Insight by Gordian

The not-so-secret weapon agencies are using to attack their maintenance backlogs

This content is provided by Gordian.

Deferred maintenance backlogs are practically a way of life for the government. Federal agencies that manage large numbers of facilities, like the Defense Department or the National Park Service, almost never get the appropriations they need to perform all the maintenance those facilities require.

The 2021 National Defense Authorization Act, however, provides each of the armed services slightly more money for facilities sustainment, restoration, and modernization (FSRM) than they requested. Total FSRM spending in the 2021 NDAA comes to more than $12 billion. To put that money to its best possible use, DoD should consider using Job Order Contracting (JOC), a specific type of contract that’s not new, but is experiencing a resurgence as agencies realize it can be used to eliminate some of the smaller tasks from deferred maintenance backlogs.

Job Order Contracting is an indefinite delivery, indefinite quantity contract that utilizes unit price data as the basis of pricing and a well-defined process for collaborative development of scope. It’s been allowing owners and contractors to work in partnership together since the 1980s, something recent methods like design-build and integrated project delivery have only just been coming back around to. It was the original collaborative delivery method for small projects. Now the JOC model is growing, as the Army delegates authority for local execution of larger projects, into design-build single award task order contracts that also leverage unit price data.

The JOC model is also expanding the other way, to support small and disadvantaged businesses with sole source awards based on unit prices (sometimes called a mini- or rapid-JOC or a performance-oriented construction activity contract). These types of projects — whether small or large – are uniquely suited to being solved with Job Order Contracting.

JOC is focused primarily on FSRM work. But advances in technology, particularly data science, are enabling the Job Order Contracting methodology to expand and address more unique customer requirements. For example, the Air Force has turned to Job Order Contracting to meet emerging chemical remediation requirements for spaces contaminated by fire retardants. To adapt to these unique customer requirements, a reliable source of tailored data development is needed.

These types of contracts have built a record of success in helping to address deferred maintenance across government. When faced with significant backlogs of deferred maintenance, project formulation, packaging and scoping becomes very resource intensive. That’s where Job Order Contracting comes in.

It allows a more rapid execution and collaborative process where the contractor and the owner can jointly review the site conditions, project goals, and budget, and then work together to develop the scope that brings the best value to the government.

Common cost data is a critical component of JOC and allows the government and the contractors to negotiate pricing more effectively and efficiently, resulting in savings of both time and money. According to a 2009 study at Indiana State University, 75% of job owners said Job Order Contracting required less time to start a project. Almost 60% said it required less time to design a project, and roughly 65% said it required less time to complete a project. A 2016 study at Arizona State University found that 87% of Job Order Contracts finished on time.

The same study also found that 91% of Job Order Contracts delivered on budget. According to Gordian, job owners estimate administrative cost savings of 24% using Job Order Contracts, while vendors estimate a 21% overall savings.

Time and cost savings are both important. While the benefits of cost savings are obvious, saving time also reduces risk, because many deferred maintenance issues are also safety risks. That means federal agencies and contractors can both be more efficient when improving and modernizing facilities to support agency mission.

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