Job Order Contracting (JOC) is a unique construction delivery method used by organizations to get numerous projects done in quick succession through a “system of contracts” called job order contracts. A job order contract is a contract given for a fixed term or maximum dollar value where a contractor is selected based on a competitive bid to perform separate job orders in the future. Job order contracting is used for well-defined recurring work where quick execution is essential like repairs, maintenance, renovations, and new construction projects.
Things to Consider Before Choosing Job Order Contracting
Type of work
Since JOC is used for repetitive work, it is important to consider if your project job order will be recurring in quick succession before choosing this construction delivery method in Austin, TX. If you’re in the real estate industry, then it will be perfect for you because it establishes an excellent working relationship with your contractor due to the length of time you will be working together. It will get your constructions and renovations done more effectively.
All contracts are required to have terms, and job order contracts are no exception. Before job order contracting, it is essential to read over the terms to see if they are suitable for you and your work.
Some of the terms to look over are:
- Duration—Job order contracts are usually one year long with the option to extend after it has expired.
- Value of the contract
- Non-priced work—This is work that is not reflected in the project task catalog and usually does not exceed 10% of the total value of the job order.
- Bonding, insurance, and liquidated damages
- The unit price book
A unit price book is where each job is listed along with a clearly defined scope of work and the estimated price of the work. The cost of each work is estimated based on the material, labor and equipment costs that go into the work. Contractors usually take the cost in the unit price book and multiply it with their costs of doing business like profit before making a bid for the contract.
Benefits of Job Order Contracting
If you decide that job order contracting is right for your project, you can be sure to reap the countless benefits that come with it. Some of its benefits include:
- It is cost-efficient and has better cost visibility.
- Creates a long-term relationship between you and the contractor.
- Gets more projects completed on time and on budget.
- Has reduced deferred maintenance backlogs.
- Has fewer change orders.
- Has reduced legal fees.
- Is very transparent.
- Has “best management practice” deployment.
In conclusion, JOC can be the difference between success and failure in your construction projects. The process of procuring repair, maintenance, renovation, and new construction contractors sometimes takes longer than the actual construction. Job order contracting simplifies the process so that work begins faster. These are just a few of the benefits you can see when choosing JOC as your project delivery method.