Going Lean: Trimming Waste and Strengthening Partnerships with Job Order Contracting
How does Job Order Contracting compare to Inegrated Project Delivery?
- By David Rasberry
- January 10th, 2019
There is a trend towards more collaborative processes throughout the construction industry to avoid the communication silos that crop up with traditional delivery methods. Job Order Contracting (JOC) is often spoken about in the same context as Integrated Project Delivery (IPD) for their tendency toward collaboration, but how does JOC compare to IPD? And can integrated principles help achieve Lean Construction?
As a philosophy, IPD occurs when integrated processes are applied to other delivery methods and contracts. IPD as a delivery methodology merges project teams for increased collaboration and reduced waste. Regardless of the specific definition, IPD is characterized by uniting stakeholders from the beginning.
How does JOC fit in? JOC is a method of construction procurement that integrates the project owner and facilities team with the contractor before the scope of work is finalized.
Differences Between IPD and JOC
IPD and JOC differ in two key ways. One difference is IPD’s primary use for large new construction projects, creating a team that includes the project owner, design team, prime contractor, subcontractors, suppliers, and fabricators all working together from the beginning to achieve accelerated schedules, fewer claims, and lower costs for the overall goal of increased value for all parties.
JOC is ideal for minor new construction, renovations, repairs, and maintenance—projects that do not require extensive teams for planning and scope of work development.
The second difference is that IPD is project-based while JOC is program-based, allowing for quicker placement of contractors on a substantial number of projects with one competitively awarded contract. This one-bid process allows for greater collaboration and familiarity between building systems and stakeholders, resulting in a better overall experience.
Collaboration and Stronger Partnerships With JOC
By design, JOC necessitates collaboration. There must be trust and open communication because the owner and design team work together with the awarded contractor up front to develop a mutually agreed upon scope of work. This cannot be completed if the parties are focusing on their own silos of expertise in a contractual relationship.
Possibly the most important benefit of JOC is the ability to manage an efficient and expedited construction procurement system. The procurement procedure alone has components of IPD by eliminating the traditional bidding process. However, achieving these efficiencies at the project level is where you can link JOC to IPD and ultimately Lean Construction.
Lean Construction adopts Lean Manufacturing principles to improve processes, reduce costs, and focus on customer needs to achieve maximum value. There are several components that contribute to achieving Lean Construction throughout the life cycle of a project. And with JOC and IPD, collaboration throughout the process is key for total project success. A contractor can work with the owner and designer in a non-adversarial relationship to help bring maximum value by decreasing waste and increasing collaboration to solve challenges or provide expert input on value engineering, constructability, and possible unforeseen conditions. These items are addressed early on in JOC and IPD to help achieve Lean Construction.
In traditional project delivery methods, collaboration typically stops with the owner and design team. With JOC, not only can the contractor have invaluable input in the conceptual or planning phase, they can also frequently use a pragmatic approach when collaborating with facility managers and end users to maximize the scope for practical use. The practical benefits don’t end there.
IDIQ Contracts to Trim Waste
JOC contracts are typically multi-year, Indefinite Delivery, Indefinite Quantity (IDIQ) contracts, so JOC contractors become very familiar with an owner’s building systems. This is mutually beneficial to both the owner and contractor and fosters continuous improvement by eliminating lost time during a project.
Within a complex facility campus, such as a college or university, it is fair to assume a low bidder in the traditional world of construction may not understand the challenges of working in such an environment. Learning on the job is costly. Contractor inexperience could lead to inefficiencies which may result in budget overruns, delays and other scenarios that have a negative financial impact for the owner. Because JOC contracts are performance-based, contractors are motivated to continuously improve and deliver high quality work at a project level.
Lean Construction principles are baked into JOC. Pricing and factors are pre-set in a Construction Task Catalog, eliminating lengthy and contentious negotiations. The multi-project, performance-based contract improves the quality of work while saving valuable time and money. Through collaborative partnership, all parties contribute to the principles of Lean Construction.
David Rasberry is an enterprise account executive, Great Lakes Region and Pennsylvania, at Gordian.