Gordian, the leading provider of facility and construction cost data, software and expertise, announces the outcome of a partnership with NIGP: The Institute for Public Procurement to conduct market research on construction project delivery method challenges and opportunities. The report indicates that construction project delivery via Job Order Contracting (JOC) requires fewer people and less time compared to other delivery methods. Further, the research confirmed that JOC significantly improves the relationship between project owners and contractors.
“Gordian’s founder created JOC to simplify the process of completing construction projects, and the outcomes of this research report validate JOC’s clear benefits as a project delivery method,” says Mark Schiff, President of Gordian. “While thousands of projects have been successfully completed through JOC for decades, there is still low awareness within the industry, especially among those who stand to benefit the most from it. We partnered with NIGP on this research to help educate procurement and construction professionals on when and where they should consider JOC as an alternative project delivery method.”
The scope of the research was to better understand construction procurement trends, solicitation activities, and the differences between project delivery methods—with the primary objective of providing preliminary evidence of how JOC performs versus other construction delivery methods. The research also concludes:
- When using JOC, the transaction costs (i.e., human, material and capital resources invested) related to issuing the contract are comparable to those in more traditional project delivery methods like Design-Bid-Build, Design Build and Construction Manager at Risk; However, since JOC is an IDIQ contract used to execute multiple projects, over time the transaction costs are less than those of traditional methods.
- Compared to other project delivery methods, JOC can guarantee buyers more effective governance of the relationships with contractors by increasing the quality of communication and enhancing trust, which ultimately provides better project outcomes.
“JOC is an under-researched topic in construction management—both in research and practice. Working with Gordian, we realized that many procurement professionals want to know more about project delivery methods, and we hope the results of this project contribute to increasing awareness about the benefits of JOC and its applicability for construction works in the public sector,” said Andrea Patrucco, Ph.D., Assistant Professor of Supply Chain Management in the Department of Marketing and Logistics at the Florida International University College of Business and one of the researchers for the report.
Fellow researcher for this report, Ana-Maria Dimand, Ph.D., Assistant Professor of Public Policy and Administration in the School of Public Service at Boise State University, stated, “I really enjoyed working with the team on better understanding the opportunities and challenges of Job Order Contracting. This project first introduced me to Job Order Contracting as a procurement tool, and it made me realize its importance and usefulness for managing construction projects.”
The survey sample consists of 260 responses from procurement professionals operating in various public organizations including local and county governments, state agencies, healthcare organizations, educational institutions and others. Additionally, 67% of the agencies in the sample are large organizations that spend more than $10 million on construction projects annually, with most of their spending concentrated on a few projects. Respondents in the sample generally have several years of experience procuring construction projects, and for most of them, the duration of the procurement process generally surpasses 12 weeks.
The full report, with complete statistics and analysis from the research team, is available from Gordian and NIGP.
For more information about Gordian’s Job Order Contracting solutions, visit Gordian’s website.
Since 1944, NIGP has been developing, supporting, and promoting professionals in the public procurement sector through premier research and professional development programs, technical services, networking, and advocacy initiatives.
Gordian (www.gordian.com) is the leader in facility and construction cost data, software and services for all phases of the building lifecycle. A pioneer of Job Order Contracting, Gordian’s solutions also include proprietary RSMeans data and Facility Intelligence Solutions. From planning to design, procurement, construction and operations, Gordian’s solutions help clients maximize efficiency, optimize cost savings, and increase building quality.
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