Four BT, LLC

Technology, cost data, and services supporting the efficient renovation, repair,
& sustainability of the built environment - buildings, transportation, utilities.

Becoming Job Order Contract Ready – WHITE PAPER URL: www.4bt.us

Collaborative and Productive Renovation, Repair, & Minor New Construction of the Built Contact:
Info@4bt.us
Environment

JOC IS A PROVEN METHOD FOR

ATTAINING HIGHER EFFICIENCIES WITH
RESPECT TO THE NUMEROUS
RENOVATION AND REPAIR
CONSTRUCTION PROJECTS ENCOUNTERED
THROUGHOUT A BUILDING’S LIFE-CYCLE.
.
INTRODUCTION
A well designed and managed Job Order Contract (JOC) can deliver measurable
improvements in productivity, quality, and project delivery timelines. Unlike traditional design-bid-build1, a JOC program
enables 98% satisfaction and the vast majority of project to be completed on-time and on-budget.

That said, JOC requires a major departure from traditional AEC processes and requires dedicated “change management”
activities for all involved participants; real property owners, facilities managers, contractors and subcontractors.

The required levels of collaboration and financial transparency/visibility are significantly higher. Owners must possess
LEADERSHIP skills as well as technical competency. Contractors must be willing to collaborate with owners, provide “on-
demand” services, and commit to a long term relationship.

COMPETENCY and COMMITTMENT

Management and technical competency and commitment are JOC requirements for both real property owners and
contractors. Equally important is understanding that JOC requires building long term relationships and maintaining long
term perspective. Both parties must be willing to share information as well as risk and reward.

Owners must be capable of LEADERSHIP without excessive management and control. Owners must focus upon best value
outcomes, and engage in best value procurement methodology. They also must have technical skills such as line item
construction cost estimating. Owners must be able to present a scope of work (SOW) is such a manner that will also
enable their awarded JOC contractor to create a detailed line item estimate using the unit price book (UPB) selected for
the Job Order Contract.

Both owners and contractors must also have negotiation skills, as each individual job order requires a review and
potential negotiation between parties. Owners must be willing to provide a reasonable profit margin to the contractor,

1
Traditional construction delivery (design-bid-build) continues to dominate, despite that fact that construction
delivery methods directly support or limit the level of collaboration, and ultimately determines success or failure.
Using traditional methods… Only 8% of construction sector professionals view themselves as visionaries. Only 20%
of construction firms and facility managers are aggressively disrupting their business models. Less than 1/3 of
AEC firms and facility managers have integrated project management systems. Approximately 70% view
themselves as “behind the technology curve” and “industry followers” versus leaders. (Statistics Source-2016,
Global Construction Survey, KPMG)

 2016 - Copyright Four BT, LLC 4BT, OpenJOC, and OPEN JOC are trademarks Four BT, LLC
Four BT, LLC

Technology, cost data, and services supporting the efficient renovation, repair,
& sustainability of the built environment - buildings, transportation, utilities.

which is reflected in the contractor’s JOC coefficient.2 Contractors, on the other hand, must provide accurate estimates,
limit or eliminate change orders, and provide on-demand services.

Not all Owners are ready for their own JOC program. While and Owner developed and deployed JOC provides the best
overall value and associated higher levels of visibility, productivity, retained knowledge, and compliance, there are two
alternative JOC deployment methods.
Cooperatives provide smaller or “new to JOC” Owners an opportunity to leverage JOC on an individual project basis. If so
enabled by statues/regulations, public sector owners (non-Federal Government), may pay a fee to a cooperative (a
percentage of the JOC project construction value) to “ride” on the cooperative’s JOC, and select contractors from a pre-
approved list.
Alternatively, “outsourced-JOC”, using a consultant to develop and manage a JOC for an Owner, is also a possibility. In
this instances, it is critical to NOT pay a fee (based upon construction volume) to a consultant that is both managing and
approving job orders. This would present a clear conflict of interest and potential for fraud.

THE JOB ORDER CONTRACT PROCESS.

Job Order Contracts involve a well-defined process and associated roles, responsibilities, and deliverables. It is the
consistent deployment of process that enables the achievement of the significant benefits that JOC can deliver. The
specific processes, roles, responsibilities, tools, and deliverables for a Job Order Contract should be documents in a JOC
Operations Manual (or JOC Execution Plan), a written component of any “best practice” Job Order Contract.

The figure below provides a basic overview of the process followed for an individual Job Order.

The key characteristics associated with a Job Order Contract that follows current best management practices include the
following:

2
JOC Coefficient – A factor, typically ranging from 0.80 to 1.20, that is multiplied by the total of a job order estimate as created and
totaled using the unit price book associated with a Job Order Contract. The coefficient may apply to the duration of the Job Order
Contract (generally one year with up to four additional option years), or may change annually. There may be a single coefficient, or
multiple coefficients (normal hours, non-normal hours, secure/remote locations, etc.). The contractor costs that may be included in
the coefficient are specified in the JOC RFP and awarded JOC. They include contractor overhead and profit, among other defined
items.
2
Four BT, LLC

Technology, cost data, and services supporting the efficient renovation, repair,
& sustainability of the built environment - buildings, transportation, utilities.

 Best value procurement

 Written JOC Operations or Execution Manal as part of the Job Order Contract
 Early and ongoing collaboration among all project participants
 Financial and Technical Information Transparency
 Use of common terms, definitions, and data formats (MasterFormat3)
 Monitoring and key performance indicators – KPI’s
 Shared risk/reward
 Organizational behaviour - “top-down & bottom-up”, global oversight and local action, owner leadership without
excessive management and control
 Longer term relationships
 Performance based reward system / incentives
 Adoption of supporting cloud-based “open” , “app-based” technology and/or “plug-ins” technology
 Mutual trust and respect
 Co-location of teams

DEFINED OUTCOMES A & JOC BENEFITS

Job Order Contracting is an outcome-centric methodology. As such key performance indicators (KPIs) and associate
metrics are required in order to manage the process, quantify success, and enable continuous improvement. In short, it’s
impossible to manage what you don’t measure.
A potential list of JOC key performance indicators is provided below.

JOC Key Performance Indicator Unit of Measure / Other Classification Method

Projects Completed On-Time % / Number
Project Completed On-Budget % / Number
Training Frequency / Type Annual (Introductory, Advanced, Owner, Contractor)
Quotations Issued4 (Contractor) # / Year
Quotations Issued On-Time % / Year
Number of RFQs Issues (Owner) # / Year
Average Quotation Time (Contractor) Days
Number of Estimates (Owner) # / Year
Average Estimate Creations Time (Owner) Days
Estimate Variance (Owner/Contractor) %
Average Number of Negotiation Cycles / Task Order #
Percentage of Projects Requiring Change Orders %
Average Project Delivery Time Days
Level of Quality 1-5 Ranking
Contractor Responsiveness 1-5 Ranking

In addition to the above, the following list of questions should also be considered after deployment of a JOC Program.

 What problems or issues with the JOC program need to be addressed?

 How does the JOC Program compare to alternative construction delivery methods used in the past?
 How are Job Order Contract activities dispersed throughout the year?
 What type of projects are typically assigned to the JOC program?
 Should the JOC Program be expanded?
3
MasterFormat is a trademark of the Construction Specification Institute, CSI

3
Four BT, LLC

Technology, cost data, and services supporting the efficient renovation, repair,
& sustainability of the built environment - buildings, transportation, utilities.

A properly designed and executed Job Order Contract Program can deliver multiple benefits versus traditional
construction delivery methods. A partial list of potential benefits is shown below.

• More responsive services, available “on-demand”

• Higher quality work product
• Shorter procurement timelines
• Shorter overall project delivery timelines
• Lower total project costs
• Higher overall levels of satisfaction (from all program participants and facility/infrastructure users)
• Greater financial visibility
• Higher overall transparency
• Shared and acceptable levels of risk/reward
• A collaborative working relationship between program participants
• Long / longer term and mutually beneficial owner/contractor relationships
• Better defined project work scopes
• Compliance with statues/regulations
• Improved resource utilization / reduced waste

MOVING FORWARD

For those Owners considering the implementation of Job Order Contract for the first time, or who wish to improve an
existing JOC, or for Contractors wanting to enter the JOC market or improve their performance on JOC Programs,
education and training is first place to begin.

Contact your peers in the area who currently deploy or work on JOCs and discuss their experiences. Focus on both the
positive, as well as the challenges faced. Also, contact JOC consultants and JOC product/service providers. Introductory
and Advanced training classes are available from professionals with decades of experience working on, developing,
supporting, and auditing JOC Programs. Training is generally available in multiple formats, including on-line, regional, and
on-site. There are also consultants that can help contractors and owners develop and improve line item estimating skills
and negotiation techniques. Some firms also help contractor develop coefficients and bid on Job Order Contracts.

When the competencies and goals of Owners, Facility Management, contractors, subcontractors, and engineers are
respectively increased and aligned, completion of renovation, repair, and new construction projects on-time, on-budget,
and to everyone’s satisfaction will be the norm, and not the exception!

JOC Overview WEBCAST -

4
Four BT, LLC

Technology, cost data, and services supporting the efficient renovation, repair,
& sustainability of the built environment - buildings, transportation, utilities.