San Diego State University

JOB ORDER CONTRACT

JOC-08
Bid #6698

Pre-Bid Conference
February 2, 2012

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

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 2

 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

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 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

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 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

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 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 6

 JOC Contract Documents

• Construction Task Catalog®

• Technical Specifications
• Contract Terms, Conditions & Bid Documents

Copyright © 2001 The Gordian Group, Inc. all rights reserved 7

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 JOC Contract Documents

Printed On CD

• Bid Documents • Construction Task Catalog

(CTC)
– Notice to Contractors
– Sample Bid Forms – Catalog of over 160,000 Pre-
Priced Construction Tasks
– General Conditions
– Organized by CSI Format
– Supplemental General
Conditions – Prices Contain Local Labor,
Material & Equipment Costs Only
– Special Conditions
– Customized for SDSU
– Sample Forms

• Bid Forms • Technical Specifications

– Available upon Prequalification – Specifies Quality of Materials and
w/Chancellor’s Office Workmanship

Copyright © 2001 The Gordian Group, Inc. all rights reserved 8

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 9

 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)

Copyright © 2001 The Gordian Group, Inc. all rights reserved 10

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 11

 JOC Execution Process

• Joint Scope Meeting at Project Site

• 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 10–14 DAYS

• Issue Lump Sum Task Order

Copyright © 2001 The Gordian Group, Inc. all rights reserved 12

 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

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 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

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 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 15

Gordian Resources at www.egordian.com

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 JOC Internet Based Management Software

• PROGEN® Software Manages All Aspects Of The JOC

Process Including:

• Project Initiation • Subcontractor • Related Documents

Utilization
• Cost Estimate • Evaluation
• Proposal Review
• Meetings • Forms
• Administration
• Job Scope and Requests • Management
• Submittal Log Reports
• Contractors Proposal
• Invoices • Security

Copyright © 2001 The Gordian Group, Inc. all rights reserved 17

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 BID CONSIDERATIONS

•Formula for Calculating the Job Order Value

•What is Included in the Adjustment Factor

•Understanding the CTC

•Calculating the Adjustment Factor

Copyright © 2001 The Gordian Group, Inc. all rights reserved 18

 ADJUSTMENT FACTOR

Formula for Calculating the Job Order Value*

Unit Price
X Quantity
X Adjustment Factor
= Total for Task

Unit Price
X Quantity
X Adjustment Factor
= Total for Task

Unit Price
X Quantity
X Adjustment Factor
= Total for Task

$
$$$

Total Job
* Nonprepriced Tasks are Calculated Separately
Order Price

Copyright © 2001 The Gordian Group, Inc. all rights reserved 19

 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.

Copyright © 2001 The Gordian Group, Inc. all rights reserved 20

 UNDERSTANDING THE CTC

• Construction Task Catalog (CTC)

– Pre-Priced Construction Tasks
– Based on Local Labor, Material & Equipment Costs
– Customized for SDSU

Copyright © 2001 The Gordian Group, Inc. all rights reserved 21

21
 Unit Prices

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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 22

 Understanding the CTC

• 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 23

 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.

Copyright © 2001 The Gordian Group, Inc. all rights reserved 24

 Know Your Costs

• Direct Cost
– Labor Subcontractors
– Materials Misc. Field Costs
– Equipment Other
• Indirect Costs
– Office Insurance Supervision
– Vehicle Bonding Closeout
– Fringes Overhead
• Other Costs
– A/E costs
– Other
• Some Fixed - Some Variable

Copyright © 2001 The Gordian Group, Inc. all rights reserved 25

 Methods to Calculate AF

Use Historical Project Data Sampling Method

– Select a Representative Completed Project • Evaluate a
Sampling of the
• You Know Scope and Direct Costs
Anticipated
– Price Project From CTC Items
– Add on Overhead and Profit
– Calculate the Adjustment Factor

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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 26

 PROJECT SCOPE

28'

Renovation of a Classroom
– Replace VCT 18' x 4' Dry Marker Board

– Replace Chalkboard on Front Wall

with Dry Marker Board
3x7 Door
– Replace 2 Doors and Hardware
• Lockset shall be Sargent 8200
LW1L Series Floor Area 896 SF

32'
• Closer shall be Sargent 351 Series Ceiling Height 13' -6"

• Glynn Johnson Stop

– Skim Coat Ceiling Install
24K BTU
– Prime and Paint Ceiling and All A/C

Walls 3x7 Door

– Install 1 Air Conditioner

Copyright © 2001 The Gordian Group, Inc. all rights reserved 27

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 28

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 29

 COMPARING QUOTES AND CTC

• 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 30

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 31

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 32

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 33

 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 34

 Review/Key Points

• 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

Copyright © 2001 The Gordian Group, Inc. all rights reserved 35

 Bidding Details
• Bid Opening
– Bids to be delivered no later then:
3:00 PM , Tuesday, February 21, 2012
Contract and Procurement Management Office
Administration Building, Room 116
5500 Campanile Drive
San Diego, Ca. 92182-1616

• Questions and Answers

• For Contract Information, Contact:
– Vickie Hokenson, Contract Specialist (619)594-2796 or email at
vhokenso@mail.sdsu.edu
• For Technical Information, Contact:
─ Jeff Brown, Project Manager (619)594-2629 or email at
jbrown@mail.sdsu.edu

Copyright © 2001 The Gordian Group, Inc. all rights reserved 36