What is Job Order Contracting?

One framework, individual jobs

Job Order Contracting combines a contract framework with individual packages of construction work. Its formal description is competitively bid, firm-fixed-price, indefinite delivery / indefinite quantity, commonly shortened to IDIQ. It is used for repair, maintenance, renovation and minor construction.^[1][2]

The base contract and the job order answer different questions. The contract establishes the framework; the job order identifies the particular work being ordered within it. To prepare a job, assemble the location, scope of work, selected pricing entries and the documents required for issuance.

Do not use “repair the corridor” as a complete scope. Identify which corridor, which surfaces need work and what the finished result should be. Separate the requested work from adjacent areas that are to remain untouched.

How the price is assembled

A unit price book lists construction tasks, units of measure and unit prices. Those unit prices include direct material, labor and equipment costs, but not indirect costs or profit. The book gives both parties the same task and unit-price references.^[3][2]

A coefficient is a numerical factor covering costs outside the unit prices, such as general and administrative and other overhead, insurance and bonding. Contractors bid their coefficient or coefficients. The factor is a separate input from the selected task and the amount of work.

For each line item, multiply its book unit price by its quantity and the applicable coefficient. Add the calculated line amounts to obtain the job order price. The total therefore depends on which tasks are selected, how much of each task is included and which factor applies.

The scope determines what gets priced

Because owners and contractors price from the same book, negotiation is mostly about selected line items and quantities. A review should therefore connect the proposed entries to the written work, rather than start with a request for a lower total.^[4]

Match each scope task to the entries that represent it. Then check the reverse: for each proposed entry, identify the scope passage that explains its inclusion. Flag a missing task, an unexplained entry or a quantity with no supporting measurement.

Check the unit before accepting the quantity. A count of objects and a measurement of area are not interchangeable. Retain the measurement notes and location labels so the reviewer can reproduce the takeoff without revisiting the site.

• Task selection: compare the full entry description with the intended work.
• Quantity: attach measurements with units and the locations they represent.
• Coefficient: identify the applicable category beside the factor.
• Arithmetic: reproduce each line amount and the sum of the selected items.

From a facility need to an issued order

For scope development, bring together the owner’s facility representative, the contractor and the trades whose input is needed. Walk the work area, record existing conditions and agree on boundaries. Photograph details, measure the affected work and assign any unresolved questions.

Turn the site record into a written scope before preparing the proposal. Describe access arrangements and working hours as well as the physical work. A reviewer who missed the meeting needs the same information the estimator used.

During review, distinguish a scope question from a pricing question. “Does this include the adjoining lobby?” changes the work boundary; “Where is the wall measurement?” asks for quantity support. Record the answer against the affected task and revise the scope and proposal together when necessary.

Before starting, identify the authorized issuer and obtain the required job order documents. A site meeting or a submitted proposal is not a substitute for the authorization required by the contract. Keep the issued scope and priced proposal together for the people carrying out the work.

Keep the work record usable

Use the same location names in the scope, photographs, takeoff and proposal. Put a date or revision identifier on updated descriptions so an old scope cannot be mistaken for the one currently being priced. Record decisions separately from questions still awaiting an answer.

At closeout, compare completed work with the issued scope and identify remaining tasks. Gather the required completion records and file them with the job order. This preserves the connection between what was requested, what was priced and what was completed.