1. Lisa Cooley, LEED AP
Program Director
Job Order Contracting and Custom Cost Engineering

2. The Premise
How small is too small for Design-Build?
• No project is too small to benefit from Design-
Build principles
• The challenge lies with process definition and
procurement

3. A personal journey through Federal
Design-Build History
• Federal Acquisition Streamlining Act,
1994
– Reduce unique purchasing
requirements
– Simplified Acquisition of small
purchases
– Focus on speed
– Established preference for Multiple
Award Contracts
• Clinger-Cohen Act 1996 and FAR 1997
– Established 2 phase selection process
for D-B
• ARRA
• Sequester

4. Alphabet Soup
IDIQ (Indefinite Delivery/Indefinite Quantity)
• MACC/MATOC (Multiple Award Construction Contract/Multiple
Award Task Order Contract)
– SATOC
• JOC (Job Order Contract)
– DOC
– TOC
– SABER (Simplified Acquisition of
Base Engineering Requirements)

5. Government Perspective: Increasing Importance of O
& M in a World of Shrinking Funding
Savannah District USACE

6. Contractor Perspective:
Stabilizing Influence of O & M Work
Reed Construction Data, 2012

7. Multiple Award Task Order Contracts
• Most easily understandable form of IDIQ
• Mirrors Design-Bid-Build or Design-Build process, in
reiterative form
• Qualifications and some form of price validation are both
required at the contract level
• Contractor selection is pushed down to the delivery order
level
• In Design-Build version, it can eliminate Phase 1 process
time and investment

8. Two Examples of Small(er) Project
MATOCs
USACE Louisville
• Exclusively Design-Build
• Minimum 3, maximum 5
contractors
• Max $4m per delivery order,
typical $1m
• 3+2, $20m max
• 8(a) setaside
USACE Savannah
• Design-Build or DBB
• Maximum 5 contractors
• $750k to $10m per delivery
order
• 3+2, $100m max
• Total small business
setaside

9. MATOC vs. SATOC Benefits
MATOC
Pros
• Reduction in contracting Time &
Cost
• Contractors Prequalified
• Evaluators develop more intimate
understanding of contractor
capabilities and past performance
• Ability to Negotiate
• Flexible Response to Emergencies
Cons
• Large Upfront Effort
• Minimum Guarantee
• One contractor can dominate,
ultimately resulting is loss of
competition
SATOC
Pros
• Prepriced Work allows for single
source procurement
• Match Funding to Requirements
• Flexibility to Add Work
(Modification)
Cons
• Assuring competitive pricing
• Hard to Adjust to Market Changes
Both allow for the development of seasoned
contractor base and create efficiencies in
contractor and government staff

10. SATOC Example
• USACE Little Rock SATOC for US Air Force Medical Service
• Focused on SRM, providing D-B process flexibility
• 2 year, $49m max
• Provision for emergency services on pre-negotiated T&M
basis, up to $150k
• Requires 2 notional design solutions at 20-30% design for
every task order
– Prescriptive but streamlined project development process:
Background Narrative, Technical Observation, Technical
Solutions. Focus on photodocumentation and site investigation
in early phase.
• 65% design prior to construction start, 90% design required
at 35% construction completion

11. Job Order Contracting
Genesis: US Army, 1980’s
Smaller projects were taking up to 1 year to procure
8-22% of project costs were consumed in design and procurement
Change orders could increase project costs by 50%
Claims and litigation
Low bid procurement produced low quality
results
Large backlog of projects
Impact to mission

12.  Faster project delivery (-3 to -9 months)
 Streamlined engineering and design
 Assurance of cost reasonableness
 Better contractor performance
 Partnering relationship
 More opportunities for local small and
disadvantaged business
 Effective use of year-end funds
Cassell, Jordan W., and Linda T. Gilday. Improving the Army’s Job Order
Contracting Program. Logistics Management Institute, September
1997.
JOC Results
0% 25%50%75%100%
Non-
Partnered/Low
Bid
Non-
partnered/Best
Value Selection
Partnered/Best
Value Selection
Owner/Contractor Satisfaction with JOC
Mulcahy, Francis S. The Effectiveness of Partnering and
Source Selection in Job Order Contracting. Master’s
Thesis, University of Washington, 2000.

14. Framing JOC as a Design-Build Tool
JOC brings the advantages of the
most progressive delivery methods
to smaller projects
– Design-Build Lite
– CM At-Risk Lite
– Integrated Project Delivery Lite
– Performance-based Contracting Lite
Integrated Team
Early Collaboration
Best Value or Qualifications Based Selection
Performance Incentives
Pricing Transparency
“Great service,
less change orders?”
“Everything you ever wanted in
a construction project?”

15. The Competitive Pricing Component of JOC
 Pricing structure relies on a Unit Price Book (RSMeans)
 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.
 Effectively bidding every component of typical
construction on bid day
Example:
1 sf drywall $1.00
Coefficient .92 - .08
Contractual Price $ .92

16. Delivery Order Pricing
Delivery orders are firm fixed price, lump
sum
UPB is an estimating tool, not a billing tool.
Unit price proposals represent contractor’s
committed price—it converts to lump
sum.
Change orders rare, governed by same
pricing structure.
No surprises!
16

17. What if an item is not in the Unit Price
Book?
• Items not appearing in the Unit
Price Book are considered Non
Pre-priced Items (NPP)
• Typical NPP options:
1. NPP coefficient serves as a markup on three
transparent subcontractor bids
2. NPP markup can be set per contract provisions
 Warning: can skew pricing/coefficients
3. Once a new unit price is negotiated it can be
incorporated into the contract
4. Some contracts will prohibit or limit NPP items as a
percentage of delivery orders.
Sample Contractor Bid:
UPB Coefficient .92
applied to line items
NPP Coefficient 1.18
applied to actual sub costs

18. Advantages of Unit Pricing
• Allows for Market-researched Price Escalation
• Change Orders are rare in JOC
– Owner-initiated
– Truly unforeseen conditions
Single-source responsibility
=
complete scope of work
• UPB governs original scope of work and scope added after
– Puts owners at an advantage when directing changes in the work
• Non-prepriced Provisions for unusual items of work

19. JOC Design and Proposal Deliverables

20. Streamlined Design

21. Whiteman AFB SABER
• HVAC Upgrades for Mold
Remediation
• Scheduled to go through
MATOC but time was too
short at FYE
• Provided drawings from a
similar building as design
direction

22. Whiteman:
Economy of Scale and Reiterative Efficiencies

23. A Hybrid Approach
• GSA Region 7 Contracts
• GSA-specific price schedule
with RSMeans Facility
Construction Cost Data as
backup—line item pricing for
projects under about $100,000
• Projects over $100,00 are
competed as DBB or D-B
• D-B capabilities are an option
at contract award

24. Dennis Chavez Federal Building
• Albuquerque, NM
• Converting 30’ high
courtroom on 11th floor to
two floors of office space
• Fast-track Design-Build,
integrated structural
inspection with demo
• Utilized 4’x8’ opening on
10th floor for concrete
pumping and structural
steel access

25. Other Issues
• Potential for Regionalization
– USACE Little Rock Regional JOC
• Role of Small Business
– 8(a) setasides—standalone or IDIQ
• Impact on A/Es
– Embracing LEAN Design

26. Pricing Transparency and Electronic
Support Systems
• Industry standard data updated
regularly are key to pricing
fairness in a long-term contract
• True transparency required
owner and contractor
understanding and a robust
collaborative software program
• 4Clicks Project Estimator (DOD)
and RSMeans JOCWorks (other
federal agencies)
• Integrated cost estimating,
project management, contract
management, document
management, and visual
estimating in a single program.
• Automated Technical
Evaluations, enabling Owners to
quickly compare Contractor and
Owner estimates.
• Complete Post Negotiations
Memorandums for Contractors
to identify the changes that
happened during the
Owner/Contractor negotiation
process.
• Embedded project delivery and
contract processes –Ability to
directly populate government
forms.

27. Lisa Cooley, LEED AP
Program Director for JOC and Custom Cost Engineering
lisa.cooley@reedbusiness.com
505-239-3446
Presentation will be posted at:
http://www.reedconstructiondata.com/market-intelligence/job-order-
contracting/
Discussion