OSU Initiates Pilot Job Order Contracting Program
Kegler Brown Construction Newsletter November 1, 1995
The Ohio State University ("OSU") has become the third university in the country to begin a Job Order Contracting ("JOC") system. JOC is designed to deal with smaller projects, particularly maintenance or repair work, that are historically burdensome to manage through traditional procurement techniques.
JOC uses a list of 60,000 pre-priced construction tasks (the unit price book) that bidding or negotiating contractors then apply an overhead factor to (i.e., 1.18 of unit price). The successful contractor is only guaranteed a small minimum contract value, with work orders beyond the minimum tied to the contractor's performance in the mind of the public owner. Supporters of JOC argue that it is not only quicker and less burdensome to manage but that the contractor has a continuing financial incentive to provide quality work and responsive services. Critics suggest that it can allow cronyism and favoritism to interfere with the contracting process and that it can be misused to direct an inordinate amount of work to local, minority or women owned businesses.
Time will tell as to how well the JOC pilot system at OSU works and is received by local contractors.