ever stopped to calculate the cost in time and money spent to bid out every renovation, repair activity or minor construction project — big or small — you’d understand the significant cost savings realized through JOC. Rates are established once, up front, which means there are no surprises or unexpected costs when starting a new job. This not only saves you administrative time and money, but avoids delays in getting your projects started — and completed.
JOC’s also typically provide faster visual results for a school district's staff and constituents. Everyone starts seeing bond money put into action as progress is more quickly made on the backlog of repair or renovation projects.
A 20-Year Veteran
The JOC concept was initiated by the U.S Corps of Engineers in 1985 to provide a more efficient solution to facility repair requirements, and to substantially reduce the procurement cycle time to award and accomplish multiple job orders. Due to the Department of Defense’s success with JOCs, many state legislatures have enacted laws authorizing JOC contractors.
A JOC contract is awarded on a "best value" basis, which is determined by an evaluation of past performance, technical expertise and price. The contracts have a low guaranteed minimum value of work, with a realistic maximum value dictated by local procurement rules. The difference between the minimum and maximum volume, and opportunities for year-end extensions at client discretion, give the contractor a strong incentive to provide high-quality, cost-effective and responsive service.
The simplicity of establishing a JOC is one of its attractions. A contractor becomes an entity’s contractor of choice through a competitive bid. Upon award, a program management office is established locally. Once in place, the JOC is immediately available to begin meeting your repair and renovation needs.
Work begins by simply identifying the work needed to be don. After performing an evaluation of the proposed task, the contractor develops a complete scope, or detailed line estimate, and presents it to the client for approval before work begins. The customer and contractor review the estimate and scope and make adjustments where necessary to meet the available budget. Once the scope and budget are agreed upon, the client issues a lump-sum, fixed-price job order, sub-contracts are let and work begins.
There is also a quality control benefit embedded in this process. Because the JOC only guarantees a minimum amount of work for the contractor, the success of the JOC and the award of projects above the minimum is based on your ongoing satisfaction with results.
Working to Benefit the Local Community
For many businesses potentially looking to use a JOC, there is a concern with excluding local contractors in the process. In most cases, however, using local subcontractors creates a competitive advantage for a JOC contractor as local companies are familiar with the local community, its resources and unique regulatory requirements. In order to assure your support of local businesses, you can even make small and small-disadvantaged business usage targets part of your JOC program.
Partner With Your Contractor
Successful JOCs hinge on strong, direct relationships. An experienced JOC contractor can bring you efficient results. In return, that contractor expects enough task orders to generate a fair and reasonable profit. Task orders that are large enough to build a solid subcontractor base are important to the long-term success of a JOC contract. Putting an intermediary between you and your JOC contractor will only increase cost and drive down efficiency. Your direct relationship, along with other protections and benefits embedded into the JOC, provide you with far better safeguards than an intermediary.
Decide on a possible, optimistic, but potential yearly maximum. This is part of your budget control. However, let it be a tool, not a restraint. Allow some “wiggle room.” Hire an experienced JOC provider. An inexperienced JOC contractor will not have the “know-how” to provide the rapid response in estimating, presenting and executing work, and may provide disappointing results. Base your contractor selection on best value. Going with the lowest bid may end up costing you more money overall. When making a decision, be sure to elect the overall best value.
Meeting the Challenge… A Better Way
Optimizing budgets for quality facilities to enhance learning is one of your greatest challenges. Facility planners looking for an innovative procurement vehicle to better manage facility repair, renovation and minor construction can appreciate a proven alternative that has been used successfully by educational institutions for over 10 years. A decision to utilize JOC in your K-12 district can positively impact renovation programs and your constituents' trust in the governing administration by lowering costs, reducing time, ensuring quality and supporting the local community.
Mike Coberley has been in the construction industry for over 18 years and currently works for KBR. He has authored papers and made numerous presentations on JOC and is a certified Facilities Management Professional with IFMA. Mike can be contacted at 703/526-7713 or firstname.lastname@example.org.