What is - Efficient Construction Project Delivery
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Transcript What is - Efficient Construction Project Delivery
June 2012,
Copyright 2012, 4Clicks Solutions, LLC
Business Partner
What is
The BEST electronic presentation of RSMeans
Cost Data
Software Technology to efficiently deploy and
manage Job Order Contracting (JOC) programs,
SABER, IDIQ, SATOC, MATOC, MACC, POCA,
BOA …
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Who Uses
#1
Building Owners, Contractors, and AE’s doing a lot of
RSMeans-based line item cost estimating.
#2
Anyone sharing or collaborating on RSMeans-based line item
cost estimates
#3
Contractors, AE’s working with and hoping to work with and/or
improve work on DOD/non-DOD Federal Government,
State/Local/County Government, Education, Healthcare, or
Airport/Transportation - Renovation, Repair, Sustainability, and
Minor New Construction Projects
#4
Over 80% of United States CONUS Air Bases, and rapidly
growing numbers of other DOD and non-DOD Federal Real
Property Owners.
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Exclusive Features of
Built to enable Collaboration among Owners, Contractors,
Subs, & AE’s.
Enhanced 400,000 Line Item RSMeans Cost Data*
Integrated Estimate, Project, Contract, & Document
Management
Automated Owner/Contractor Estimate Comparisons
*Including Full Descriptions and Modifiers. References, Graphics, and Specifications are also
electronically available.
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Additional e4Clicks Project Estimator Features
Set Contract Coefficients
Manage Multiple Projects with Multiple Coefficients
Track and Report RSMeans Line Items and non-RSMeans
Items (Priced and non-Priced)
Specifications Linked to Cost Estimate (Summary and
Detailed)
Track Project Status – From Concept Through Warranty
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Software Overview
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Benefits of
Rapid Implementation
Easy-to-use, Single seat to Network/INTERNET deployment
Consistent Usage
Organization’s JOC, SABER, etc. procedures embedded in
software
Transparency
System-wide RSMeans-based UPB (North American Standard),
or your own cost guide
Collaboration
Built-in estimate/project/document/contract management
Performance Gains
Estimate re-use, shorter project timelines
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Software Versions
Subscription Pricing Model
e4Clicks BASIC
Targets Sub-Contractors who estimate and don’t require contract, document, or
project management features. Includes the Basic Version of eTakeoff.
e4Clicks PROFESSIONAL
For General Contractors and Sub-Contractors who require multiple project
management, document management, contract management, advanced estimating
features, exporting to Adobe PDF and Microsoft Excel importing other external
databases. Includes the Pro Version of eTakeoff.
e4Clicks PREMIER
For Owners to estimate and manage entire contracts or programs in a single product.
Premier is used through-out the country on single and multiple award contracts
(MACC, MATOC, JOC, SABER, BOA, etc). Estimate Comparison and Technical
Evaluation features are included in this version. Includes the Premier Version of
eTakeoff.
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Are you using SpreadSheets or CostWorksTM?
Studies have readily demonstrated the errors and lack of
productivity related to spreadsheets – date entry and
formulae errors, costly data maintenance, lack of
collaboration, and miscommunication.
CostWorks and e4Clicks Project Estimator are NOT
competitive.
CostWorks delivers excellent electronic access to RSMeans
Cost Books without modifiers, enhancements, etc.
e4Clicks Project Estimator is an advanced and
collaborative cost estimating, project management,
contract management, document management package
inclusive of visual estimating.
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Full Product & Services Offerings
e4Clicks Project Estimator Software – Subscription pricing models
Custom Unit Price Book / Cost Data Engineering Services
Software Training* - Owners, Contractors, and AEs
Consulting and Marketing to Support JOC Programs
* Regional, On-site, Virtual/Remote
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FAQs
What is the cost of e4Clicks Project Estimator?
The annual cost of e4Clicks ranges from approximately $850/year to $2500/year per
concurrent users and is dependent upon the software version and RSMeans cost
databases required.
Can I create custom line items in addition to RSMeans line items?
a. Custom line items can be created for the Owners UPB, or an entirely custom
UPB.
b. Once a UPB is created and the JOC program is running, and non-priced items are
noted and appropriately handled.
How often is are the UPB cost updated.
This is entirely up to the Owner when establishing the JOC contract. We
recommend annual price updates at a minimum, with quarterly updates via CCI
available.
How long has JOC – Job Order Contracting been available?
JOC was first deployed in the 1980’s and is used to efficiently manage billions of
dollars of project annually, with documented savings coming via more efficient
procurement, shorter overall project timelines, and better/long term
owner/contractor relationships.
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A Primer for Job Order Contracting
(JOC)
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A Primer for Job Order Contracting (JOC)
(Source - Material adapted from worked done by Lisa Cooley, formerly with Centennial Contractors)
“Job Order Contracting (JOC) is a method of managing
multiple details of renovation, rehabilitation, repair, and other
construction projects on a predetermined set of pricing and
standards. By using JOC customers take advantage of a
process that is fast and responsive to their needs while
providing excellent quality construction.”
--Center for Job Order Contracting Excellence
(www.jocexellence.org)
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Contractor
Definitions?
Contractor:
A gambler who never gets to shuffle, cut or deal.
Bid Opening:
A poker game in which the losing hand wins.
Low Bidder:
A contractor who is wondering what he left out.
Engineer's Estimate:
The cost of construction in Heaven.
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Low-bid Contractor?
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A World Without JOC
Smaller projects easily can take up to 1 year to
procure
Up to 22% of project costs are consumed in design
and procurement
Change orders can increase project costs by 50%
Claims and litigation are the “Status Quo”
Large backlogs and inefficiencies negatively impact
an organization's mission.
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Who is using JOC?
(partial listing)
Federal Government
Army
Navy
Air Force
Veteran’s Administration
GSA / Department of Homeland
Security
US Postal Service
Higher Education
University of New Mexico
Northern Arizona University
City Colleges of Chicago
Georgia Tech
Healthcare
Harris County Hospital District
University of Washington Hospital
System
Transportation
Phoenix Metrorail
DFW Airport
State/County/Local Government
State of Washington
State of Arizona
City of Phoenix
City of Houston
Baltimore Housing Authority
Los Angeles County (DPW)
K-12 Independent School Districts (IDSs)
Hartford County Schools
Loudon County Schools
Dallas Public Schools
Houston ISD
Mesa Public Schools (AZ)
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JOC Benefits / Results
Faster project delivery (3-9 months less)
Streamlined engineering and design
Cost visibility/transparency
Better contractor performance
Integrated Team - Partnering/collaborative
owner/contractor relationship
More opportunities for local business
Effective use of year-end funds
Higher overall satisfaction*
NonPartnered/Low
Bid
*Mulcahy, Francis S. The Effectiveness of Partnering and Source Selection in Job Order Contracting.
Master’s Thesis, University of Washington, 2000.
Nonpartnered/Best
Value Selection
Partnered/Best
Value Selection
0% 25%50%75%100%
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JOC / non-JOC Timeline Comparison
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JOC - Establishing a Fiscally Beneficial
Relationship
Long-term contracts foster a
higher level of investment in
making the working
relationship yield successful
results
A JOC program not a project
Allows for the development of a
trusted partner
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The Pricing of JOC Projects
Pricing structure relies on a Unit Price Book ( UPB )
For example - Standardized, but enhanced
400,000 line item RS Means Cost Data
Custom and/or localized UPB and/or line items.
Competitively-bid coefficient (multiplier,
factor) establishes pricing at the outset of the
contract.
Coefficient includes all costs including materials,
labor, overhead, profit, and sometimes bond and
tax.
Example:
1 SF Drywall
Coefficient .92
Contractual Price
$1.00
-0.08
$0.92
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JOC Delivery Order Pricing
Delivery orders are firm fixed price, lump
sum
UPB is an estimating tool
Unit price proposals represent contractor’s
committed price—it converts to lump sum
Change orders rare, and with consistent
pricing structure
Brings IPD/CM advantages to smaller
projects but in an efficient way with an atrisk incentive to perform.
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Non-priced Items
Items not appearing in the Unit
• Price Book are considered Non
Pre-priced Items (NPP)
Typical NPP options:
Sample Contractor Bid:
UPB Coefficient
.92
applied to line items
NPP Coefficient
1.18
applied to actual sub costs
• NPP coefficient serves as a markup on three
transparent subcontractor bids
• NPP markup can be set per contract provisions
• Once a new unit price is negotiated it can be
incorporated into the contract
• Some contracts will prohibit or limit NPP items as
a percentage of delivery orders.
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Dynamic vs. Static Costs
Either the Unit Price Book or the Coefficient is
usually adjusted annually
Dynamic cost databases generally maintain the
same coefficient
Customized price books typically adjust
coefficient annually according to an industry
benchmark (RSMeans City Cost Index-CCI),
and/or add customer-specific unit price line
items
Goal is to help contractor and owner manage
risk
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Change Orders and JOC
Change Orders are rare in JOC
• Owner-initiated
• Truly unforeseen conditions
UPB governs original scope of work and
scope added after
• Puts owners at an advantage when directing
changes in the work
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Owners Preparing for JOC
Analyzing potential JOC volume
• Review historic project data (2-3 years) and reconcile with
budget projections. Segregate projects by size, location,
type, etc.
• What will your JOC “bandwidth” be?
• All-inclusive, or selective? As defined by scope, or urgency.
• Size limits? Consider in-house capabilities, other contract vehicles, and
political influences
• Define contract footprint, including potential regionalization
• Single or multiple award
Numbers to consider.
• $3M—minimum annual volume for standalone JOC program
• $6M—maximum efficiencies are achieved, allowing addition
of support staff
• Many owners with less volume can access JOC through
purchasing cooperatives
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Owners Preparing for JOC
Assess in-house capabilities
• Project Management Capacity
• Skillsets
• Line-item estimating, or ability to review
estimates, Proactive definition of scope,
In-house maintenance crews
One Owner’s
Management Plan:
Each PM manages
15-20 projects
simultaneously, up
to 50 per year
• Training Plan
How will JOC interface with your design
professionals?
Flowcharting how JOC process will interface with
purchasing, management and board approvals
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Contractors Preparing for JOC
Company culture of high performance needed to
succeed in JOC?
Ability and capacity to create productive teams?
Proactive rather than reactive?
Line item estimating capabilities?
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Contractors Preparing for JOC
Considerations that drive the coefficient:
Contract volume (higher volume = ⇩)
Geographic dispersion of projects (further apart = ⇧)
Type of work
Average size and size range of delivery orders
Three S’s: Supervision, Security, Safety
Contract Administration Cost
For RS Means, Division 1 provisions and column used
(Bare Costs vs. O&P column)
UPB used
Marketing costs
Look at historic coefficients, but beware of changes
that can impact the coefficient!
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Contractors Preparing for JOC
Bidding the Coefficient:
Historic Costs
Reconcile 2-3 historic projects where final costs are
known against a line item estimate generated from
UPB
Focus on Divisions 2, 9, Mechanical and
Electrical?
Program Costs
Calculate total personnel and overhead costs to
manage the program, reconcile with typical project
costs and then reconcile unit costs with select line
items
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The JOC Process
Once a JOC Program is in place, client project demands/requests happen
over the contract term. This starts the JOC Process:
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The JOC Process - SCOPE
Scope Variability - Detail of Owner scope preparation varies
according to:
Owner preference and skillset
Owner people resources available
When in planning cycle project was identified for JOC
Owner Provides:
Owner Provides:
Owner Provides:
Project Need,
Target Budget
Defined Scope
Document
Complete Bid
Documents
More turnkey, contractor led
More proactive owner involvement
Range of Owner Participation
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Site Visits
Typically within days
Collaborative Process
Goal of capturing
every necessary
component of work
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Owner/Contractor-Joint Scope
Development /Documentation
• Remove and reinstall existing 3 urinals and 2
commodes
• Demo
/ dispose of 3 existing lights Reuse existing circuit
for new lights.
• Remove & replace 2 existing
HVAC grilles
• Install gyp ceiling at 8' 8" with 4 new surface mounted
explosion proof lights. Relocate existing smoke detector to
new ceiling
• Demo CMU for 42" opening min. (exist opening +/- 36")
• Demo & dispose of existing metal partitions and replace
with new 4" CMU covered completely with ceramic tile,
with one block scupper at bottom of each
• Demo ceramic tile, floors and walls, (exist ceramic on walls is
approx. 8'-0" high)
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Targeted or Incidental Design
Performed inhouse
Included in
coefficient
Will engage
design
professional when
needed
Major building
system
engineering
Structural
Life-safety
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Scope and Work Plan Submitted to Owner
Presented to owner for
approval
Important confirmation
step for aligning vision
and expectations prior
to proceeding with
labor-intensive line item
proposal
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The JOC Process - PROPOSAL
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Proposal Format
Generation of the line item estimate
Assurance of a fair price:
– Are the line items appropriate?
– Are the quantities correct?
Owner has to understand the process and have
faith that it provides competitive value
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Project Execution
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Case Study – DFW Airport (Dallas/Fort Worth)
The Program
First used JOC through a cooperative,
then solicited their own contract
Sophisticated owner that uses JOC in a
targeted way
RSMeans UPB
The Value
Badged and screened contractor and
subcontractors who understand the
security logistics of working in an
airport environment
A contractor who will go the extra mile
to meet ambitious schedules
Faster, Faster, Faster!
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The Future of JOC
JOC is a form of IPD – Integrated Project Delivery
Emphasis on Pricing Transparency
Integration Across the Building Lifecycle
JOC of the Future Blog
Technology Changes:
– Link to Building Information Modeling
– Cost Databases and Estimating Approaches will
further evolve to reveal lifecycle costs
“Greater Good” goals
– Small and disadvantaged business utilization
– Sustainability
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Job Order Contracting - RESOURCES
Center for Job Order Contracting Excellence
www.jocexcellence.org
RS Means—Unit Price Books, Training, JOC Consulting
http://www.rsmeans.com/consulting/joboc.asp
4clicks—Estimating/Management software for JOC
programs
http://www.4clicks.com/
Kosten-Technik International—JOC estimating
services for owners and contractors
http://www.kosten-technik.com/
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