Job Order Contracting – Recommended Best Practices

The following, Job Order Contracting – Recommended Best Practices, have been compiled from numerous independent third party audits of JOC Programs as well as decades of experience.

All the tools, training, information, processes, and support are available to ANY procurement and facilities management team that wants to consistently deliver renovation, repair, and minor new construction project on-time, on-budget, and to everyone’s satisfaction.

We hope you benefit from the following information.

1. Conduct a strategic review of your organization’s facilities/infrastructure repair, renovation, maintenance, sustainability, and minor new construction requirements, including a gap analysis of current process and issues and desired outcomes as well as current and required resources.    A policy establishing JOC program purpose is central to providing guidance to internal and external participants and oversight groups.
2. Create a detailed, written JOC Operations Plan / JOC Execution Guide that outlines all roles, responsibilities, information requirements, deliverables, metrics, etc.      Lack of formal written policies, procedures or guidelines is the primary reason for JOC Program failure and/or inconsistencies in project management and documentation, and compliance.
3. Assure fair owner/contractor negotiations occur for all individual projects in order to assure quality and timely work at fair and reasonable prices.
4. Establish processes and guidelines for evaluating and negotiating Contractor Job Order Contract proposals.
5. Place limits on the use of non-prepriced line times.  For example, only 10% of the total value of any individual JOC Project can result from the used of non-prepriced line items.
6. ALL Contractor proposals/estimates should be reviewed in detail, on a line item basis, by the owner and/or an owner’s designated representative.
7. ALL Contractor proposals/estimates over a specified dollar level (for example, $150,000) should require that an independent owner estimate be created for comparison to the contractor estimate.
8. ALL, or a minimum a statistically valid sample number, contractor proposals should be should be reviewed by an independent third party for compliance with JOC Program requirements.
9. Require that any Scope of Work has sufficient detail to enable a contractor to create a detailed line item estimate.  A joint site visit should be done for every project.  Poor performance at this stage is a primary cause for cost overruns, change orders, and lack of satisfaction.
10. Assure ALL stages, approvals, documents, and document packages are sent and received in a timely matter, and that NO WORK is begun until these requirements are met.
11. DO NOT use JOC simply as a procurement method to bypass the lengthy traditional procurement processes.  JOC is a LEAN construction delivery method and should NEVER be used to approve projects that otherwise would not have been approved, JOC should not be used to simply approve projects quickly, regardless of size or type, importance, etc.
12. Assure that JOC is appropriate for the associated project.
13. Deploy a process and associated technology to guard against fraud or other forms of impropriety.   For example, a JOC technology with robust document management capability should be used.  Important features in this regard include document access and edit privileges management and control, system monitoring/auditing of all system access and associated changes, and associated user management.
14. Implement regular full JOC Program audits, performed by an independent third party.
15. Regular and ongoing owner inspections of work in progress and upon completion.  Oversight, without excessive management and control is vital.
16. Assure Program, Project, Estimate, Document, Contractor, Subcontractor, UPB, and Coefficient Management are all part of the JOC process and technology.
17. Develop and maintain a formalized comprehensive monitoring and reporting system is in place.  Items to be following include…timelines for all JOC Program and JOC Project Phases, budgetary items/levels, contractor performance, appropriate documentation and approvals, etc.
18. Owners MUST be directly involved in the day-to-day JOC process.  Excessive reliance on third party JOC consultants sets the stage for potentially inappropriate activities to take place and also defeats the purpose of early and ongoing communication between owners and contractors.   The latter is a basic tenant of LEAN construction.
19. Use a locally researched unit price book versus a “national average” reference cost book and associated localization factors.