How Job Order Contracting can improve efficiency in agency infrastructure spending

This content is provided by Gordian.

Infrastructure is in the spotlight once again as the Senate moves forward on its infrastructure bill. Part of that involves the modernization of existing federal buildings and construction of new ones where necessary. An earlier proposal in March from President Joe Biden would have included $28 billion for these efforts, $18 billion of which would go to the Veterans Affairs Administration. According to its own estimates, it would take at least $22 billion to address poor or failing conditions at VA facilities, the department told a House appropriations subcommittee at a hearing on its infrastructure challenges in March. The other $10 billion would go toward a revolving fund to allow agencies to borrow money for projects they wouldn’t have funding for in their annual appropriations, then pay back over several years.

But even with such a large investment, those funds are still limited, and the VA and other agencies are going to need to get the most impact for their money. The problem is that federal construction contracting is a generally inefficient process. Inefficiencies in past public sector construction have resulted in over $270 billion in costs in just one year, according to a Government Business Council Issue Brief sponsored by Gordian.

“We’ve found three main pillars of this construction procurement issue within government,” said Josh Okada, the manager of custom research for the Government Business Council, during a Gordian webinar. “The first one is slow bidding processes. The second is that the best pricing is not always secure. And then the third issue that we’ve identified is staffing gaps.”

Bidding processes can take as long as four years, he said, which is not conducive to projects that require urgency. Regulatory controls like the Federal Acquisition regulation can also slow the process. On the pricing issue, market data on pricing can be difficult to acquire, so federal agencies often struggle to identify the best possible prices. And shortages in contracting staff are rampant across the federal government, especially in the Defense Department, often due to lack of qualifications and training.

But there are a few things agencies can do to overcome these challenges and better spend their infrastructure budgets. First, Job Order Contracting (JOC), a kind of IDIQ contract, can reduce the slowing effects of the FAR by establishing a single competitively billed contract for multiple projects. It’s essentially an “easy button” for FAR compliance, especially “fair and reasonable pricing” requirements. They’re also fast and easy to set up, making them perfect for a number of construction jobs, including maintenance, repair and operations; projects with fixed budgets or short timelines; small and medium projects that can be scoped, priced and completed quickly; and advance work on larger projects.

The U.S. Army Corps of Engineers has used JOC to great effect in the past, according to Christopher Reinhardt, the chief of Military Programs Branch for the U.S. Army Corps of Engineers, New York District. Reinhardt said there was some initial hesitancy to use these types of IDIQ contracts because they weren’t very well understood. But once they got past that hesitancy and understood some of the benefits, like pre-priced items, it became a powerful tool for completing construction projects.

“JOCs provide flexibility. We’ve had the ability to react to urgent requirements. We’ve awarded some urgent projects in less than a week to get from identification of the requirement to construction start, so it provides that flexibility,” said David Scruggs, chief of the Fort Riley, Kansas Directorate of Public Works Engineering Services Division for the U.S. Army. “And it allows us to develop projects ahead of time, prior to having funding available, so we can put those projects on the shelf and wait until we get funding. And that allows us a lot of flexibility in our fourth quarter budget obligations.”

In fact, Gordian JOC contracts leveraging the Construction Task Catalog unit price book directly map to the requirements outlined in the Army Job Order Contracting Guide. That includes data, such as demolition line items, customizable specifications, and frequently updated labor, equipment and material pricing localized to reflect the local economy.

It’s also a cloud-based software, meaning there are no hardware requirements. Line items can be added or deleted, and line item tasks that should be in the contractor’s coefficient – and therefore should not be included in individual task orders – are removed. Gordian also provides hotline support.

“I’ve seen everything from full blown barracks built… all the way down to just renovating a commander’s office or the bathrooms in garrison commanders building,” Reinhardt said during the webinar. “So really the depth and breadth of what you can use them for is really unlimited. It’s just a matter of how you set it up and knowing and understanding what tool you have in hand.”

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