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The One Where Everyone Wins:
A Mutually Beneficial Contracting Method
KEY TAKEAWAYS
- Job Order Contracting is a collaborative procurement process.
- Job Order Contracting addresses common project challenges faced by contractors and owners.
- Job Order Contracting enhances communication between key stakeholders.
Owners struggle to meet budgets and timelines while satisfying transparency goals. Traditional procurement models, such as price-based contracts; design, bid, and build; time and materials; and construction manager at-risk, typically don’t emphasize healthy relationships and partnerships between owners and contractors. Job Order Contracting is a great alternative that fosters mutually beneficial relationships while addressing common project challenges.
Presenters
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The One Where Everyone Wins:
A Mutually Beneficial Contracting Method
A Mutually Beneficial Contracting Method
In our recent webinar, Wes Everett and Paul Hedin shared how Job Order Contracting is saving taxpayers time and money while providing transparent and auditable processes. John Castillo and Craig Wolford from Gordian discussed how their firm supports Job Order Contracting.
“With JOC, the team gets together up front to discuss the scope of the project. The project is black and white based on the discussions of that meeting. It’s very simple and transparent.”
Paul Hedin, President, Lobar Associates, Inc.
Job Order Contracting is a collaborative procurement process.
Job Order Contracting, or JOC, is an indefinite quantity construction procurement process. It enables owners to complete large numbers of individual projects within a single competitively awarded contract.
Job Order Contracting pricing is established by a team of experts who analyze material and labor costs in a particular geography. They consider the prevailing wages, union wages, and Davis-Bacon wages. The contract pricing is assembled into a construction task catalog, custom-designed for that specific customer’s needs.
When a project arises, a scoping meeting is all that is needed. This gives contractors and Gordian account managers an opportunity to work with customers on the scope of work and to request a price that is in alignment with the pricing standard.
“Job Order Contracting enables contractors to complete a substantial number of individual projects with one single bid. They save time and money, while gaining transparency and auditability.”
John Castillo, Account Manager, Gordian
Job Order Contracting addresses common project challenges faced by contractors and owners.
The panelists highlighted how Job Order Contracting solves typical project obstacles:
Fast Turnaround Times
Since a job order contract has already been competitively bid, project teams save time. They can start immediately on the scope of work and complete the proposal and purchase order within a couple of weeks. Lubbock, Texas, for example, has used JOC to perform high-priority maintenance work on large numbers of fire stations and to renovate a public library.
Scope Creep
Thanks to the flexibility of JOC, construction consultants can work with customers and contractors to define a scope of work that provides the best value to the customer. JOC enables teams to discuss nuances in material quality and availability at the job scoping meeting.
Unforeseen Conditions
In a low-bid scenario, changes due to unforeseen conditions are priced using an arbitrary change order. In contrast, JOC allows teams to price the additional work using the same pricing standard as the existing project. JOC provides transparent and verifiable costs for addressing unforeseen conditions.
Lack of Transparency
Job order contracts are highly transparent since they list the cost of each item. Since everything is pre-priced, there is no bickering about prices. Everyone focuses on the solution to the problem and getting the project done.
“Job Order Contracting creates partnerships between customers and contractors. It gives contractors the opportunity to provide direction very early in the process. While JOC isn’t a cost estimating tool, customers enjoy talking through projects with a trusted construction partner.”
Craig Wolford, Senior Account Manager, Gordian
Job Order Contracting enhances communication between key stakeholders.
Communication between the key stakeholders occurs before and while the scope of work is developed. This speeds the pace of projects. The JOC model works well for emergency projects, maintenance work that must be done before the school year begins, and routine day-to-day projects.
When Lubbock’s City Hall flooded, for instance, many trades had to be coordinated to repair the damage. JOC simplified this process. JOC also eliminates disagreements about prices because everything has been documented in the unit price catalog.
JOC strengthens teams. Familiarity improves communication. Value engineering often occurs as stakeholders benefit from one another’s experiences.
“To serve the citizens of Lubbock, we must react quickly, identify the project scope, and deliver in a timely manner. Some of the biggest challenges are responding rapidly, finding auditable forms of procurement, and controlling the project quality. JOC helps us do all these things.”
Wes Everett, Director of Facilities, City of Lubbock, TX
Diversity and Inclusion
JOC can help with diversity and inclusion. When Gordian set up the state of Pennsylvania’s job order contracting program, Governor Wolf’s administration established goals of diversity and inclusion. Gordian conducts events that give small, diverse contractors the opportunity to interface with JOC contractors. It’s a win for everyone.
Additional Resources
- BLOG
- VIDEO
