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Home My WebLink About05/20/2003, C7 - JOB ORDER CONTRACTING (JOC) IMPLEMENTATION AD council ' em°� May 20,2003 agcnaa REpoRt I"N.W.. c 9 CITY OF SAN LUIS OBISPO FROM: Michael D.McCluskey,Public Works DirectoW ru- mom Prepared By: Jay D. Walter, City.Engineer SUBJECT: JOB ORDER CONTRACTING (JOC)IMPLEMENTATION CAO RECOMMENDATION 1. Authorize staff to advertise for bids for a unit-price contract that has a term of one year, extendable for two additional years. 2. Authorize the CAO to award the contract to the lowest responsible bidder. DISCUSSION Background: In December 2001, the Director of Public Works authorized staff to research the concept of implementing a Job Order Contract (JOC) system for the City. After a review of existing JOC programs in several cities and counties it was determined that a JOC system for the City of San Luis Obispo would significantly enhance the Engineering Division's ability to deliver Capital Improvement Plan (CIP) projects. In May 2002, the Council approved a plan to implement alternative methods for Public Works contracting and authorized a measure to amend the City Charter to be placed on the ballot for the November municipal election. In November 2002, voters approved Measure L-02, which amended the City Charter and authorized the use of unit-price contracts for maintenance type projects. In December 2002 the Council authorized the hiring of The Gordian Group to develop the Construction Task Catalog and Technical Specifications. On April 15, 2003 the Council adopted Resolution No. 9444 setting authorization limits for JOC Task Orders; and lastly, on May 6, 2003, the Council adopted Ordinance No. 1435 establishing JOC procedures. WHAT IS A JOC SYSTEM? A JOC is a competitively bid, fixed unit price indefinite quantity contract. Indefinite quantity means that the quantities or units of work required during the term of the contract may vary based on the City's needs. A JOC is used for the accomplishment of repair, alteration, modernization,. maintenance, refurbishment, rehabilitation, and repetitive construction work needed for City buildings, structures, or other infrastructure assets. The JOC has a maximum dollar value over a fixed term. The goals of the JOC program are to provide quality work, competitive costs, and improved responsiveness in completing building maintenance and construction projects. The JOC program employs the services of a prime general contractor and a network of sub-contractors expert in the complete range of building maintenance and construction tasks. Job Order Contracts are competitively bid and awarded in the same manner as current City construction projects. C� - i C - Council Agenda Report—JOB ORDER CONTRACTING (JOC)IMPLEMENTATION Page 2 The JOC system includes a Construction Task Catalog (CTC) and Technical Specifications. The CTC is a comprehensive listing of over 160,000 pre-priced construction tasks. The standard tasks are based on the use of experienced labor with high quality materials. All of the unit task prices are approved by the City and incorporate prevailing State wage and local materials cost data. The Technical Specifications are similar to the City's Standard Specifications in that they specify the quality of materials and workmanship required for each task. A contractor's bid is in the form of an adjustment factor, expressed in terms of a percentage of the specified CTC prices such as 115 percent or 125 percent. Contractors generally bid two adjustment factors: one for work performed during normal business hours and another for work performed outside of normal business hours. These factors include profit and overhead costs and apply to all items in the CTC. The contractor with the lowest composite adjustment factor is awarded the Job Order Contract. The CTC, Technical Specifications and the successful contractor's price adjustment factors are incorporated into the awarded contract. After the JOC contract has been awarded, the contractor and City staff meet on the project site. A scope of work is jointly developed by both parties and the contractor develops a proposal based upon the CTC and the Technical Specifications. The contractor estimates quantities and what construction tasks are necessary, develops a schedule to perform the work and submits a list of subcontractors who will be hired for the project. If the proposal also called a Task Order, is acceptable to the City, the contractor can be issued a notice to proceed, and work can begin. Thereafter, as individual building maintenance and construction projects are identified, the City and the prime JOC contractor develop the scope of work for the project. All projects must meet the performance criteria defined by the City and included in the Technical Specifications of the JOC contract. The City's Disadvantaged Business Enterprise (DBE) Program goals will be part of the Technical Specifications of the JOC contract. Prime contractors and subcontractors will be invited to attend informational meetings regarding how to participate in the JOC process. As a general rule, JOC systems in place around the country claim to save from 10% to 15% of the capital costs of the projects. The savings are realized as both direct and indirect costs, typically reduced staff time to develop the projects, and the efficiency of a larger, single contract with fixed costs for the tasks performed. The JOC program implemented by San Luis Obispo County is reporting project cost savings ranging from 7% to 12% when compared to traditional procurement and contracting methods.. Workload Impacts: As part of the Department of Public Works recent reorganization, a full time staff position has been set up to handle the JOC contract as their primary duties. The work that this employee previously performed can be done under the JOC contract or handled by other City staff. O 0 Council Agenda Report—JOB ORDER CONTRACTING (JOC)IMPLEMENTATION Page 3 JOC CONTRACT Work is performed under the JOC by the use of individual Task Orders, which are specific proposals agreed to by the City and the contractor on a project-by-project basis using the fixed unit-prices specified in the master contract. The authority to approve Task Orders is set forth in the City's Purchasing Resolution. As formalized on April 15, 2003 the City Engineer is authorized to approve JOC Task Orders up to $25,000; and the CAO is authorized to approve all Task Orders in excess of this amount. Regardless of the amount, all Task Orders will be subject to the requirement that the amount be equal to or less than the budget amount specifically approved by the Council for each project. This will be verified through the rigorous "CAO Report" and purchase order process already in place for all purchases. Only CIP projects approved by the City Council can be completed by the JOC contract. Example projects that could be done under the JOC range from $10,000 up to $1,500,000, although they are not limited to those amounts. The minimum amount of work that must be done under this contract is $50,000. CONCURRENCES All City Departments that have CIP projects have concurred with the implementation of a JOC system. Positive support has been received from the San Luis Obispo County Builders Exchange, the organization that represents local contractors. FISCAL IMPACT All of the projects that will be completed under this contract have previously been approved by Council and are contained either in the 2001-03 Financial Plan — Appendix B or earlier financial plans or will be approved by Council as part of the 2003-05 budget. No project that has not been previously approved by Council will be completed using the JOC contract. ALTERNATIVE Take No Action. Without granting approval to advertise, the City cannot take advantage of the productivity improvements now envisioned in the City Charter and the City's Purchasing Ordinance. JOC IMPLEMENTATION TIMELINE November 2002—City Council approves agreement with Gordian December 2002—Gordian begins work on CTC and Technical Specifications May 2003 —Advertise bids for JOC construction contract June 2003—CAO approves award of construction contract July 2003—First Task Order issued CD of Construction Task Catalog and Technical Specifications on file in Council reading room. 1:\—Council Agenda Reports\2003 agenda reports\CAR-JOC Adverdse.doc