San Diego State University

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 3

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

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

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

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

JOC Contract Documents
Construction Task Catalog® Technical Specifications Contract Terms, Conditions & Bid Documents Copyright © 2001 The Gordian Group, Inc. all rights reserved 7 7

JOC Contract Documents
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 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 Copyright © 2001 The Gordian Group, Inc. all rights reserved

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

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

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

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 Issue Lump Sum Task Order Copyright © 2001 The Gordian Group, Inc. all rights reserved

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

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

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

Gordian Resources at www.egordian.com

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

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

Formula for Calculating the Job Order Value*
ADJUSTMENT FACTOR Formula for Calculating the Job Order Value* * Nonprepriced Tasks are Calculated Separately Copyright © 2001 The Gordian Group, Inc. all rights reserved

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

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 7 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

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

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

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

Methods to Calculate AF
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 Copyright © 2001 The Gordian Group, Inc. all rights reserved

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

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 $ TOTAL = $ 7,305.38 Cost of Work (from quotes or estimate) VCT $ 2,100.00 Dry Marker Board $ Doors and Hardware $ 2,100.00 Paint and Plaster $ 1,600.00 Air Conditioner $ TOTAL = $ 7,595.00 Copyright © 2001 The Gordian Group, Inc. all rights reserved

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

PUTTING IT ALL TOGETHER
Cost of Work In-House + Sub Prices = $ 7,595.00 Mark-up 10% = $ 10% = $ Total $ 9,189.95 Price from CTC $ 7,305.38 $7,305.38(Adjustment Factor) = $9,189.95 $9,189.95/$7, = Adjustment Factor Adjustment Factor = Copyright © 2001 The Gordian Group, Inc. all rights reserved

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

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 6 5

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

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 Questions and Answers For Contract Information, Contact: Vickie Hokenson, Contract Specialist (619) or at For Technical Information, Contact: Jeff Brown, Project Manager (619) or at Copyright © 2001 The Gordian Group, Inc. all rights reserved

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