1 cappo/nigp conference workshop #4 job order contracting

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CAPPO/NIGP CONFERENCE

WORKSHOP #4

JOB ORDER CONTRACTING

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Agenda

• Overview of Job Order Contracting

• Sacramento County’s JOC Program

• JOC Programs in California

• JOC Procurement Codes

• Questions & Answers

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Job Order Contracting Overview

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Why JOC?

• Job Order Contracting (JOC) is all about efficiency and value. Sacramento County struggled with the need to procure quality construction, in a timely fashion, and at a competitive price for the small to medium size repair, remodel renovation work.

• What JOC did was enabled Sacramento County to focus on completing projects instead of getting bogged down in the procurement process.

SACRAMENTO COUNTY

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Job Order Contracting (JOC) Is A Firm Fixed Priced, Competitively Bid, Indefinite Quantity Procurement Process For Small To Medium Sized Construction and Repair Projects.

JOC Creates a Fundamentally Different Construction Procurement Relationship

Contractors Are Subjected To Different Motivations And Behaviors

Fosters a Non-Adversarial Relationship Between Public Agency & Contractor


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Contract Documents

• Construction Task Catalog

• Technical Specifications

• General and special conditions

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• Construction Task Catalog® (CTC)• Contains over 240,000 Individual Construction Tasks• Represents the “Scope of Work” of the Contract• Inclusion of Tasks Customized for The County of

Sacramento• Includes Specific County of Sacramento Approved

Products• Priced Using Local Prevailing Labor, Material,

Equipment Prices

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• Technical Specifications

• Customized for The County of Sacramento that Incorporate County Quality Standards

• Clearly Tells the Contractors What Is Required for Each Task in the CTC®

• Specifications Must Be Linked to Tasks in the CTC

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• JOC General Conditions & Bidding Documents

• Critical Document

• Must be Consistent with Procurement Laws

• Must Accurately Explain the JOC Process

• Some Standard Clauses Need to Be Modified for JOC

• Poorly Drafted Contract Language Increases Risks & Costs

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JOC Structure & Bidding Guidance

• County establishes a fixed initial term • Typically one year• May include options to extend

• County establishes a guaranteed minimum dollar value• Some nominal amount - typically $25,000 or $50,000

• County establishes a pre-established maximum value• Represents the expected amount of work to be accomplished• Based on owner’s budget

• Prior to bidding the County does not:• Identify or commit to any specific project or location• Identify or commit to any specific quantities or tasks in the catalog of

construction tasks

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A JOC is Competitively Procured!

• Each bidder must bid two adjustment factors to the prices published in the unit price book• Normal time & other than normal time

• Same two adjustment factors apply to all tasks in the unit price book

• Adjustment factors must include all indirect costs & profit & are fixed for one year

• Lowest adjustment factors (i.e. lowest bid) is the basis of award to the lowest responsive, responsible bidder• A typical adjustment factor might be 1.10 or 1.20

• The same adjustment factor applies to every task in the unit price book and cannot be changed

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How Does JOC Work?• Joint Scope - County & contractor jointly develop scope of work

as a team• Contractor develops price using tasks & prices from the unit

price book• Each total task price = price book unit price x quantity x adjustment factor• Prices are fixed, only scope is negotiated• Also develops schedule, shop drawings, material samples

• Contractor’s price & other information is reviewed & approved• County issues a lump sum job order

• Risk of performance remains with contractor - no adjustment of quantities after issuance of job order

• Average duration from joint scope to issuance of job order is ~ 28 days

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JOC - Why It Works

• The job order contract is a series of individual projects or job orders• Contractor is guaranteed only a minimum amount of work• If minimum value is met, no further work has to

be given to a failing contractor

• Contractor has a continuing financial incentive to provide:• Responsive services• Quality work• Lower cost

• Future job orders tied to contractor performance• No obligation to give a specific project to JOC contractor• Additional JOCs may be bid and awarded • Key point - profit for prime JOC is a function of volume

• JOC is truly a performance-based contract

• JOC does not replace traditional methods for accomplishing work

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Sacramento County’s

JOC Program

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Sacramento County

Benefits

Sacramento County’s JOC Program provides significant and measurable benefits over the more Traditional Design-Bid-Construct process• Significant time savings - upwards of 90%

• Lower overall construction costs of an estimated 8% to 15%

• Lower Soft costs

• Higher quality work

• Virtual elimination of change orders, claims, defaults and terminations

• Greater control over contractors whose future hiring is dependent upon job outcomes

• Increased transparency at all levels

• Enhanced opportunities for Small, Local, Minority and Women-owned Business Enterprises

• Enables Sacramento County to more effectively manage multiple construction locations from a single vantage point through the use of web based software and administration

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Sacramento County

Traditional Process: 9 to 15 Months

JOC Process: 3 to 5 Weeks

4 - 6 Months2 - 4

Months2 – 4

Months1

Month

1 - 3 Weeks1 Week

1 Week

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Sacramento County

• JOC Program Initiated in 2002

• Over 400 Projects have been completed using JOC

• Total Value of projects in excess of One Hundred Million Dollars

• No Claims filed

• No litigation filed

•

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Sacramento County

• Departments that use JOC

• Architectural Services

• General Services

• Sacramento Airport System

• Water Resources

• Department of Transportation

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Sacramento County

• Sacramento’s Structure

Architectural Services

AirportsWater

ResourcesGeneral Services

DOT

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Sacramento County

• Advantages:• Insure consistancy in procedures throughout all county

departments using JOC.

• Provides control of projects that my include hazardous materials.

• One point of contact for contract administration

• Additional Oversight for compliance

• Challanges:• Insuring all project mangers follow the same procedures

• Additional layer of overhead

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Sacramento County

• Department of Water Resources• The department has an annual budget of $3,000,000 for

upgrading existing storm water drainage system. JOC is typically used to repair and upgrade the system.

• By using JOC the county can control the costs of unforseen conditions.

• Price out projects during the winter months and begin work in spring without delay.

• Pre priced Change Orders

• Issuing Job Orders for exploratory excavation.

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Sacramento County

• Architectural Services

• Typical projects are multi traded projects with an average cost between $75,000 and $100,000.

• Specialty projects that require a signicant amount of phasing.

• Projects with a high likelyhood of change orders if bid in the traditional design bid build process.

• Fast track projects

• Repair, remodel and renovation projects.

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Sacramento County

• DOT• Sacramento County Department of Transportation using JOC to

install traffic calming devices on existing road ways.

• JOC has drastically reduced the procurement time and costs for the Sacramento County Traffic Calming program.

• The following is an example Project

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Traffic Calming

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Traffic Calming

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Sacramento County

• Sacramento Airport System

• Uses JOC to accomplish time sensative projects.

• JOC Allows the airport an on call contractor with all the appropriate security clearances.

• Used as a support contract to the "Big Build" Terminal Modernization Project.

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Taxiway Repair

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Taxiway Repair

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California JOC Programs

• County of Sacramento

• County of Solano

• County of Contra Costa

• County of Sonoma

• County of Alameda

• County of San Francisco

• County of San Mateo

• County of Santa Clara

• County of Ventura

• County of Los Angels

• County of Riverside

• County of San Diego

• County of Fresno

• County of Kern

• County of Tulare

• County of San Luis Obispo

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California JOC Programs

• UC System

• California University System

• Los Angeles Unified School District

• SANDAG

• City of Long Beach

• City of San Diego

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Procurement Authority

• Counties Issue JOC Contracts Under The Annual Contract Code 20128.5• Attorney General Opined That JOC Was A Form Of Annual Contract

• CSU System And LAUSD Wrote Special JOC Legislation

• Charter Cities Are Able To Issue JOC Contracts Under Charter

• Non-charter Cities Have Two Potential Options• Under The Uniform Cost Accounting Procedures Issue JOC Contracts

Only For Project Under $125,000• Issue A General Requirements Contract

• Follow The Principals And Structure Of JOC• List All Of The Potential Projects To Be Accomplished

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Procurement Authority

• State of California• Open discussion point

• Nothing prohibits JOC

• JOC is Competively bid

• Section 10124 authorizes contracting on 'a unit basis'

• Other Jurisdictions• Califronia Government Code Title 1, Division 7, Chapter 5, Article

1, Joint Powers Agreements.

• National Joint Powers Alliance has compitively bid "JOC Type" contracts in accordance with California Public Contract Code

• NJPA Members can purchase off of these contracts.

• www.eziqc.com for more information on this system

http://www.eziqc.com/

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JOC Awards

• In 2005, the City of Miami Beach won the prestigious Robin J. Zee Presentation for Excellence and

Outstanding Achievement Award by utilizing TGG’s JOC Complete Solution®.

• The award, which referred to the City’s use the JOC Complete Solution as the “Best of the Best”, was

awarded by the National Institute of Governmental Purchasing (NIGP).

Measurable Results Leading to the NIGP Award

Traditional Procurement System JOC Complete Solution®

Projects Completed 78 in 5 years 131 in 2 years

Procurement Time 184 days/project 21 days/project

Change Orders 273 0

Protest/Litigation 9 0

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Questions and Answers

1 cappo/nigp conference workshop #4 job order contracting

Documents

job order contracting

joc work

sacramento county slide

overview slide

agenda overview of job

prime joc

job orders contractor

ctc slide