JOCWorksTM The Efficient Cost Estimating & Project Management Solution for Facility Construction, Renovation, Repair, and Sustainability. An introduction to JOCWorks. Premier software for job order contraction (JOC) program management – cost estimating, visual cost estimating, project management, document management, and contract management. For Owners, Contractors, Sub-Contractors, and AEs. Enables efficient, transparency JOC programs deployment and ongoing management and reporting. © Copyright 2012, 4Clicks Solutions, LLC Local Rights Reserved. All trademarks are the property of their respective owners.

#1 #2 The BEST electronic presentation of RSMeans Cost Data What is JOCWorks? The BEST electronic presentation of RSMeans Cost Data #1 Software Technology to efficiently deploy & manage Job Order Contracting (JOC) programs #2 Exclusive enhanced 400,000 line item RSMeans cost database. Full descriptions, references, graphics, specifications.

Who uses JOCWorks? Anyone doing a lot of RSMeans-based line item cost estimates #1 Anyone sharing, collaborating on RSMeans-based line item cost estimates #2 Owners, Contractors, AE’s working on, or hoping to work on JOC programs. #3 $15B+ Annual JOC market. Rapidly growing and spanning multiple sectors. Non-DOD Federal Government, County, State, Local Government, Higher Education, K-12 School ISDs, Airports… #4

Exclusive JOCWorks Features Built to enable Collaboration among Owners, Contractors, Subs, & AE’s. Enhanced 400,000 Line Item Enhanced RSMeans Cost Data* Integrated Estimate, Project, Contract, & Document Management Automated Owner/Contractor Estimate Comparisons *Including Full Descriptions, References, Graphics, Specifications Unlike competition, targets and serves Owners, Contractors, AEs, Subcontractors equally, providing benefits to all. Exclusive ability to automatically compare Owner/Contractor estimates in seconds. 400,000 unit line item database including modifiers, provides the basis for establishing accurate, detailed, and transparent lump-sum fixed price for each delivery order. Emphasis is on building relationships through teamwork and partnering by the Owner Contractor, Subcontractors, AEs. Performance-based - The goal is to provide quality and service resulting in maximum volume and favorable prices.

Additional JOCWorks Features Set Contract Coefficients Manage Multiple Project with Multiple Coefficients Track and Report RSMeans Line Items and non-RSMeans Items (Priced and non-Priced) Specifications Linked to Cost Estimate Track Project Status – From Concept Through Warranty

JOCWorks Software Overview Accuracy, Transparency, Improved Productivity Track & Manage each project from inception to completion. Manage a single project, your entire contract, or multiple contracts. All project milestones, thru warranty period. Display status of each project. Maintain a complete cost history Record all estimates associated with a project. Review value of all projects awarded on a specific contract, or to a specific contractor. Reports show pre-negotiation strategies and post-negotiation summaries.

Rapid Implementation Consistent Usage Transparency Collaboration JOCWorks Benefits Rapid Implementation Easy-to-use, Single seat to Network/INTERNET deployment Consistent Usage Organization’s JOC procedures embedded in software Transparency System-wide RSMeans-based UPB (North American Standard) Collaboration Built-in estimate/project/document/contract management Performance Gains Estimate re-use, shorter project timelines

JOCWorks Software Versions Perpetual and Subscription Pricing Models JOCWorks Basic Targets Sub-Contractors who estimate and don’t require contract, document, or project management features. Includes the Basic Version of eTakeoff. JOCWorks Advanced For General Contractors and Sub-Contractors who require multiple project management, document management, contract management, advanced estimating features, exporting to Adobe PDF and Microsoft Excel importing other external databases. Includes the Pro Version of eTakeoff. JOCWorks PRO For Owners to estimate and manage entire contracts or programs in a single product. Premier is used through-out the country on single and multiple award JOC and IDIQ contracts. Estimate Comparison and Technical Evaluation features are included in this version. Includes the Premier Version of eTakeoff. JOCWorks versions for all program participants. Ad-hoc reporting. Programming Estimate Estimates from Each Design Stage Final Detailed Cost Estimate Initial Contractor Proposals Technically Evaluated Proposals Final Revised Contractor Proposals Modifications & Changes Orders Administrative Costs Saved Due to Efficiencies Submittal Approvals Permit Approvals Construction Inspections As-Built Drawing Preparation Order Close-out

JOCWorks vs. CostWorks NOT competitive products CostWorks is an excellent electronic version of “as is” RSMeans Cost Books without line modifiers, enhancements, estimate / project / contractor /contract / document management or visual estimating/QTO. JOCWorks is an advanced estimating, project management, contract management, document management package inclusive of visual estimating. Goal is to assure client has appropriate software for their needs. Upgrade CostWorks users to JOCWorks if they…. Do a lot of line item estimating Heavily reference RSMeans cost data Have JOC, IDIQ, MATOC, programs.

JOCWorks – Full Product & Services Offerings JOCWorks Software – Traditional perpetual license and subscription pricing models Custom Unit Price Book / Cost Data Engineering Services Software Training* - Owners, Contractors, and AEs Consulting and Marketing to Support JOC Program * Regional, On-site, Virtual/Remote Always quote both pricing models… perpetual and subscription… move to subscription whenever possible. Service offerings…custom cost data, training, joc program marketing and support enable client to select what they need.

Frequently Asked Questions Why does JOCWorks costs much more than CostWorks? JOCWorks is a powerful, integrated, and collaborative cost estimating and project management software package. The initial cost difference is insignificant vs. the value JOCWorks provides via more accurate estimates, fewer owner/contractor negotiations, and the ability to create estimates, including specification in hours vs. days, or minutes vs. hours. Can I create custom line items in addition to RSMeans line items? a. Yes. Custom line items can be created for the Owners UPB, or a totally custom UPB or IDIQ price book used. b. Once a UPB is created and the JOC program is running, and non-priced items are noted and appropriately handled. How often is the UPB cost data updated. This is entirely up to the Owner when establishing the JOC contract. We recommend annual price updates at a minimum, with quarterly updates via CCI available.

How old is JOC? JOC is proven to be an extremely efficient construction delivery method vs. tradition design-bid-build for the numerous renovation, repair, sustainability and minor new construction projects encountered by Owners, Contractors, and AEs. JOC was first deployed in the 1980’s and is currently being used to manage billions of dollars of projects annually. Documented savings have been demonstrable via more efficient procurement, shorter overall project timelines, and better, longer term owner/contractor relationships.

A Primer for Job Order Contracting (JOC) (Source - Material adapted from work done by Lisa Cooley, Centennial Contractors) “Job Order Contracting (JOC) is a method of managing multiple details of renovation, rehabilitation, repair, and other construction projects on a predetermined set of pricing and standards. By using JOC customers take advantage of a process that is fast and responsive to their needs while providing excellent quality construction.” --Center for Job Order Contracting Excellence (www.jocexellence.org)

JOC Benefits / Results Faster project delivery (3-9 months less) Streamlined engineering and design Cost visibility/transparency Better contractor performance Integrated Team - Partnering/collaborative owner/contractor relationship More opportunities for local business Effective use of year-end funds Higher overall satisfaction* There have been studies of JOC and the results are impressive. Projects under a JOC are completed faster, with streamlined processes. There is an assurance of fair pricing and superior contractor performance. The long-term contract mechanism promotes a partnering relationship. JOC also increased opportunities for local small and disadvantaged businesses rather than reduced them, because a JOC contractor will typically subcontract most of the work to local businesses, and will actually mentor and train these contractors in working in the federal sector. *Mulcahy, Francis S. The Effectiveness of Partnering and Source Selection in Job Order Contracting. Master’s Thesis, University of Washington, 2000.

JOC / non-JOC Timeline Comparison Studies demonstrate cost saving on a particular project or group of projects. It is also important is to look at JOC as a value-added service. In addition to the time savings, JOC provides a higher level of service.

A Long Term Program… not just another project! Long-term contract fosters a higher level of investment in making the working relationship work. A program not a project. Allows development of a trusted partner. As in most business dealings, strong relationships are a key to success. The long-term nature of JOC contracts (3-5 years) requires and allows contractors and owners alike to really dedicate themselves to making the relationship work. They are not a single project and then you can walk away. A lot of time is typically invested in early stages of a relationship—learning how our customers/contractors like things done, what their internal review process looks like, how they like to be communicated with, what their organizational structure is, etc. JOC is a PROGRAM rather than a single project.

The Pricing of JOC Projects Pricing structure relies on a Unit Price Book Standardized, but enhanced 400,000 line item RS Means Cost Data Custom and/or localized UPB and/or line items. 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. The pricing structure of JOC is very different from any other contract method. Central to JOC pricing is a unit price book—and these come in two versions. There is a standardized option, which is typically the RS Means books - this is a single nationwide price book, a North American standard, that also has local cost factors available (CCI/City Cost Index) to account for local pricing variations (by zip code). There are also customized UPBs for the owner and already has localized or specialized pricing applied, and/or a combination of both. These UPBs contain contractual pricing for many if not most components of construction. Any item not in the UPB is considered a non-priced item and is noted accordingly and can be added to the UPB in the future based upon the contract structure. The competitively pricing component is accomplished by asking contractors to bid a coefficient (also called a multiplier or factor) which is applied to the unit price book throughout the term of the contract. It can be a markup or a discount, depending upon the UPB, the geographic location and other contract factors. Example: 1 SF Drywall $1.00 Coefficient .92 -0.08 Contractual Price $0.92

JOC Delivery Order Pricing Delivery orders are firm fixed price, lump sum UPB is an estimating tool Unit price proposals represent contractor’s committed price—it converts to lump sum Change orders rare, and with consistent pricing structure Brings IPD/CM advantages to smaller projects but in an efficient way with an at-risk incentive to perform. Then when projects arise under the contract it is a matter of scoping the project, and then producing a detailed line item proposal based on the unit prices. Unit pricing is a contractual means to arrive at a lump sum cost per delivery order before proceeding. You know the whole cost going in, and this distinguishes JOC from a T and M contract or some other unit price contracts. The unit pricing and the detailed line item estimate satisfies procurement requirements and gives you as an owner a way to evaluate the fairness of the deliver order price. JOC’s detailed scoping process drives a commitment to perform the full scope of work for the lump sum arrived at in the unit price line item estimate. Change orders are rare—generally only when an owner decides to add scope or there is a truly unforeseen condition—and they are priced with the same unit prices as the original work. The lump sum pricing drives a contractor to perform efficiently, which unfortunately is not always the case with a T and M contract, where the longer a task takes, the more profit a contractor makes. There typically are few or no surprises with a Job Order Contract—Owners and Contractors know what you are getting before you make the commitment on a delivery order.

Non-priced Items Items not appearing in the Unit Price Book are considered Non Pre-priced Items (NPP) Typical NPP options: NPP coefficient serves as a markup on three transparent subcontractor bids NPP markup can be set per contract provisions Once a new unit price is negotiated it can be incorporated into the contract 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 A JOC Contract should have a provision for what is called a non-prepriced item (NPP), and there are two distinct approaches. One considers NPP items to be part of the contractors initial bid—which is to say, the contractor will propose a markup on actual subcontractor and material costs, and that percentage will be weighted based on what percentage the owner anticipates needing to use the NPP coefficient. Another approach is a contractual provision that sets the NPP markup at a set %. Sometimes this % is quite a bit lower (5% to cover all overhead, profit, GC and supervision) than actual contractor and subcontractor costs to manage the work, and that can have positive and negative implications. It discourages the inappropriate use of NPP items, which is a good driver for a JOC program—you want to minimize the use of NPP. On the other hand, when it is punitively low it can cause a problem for contractors and reduce responsiveness.

Dynamic vs. Static Costs Either the Unit Price Book or the Coefficient is usually adjusted annually Dynamic cost databases generally maintain the same coefficient Customized price books typically adjust coefficient annually according to an industry benchmark (RSMeans City Cost Index-CCI), and/or add customer-specific unit price line items Goal is to help contractor and owner manage risk These are long term contracts there has to be a way to account for construction inflation. The standardized UPBs are updated regularly.—with RS Means we see a yearly price book and quarterly updates on the city cost indexes. So typically the coefficient will hold throughout the contract but will be applied to updated pricing data, which will track material or trade-specific price surges. Customized price books can used similar cost indexes. The ability to adjust pricing, or “dynamic vs. static pricing” is an important component of any JOC contract. JOC programs that maintain pricing during the life of a multi-year contract are problematic. They may attempt to adjust coefficients annually based upon some industry benchmark such as ENR, however, this is clearly a “gross” approach to cost variation.

Change Orders are rare in JOC Change Orders and JOC Change Orders are rare in JOC Owner-initiated Truly unforeseen conditions UPB governs original scope of work and scope added after Puts owners at an advantage when directing changes in the work Change orders are rare in JOC.

Owners Preparing for JOC Analyzing potential JOC volume Review historic project data (2-3 years) and reconcile with budget projections. Segregate projects by size, location, type, etc. What will your JOC “bandwidth” be? All-inclusive, or selective? As defined by scope, or urgency. Size limits? Consider in-house capabilities, other contract vehicles, and political influences Define contract footprint, including potential regionalization Single or multiple award Numbers to consider. $3M—minimum annual volume for standalone JOC program $6M—maximum efficiencies are achieved, allowing addition of support staff Many owners with less volume can access JOC through purchasing cooperatives

Owners Preparing for JOC Assess in-house capabilities Project Management Capacity Skillsets Line-item estimating, or ability to review estimates, Proactive definition of scope, In-house maintenance crews Training Plan How will JOC interface with your design professionals? Flowcharting how JOC process will interface with purchasing, management and board approvals One Owner’s Management Plan: Each PM manages 15-20 projects simultaneously, up to 50 per year Project Management is more efficient, but new skillsets may need to be applied such as line item estimating and definition of scope (planning function). That said, line item estimating can be done very productively using advanced software programs such as JOCWorks.. Training is part of the services by RS Means.

Contractors Preparing for JOC Company culture of high performance needed to succeed in JOC? Ability and capacity to create productive teams? Proactive rather than reactive? Line item estimating capabilities? Cooperative approach, getting past “meeting the spec” to “pleasing the customer” Checking egos at the door—making relationships more important than building monuments. Comfortable with managing multiple projects at once. Difficult to mix hard bid and performance-based work in the same portfolio Matching personalities—very nuanced, can be hard in a small company (eg OSU/IHS); do you have that felxibility and do you have the people smarts to recognize what is needed? No finger pointing Detail orientated folks who can embrace process And of course, the biggest hurdle to becoming a JOC contractor is coming up with that coefficient bid.

Contractors Preparing for JOC Considerations that drive the coefficient: Contract volume (higher volume = ⇩) Geographic dispersion of projects (further apart = ⇧) Type of work Average size and size range of delivery orders Three S’s: Supervision, Security, Safety Contract Administration Cost For RS Means, Division 1 provisions and column used (Bare Costs vs. O&P column) UPB used Marketing costs Look at historic coefficients, but beware of changes that can impact the coefficient! An art and a science. Even at Centennial where many are well-versed in JOC, coefficients are produced at a high level and only a couple of people in the organization have the skillset. C G—windshield time and travel costs T—some CSI divisions tend to be more profitable than others A—if an owner is expecting you to do a lot of $500 project that drives a different GC/overhead and coefficient than lots of $1m projects. SSS---campus/military installation vs. discrete supervision/far flung projects; security—airports, courthouses (parking); safety Contract Admin—documentation beyond lump sum, reporting Generally, Gordian is an add; RS Means a deduct in many parts of the country M—for coops; also for standalone contracts—outreach to subs, end users, education of departments, etc.

Contractors Preparing for JOC Bidding the Coefficient: Two Approaches Historic Costs Reconcile 2-3 historic projects where final costs are known against a line item estimate generated from UPB Focus on Divisions 2, 9, Mechanical and Electrical? Program Costs Calculate total personnel and overhead costs to manage the program, reconcile with typical project costs and then reconcile unit costs with select line items For all the hype on hundreds of thousands of line items, 400 commonly used line items

The JOC Process Once a JOC Program is in place, client project demands/requests happen over the contract term. This starts the JOC Process:

Range of Owner Participation The JOC Process - SCOPE Scope Variability - Detail of Owner scope preparation varies according to: Owner preference and skillset Owner people resources available When in planning cycle project was identified for JOC Owner Provides: Project Need, Target Budget Defined Scope Document Complete Bid Documents More turnkey, contractor led More proactive owner involvement Range of Owner Participation

Site Visits Typically within days Collaborative Process Goal of capturing every necessary component of work

Owner/Contractor-Joint Scope Development /Documentation Remove and reinstall existing 3 urinals and 2 commodes Demo / dispose of 3 existing lights Reuse existing circuit for new lights. Remove & replace 2 existing HVAC grilles Install gyp ceiling at 8' 8" with 4 new surface mounted explosion proof lights. Relocate existing smoke detector to new ceiling Demo CMU for 42" opening min. (exist opening +/- 36") Demo & dispose of existing metal partitions and replace with new 4" CMU covered completely with ceramic tile, with one block scupper at bottom of each Demo ceramic tile, floors and walls, (exist ceramic on walls is approx. 8'-0" high)

Targeted or Incidental Design Performed in-house Included in coefficient Will engage design professional when needed Major building system engineering Structural Life-safety

Scope and Work Plan Submitted to Owner Presented to owner for approval Important confirmation step for aligning vision and expectations prior to proceeding with labor-intensive line item proposal

The JOC Process - PROPOSAL

Proposal Format Generation of the line item estimate Assurance of a fair price: Are the line items appropriate? Are the quantities correct? Owner has to understand the process and have faith that it provides competitive value

Project Execution

Case Study – DFW Airport (Dallas/Fort Worth) The Program First used JOC through a cooperative, then solicited their own contract Sophisticated owner that uses JOC in a targeted way RSMeans UPB The Value Badged and screened contractor and subcontractors who understand the security logistics of working in an airport environment A contractor who will go the extra mile to meet ambitious schedules Faster, Faster, Faster!

The Future of JOC JOC is a form of IPD – Integrated Project Delivery Emphasis on Pricing Transparency Integration Across the Building Lifecycle JOC of the Future Blog Technology Changes: Link to Building Information Modeling Cost Databases and Estimating Approaches will further evolve to reveal lifecycle costs “Greater Good” goals Small and disadvantaged business utilization Sustainability Methods/Process will continue to evolve with changes in the industry. Renewed focus on true pricing transparency through JOC. Unit price/line items should provide full transparency, but only if owners fully understand the line item estimating process. Connection to Capital Construction, FM—lines blurred A lot of that is being driven by technology including BIM. As we build a BIM database of the built environment JOC will have to absorb and leverage that, and new technology systems will emerge to do just that. Imaging a day when you will not walk a job and then look up line items by CSI code, but will be given an electronic model and will pluck off 3-d items for demolition, and then choose from a selection of BIM items, already connected to a UPB, for reinstallation—updating the model as you build your estimate. 4clicks is already working towards this type of system with its visually-based estimating systems, incorporating eTakeoff, etc. JOC is very well suited to incorporating owner’s social responsibilities into its process—SBE and sustainability. Peter Cholakis’ blog—more than JOC, the evolution and integration of JOC with the built environment

Job Order Contracting - RESOURCES Center for Job Order Contracting Excellence www.jocexcellence.org RS Means—Unit Price Books, Training, JOC Consulting Robert Gair, bgair@rsmeans.com, www.jocworks.com 4clicks—Estimating/Management software for JOC programs http://www.4clicks.com/ Kosten-Technik International—JOC estimating services for owners and contractors http://www.kosten-technik.com/