4Clicks – Job Order Contracting Process and Software Overview

An introduction to Job Order Contracting best practices and technology.  Including e4Clicks Project Estimator, premier software for job order contraction (JOC) program management – cost estimating, visual cost estimating, project management, document management, and contract management.  For Owners, Contractors, Sub-Contractors, and AEs and efficient and transparent JOC program deployment and ongoing management and reporting.

 

Design-bid-build is a problem for everyone!   The low-bid system is particularly poor.  Both contractors and owners are rolling the dice when it comes to projects outcomes.  Contractors are forced to shave their profits to razor-thin margins and gamble on their ability to compensate with change orders and claims on the back end.  Owners have no idea what their final project costs are going to be, or the quality of the work. The result is commonly an adversarial relationship and even litigation.

“Job Order Contracting (JOC) is a method of managing multiple details of renovation, rehabilitation, repair, and other construction projects on a predetermined set of pricing and standards. By using JOC customers take advantage of a process that is fast and responsive to their needs while providing excellent quality construction.”

–Center for Job Order Contracting Excellence (www.jocexellence.org)

All of the branches of the military use some form or variation of JOC.   Though some, including the Air Force and Army apply more vigorous programs.

University campuses are probably the most geographically-similar to the military installation model and have been adopting JOC very successfully.

JOC penetration of healthcare is a little more recent, but there are some good examples in public healthcare entities.

Airports with security requirements are a natural fit for a long-term contract like JOC, but we also see public transit agencies using JOC for miscellaneous upgrades that their heavy infrastructure contractors may not be well-suited to complete.

Several states have also adopted JOC and they tend to do it in a very thoughtful, strategic way that serves as a model for other public entities in the state.

Municipalities use JOC for a variety of projects, and larger K-12 Independent School Districts who are often understaffed and need to deal with summer work surges use JOC very effectively too.

As in most business dealings, strong relationships are a key to success.

The long-term nature of JOC contracts (3-5 years) requires and allows contractors and owners alike to really dedicate themselves to making the relationship work.  They are not a single project and then you can walk away.  A lot of time is typically invested in early stages of a relationship—learning how our customers/contractors like things done, what their internal review process looks like, how they like to be communicated with, what their organizational structure is, etc.  JOC is a PROGRAM rather than a single project.

 

The pricing structure of JOC is very different from most other contract and/or construction project delivery methods.

Central to JOC pricing is a unit price book ( UPB ) and these come in two versions.  There is a standardized option, which is the most common, and is typically the RS Means Construction Cost Books, and represents a single nationwide price book / cost average, and commonly viewed as a North American standard.  RSMeans also provides local cost factors/indices (CCI/City Cost Index) to account for local pricing variations (available to zip code level as averages or  independently for material, equipment and labor).  City cost index information is updated quarterly, although “best practice” for JOC Contracts is typically considered to be annual updating of UPB information.  The importance of dynamic cost data, aka annual cost updating, vs. using static costs (same UPB data throughout the 3-5 year life of JOC program can not be overstated.

There are also customized UPBs for the owner and already has localized or specialized pricing applied, and/or a combination of both.

These UPBs contain contractual pricing for many if not most components of construction.  Any item not in the UPB is considered a non-priced item and is noted accordingly and can be added to the UPB in the future based upon the contract structure.

The competitively pricing component is accomplished by asking contractors to bid a coefficient (also called a multiplier or factor) which is applied to the unit price book throughout the term of the contract.  It can be a markup (+) or a discount (-), depending upon the UPB, the geographic location and other contract factors.

Project Management is more efficient, but new skillsets may need to be applied such as line item estimating  and definition of scope (planning function).  That said, line item estimating can be done very productively and with a significantly reduced learning, using advanced software programs such as e4Clicks Project Estimator.

Introductory and Advanced Software training is part of the services by 4Clicks Solutions, LLC.

Methods/Process will continue to evolve with changes in the industry.

Renewed focus on true pricing transparency through JOC.  Unit price/line items should provide full transparency, but only if owners fully understand the line item estimating process.

Connection to Capital Construction, FM—lines blurred

A lot of that is being driven by technology including BIM.  As we build a BIM database of the built environment JOC will have to absorb and leverage that, and new technology systems will emerge to do just that.  Imaging a day when you will not walk a job and then look up line items by CSI code, but will be given an electronic model and will pluck off 3-d items for demolition, and then choose from a selection of BIM items, already connected to a UPB, for reinstallation—updating the model as you build your estimate.  4Clicks is already working towards this type of system with its visually-based estimating systems, incorporating eTakeoff, etc.

JOC is very well suited to incorporating owner’s social responsibilities into its process—SBE and sustainability.

As this blog notes—the evolution and integration of JOC with the built environment and BIM is here.