1 Copyright © 2001 The Gordian Group, Inc. all rights reserved San Diego State University JOB ORDER CONTRACT JOC-08 Bid #6698 Pre-Bid Conference February

1Copyright © 2001 The Gordian Group, Inc. all rights reserved

San Diego State University

JOB ORDER CONTRACT JOC-08

Bid #6698

Pre-Bid Conference

February 2, 2012


Pre-Bid Conference Agenda

• Explanation of JOC Concept• University’s JOC Program• Understanding the Construction Task Catalog• How to Bid a Job Order Contract• How to Obtain a Bid Package• Question & Answer Session


JOC - Background

• Introduced In the United States in 1985– In Use By DOD, DOT, USPS, NASA, GSA, HUD And Other Federal Agencies

• Over 1000 Job Order Contracts in Use• Implemented by Major Cities, Counties, PHAs, Schools &

Universities

– County of Los Angeles– San Diego County– San Diego Metropolitan Transit System – County of Ventura– UC Campuses Statewide– Riverside County– City and County of San Francisco– Los Angeles Unified School District– SANDAG


What is JOC?

• Job Order Contracting Provides:– A Way to Accomplish a Large Number of Individual Projects with a

Single Competitively Bid Contract– On-call Contractors Ready to Perform a Series of Projects for

Competitively Bid Prices

• Typical Mission for Job Order Contracting:– Small to Medium Sized Straightforward, Standalone Construction,

Renovation or Demolition Projects– Complete the Work of a Non-performing Contractor

Punchlist Change Orders Take Over Work for Defaulted Contractor

– Sensitive Projects No Time for Traditional Bidding or Drawn-out Negotiations High Priority


Why JOC ?

• Traditional Bid System can be Slow and Costly– Months from Project Identification to Contract– Process Can Be Complicated– Adversarial Relationship Between the University and Contractor

• JOC Offers a Cost Effective Alternative to Traditional System– Faster Response – Days or Weeks instead of Months – Well Defined, Goal Oriented Administration– Based upon a Partnership Between the University and JOC Contractors

• JOC is Another Way for the University to Get Work Done in Addition to:– In-House Work Force– Single Project, Lump Sum Bidding


JOC - Why It Works

• JOC is A Series of Individual Small Projects– Contractor Is Guaranteed Only a Small Minimum Amount of Work

•Contractor Has a Continuing Financial Incentive To Provide:

–Responsive Services–Defendable, Accurate Cost Proposals–High Quality Construction/Timely Completion

•Future Job Orders Tied to Contractor Performance

–No Obligation To Give A Specific Project–Additional JOC's May Be Bid and Awarded If SDSU Is Not Satisfied with Contractor Performance–JOC Does NOT Replace Traditional Methods For Accomplishing Work


7

JOC Contract Documents

• Construction Task Catalog® • Technical Specifications • Contract Terms, Conditions & Bid Documents


JOC Contract Documents

Printed

• Bid Documents– Notice to Contractors– Sample Bid Forms– General Conditions– Supplemental General

Conditions– Special Conditions– Sample Forms

• Bid Forms– Available upon

Prequalification w/Chancellor’s Office

On CD

• Construction Task Catalog (CTC)– Catalog of over 160,000 Pre-

Priced Construction Tasks– Organized by CSI Format– Prices Contain Local Labor,

Material & Equipment Costs Only

– Customized for SDSU

• Technical Specifications– Specifies Quality of Materials

and Workmanship


Pre-Bid Guidance to Contractors

• Prior to Bidding the University Cannot:– Identify or Commit to any Specific Project or Location– Identify or Commit to any Specific Quantities or Tasks in the CTC

• Prequalification– All contractors must be Pre-qualified for ½ the Maximum Value of

the Contract (General Conditions Article 2.02)– Pre-Qualification form must be submitted to Chancellor’s Office at

least 10 days prior to Bid Opening.– Any bid received from a bidder who is not Pre-qualified shall be

disregarded.

• Bid Forms– Issued only to bidders who have Pre-qualified – Pick Up at the Contract and Procurement Management Office in

the Administration Building


Contract Details

• Contract Terms– Term of the Contract is One Year or Achievement of Maximum Contract

Value (whichever occurs first).– $ 50,000 Guaranteed Minimum– $ 3,000,000 Maximum

• Performance Bond– Bond must be for 100% Maximum value of contract ($3,000,000)

• Payment Bond– Bond must be for 100% Maximum value of contract ($3,000,000)


Bid Award

• Award Based Upon Competitive Bid– Must Bid Three Adjustment Factors

• Normal Working Hours• Overtime Working Hours• Premium Working Hours• For award evaluation bids will be weighted at 85%Normal

Working Hours, 10% Overtime Working Hours and 5% Premium Working Hours

– Lowest Composite Adjustment Factor From a Responsive, Responsible Bidder Wins!

– Same Adjustment Factors Apply to All Tasks in the CTC– Adjustment Factors Must Include all Indirect Costs and Profit– Adjustment Factors Fixed for the Duration of Contract


JOC Execution Process

• Joint Scope Meeting at Project Site

10–14 DAYS

• Contractor and University Develop Scope of Work

• University Issues Request for Proposal

• Contractor Develops Proposal– Selects Tasks and Estimates Quantities– Prepares Incidental Drawings/Plans– Develops Schedule & Lists Subcontractors

• Issue Lump Sum Task Order


SDSU’s Expectations

To be Successful, a JOC Contractor Must:• Provide a Responsive and Experienced Management

Team Capable of:– Preparing and Executing Multiple Concurrent Projects.– Delivering High Quality Work in a Timely Manner– Manage a Large Number of Subcontractors– Maintain a “Can Do” Attitude

• Have Financial Resources to Undertake the Projected Level of Work:– Significant Mobilization Cost (Bonds, Computers, etc.)– Assist Some Subcontractors with Payroll and Material Costs– Long Lead Time Before a Positive Cash Flow


What should the Contractor Expect?

• Possibly Provide Some Incidental Architectural/ Engineering Services, including DSA Plan Submittals.

• Experience Interruptions in Work Flow

• Operate in Occupied Spaces

• Construct during “Windows of Opportunity”

• Prepare Proposals for Some Projects That Will be Canceled

• Lose Money on Some CTC Items

• Lose Money on Some Projects

• Be Knowledgeable in Computer Operations– Electronic Transfer of Data and Drawings


SDSU Program

• Unforeseen Site Conditions or Change in Scope– Treated as Additional Job Order

• Retainage– 0-10% based on individual Job Order– Released at Completion of Job Order

• No Substantial Completion– In JOC, Projects are 100% Complete or Incomplete

• One Payment for Projects to be Completed within 45 Days– Partial Payments Monthly for Other Projects

16

Gordian Resources at www.egordian.com


17

JOC Internet Based Management Software

• PROGEN® Software Manages All Aspects Of The JOC Process Including:

• Project Initiation

• Cost Estimate

• Meetings

• Job Scope and Requests

• Contractors Proposal

• Subcontractor Utilization

• Proposal Review

• Administration

• Submittal Log

• Invoices

• Related Documents

• Evaluation

• Forms

• Management Reports

• Security


BID CONSIDERATIONS

•Formula for Calculating the Job Order Value

•What is Included in the Adjustment Factor

•Understanding the CTC

•Calculating the Adjustment Factor


ADJUSTMENT FACTOR

Formula for Calculating the Job Order Value*

X X =Unit Price Quantity Adjustment Factor

Total J obOrder Price

Total for Task

X X =Unit Price Quantity Adjustment Factor Total for Task

X X =Unit Price Quantity Adjustment Factor Total for Task

* Nonprepriced Tasks are Calculated Separately* Nonprepriced Tasks are Calculated Separately


ADJUSTMENT FACTOR

•Adjustment Factors– Normal Working Hours: 5am to 7pm Monday through

Friday, except holidays

– Other Than Normal Working Hours: 7pm to 5am Monday through Friday, plus Saturday

– Premium Hours: Sundays and Holidays

•Factor Includes Everything– Overhead, Profit, Bonds, Insurance

– Scoping, Proposal Development and Review

– Obtaining Permits

– Mobilization, Management, Clean-up

– Supervision, Training, Quality Control, etc.


21

UNDERSTANDING THE CTC

• Construction Task Catalog (CTC)– Pre-Priced Construction Tasks– Based on Local Labor, Material & Equipment Costs– Customized for SDSU


General Rules– Unit Prices are for Complete and In-Place Construction

– Unit Prices Include Labor, Material and Equipment. Do Not

Add Labor to Masonry Repointing Task. Do Not Add Bobcat

for Concrete Sidewalk

– Unit Prices Include the Cost of Delivery to Site, Unloading,

Storage and Handling. Delivery Height is up to 2 ½ Stories

– Unit Prices Include Testing, Calibration, Balancing Etc. for

New Work

– Unit Prices Include all Fasteners, Bolts, Anchors, Adhesives

Etc. For New Work

– Unit Prices for Tasks Such as Windows, Doors, Frames,

Countertops Etc. Include Sealant and Caulk

Unit Prices


• General Rules (continued)– Demo Price includes loading into truck or dumpster.– If an item is demolished as part of a different task, it will not be

paid for separately (I.e. hardware demolished as part of a door).– Contractor to be paid for installed quantities only (NO WASTE).– Assembly prices take precedence over component pricing– 14’ working height for all work except Masonry– 4’ working height for Masonry– Dumpsters are a separate Item

Understanding the CTC


• Contractors Never Get Paid For:– Quality control testing (HVAC test & balance)– Incidental moving of furniture– Labor for protecting work in place. (I.e. a laborer to stay after a

concrete pour)– Minor barricades and signage (I.e. traffic cones and orange tape

around a concrete pour)– Temporary Gang boxes, storage containers.– Portable toilet, field office, field office equipment– Surveying or layout for the work itself.

Understanding the CTC


Know Your Costs

• Direct Cost

– Labor Subcontractors

– MaterialsMisc. Field Costs

– Equipment Other

• Indirect Costs

– Office Insurance Supervision

– Vehicle Bonding Closeout

– Fringes Overhead

• Other Costs

– A/E costs

– Other

• Some Fixed - Some Variable


Use Historical Project Data– Select a Representative Completed

Project

• You Know Scope and Direct Costs

– Price Project From CTC

– Add on Overhead and Profit

– Calculate the Adjustment Factor

Sampling Method

• Evaluate a Sampling of the Anticipated Items

Create a Representative Project

• Create a Scope of Work

• Get Sub Quotes or Estimate Cost

• Price Project From CTC

• Add on Overhead and Profit

• Calculate the Adjustment Factor

Methods to Calculate AF


PROJECT SCOPE

Renovation of a Classroom– Replace VCT

– Replace Chalkboard on Front Wall with Dry Marker Board

– Replace 2 Doors and Hardware• Lockset shall be Sargent 8200

LW1L Series

• Closer shall be Sargent 351 Series

• Glynn Johnson Stop

– Skim Coat Ceiling

– Prime and Paint Ceiling and All Walls

– Install 1 Air Conditioner

28'

32'

3x7 Door

18' x 4' Dry Marker Board

3x7 Door

I nstall24K BTU

A/ C

Floor Area 896 SFCeiling Height 13' -6"


BUILDING THE PRICE PROPOSAL

Section Mod Description UOM Price Qty Subtotal Total

VCT Tile

03920 2021 Patch Floors, Cementitious Material SF $2.23 50 $111.50

09650 3111 Demo Vinyl Composition Tile SF $0.39 896 $394.44

09650 3111 Vinyl Composition Tile SF $1.25 896 $1120.00

09650 3111 1114 Add for Extra Stock SF $0.77 45 $34.65

09650 3121 Demo Base LF $0.39 120 $46.80

09650 1211 Vinyl Base LF $1.31 120 $157.20

09650 3127 Premoded Corners EA $1.67 4 $6.68 $1826.27

DryMarker Board 10415 1008 Demo Chalkboard, 1/4” thick SF $0.78 72 $56.16 10415 1002 DryMarker Board SF $14.93 72 $1074.96 $1131.12

Door and Hardware 01510 2010 4 CY Dumpster EA $173.00 1 $173.00 08210 3414 Demo 3’x 7’x 1-3/4” Door EA $10.00 2 $20.00 08210 3414 3’x 7’x 1-3/4” Door EA $121.09 2 $242.18 08210 3414 3484 For Solid Wood Stave Core add EA $25.27 2 $50.54 08210 3414 3499 For 1-1/2 hour Fire rated add EA $121.32 2 $242.64 08210 4103 Wired vision glass & frame SI $0.48 200 $96.00 08710 6414 Classroom Lockset, F84 EA $154.49 2 $308.98 08710 5103 Heavy duty door closer EA $191.91 2 $383.82 08710 2328 Heavy duty door stop EA $164.54 2 $329.08

09930 3304 Varnish Wood Doors EA $26.70 4 $106.80 $1953.04


BUILDING THE PRICE PROPOSAL

Section Mod Description UOM Price Qty Subtotal Total

Paint and Plaster 09201 3001 One coat skim coat Plaster SF $0.30 896 $268.80

09201 3001 1101 Plaster Weld SF $0.03 896 $26.88

09201 3001 1102 Add for ceiling SF $0.03 896 $26.88

09201 3001 4012 Quantity Discount SF -$0.02 896 -$17.92

09920 2304 Prime Ceiling SF $0.19 896 $170.24

09920 2306 Paint Ceiling, 2 coats SF $0.35 896 $313.60

09920 1415 Prime walls SF $0.16 1378 $220.48

09920 1417 Paint walls, 2 coat paints SF $0.34 1378 $468.52 $1477.48

Air Conditioner

15770 6208 24,000 BTU Window A/C EA $706.24 1 $706.24

15770 6901 Aluminum A/C Bracket EA $211.23 1 $211.23 $917.47

Total $7,305.38


• Price from CTC– VCT $ 1,826.27– Dry Marker Board $ 1,131.12– Doors and Hardware $ 1,953.04– Paint and Plaster $ 1,477.48– Air Conditioner $ 917.47– TOTAL = $ 7,305.38

• Cost of Work (from quotes or estimate)– VCT $ 2,100.00– Dry Marker Board $ 995.00– Doors and Hardware $ 2,100.00– Paint and Plaster $ 1,600.00– Air Conditioner $ 800.00– TOTAL = $ 7,595.00

COMPARING QUOTES AND CTC


Costs to Manage the Contract

• For Small to Medium Size Contracts - Typically 8% to 12%– Scoping – Proposal Development– Site Supervision and Management– Bonds– Insurance – Vehicles– Home Office Support– Computers– Communications– A/E Services


PUTTING IT ALL TOGETHER

• Cost of Work– In-House + Sub Prices = $ 7,595.00

• Mark-up – Overhead @ 10% = $ 759.50

– Profit @ 10% = $ 835.45

• Total $ 9,189.95

• Price from CTC $ 7,305.38

$7,305.38(Adjustment Factor) = $9,189.95

$9,189.95/$7,305.38 = Adjustment Factor

Adjustment Factor = 1.2580


What are the Risks?

• Work Volume• Construction Task Catalog & The Adjustment Factor

– Does the CTC reflect market prices/construction requirements– Accuracy of your analysis

• Timely Completion/Quality Construction– Subcontractor availability/capability

• Escalation– Prices good for the term of the contract– Oil and steel prices have risen significantly recently

• Payment– Projects with a duration of 45 days or less receive single

payment– Multiple payments for all other projects


RISKS OF LOW AF

•A Low Adjustment Factor– Leads to Arguments in Proposal Review

• Unsupportable Tasks

• Exaggerated Quantities

– Leads to Delays in Job Order Development

• Takes Longer to Review Proposals

•Creates an Adversarial Relationship– Reduced Volume of Work

– No Option Periods

– Lost Profitability

•No Change Orders to Improve the Margin


• Understand How to Price Projects from CTC

• Know the Value of CTC

• Evaluate Risk of an Unrealistically Low Bid

• JOC is a Long Term Relationship

• Volume Driven by the Contractor– Put the Right Staff in Place

– Good Defendable Proposals

– High Quality Construction

– Timely Completion

– Meeting University Expectations

– Solve Problems, Do Not Create Them

Review/Key Points


Bidding Details

• Bid Opening– Bids to be delivered no later then:

3:00 PM , Tuesday, February 21, 2012Contract and Procurement Management OfficeAdministration Building, Room 1165500 Campanile DriveSan Diego, Ca. 92182-1616

• Questions and Answers• For Contract Information, Contact:

– Vickie Hokenson, Contract Specialist (619)594-2796 or email at [email protected]

• For Technical Information, Contact: ─ Jeff Brown, Project Manager (619)594-2629 or email at

[email protected]