Study shows Job Order Contracting would get stimulus projects started faster than conventional construction methods
VIENNA, Va. — February 17, 2009 — Federal agencies receiving funds from the $790 billion economic stimulus plan can begin their construction renovation and retrofit projects quicker and easier by using the construction contract method known as job order contracting (JOC).
A study by Northern Arizona University of facility owners and managers revealed that JOC requires less time to start a project than other commonly used methods. The study reported 74.5% of the respondents stated that JOC requires less time to start a project than other most likely used methods (including design-bid-build, or design-build or CM at risk). The study was conducted in 2005 and 2006 for the Center for JOC Excellence. The results can be found at www.jocexcellence.org along with information on starting or utilizing a JOC program.
JOC is an indefinite quantity, indefinitely delivery procurement method. An agency, such as the Department of Defense, - enters into a competitively bid contract with a JOC contractor for an amount it could potentially spend over a certain time period; however it is not required to ever complete any work. By establishing a JOC contract, federal agencies have the flexibility to begin construction projects in weeks rather than months.
"This method is ideal for federal construction projects, because they often have short windows of time that the work can be completed in," explains Mark Bailey, president of Centennial Contractors Enterprises, a national job order contractor. "Under a Job Order Contract, an agency can assign project work orders without bidding each project out, because they've already gone through the procurement process to put the JOC program in place."
Job Order Contracting was created by an agency of the federal government – the Army Corps of Engineers, in 1981. The goal of the procurement method, according to the Center for Job Order Contracting Excellence, was to reduce the time-consuming procurement procedure involved in awarding and achieving multiple projects along with assuring that contractors performed quality work.
Additionally, JOC stimulates local economies, because the contractor hires local minority and small subcontractors to do the actual construction work. These small businesses might not otherwise have access to these large projects, because they cannot meet the bonding requirements on their own or come in as the lowest bidder in the typical methods. Nonetheless, they rely on a steady stream of projects to maintain their staffs in this economy.
"JOC is performance-based, which means it is focused on generating the best quality solution for the budget and time demands of the client," Bailey added. "As such, JOC contractors have to work hard to exceed the clients' expectations to earn the right to do more work in the future. A JOC program also allows for sustainable and green practices to be included as part of the solution."
"Having the dollars available but no way to execute the work in a rapid and responsible fashion can be frustrating," said David Carrithers, 2008 Industry Chairman of The Center For JOC Excellence and vice president at Centennial, "A Job Order Contracting program is allowed under both the FARS (Federal Acquisition Regulations System) and DFARS (Defense Federal Acquisition Regulations System)."
"This competitively bid method allows for one time, upfront bidding on pricing and meets the requirements of public procurement of publicly-funded facilities and construction. This allows federal agencies or military bases to execute as many projects, as possible, as quickly as possible," he explained. "With a JOC program there is no guarantee of the volume of work to the JOC contractor – if they don't perform they do not earn the right for more work. Job order contracting is currently used by many federal departments and agencies, including US Army Corps of Engineers, US Postal Service, US Air Force, NAVFAC, and the Department of Defense."
Job Order Contracting programs are designed to get more of the dollars to the work projects not to procurement and re-procurement costs. A professionally developed and managed JOC program saves from 8 percent to 15 percent – in time, design and procurement costs.
Carrithers concludes, "America's federal agencies need not only the funds, but a fast, transparent, way to use stimulus dollars today – not two years from now. While JOC is not the answer to every construction need, it is a key tool in the tool box of solutions. With a JOC program in place work could start in less than 90 days. That's 90 days sooner we start to turn the economy around by putting the stimulus dollars to work in local communities today."
See a comparison timeline of Job Order Contracting versus Standard Bid at www.frostmiller.com/cen/JOC_Timeline.pdf .
About Centennial Contractors Enterprises
For more than 20 years, Centennial Contractors Enterprises, Inc., has been a leader in providing responsive construction solutions supporting government, educational and business facilities and infrastructures, with projects focused on renovation, rehabilitation and repair. Centennial has 40 offices across the country. To learn more, go to www.cce-inc.com .
Contact: Louise Muth, Director of External Communications: (703) 480-3707