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1 I~ri lw rM '.5 mUPLM =Nm Wmnfl Iij TFILL (CO .i 00 JOB ORDER contracting :A PROCUREMENT SUCCESS STORYR eport AR713R1 February 1988 ]William B. MooreCarl F. StoutPrepared pursuant to Department of Defense Contract views expressed here are those of the Logistics Management Institute atthe time of issue but not necessarily those of the Department of to quote or reproduce part must -except for GovernmentIpurposes -be obtained from the Logistics Management Institute. DI6 Gd rELECTE4Gl rRoLOGISTICS MANAGEMENT INSTITUTE MAY 19886400 Goldsboro RoadBethesda, Maryland 20817-58866 bt k befm *WE fl 9a8m =A ownu a"005-A1 ?)

2 K MW nxM "K IWMt WJKN Ud FW.~ h6 AK Pt " W A~ ' V v Wr -V X VIMV Juv \1d _. XF% I PWIL Aruvi -WI ijPWI A %,\ w~n FUNIIN[LMIy Executive SummaryJOB ORDER contracting : A PROCUREMENT SUCCESS STORYIn the past 10 years, real property maintenance activities (RPMA) spending byArmy installations has more than doubled in real terms while the staffs that supportthose efforts have remained relatively constant. The shortage of contractadministration and engineering staffs has resulted in increases in the time requiredto obtain RPMA construction contracts and subsequent degradation of missionsupport.]

3 Job order contracts (JOCs), an innovative means for providing RPMA supportto Army installations, are being tested by the Army Corps of Engineers as asolution to the problem. JOCs are competitively bid, firm-fixed-price, indefinite-quantity contracts that list detailed tasks, unit prices, and price multipliers that caneasily be used to establish the prices and terms for RPMA projects. JOCs differ fromconventional firm-fixed-price contracts in that anSumbrella contract is awardedunder which individual work orders are issued, eliminating the need for separatecontracts and many of the detailed specifications and formal drawings for each , work order lead times and contracting and engineering effort are Experience at eight installations, where more th9n $57 million in JOCs havebeen placed.

4 Confirms that a JOC takes less time and effort than a conventionalcontract with no sacrifice to quality and control. Administration of JOCs is nodifferent than that of other installation contracts. JOCs also provide newopportunities for small businesses and small disadvantaged businesses to participatein DoD construction . Furthermore, JOCs do not interefere with installationcommercial activities programs. k IWe conclude that a JOC is an effective way of improving installation missionsupport. However, some i- provements can still be made.

5 We recommend that JOCunit price books be expanded to include more task items, that the current executionguide include more detail, and that JOC training courses be developed. We alsorecommend that JOCs be made available to other Army installations that canbenefit from their AR713RI/FEB 88[ ~ w~ A~A v~ w~~w~ w ~ixrui'~ ~ ~.U1W% V1W WV M1 X V-W 1WV WVItCONTENTSE xecutive Summary .. iiiChapter 1. Background .. 1- 1 Chapter 2. Evaluation of Test Results and Conclusions .. 2- 1 DEH Responsiveness .. 2- 1 RPM A Quality.]

6 2- 5 Business Im pact .. 2- 7 contracting Workload .. 2-11 Supporting Documents .. 2-14 Contract Administration and Legal Issues .. 2-15 Sum m ary .. 2-17 Appendix A. Job Order Contract Workflow Diagram .. A-1-A-12 Appendix B. Summarized Questionnaire Data ..B-1-B-23 Appendix C. Summary of Performance Data .. C-1-C-29 Accession ForNT-I-SGR-A&iIDTIC TABU nannouncedJustificatin-D ist ribut ion/ -_. Availability CodesAvalX nidi/orDist SpecialAl_Vu~ MVu wwirv%. wuV u-y 1u' ULI 9wIITABLES2-1. Responsiveness.

7 2- 22-2. Small and Small Disadvantaged BusinessSubcontracting Participation in JOC .. 2- 82-3. Average Small and Small Disadvantaged Business GoalAttainm ent .. 2- 92-4. Cost of construction contracting .. 2-14V7I)IiNiIFIGURESP agre2- 1. Comparison of Engineering and ProcurementLeadtim es .. 2- 22- 2. DEH's Responsiveness with Job Order Contracts .. 2- 32- 3. Opinion on the Amount of ContractualAuthorities Delegated to the DEH .. 2- 42- 4. Desire to Retain Job Order contracting .. 2- 42- 5. construction Quality Under JOC.

8 2- 62- 6. Smill and Small Disadvantaged BusinessSubcontracting Under JOC .. 2- 92- 7. Job Order contracting Effect onCommercial Activities Programs .. 2-102- 8. Job Order contracting Effect on Contractual Workload -Perceptions of Installation Directorate ofContracting Staffs .. 2-122- 9. RPMA contracting Per Man-Month of Effort .. 2-122-10. End of Fiscal Year Responsiveness .. 2-132-11. Overall Opinion of Job Order contracting .. 2-18ixS",A N M M NN NINN k k itCHAPTER 1 BACKGROUNDJob order contracting is an innovative procurement technique designed toprovide more responsive facility maintenance and repair and minor construction atArmy installations.

9 It is intended to reduce engineering and procurement leadtimesdramatically by awarding a competitively bid, firm-fixed-price, indefinite quantity,multit-sk contract to a single contractor. That contract consists of detailed taskspecifications for a multitude of real property maintenance activities ( 'MA)encountered at an , job order contracts (JOCs) are based on a Government-prepared UnitPrice Book (UPB) that lists all tasks encompassed by a contract with a correspondingunit price. In making offers on the contract, responders propose two multipliers -one for work performed during normal working hours and one for work performedduring other than normal hours.

10 The Government's unit prices are then multipliedby the appropriate coefficient to determine the total price. (Supplemental items thatare not identified in the UPB are estimated separately and added to the total cost.)After the basic contr9ct has been awarded, the contractor and the installationrepresentative discuss and establish the scope and quantity for each task and theinstallation issues a delivery order for the obj-ctive of job order contracting is to increase the responsiveness of RPMA support to the installation by decreasing the engineering and contracting leadtimewithout sacrificing cost, quality, or administrative control.