Strategic Considerations for a JOC Program include a thorough Evaluation of Objectives, Goals, and Appropriateness.
Development and review of Strategic Considerations for a JOC Program improve the value and overall success for all participants and stakeholders.
An owner’s review of the historical type and volume of construction work is the first step. This will help to establish the level of need.
It’s generally considered that numerous and repetitive renovation, repair, maintenance, sustainability, and minor new construction (where allowed) with a minimum total annual volume of $2M is an initial threshold for setting up an in-house, owner-managed job order contract.
If an owner doesn’t meet this criteria, participation in a JOC Cooperative may be a viable altnerative to an owner established JOC Program.
Facility management/engineering should conduct a review of work that could be done under the support of the JOC program and develop an estimated annual volume.
Strategic Considerations for a JOC Program improve the value and overall success for all participants and stakeholders…
Work below a specified and appropriate threshold (for example $10,000) should not be included in the analysis as this level may not be cost effective and/or may be best accomplish by in-house staff or alternative methods.
Consider what work is being accomplished, how, by whom, and where. Also consider the urgency of tasks and other elements that would benefit from fast, high quality turn around. JOC is particularly well suited for reducing an existing backlog of projects/tasks.
Consideration of future requirements is also important.
It’s beneficial to review historical and planned budgets to assure long term, consistent execution of the JOC program, including any existing related contracts, etc., in order to avoid any potential conflicts or work disruption.
A review of owner staff personnel and management philosophy is critical in order to assure in-house capability to support a JOC Progam from a the technical (facility management/engineering), purchasing, and other administrative areas. In-house staff MUST be capable of reviewing line item detailed construction cost estimates provided by the awarded JOC contractors. In certain JOC programs, in-house staff MUST also be capable of creating in-house and/or independent owner estimates for use in comparison to contractor estimates.
Determining the source for the JOC UPB is also extremely important. The JOC UPB must be from an independent, objective, and quality source. It should be locally researched and not a national average cost book (even the use of localization factors and a national average price book and introduce gross errors and JOC performance issues). The UPB should include detailed line items with easy to understand descriptions in plain English using industry standard terms, with a minimum use of confusing acronyms. The UPB should provide sufficient content to assure that a minimum of 90% of the work to be accomplished for a particular project is derived from the UPB in terms of value and a maximum of 10% from non-prepriced (non-UPB) line items. Factors such as ease of use, should also be considered. For a example, most JOC Programs only require 30,000 to 60,000 line items. An excessive number of line items…i.e. hundreds of thousands, can create confusion, cause errors, and negatively impact a JOC Program.
Technology is also important, and cloud computing can greatly aid in assuring collaboration and compliance.
Initial and ongoing training for all JOC Program participants is a requirement, as are regular JOC Audits.
Customized technical specifications are NOT REQUIRED for a JOC Program. An owner’s existing technical specifications should be referenced and used for the JOC Program. If technical specifications are not available, they may be purchased and adapted as needed.
A market of local contractors to assure a pool of qualified and interested companies is another important task. This should include consideration of any specific technical or service requirements associated with the JOC program.
Depending upon the types and locations of work, as well as service levels, there may be a need to have multiple JOC UPB’s and/or multiple coefficients. For example, work in several locations and/or associated varied building types, or security/access issues, may require the use of various location factors or even separate JOC unit price books. (Separate coefficients may be require for work during normal hours, or after hours, and or for specific types of buildings and/or for secure areas.)
The structure, content, and values associated with indirect costs and profit for non-prepriced (NPP) work should be clearly noted.
A final report summarizing the results and conclusions of the strategy component of the JOC Program is helpful the final decision and approval processes.
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