What is Job Order Contracting?

By Tony De Sciscio
Contract Manager for Canoe Procurement Group

"We have always done it that way."

It’s been said that these are the seven most dangerous words in construction. The failure to adapt to changing circumstances or innovation has sometimes led to disastrous consequences. When it comes to risking delivery failure of public construction programs, the hazard of the status quo also applies to dated construction procurement practices.

For public sector owners, the traditional approach to engaging contractors is an extensive process. It involves developing detailed drawings and specifications to ensure a project is both buildable from a technical standpoint and biddable in terms of clear expectations. With public funds at stake, there's a strong emphasis on fairness and transparency in bid evaluations—a process that is necessarily time-consuming and labor-intensive, even for high-quality renovations and maintenance projects. Despite technological advances, the core principles of this process have remained largely unchanged.

Contractors, too, can be anchored in long-standing practices. General Contractors analyze project requirements, pre-estimate costs, and seek bids from their network of specialty sub-trades. Unlike public sector owners, General Contractors are not bound by the same stringent rules of fairness and transparency with subcontractors. They may choose partners based on preference rather than price alone, and it's not unheard of for sub-trades to be asked to adjust bids without knowing they were already the lowest in order for the General Contractor to maintain margins.

Yet, there may be a more efficient model to consider: Job Order Contracting (JOC). This approach uses one compliant, competitive contract to deliver a program of construction projects, especially general contracting, roofing, mechanical, electrical, and civil projects. At the core is a pricing model that uses a construction task catalogue of locally indexed input costs of labour, material, and equipment coupled with the contractor’s bid of an adjustment factor on every task item no matter the project. Canoe Procurement supplier Gordian supports this process with expert data insights and robust technology that match task completion with progress payments. The benefits of removing this bad friction accrue not only for public sector owners but also for contractors. JOC programs use a two-part pricing method: benchmarked costs as a starting point, agreed upon in Canoe’s procurement process, and a competitively bid adjustment factor finalized with the member prior to project startup. This model fosters long-term relationships, streamlines the procurement and pre-construction phases, and accelerates project delivery.
Canoe members are in a unique position to leverage this innovative approach. Canoe’s planned procurement process this winter to the Ontario market is enhancing the traditional contractor pre-qualification process. This enhancement will allow contractors to qualify for specific regions within Ontario based on their chosen areas of operation. By meeting Canoe’s rigorous public procurement standards, this regional approach will enable contractors to pursue business opportunities with multiple Canoe members without undergoing additional pre-qualification processes each time. This means contractors and members can develop projects in partnership more efficiently and collaboratively.

If members would like to refer Canoe with reputable, strong performing contractors in your community to learn more, or to stay up to date on its progress and other regional JOC plans, please contact Sarah Hubble, Canoe Client Relations Manager for Ontario. The Canoe Procurement Group is an LAS program tasked with saving municipalities time and money through bulk purchasing.