JOB ORDER CONTRACTING PROGRAMdistribution.easternengineering.com/Job_Details/IU JOC Info...

copyright © 2011 The Gordian Group, Inc., all rights reserved1

INFORMATIONAL SEMINAR

FOR

INDIANA UNIVERSITY’S

JOB ORDER CONTRACTING PROGRAM

FEBRUARY 2012


AgendaAgenda

1. Overview of Job Order Contracting (JOC)2. Bidding a JOC Contract as a Prime™ Contract Documents

™ Bidding a Job Order Contract

3. Procuring Individual Projects Post Award™ Accomplishing Work as the Prime JOC Contractor

™ Design & Subcontracting Opportunities

4. Open Discussion (Q&A)


Overview of Job Order ContractingOverview of Job Order Contracting

™ In House Trades

™ Direct Quote

™ Traditional Bid

™ Job Order Contracting (JOC)

JOC is another delivery method for the University to procure construction services

JOC is not meant to replace any procurement method.It is another tool for the University to accomplish work.

Identify Scope of Work

Start Construction

copyright © 2011 The Gordian Group, Inc., all rights reserved

University Advertises Job Order Contract

Prime Contractors Submit Bids

University Awards

Master Job Order

Contract to the Prime Contractor

Project C

Project B

Project A

Subcontracting Opportunities



Part 1

Bidding the Umbrella Job Order Contract

Part 2

Procuring Individual Projects Post-Award

4



ó JOC is part of the family of indefinite quantity contracts: JOC, WOC, DOC, SABER, IDIQ, IQC, and ezIQC®.

ó The Federal Government began using JOC in the mid-1980’s as a delivery method for small to medium sized construction work.

ó The Gordian Group was established in 1990 for the purpose of implementing JOC for non-Federal agencies such as Indiana and Purdue Universities.

ó Today, there are over 2,000 Job Order Contracts in use nationwide with over $1 billion of construction ordered annually.

ó The National Institute of Governmental Purchasing (NIGP) has awarded the “Best of the Best” award to City of Miami Beach for their implementation of a JOC program and the subsequent efficiencies that came out of having a JOC program.

5



A Job Order Contract is a firm, fix priced, competitively bid, indefinite quantity contract designed to accomplish a large number of medium size repair and rehabilitation projects quickly.

ó Firm, Fix Priced: Includes a Construction Task Catalog® of pre-priced work tasks identifying what the University will pay for a particular construction task.

ó Competitively Bid: all Bidders submit a set of Adjustment Factors to the fixed prices in the Construction Task Catalog ®.

ó Indefinite Quantity: Contract is for fixed term of one year , has a guaranteed minimum and an estimated annual value. No projects are identified at the time of advertisement.

ó Once the Master (Umbrella) Contract is awarded, Job Orders are issued for individual projects.

6



Job Order Contracts are a performance based contracting system! Work is dependent upon the contractor’s performance:

ó Responsiveness of the contractor™ During the project development phase™ During construction—start-up to close-out

ó Project development phase™ Scope definition™ Timely and accurate Price Proposals

ó Construction phase™ Timely start up and effective management of subcontractors™ Ensuring project is constructed according to the specifications™ Meeting or exceeding the M/WBE goals set forth in the contract

ó Success in developing a partnership relationship with the University

ó Performance depends on:™ Accurate Adjustment Factors™ Quality Staff

7



Overview of Job Order ContractingOverview of Job Order ContractingThe JOC contract documents include measurable performance standards:

ó Timely Price Proposals: timely price proposals that are submitted on or before the due date indicated on the Request for Price Proposal.

ó Quality Price Proposals: accurate price proposals that can be approved on the first or second submission.

ó Quality of Construction: high quality construction where projects are constructed according to the specifications, within the project schedule, and require minimal punch list items.

ó Achievement of M/WBE Goals: Meet or exceed the M/WBE goals set forth in the Contract

8


Overview of Job Order ContractingOverview of Job Order ContractingPrime Contractor’s benefits with Job Order Contracting:

ó JOC can be profitable™ Profit is a function of volume™ Volume is driven by performance™ JOC provides a steady flow of work™ Do not have to chase the next project

ó Long-term relationship with the University™ Non-adversarial relationship™ Develop partnership with the University

ó Professionally rewarding™ Different types of projects (varying scope)™ Ability to provide input during scope development

9


Overview of Job Order ContractingOverview of Job Order ContractingSubcontractor’s benefits with Job Order Contracting:

ó Increases subcontracting opportunities because Prime Contractors must utilize subcontracting community.

ó No projects are identified at the time of bidding, which inhibits the Prime Contractor from staffing up to self perform the work.

ó Simplified procurement process for the University allowing them to procure more work in a shorter period of time.

ó Multiple projects on multiple sites simultaneously.

10


ó Bidders have to meet applicable requirements of the contract including licenses, insurance, and bonds.

ó Bidders must complete all required forms in their entirety and submit with the bid. Typical for anyone bidding a University contract.

ó Bidders include those firms who typically bid multi-trade projects fitting the descriptions provided on the IU JOC Data, or those Bidders interested in starting to bid those type of projects.

ó A JOC Prime Contractor must be able to manage multiple projects at multiple sites with multiple subcontractors.

ó Previous JOC experience is NOT a requirement. The Gordian Group will provide training on the JOC process, software, and other JOC related activities.

11

Bidding as a Prime ContractorBidding as a Prime ContractorBid RequirementsBid Requirements


A Job Order Contract Consists of the Following Documents:ó University’s Standard Documents™ Notice to Bidders

™ Instructions to Bidders

™ Bid Forms

™ Project Requirements

™ University Supplemental Conditions

™ General Conditions for Construction (AIA A201)Documents Above are Customized for the JOC Procurement System

ó JOC Specific Documents™ JOC Specific Conditions

™ Construction Task Catalog®

™ Technical Specifications

12

Bidding as a Prime ContractorBidding as a Prime ContractorThe Contract DocumentsThe Contract Documents


The Construction Task Catalog® (CTC)ó Catalog of pre-priced construction tasks

ó Organized by the CSI 2004 Numbering System

ó Prices include Local Labor, Equipment and Material (LEM) costs

ó Customized for the University’s tasks and standards

13



ó Contract Includes Technical Specifications for each task

ó KEY POINT!™ Must know what the price is for!™ Essential that each construction

task be tied to a concise technical specification!



Bidding as a Prime ContractorBidding as a Prime ContractorJOC Structure & Bid GuidanceJOC Structure & Bid Guidance

ó University establishes a fixed initial term ™ Typically one year™ May include options to extend ™ Bilateral option to extend an option term

ó University establishes a guaranteed minimum dollar value™ Some nominal amount - typically $25,000

ó University sets a pre-established maximum or estimated value™ Represents the expected amount of work to be accomplished™ Based on University’s budget

ó Prior to Bid the University does not:™ Identify or commit to any specific project or location™ Identify or commit to any specific quantities or tasks in the Construction Task Catalog®

ó TGG JOC Solution Typically has multiple contracts/contractors™ Promotes post-bid performance on the basis of service


ó Each contractor must bid their Adjustment to the unit prices published in the Pricing Structure

ó Two Adjustment factors are typically bid™ Normal Working Hours & Other Than Normal Working Hours™ Owners also use different adjustments for unique requirements, such as

different campuses

ó Adjustment Factors must include all overhead and profit ó Adjustment Factors fixed for one yearó The same Adjustment Factors apply to every task in the

Pricing Structureó To determine the low bidder, the Adjustment Factors are

weighted according to estimated usage

Bidding as a Prime ContractorBidding as a Prime ContractorJOC is Competitively BidJOC is Competitively Bid


1. Accuracy of Proposed Adjustment Factors™ Anticipate the type of work the University may procure with JOC

™ Did you spend time analyzing the prices in the CTC versus your costs to complete the Work

2. OH & Profit Expectation (OH Dependent on Cost of Staff)™ Project Manager(s) must be able to manage multiple projects at

multiple sites simultaneously™ Superintendent(s) must be able to superintend the project ensuring

construction according to the specifications™ Office Administrators must to execute necessary paperwork,

payments, and follow up to correct any deficiencies

The Adjustment Factors and the Quality of Staff affect whether or not a Contractor can meet the Performance Standards.

Bidding as a Prime ContractorBidding as a Prime ContractorFactors to Consider When Developing Your Adjustment FactorsFactors to Consider When Developing Your Adjustment Factors


0

20

40

60

80

100

120

140

0-100K 100-250K 250-500K 500-750K >750K

#

OF

PROJECTS

VALUE OF WORK ORDER

From April 2009 – January 2012Approximate Values Only

• # of Job Orders = 166• TOTAL = $14,095,512• AVERAGE WO = $484,912.72• LARGEST WO = $TBD• SMALLEST WO = $TBD

18

77%

7% 4%

12%

0%

Bidding as a Prime ContractorBidding as a Prime ContractorAnticipate the Type of Work the University May Procure with JOCAnticipate the Type of Work the University May Procure with JOC


0-100K100-250K250-500K500-750K>750K

$3,155,208 0-100K

$3,137,175$100-$250K

$3,942,291.12$250-$500K

JOC Total = $14,095,512

19

$0 >$750K

$3,860,838 $500-$750K

Bidding as a Prime ContractorBidding as a Prime ContractorAnticipate the Type of Work the University May Procure with JOCAnticipate the Type of Work the University May Procure with JOC


Analyzing the price in the CTC versus your costs:ó Recommended Method™ Select comparable projects from your files (more than one)

… Example: for a project you select, you received a price of $180,323

™ Price the project from the CTC at a Factor of 1.0000 (i.e., no adjustment)… Example: Direct Cost from the CTC is $160,746

™ Calculate the Adjustment Factor… If you were satisfied with the $180,323 (i.e., you covered your Direct Costs, Overhead & Profit), you

would need and Adjustment Factor of:

($180,323 / $160,746) = 1.1218 Adjustment Factor

… What if you determine that your OH could be less as cost of staff spread over entire contract? What if you could be satisfied with 5% less OH lowering cost to $171,307? Then, you would need Adjustment Factor of:

($171,307 / $160,746) = 1.0657 Adjustment Factor

ó Don’t Stop with One Project! Try Varying Scope & Sizeó Break Costs Down per Trade and Discuss with Subcontractors

Bidding as a Prime ContractorBidding as a Prime ContractorAnalyzing the Prices in the CTC versus your costsAnalyzing the Prices in the CTC versus your costs


Example of an Excel spreadsheet used to analyze pricing:

21

Bidding as a Prime ContractorBidding as a Prime ContractorAnalyzing the Prices in the CTC versus your costsAnalyzing the Prices in the CTC versus your costs


Review the Guidelines for Using the CTC:ó Pages 00-1 through 00-7 of the CTC

ó Description of what the Unit Prices include

ó Description of Installation Prices

ó Description of Demolition Unit Prices

ó Description of what the Adjustment Factors include™ Business Costs

™ Construction Costs

ó General Interpretations for the CTC

ó Price Variations22

Bidding as a Prime ContractorBidding as a Prime ContractorWhen Building a Sample Price Proposal, Keep the Following in MindWhen Building a Sample Price Proposal, Keep the Following in Mind


TAKE TIME TO REVIEW NOTES TO UNDERSTAND:WHAT IS INCLUDED AND EXCLUDED IN THE UNIT PRICE

23



The CTC Contains Minimums for Various Work

24

Also contains minimums for small quantities of asphalt, core drilling, saw cutting, etc…




TAKE TIME TO REVIEW MODIFIERS TO UNDERSTAND:WHICH ONES ARE APPLICABLE & SHOULD BE ADDED TO SAMPLE PROPOSAL


ó University Identifies Work to be Procured with JOCó Joint Scope Meeting™™ Finalize Scope of WorkFinalize Scope of Work

ó Request for Price Proposal / Request for Designó Contractor Develops Price Proposal™™ Selects Tasks from CTC and Apply QuantitiesSelects Tasks from CTC and Apply Quantities

™™ Develops Schedule Develops Schedule

™™ Prepares List of Subcontractors and MWBE StatusPrepares List of Subcontractors and MWBE Status

ó Contractor’s Proposal Reviewed and Approvedó Issue Lump Sum Job Orderó Total Procurement Time Approximately 25 Days

Unforeseen Conditions and Changes Follow the Same Process as Above

Procuring Individual Projects PostProcuring Individual Projects Post--AwardAwardAccomplishing the Work as the Prime ContractorAccomplishing the Work as the Prime Contractor

26


The Design Process:

ó As the need arises for an individual Job Order, the University will issue a Request for Design

ó The Contractor will contact A/E firms to obtain a quote and will provide to the University

ó University will review and approve A/E firm(s) (or approve none & cancel the RFD)

ó A/E will prepare the design and the University will review

ó Contractor is reimbursed by the University on a 1 to 1 ratio for A/E costs, NO adjustment

ó Once the design is approved, the Contractor will prepare a Price Proposal for that Scope of Work

27

Procuring Individual Projects PostProcuring Individual Projects Post--AwardAwardDesign OpportunitiesDesign Opportunities


To get involved in the JOC program:

ó Analyze the JOC programs in the your area and any other areas you are willing to work.™ Indiana & Purdue Universities

™ Federal Owners such as Department of Defense Military Bases and United States Postal Service

ó Identify those programs whose Scope of Work relates to your work.

ó For Subcontractors, Architects, Engineers, Material Suppliers – contact the Prime Contractors and establish a relationship

28

Procuring Individual Projects PostProcuring Individual Projects Post--AwardAwardDesign and Subcontracting OpportunitiesDesign and Subcontracting Opportunities


ó Reimbursement for Architects / Engineers to provide a quote:™ Provide quotes based on your normal methods taking into account level of design required

™ The JOC Contractor is reimbursed for the cost of the A/E directly, 1 to 1 ratio at NO adjustment

™ Once the design is approved, the Contractor will prepare a Price Proposal for that Scope of Work

ó Variety of methods for Subcontractors to provide a quote:™ Provide a lump sum quote™ Provide a lump sum quote with a material breakdown™ Provide a lump sum quote with a material breakdown and CSI numbers from CTC™ Obtain a copy of the CTC so you are knowledgeable of what the Prime Contractor is being paid

ó Opportunity for Specialty Subcontractors & Material Suppliers:™ If you would like for your items added to the CTC, contact The Gordian Group (Christian Mellon)

ó JOC is a performance based contracting system that requires high quality construction.

29

Procuring Individual Projects PostProcuring Individual Projects Post--AwardAwardDesign and Subcontracting OpportunitiesDesign and Subcontracting Opportunities


Review of Key PointsReview of Key Points

ó JOC is a long-term relationship

ó Volume is driven by the Contractor™ Put the right staff in place

™ Good defendable proposals

™ High quality investigation and reporting

™ Timely completion

™ Exceeding the University’s expectations

™ Help the University to solve problems


Questions & DiscussionQuestions & Discussion

JOB ORDER CONTRACTING PROGRAMdistribution.easternengineering.com/Job_Details/IU JOC Info...

Documents

Transcript of JOB ORDER CONTRACTING PROGRAMdistribution.easternengineering.com/Job_Details/IU JOC Info...