A. The Job Order Contracting Process
“Job Order Contracting” means the acquisition of contracting services using a selection method that requires contractors to submit qualifications and prices based on wage rates inclusive of fringes and burden, plus a pricing matrix for mark-ups on materials and subcontractors (Arkansas Code Annotated §19-4-1416).
It is used primarily for small (less than $400,000), frequently occurring construction and renovation projects and allows the institution to acquire the services of a contractor much quicker than the traditional design-bid-build method.
The typical steps in the process include:
- The institution develops a set of Job Order performance specifications describing the work for which a JOC contract is anticipated.
- For each project task, a unit of measure and a corresponding unit price are to be the basis for Contractor compensation. The UPB “Unit Price Book” may be defined as the current calendar issue of RS Means Facilities Construction Cost Data as a basis for unit cost.
- The institution uses an Invitation to Propose (See “Advertising” below).
- Each contractor submits price proposals for the work contained in the specifications. The price proposal includes a “coefficient” or multiplier for normal and overtime hours. The UPB rates listed in the Job Order will be multiplied by this coefficient to derive the cost of the work.
- Proposals are evaluated (see “Award Process” below) and the contract is awarded to one or more contractors.
- When the institution has a job to be accomplished, they prepare a detailed scope of work. The contractor submits a fixed price proposal based on the project requirements-using the coefficient that was submitted in response to the bid.
- The Job Order Contract documents are completed (see “Documents” below) and submitted to the office of General Counsel for review and Vice President of Administration for execution.
In accordance with Arkansas Code Annotated §22-9-203 (Appendix 21) and §19-4-1405 (Appendix 22), institutions will advertise one time each week for not less than 2 consecutive weeks for projects over $50,000 and one time each week for at least one week for projects under $50,000;
The notice shall be published in a newspaper of general circulation published in the county in which the proposed improvements are to be made or in a trade journal reaching the construction industry.
The notice shall:
- Provide for the receipt of sealed proposals;
- establish the time and place proposals will be received;
- include the place at which prospective bidders may obtain “Instruction to Proposers.”
- contain the amount of the bid bond (required for projects over $20,000);
- include a statement of the institution’s right to reject any or all bids and to waive any formalities;
- identify the date and time that bids will be opened and the time frame for awarding the contract;
- include any other pertinent facts or information that the institution deems necessary or desirable (whether Arkansas Dept. of Labor Prevailing Wage Rates apply, etc).
- Award Process
- Award shall be to the most qualified bidder (“best value”); evaluation criteria to include:
- Experience pertinent to the project scope;
- Management ability;
- Subcontractor relationships;
- Plan of work;
- Price (coefficients).
- Multiple awards (to more than one contractor) can be made.
- Statutory Requirements (Arkansas Code Annotated §19-4-1416 (Appendix 35))
- The contractor is required to bid all subcontractor work and the Institution shall receive and open the bids with the contractor present at bid opening date.
- The institution may supply all materials for the work with no additional markup if the materials may be purchased off state contracts or at a lesser price than the contractor would be able to procure.
- After the scope of work documents are prepared and have achieve the appropriate reviews, the Institution shall advertise, award, and file the contract(s) for the contemplated work in accordance with Arkansas Code Annotated §§19-4-1401-19-4-1405.
- Additional work may be awarded based upon the initial bid with the fiscal year.
- The bidder may not submit a multiplier representing estimated cost inflation as part of the formal bid process.
- Contract Provisions
- The bid will represent a fixed price amount for the fiscal year.
- Awards will not extend beyond one (1) fiscal year.
- Contracts must not exceed four hundred thousand dollars ($400,000) per construction job for institutions with education and general appropriations exceeding ten million dollars ($10,000,000).
- Contracts must not exceed one hundred thousand dollars ($100,000) per construction job for institutions with education and general appropriations less than ten million dollars ($10,000,000).
- Reasonable extensions may be granted at the beginning of each new fiscal year not to exceed a total of four (4) years if the price remains mutually agreeable to the institution and the quality of work is satisfactory to the institution.
- On or before the four year threshold, the institution must bid the construction service to assure competitive opportunities and lowest cost circumstance.
- Example Documents (Please see “Program Specifications for Job Order Contracting” for a collection of example documents listed below (Appendix 36))
- Invitation to Submit Proposals
- Instruction to Proposers
- Job Order Contract (JOC) Execution Guide
- Proposal Form
- Agreement Form (with Grant Disclosure & Certifications)
- General Conditions
- Supplementary Conditions
- Architect/Engineer Guidelines (if necessary)
- Prevailing Wage Rates (if necessary)
- Job Order Form (Estimate Summary Sheet)
- Payment and Performance Bond (Appendix 29)
- Certificate of Liability Insurance (see section IX. Award of Contract (F) in these capital construction policies and procedures for more information regarding Liability Insurance)
- Change Orders
- It is the sole responsibility of the Owner’s Representative to authorize a Change Order to a JOC. Change Orders shall be generated from UPB as the sole source for pricing. If differing site conditions are encountered during execution of the Job Order, or if there is a desired change to the quantity or quality of work by the owner, then a modified or supplemental JOC by way of Change Order is required. If a Change Order involves negotiation with the Contractor, all negotiations must be completed within 3 working days.
- For the purpose of issuing change orders to a Job Order, three typical circumstances are anticipated:
- Differing site conditions.
- Increased scope of work.
- Decreased scope of work.
- The Owner’s Representative will prepare a proposed Change Order to the JOC addressing site conditions or increased/decreased scope of work.
- If a Change Order form is used that has a section for the Design Professional’s signature and a Design Professional is not required to sign the document, please cross through the signature lines and have the authorized Owner’s representative initial the document.
- Liquidated Damages:
- Liquidated damages should be a part of each Job Order contract and a description of the Liquidated damages needs to be included in the “Instruction to Proposers.”
- The amount of liquidated damages-the penalty for failure to complete the work within the time limit specified on the Job Order contract-should be indicated on each J.O.C.
- Warning of “Intent to assess” liquidated damages should be sent to the contractor and to the Bonding company when it is determined that the project will not be completed within the agreed time frame due to insufficient progress.
- Weather related delays should be substantiated by the Contractor with appropriate documentation.
*To ensure the most accurate and up-to-date information, please check for Arkansas Code changes by searching the code section on this free Arkansas Code Search: http://www.lexisnexis.com/hottopics/arcode/Default.asp