More than ever, service delivery in today’s public sector demands strong partnerships with private industry. Public sector organizations are compelled to optimize the value derived from precious public funds as well as provide economic opportunities to a variety of firms as broadly as possible. The dual principles of value for money and maintaining a fair and open marketplace are championed by public sector construction procurement professionals.
When a public procurement office is operating efficiently, it acts as a catalyst for fostering collaboration between the client owner’s construction business and the industry. However, when it encounters operational challenges, such as resource constraints or a shortage of experienced staff, it can become a hindrance to the successful execution of projects. Much like various other sectors in today’s economy, the shortage of skilled professionals has a significant impact on procurement offices. Factors such as retirements, competition with other business sectors for new talent, and burnout have led to a decline in staffing levels. This necessitates a reevaluation of the conventional approach.
One solution to the capacity challenge is to focus effort on the areas of greatest complexity or sensitivity and seek alternate solutions for less risky procurement types. In the public corporate real estate sector, the higher-value areas include service operations that are critical to the occupant experience and new buildings that require intensive cross-department coordination and collaboration. In the middle of the job complexity spectrum, where we find single building system lifecycle renewals, simpler alterations and low-design projects, we also find fertile ground for procurement innovation.
A construction procurement method that’s been particularly useful in this middle range of project complexity is Job Order Contracting (JOC). With JOC, construction contractors make competitive bids via an adjustment factor on a published book of localized aggregated cost data rather individual projects, allowing the procurement office to begin work and to develop industry partnerships quickly. Further, JOC provides organizations with the flexibility to complete many projects with one competitively awarded contract. According to a report from NIGP and Gordian, this unique, single-solicitation approach requires fewer people to manage, allowing public sector procurement offices to optimize staff workload at a time when they desperately need it.
The proven Job Order Contracting project execution process emphasizes collaborative joint site reviews to refine project scope and confirm requirements prior to work beginning. The result is a greater proportion of contractor time on the project site, less time devoted to the procurement of low value work at a time when resources are strained, and opportunities for value engineering and fewer change orders. But the benefits of Job Order Contracting extend beyond the business line.
JOC helps uplift the local contracting community by creating the potential for a steady stream of income. As one veteran JOC contractor has noted, Job Order Contracting is a program, not a project. The programmatic nature of the procurement method creates an environment where partnerships can grow. Contractors who prove to be good partners to the public sector may have the opportunity to do more and more valuable projects. Furthermore, working with an experienced JOC provider like Gordian can help procurement offices achieve and exceed their diversity and inclusion goals. In fact, 35% of contractors involved in a Gordian JOC program hold a minority business certification.
All this creates tremendous value for the public sector. I know because I have had the privilege of seeing it firsthand. Recently, after Gordian shared a JOC overview with local government practitioners, one project manager in the audience exclaimed: “Why has this been kept secret? Why are you only sharing this now?” I can’t think of a stronger endorsement than that.
In a time of increased demand and diminished resources, the public sector’s dual principles of value and fairness are harder to live up to on its own. Private sector construction procurement innovations like Job Order Contracting help them maintain those values, create more opportunities for local contractors and improve their communities. That’s what positive partnerships are all about.
1 Arizona State University study showed that JOC projects spend 52% of project time on construction as opposed to 38% and 39% on design-bid-build and design build respectively. Download the study.
