job order contracting industry information session · 2013-12-17 · joc overview Šnew york state...

copyright © 2013 The Gordian Group, Inc., all rights reserved1

Job Order ContractingIndustry Information Session

DECEMBER 9, 2013


Agendaó JOC Overviewó Benefits of JOC to Contractorsó JOC Contract Documentsó JOC Processó JOC Management Softwareó Understanding the CTCó Calculating the Bid ó Bid Considerationsó Summaryó Questions


JOC Overview

ó Job Order Contracting is an Indefinite Quantity Construction Contract

ó Provides the Ability to Accomplish a Substantial Number of Individual Projects with a Single Competitively Bid Contract

ó On-Call Contractors Ready to Perform a Series of Projects at Different Locations for Competitively Bid Prices

ó JOC is a Prevailing Wage Rate Contractó Focuses on Small to Medium Sized Routine Projects


JOC Overview

ó 30 Year Track Record of Successó JOC Introduced in the United States in 1985ª Dept. of Defense, USPS, NASA, etc.ó Implemented by States, Counties, Cities, K-12 Schools,

Transportation Agencies, Universities, Housing Authorities, etc. since 1990

ó More than 1,000 Contracts Currently in Use ó Over $1.5 Billion in Construction Placed Annually


JOC Overview

ó New York State Department of Transportation has been using JOC for Over 10 Years

ó More Than $65,000,000 in Completed Workó More Than 1,700 individual Projectsó 22 Active JOC Contracts in 11 Regionsó No Bid Protests, No Claims, No Lawsuitsó Endorsed by Trade Associations: AGC, STA, etc.ó Pennsylvania Turnpike Commission has been using JOC

for 6 Years with Similar Results


JOC Overview - Efficiency

ó Time Savingsª Faster Procurement – Weeks Instead of Monthsª Based on Owner-Contractor Partnership = Non-Adversarial Relationship


JOC Overview – Owner Cost Savings

ó Cost of Construction: 3-6%ª Contractor Offers Discount because Bidding a Large

Volume of Work, not One Small Project

ó Lower Procurement Costs: 1-2%ª Eliminates the Full Procurement Cycle for Each Project

ó Fewer Change Orders and No Claims: 1-2%ª Joint Scoping Process Eliminates Misunderstandings ª Detailed Scope of Work Agreed to in Advance

ó Reduction of A/E fee: 3-5%ª No Need to Prepare Full Plans and Specs for each

Project

ó Total: 8-15%


Benefits of JOC for Contractorsó Why JOC Works for Contractorsª Can Complete a Series of Projects by Bidding One Contractª Fast Track Procurement Processª Limited Geographic Area and Type of Work to be Performedª Joint Scope Process Decreases Unknowns and Risksª Contractor has Input into Construction Scheduleª Contractor Paid for Each Task Performedª Can Develop Long Term, Non-Adversarial Relationship with Ownerª Simplified Unit Pricing for all Changes, Deletions, and Extrasª Contractor can Increase Volume of Work by Providing Responsive

Services, Quality Work on Time and Safely


Umbrella Contract


Process - How Work is Done

ó Scope Development ª Joint Scope Meeting With Owner to define Detailed Scope of

Workª Owner Issues RFP to Contractor to Prepare Proposaló Contractor Prepares Proposalª Typical Proposal Due Date will be 1-2 weeks from RFPó Owner Reviews Proposal ó Owner Issues Job Orderó Total Time: Average 2-3 Weeks


JOC Contract Documents

ó Front End Documentsó Construction Task Catalogó Technical Specifications



ó Front End Documentsª Standard Terms and Conditions

É Instruction to Bidders É Bid FormsÉ Insurance RequirementsÉ Bond RequirementsÉ WarrantyÉ Liquidated DamagesÉ Etc.



ó Construction Task Catalog (CTC) ª Based on Prevailing Wage Rates, Local Material & Equipment

Costs Description of Task

Modifiers for Quantity Discounts, Change in Material, etc.

Installation Price

Demolition Price

copyright © 2013 The Gordian Group, Inc., all rights reserved

ó Technical Specifications

ª NJDOT Standard Specifications

ª Specifies Quality of Materials

and Workmanship

ª Tasks in the Construction Task

Catalog based on NJDOT

Specifications


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JOC Process – How is JOC Bid?

ó Award Based on Competitive Bid from Qualified NJDOT Contractorª Must Bid Adjustment Factors:

É Normal Working HoursÉ Other Than Normal Working Hours or when NJDOT can only provide less than 7 hour

access to worksite

ª Adjustment Factors Apply to All Tasks in the CTCª Each Adjustment Factor is Weightedª Lowest, Responsive, Responsible Bidder Wins!


JOC Management Software Optionsó Internet Based Software Provided to Contractorsª eGordian Software Automates the Price Proposal Processª No Cost to Contractors for Software License or Training


Understanding the CTC

ó Contractor must read and understand Using the Construction Task Catalog

ó Presents the General Rules:ª Unit Prices include Labor, Material and

Equipmentª Explains what Costs are Included in Unit

Pricesª Explains when Contractor gets paid for

Scaffolding, Lifting Equipmentª Always paid for Dumpsters and Removal of

Excess Materialª Always paid for Mobilization of Equipment

and Certain Crews: e.g. Guiderail Crewª Explains what is included in Adjustment

Factorsó Will be Discussed in Detail at PreBid

Conference


32 16 23 00-0002 4” Cast In Place Concrete Sidewalk SF $5.06 400 $2,024.00 For Quantities 100 to 500, Add SF $2.04 400 $816.00 32 11 16 00-0015 4” Crushed Aggregate Base SF $0.63 400 $252.00 For Quantities Under 1000 SF $0.18 400 $72.00 01 71 13 00-0003 Mobilize Backhoe EA $402.63 1 $402.63 31 23 16 36-0006 Excavation by Backhoe CY $3.75 11 $41.25 For Quantities Under 20 CY, Add CY $3.75 11 $41.25 31 23 16 36-0028 Loading Excess Materials CY $3.42 13.75 $47.03 For Quantities Under 20 CY, Add CY $3.42 13.75 $47.03 01 74 19 00-0029 Hauling to Dump Site CYM $0.51 207 $105.57 01 74 19 00-0021 Landfill Dump Fee CY $15.14 13.75 $208.18 $4,056.93 /400 $10.14

Compare These Prices

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ó Include All Appropriate Tasks:

Understanding the CTC


Non-Prepriced Tasks

ó For Tasks not in Construction Task Catalog

ó Formula Appears in JOC Contract

ó Three Quotes for Materials or Subcontractor

ó Use Labor Rates and Equipment Rates in Construction

Task Catalog if Work is Self Performed

ó Pre-Set Mark Up in the Contract Documents


Bidding Adjustment Factors

ó Use Historical Project Dataª Select a Completed Project

É You Know Scope and Direct CostsÉ You Know the OH & Profit Achieved

ª Price Project From CTCª Calculate the Adjustment Factor

ó Create a Representative Projectª Create a Scope of Workª Get Sub Quotes or Estimate Costª Price Project From CTCª Add on Overhead and Profit ª Calculate the Adjustment Factor

ó Sampling Methodª Evaluate a Sampling of the

Anticipated Items


ó Whoever Prepares Bid Must Read and Understandª Using the Construction Task Catalogó Volume of Workª What Volume of Work Should You Assume?ª Type of Work Assignedó Location of Work – Limited Geographic Areaó Your Staffing Planª How Many Individualsª Type of Individualsª High Quality, Skilled Managementó Quality of Subcontractors and Work



Detailed Scope of Work

ó Bridge Deck Rehabilitation – Various Locations ª Concrete RepairÉ Remove 4” deep of concrete (12” width) on both sides of the jointÉ Dowel in #5 epoxy coated reinforcement bar at 2’ on centerÉ Tie epoxy coated meshÉ Install rapid set concreteÉ Repair deck and curb line with rapid set concrete. Reinforce with epoxy coated

mesh and pin.ª Joint RepairÉ Remove existing joint material and clean out openingÉ Insert backer rodÉ Place approved joint sealant


ó Direct Cost of Work from CTC

ª Concrete Repair $ 34,688.59ª Joint Repair $ 22,186.93

TOTAL = $ 56,875.52

ó Cost of Work from Quotes or In-House Estimates

ª Concrete Repair $ 31,225.00ª Joint Repair $ 22,750.00

TOTAL = $ 53,975.00



Overhead Costs

ó Overhead Costs:ª Joint Scoping ª Proposal Developmentª Site Supervision and Managementª Bondsª Insuranceª Vehiclesª Safety Supervisor, Trainingª Home Office Supportª Communicationsª Incidental Designª Site Specific Safety Plans


A. Direct Cost of Work $ 53,975.00

B. Overhead 10%* $ 5,397.50

C. Subtotal (Cost & O/H) $59,372.50

D. Profit 10%* $ 5,937.25

E. Subtotal (Cost & O/H & Profit) $65,309.75

F. Price From CTC $56,875.52

Adjustment Factor (= E / F) *1.1483

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Bid Considerations

ó Must Meet NJDOT Qualification Requirements

ó Must have Required Insurance and Bonding

ó Must be Able to Manage Multiple Projects at Multiple Sites

ó Previous JOC Experience NOT Required. The Gordian Group will

Provide Training on the JOC Process, Software, and other JOC

Related Activities.


ó Importance of Adjustment Factorsª Determines Winning Bidderª Used to Price Individual Job Orders

Contractor Adjustment Factor

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Risks of Low Adjustment Factor

ó A Low Adjustment Factorª Leads to Arguments in Proposal Review

É Unsupportable ItemsÉ Exaggerated Quantities

ª Leads to Delays in Job Order DevelopmentÉ Takes Longer to Review Proposals

ó Creates an Adversarial Relationshipª Reduced Volume of Workª Will Shorten Contractª Lost Profitabilityó No Change Orders to Improve the

Margin


Review / Key Points

ó JOC has a 30 Year Track Record of Successó Contractors can Receive a Large Number of Projects

with one Competitive Bidó Simplified Process to Develop each Job Orderó Contractor has Input into Detailed Scope of Work and

Construction Scheduleó Limited Geographic Region and Specified Type of Workó Contractor Paid for Each Task Performedó Simplifies Pricing for Changes, Deletions, and Extrasó Can build Long Term, Non-Adversarial Relationship with

Owner


Questions?

ó Questions and Open Discussion