Business (Managing K-12 Education)

Job Order Contracting

construction procurement alternative

PHOTO COURTESY OF GORDIAN

Construction in and of itself is a complex work process. Focus in on construction work for education facilities and you are faced with an entirely unique set of complications and challenges.

Campus projects are never ending. From the larger projects such as gym floor replacements, cafeteria renovations, library upgrades, etc., to the everyday maintenance, repairs and replacement projects, there is always something on the horizon. Traditional competitive bidding for these projects is generally extremely time-consuming and costly. And for the relatively small projects, there may be a disproportionate procurement burden relative to job size and scope.

Educational facilities also have to deal with the challenge of accessing qualified contractors due to K-12 institutions all being on the same cycle. During peak construction periods this can be especially problematic. Not to mention, education facilities often face tight deadlines. A project is usually only possible in the summer months when the bulk of students are on break. When working in a condensed time line, delays and back and forth negotiations cannot be afforded. If the project cannot be completed within this specific window it may not get past the planning phase.

A Solution

Enter Job Order Contracting, a unique indefinite quantity procurement process. During traditional bidding, each project is identified, designed and subsequently put out to bid. In contrast, Job Order Contracting allows you to put readily available contractors in place on a substantial number of projects with one, competitively bid contract. No more bidding each job separately. The Job Order Contracting process is ideal for small to medium-sized, straightforward repairs and renovations. Typical projects range from emergency plumbing repair, energy-efficient lighting and HVAC upgrades to classroom, lab and residence hall renovations.

The process is relatively straight forward. Contractors bid an adjustment factor that will be applied to a catalog of tasks with preset unit prices — this catalog is developed via local labor rates, material and equipment costs. From there, Job Order Contracts are awarded to the lowest, responsive and responsible bidder(s). The contractor can then perform a variety of projects by being paid the preset unit price, multiplied by the quantity ordered, multiplied by the competitively bid adjustment factor. No need for further negotiations.

school restroom

PHOTO COURTESY OF GORDIAN

It is understood up front that the owner is under no obligation to give the contractor more work; therefore, the contractor is motivated to provide timely work of the highest quality.

A Study in Procurement

For two decades the Arizona State University’s Performance Based Studies Research Group set out to analyze the performance and value of the Job Order Contracting process resulting in the 2015 Job Order Contracting Performance study which measured the performance, satisfaction of results and economic impact of the procurement process. Forty seven owner companies and 13 contractors representing $5 billion in construction projects were surveyed.

An aspect of the study worth noting was the realization that 99 percent of the owner respondents would recommend Job Order Contracting to other owners. Further, 96 percent of Job Order Contracting projects were completed with satisfactory results.

The study discovered 91 percent of Job Order Contracting projects are delivered on budget and 87 percent of these projects are delivered on time. To give perspective, taking in the construction industry as a whole, only 2.5 percent of all global projects are delivered on time and on budget.

Owners responded that transparency is 30 percent higher during Job Order Contracting projects, and they also believe the process is 76 percent more flexible. Owners further estimated 24 percent in administrative cost savings.

The study also identified a few best practices when implementing Job Order Contracting that included:

  • ensuring use of a detailed unit price book in bidding documents,
  • selecting the highest performing contractors, and
  • encouraging early involvement of contractors in developing a detailed scope of work.

Job Order Contracting in Action

One of the key qualities of Job Order Contracting is its flexibility. This is one of the reasons the method was implemented when the NYC Department of Education joined with the NYC Department of Environmental Protection to remove around 5,000 inefficient toilets from schools around the city to be repurposed as a productive bed of oysters in Jamaica Bay. This project was intended to serve duel purposes in helping to purify the water in the bay with the aim of saving up to 4 million gallons of water a day with the installment of new low-flow toilets in place of the removed inefficient fixtures.

before and after high school hallway

PHOTO COURTESY OF GORDIAN

Before & After. Administrators at Dover High School, in Dover, N.J., decided that they needed to provide a more “college atmosphere” for their students. Part of the project involved an outdated hallway that needed a complete overhaul to help fit this new look. The project needed to be completed over the course of the summer break before the return of students in the fall. Dover Public Schools implemented a Job Order Contracting program via a cooperative purchasing network that allowed them to access qualified, competitively awarded contractors who could immediately start on the work, which included updating wall tiles, paint and flooring as well as the replacement of an old water fountain with a modern and more mature design.

This was a complex project that involved 500 of the largest Department of Education buildings throughout all five boroughs. After surveying these buildings, it was determined about 30,000 fixtures were inefficient and prime to be replaced. Once the project was underway, contractors needed to work around the students’ schedules. With the help of funding from the Department of Environmental Protection, the Department of Education used a preexisting Job Order Contracting program to carry out the labor with a minimal impact on the students’ daily classwork on top of not affecting the day-to-day maintenance resources. Once the inefficient structures were removed, the porcelain was broken up, cleaned and subsequently repurposed into an oyster reef within the bay.

Due to the intricacies of the job, in all likelihood this project would have been unattainable without Job Order Contracting. That said, Job Order Contracting can still be ideal for the more straightforward jobs facing K-12 institutions.

Take Dover High School. They sought to provide a more “college atmosphere” for their students. Specifically, an outdated hallway needed a complete overhaul to help fit this new look. The project needed to be completed over the course of the summer break before the return of students in the fall. On top of this narrow deadline, the project had an inflexible budget. Once it was deemed that the traditional construction procurement process would make the project unfeasible, Dover Public Schools implemented a Job Order Contracting program via a cooperative purchasing network that allowed them to access qualified, competitively awarded contractors who could immediately start on the work.

The project was identified Apr. 23, construction started July 13 and by Sept. 6 construction was completed in time for the incoming students while remaining on budget. Work included updating wall tiles, paint and flooring as well as the replacement of an old water fountain with a modern and more mature design.

Construction work for K-12 facilities faces a seemingly unending number of expected (and unexpected) obstacles. Through streamlining the process and optimizing the surrounding environment, Job Order Contracting can play an essential role in helping face down those potentially devastating obstacles.

If a project fits the criteria for Job Order Contracting, the potential for time and money savings is a reality. This will mean more projects can be put on the schedule rather than be pushed out to a later date waiting for the right time and adequate funding. The result will be a better learning environment for students and faculty alike.

This article originally appeared in the February 2017 issue of School Planning & Management.

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