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5 ways job order contracting shortens the construction procurement timeline
5 Min Read
According to the United States Census, the value of public construction in 2021 was more than $346 billion. With hundreds of billions of dollars changing hands, the construction industry plays a significant role in a country’s economy and investment in this sector has been linked to economic growth. The first step towards a successful project happens long before the groundbreaking ceremony—selecting the project delivery method best suited to meet the needs of the work at hand. Depending on the project scope and objective of the contract, government agencies have various project delivery methods at their disposal. These delivery methods include but are not limited to job order contracting (JOC), design-bid-build (DBB), design-build (DB) and construction manager at risk (CMAR).
Seeking efficiency in construction project delivery
Keeping in mind that best value is in the public’s best interest, leaders of public agencies and departments are always open to more efficient project delivery. When deliberating on which project delivery method to choose, one of the key factors to consider is the project timeline. As leaders in the public sector, your community is depending on you, and unfortunately, traditional construction procurement timelines can often try their patience. Traditional public sector construction procurement cycles are hampered by complicated, bureaucratic procedures. As a result, project delivery typically takes months to complete and requires a significant amount of administrative and technical resources.
JOC is a project delivery method conceived to simplify construction procurement. Unlike traditional bidding where each project is identified, designed and then put out to bid, JOC establishes competitively bid prices up front through a Unit Price Book (UPB) and eliminates the need to separately bid each project. Therefore, JOC is presented as a solution to reduce the bidding effort as an alternative to more time-consuming delivery methods for routine construction projects.
Preliminary evidence of JOC benefits
While thousands of projects have been successfully completed through JOC for decades, there is still low awareness within the industry, especially among those who stand to benefit the most from it. Data analysis published in a recent research report from NIGP and Gordian discovered that 91 percent of the responders utilizing job order contracting indicated that projects took 12 weeks or less to procure, with nearly 70 percent of them indicating the process was fewer than nine weeks. By comparison, more than 50 percent of the responses indicated that when using other project delivery methods, like DBB, DB or CMAR, the length of the construction procurement process rose to greater than 12 weeks.
Shortening the construction procurement timeline
The results of that recent study indicate that JOC significantly shortens the timeline for construction procurement by requiring less time and fewer people than traditional project delivery methods. By looking deeper into the JOC process and best practices, we can provide practical insights for how construction management professionals can achieve greater efficiencies in their projects.
Here are five ways JOC shortens the construction procurement timeline:
Upfront competitive bidding Once a job order contract is awarded, the owner can ask contractors to perform a series of projects. This time-consuming front-end solicitation process is completed one time, rather than repeated for each project, so there is no need to prepare new bid packages each time you require a contractor to perform work.
Readily available contractors Local contractors bid on the job order contract, and once awarded, you have a pool of contractors readily available to work on your projects. All pricing is preset in the UPB, so contractors can start on your repairs, renovations, upgrades or emergency construction projects as soon as they are identified.
Aligns incentives for quality While a single job order contract is in place for multiple projects, the contractor must still satisfy the owner’s standards of quality and timely construction to ensure future work. The potential of a steady stream of work motivates the contractor to meet and exceed expectations with quality, on-time construction.
Clearly establishes project scope JOC creates a platform for owners and contractors to make sure every project scope is accurate, complete and clearly understood by both parties before construction begins. This collaboration reduces misunderstandings and change orders and helps keep projects on time.
Increased cost control Budgetary control is the cornerstone of JOC programs. JOC helps contain and control costs because prices are locked in at the outset of the contract through the UPB. Each task in the UPB includes a detailed description, unit of measurement, unit price and, where applicable, demolition cost. The unit prices contain local direct costs for material and labor. There are a set of technical specifications for each of the construction tasks and general conditions that contain the contract language concerning the execution of the contract. This level of detail aids everyone involved in the project, and because prices are preset, there are no lengthy pricing negotiations. The procurement office knows exactly what it is paying for. The contractor knows exactly what work to do and how to do it. The facilities team gets a project completed to its satisfaction.
Although the purpose of JOC is to simplify the process of completing repair, maintenance, renovation and straightforward new construction projects, its use still represents an unexplored territory for many organizations, especially in the public sector. The emergence of new research to better understand the benefits of job order contracting and its applicability for construction works in the public sector will empower city and county leaders as they seek to better provide for their communities.
Ana-Maria Dimand, Ph.D., serves as an assistant professor of Public Policy and Administration at Boise State University. Randy Horn, PMP, is a regional director at Gordian with more than 20 years of experience in the fields of program management and construction management.
