January 20, 2004

Job Order Contracting saves in renovations

Mary Walters is an editor for Facilities Management.

Is it time to renovate part of your office building? Facilities Management (FM) has a new program that may make the renovation even easier.

Job Order Contracting (JOC) is a new program being developed to streamline the bidding process for small- to medium-sized construction, renovation or repair projects at Emory. It’s meant to address only the work that currently requires bidding and formal procurement and will bring substantial time and cost savings to the Emory community.

The program’s greatest value comes down to two factors: first, improved relationships between FM and the Emory community as well as with a proven group of contractors; second, its costs and potential savings. The JOC program, through its shift to long-term thinking, has an expected total aggregate cost savings of 8–23 percent.

Each small- to medium-sized project at Emory currently is bid out on an individual basis. Planned for a February launch, the JOC program will identify five select contractors to participate based upon their qualifications and their ability to meet the prices in a comprehensive task list.

With the help of a consulting group, FM will identify anticipated tasks that might be involved in projects of this size. The tasks are then given a unit price that accounts for the cost of local materials, local labor and equipment. Each contractor is responsible for identifying “adjustment factors” over eight different circumstances (such as compensating for after-hours work).

Think catalog shopping. The JOC program and participating contractors will be able to meet the prices in the catalog of task lists with an agreed upon allowance for adjustment factors.

Now think volume shopping. Rather than just competing for one project, JOC contractors essentially are competing to be favored for future projects for the next five years.

Performance is critical for future success. JOC contractors have a base period of one year under the contract, renewable up to four additional years. Being part of JOC creates for the contractor an opportunity to earn up to $2 million per year. One of the principles behind the project is to invest in contractors—with the intent that the investment will be reciprocal.

JOC contractors will be considered for future projects by maintaining clean project sites, responding in a timely manner and producing high-quality work. These are just a few of the benefits FM customers can look forward to enjoying. Here are a few others:

• Relationships. Customers will benefit greatly from an enhanced relationship with an FM project manager. The project manager brings a wealth of expertise, including knowledge of the building standards for the University and utility systems, and the motivation to ensure any renovation is done appropriately. This relationship can reduce the changes and additions that can happen once a project is under way, as well as any maintenance issues once it is complete.

• Online access. Customers will be able to submit work requests for an evaluation and even “shop” online to assess the price of project components.

• Competition. Contractors first compete to participate in the program, and this competitive spirit lives on as the participating contractors still compete with one another in order to “win” each future job.

• Fixed project price. The project is given a fixed amount from the agreed pricing in the JOC contract. If a part or item is missed in the bid, the expense for the item goes to the contractor.

“The JOC program isn’t taking away any of the work we are currently doing in-house,” said Charles Norris, assistant director of plant operations. “It addresses work that we are already bidding out. It’s just another option.”

Customers with renovation projects costing less than $100,000 will have the choice to participate in the JOC pogram or to bid the project out individually.