C.A.S.H. WORKSHOP JOB ORDER CONTRACTING DEFINED

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1 C.A.S.H. WORKSHOP December 8 & 11,2015 JOB ORDER CONTRACTING DEFINED Job Order Contracting (JOC) is a Firm Fixed Priced, Competitively Bid, Indefinite Quantity Procurement Solution Used for Maintenance, Repair and Alterations Creates a Fundamentally Different Construction Procurement Relationship Contractors are subject to different motivations and behaviors Performance based contract Non-adversarial relationship between owner & contractor, a partnership with contractors JOC is a solution in your procurement toolkit for contracting construction projects use it when it makes sense 1

2 WHY AGENCIES USE JOC COMMON PUBLIC AGENCY CHALLENGES Disproportionate procurement burden relative to job size & scope for competitively tendered work Procurement time due to policy versus available time versus customers time Staff limitations in peak work periods to execute procurements End user limitations, seasonality of work and available time to execute projects Cost control challenges associated with change orders Lack of transparency / governance Conformance to supplier diversity objectives HOW LONG HAS JOC BEEN AROUND? JOC was invented in 1981 by Harry Mellon, founder of the Gordian Group, to tackle the demanding requirements, tight timeframes, and stringent, complicated competitive-bidding requirements at U.S. Army facilities in Europe Today, more than 1,000 job order contracts are active. More than $1.4 billion in construction is completed annually with JOC. The Los Angeles Unified School District has benefited from JOC program since October

3 HOW DOES THE JOC PROCESS WORK JOC puts contractors in place to perform a substantial number of projects with a single, competitively-bid contract. The master contract includes general conditions that contain the specific contract language concerning the execution of the contract, the owner s technical specifications and a unit price catalog. The Job Order Contract is advertised and bid in strict accordance with the owner s requirements. The contractors bid adjustment factors to be applied to the preset unit prices in the unit price catalog. For each project, the parties follow the same process: WHAT TYPE OF UNIT PRICE BOOK IS NECESSARY FOR AN EFFECTIVE JOC PROGRAM? A localized, customizable unit price catalog with tasks specifically tailored for the facility owner in his or her location. Each task should have a detailed description (technical specification), unit of measurement, unit price, and where applicable, demolition cost. Each unit price should be based on locally developed direct costs for material and equipment, and prevailing wage labor. Construction tasks should correspond to a set of technical specifications. 3

4 Construction Task Catalog DATA 260,000+ tasks 180+ labor categories 2,900+ equipment types 240,000+ material items Actual, local costs Customized technical specifications for each task HOW DOES JOC SAVE TIME AND MONEY? Saves money and time by bidding a single master contract versus many individual projects Saves money and time by not having to prepare front end documents for each project The large number of small works under a single master contract encourages volume discounting Many small works are currently designed for bidding purposes only. JOC reduces these costs. Construction costs can never be inflated because they are based on predetermined, firm pricing Contractors can provide value engineering suggestions early in the process Identify future issues up front 4

5 EFFICIENCY JOC Offers a Cost Effective Alternative to the Traditional Bid Faster Procurement Weeks Instead of Months Based on Owner-Contractor Partnership = Non-Adversarial Relationship HOW DO I MAKE MY JOC PROGRAM SUCCESSFUL? Good open communication among all parties, supported by software and data A non-adversarial environment Initial training of all parties and ongoing software, technical, and administrative support Capacity for additional support in the form of scope development and job order review Detailed unit price catalog, designed for procurement purposes Complete and comprehensive scopes of work Job order review to ensure accuracy and transparency Strict adherence to the contract documents Achieving due dates to keep the process moving Regular reporting on program achievement to the governing body 5

6 CA AGENCIES USING JOC COUNTIES Alameda Contra Costa El Dorado Fresno Kern Los Angeles Monterey Orange Placer Riverside Sacramento San Bernardino San Diego San Francisco San Luis Obispo San Joaquin San Mateo Santa Barbara Santa Clara Solano Sonoma Tulare Ventura CITIES Arcadia Culver City Clovis Covina Downey Fresno Irvine Long Beach Palmdale Pomona Redondo Beach Salinas SCHOOL DISTRICTS / UNIVERSITIES California State University (Statewide System) University of California (Statewide System) Stanford University Los Angeles Unified School District OTHER Agencies Area Housing Authority of the County of Ventura California Administrative Office of the Courts Los Angeles Housing Authority San Francisco Airport Commission San Francisco Dept. of Public Works San Francisco Municipal Transportation Agency San Francisco Public Utility Commission San Francisco Recreation & Parks Department 6

7 ABOUT THE GORDIAN GROUP The Gordian Group is the leading provider of innovative construction data, software and services to organizations pursuing efficient and effective construction planning, estimating and procurement. Northern California Paul Burns Southern California Matt Schroeder

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