Job Order Contracting ( JOC) Chicago Department of Aviation Capital Improvement Program Panel member: Joseph S. Dote, Sr. Vice President R.M. Chin & Associates, Inc. DRAFT #3: 5/27/09 FOR DISCUSSION

Introduction/Role R.M. Chin & Associates, Inc. is the Managing Partner of Joint Venture, Chicago Airports Resources Enterprise (CARE) R.M. Chin & Associates, Inc. is the Managing Partner of Joint Venture, Chicago Airports Resources Enterprise (CARE) CARE is the Construction Manager for the Chicago Department of Aviation, Capital Improvement Programs for O’Hare and Midway International Airports. CARE is the Construction Manager for the Chicago Department of Aviation, Capital Improvement Programs for O’Hare and Midway International Airports.

Overview of JOC The Department of Aviation (DOA) began using JOC in October, 1993 The Department of Aviation (DOA) began using JOC in October, 1993 Administered using The Gordian Group System Administered using The Gordian Group System Total of 667 projects, averaging approximately 43 projects/year Total of 667 projects, averaging approximately 43 projects/year On average the JOC program completes a total of $3.8 million in projects per year with an average project of approximately $89,334. On average the JOC program completes a total of $3.8 million in projects per year with an average project of approximately $89,334. Currently, DOA has 12 projects utilizing JOC. Currently, DOA has 12 projects utilizing JOC.

Overview of JOC Historical Allocation of Job Order Size

Overview of JOC The City of Chicago procures a JOC Contractor through the competitive bid process. The City of Chicago procures a JOC Contractor through the competitive bid process. –Firm provides firm, fixed unit prices, for a 3-year time period From 1993 to 2007, the DOA awarded a total of five (5) individual JOC Contracts. From 1993 to 2007, the DOA awarded a total of five (5) individual JOC Contracts. Today, the DOA utilizes 3 (three) JOC contractors. Today, the DOA utilizes 3 (three) JOC contractors.

Overview of JOC Advantages of using multiple JOC Contractors –Increased program capacity –Increased areas of specialties/expertise –Promotes performance Contractor must meet or exceed performance standards to be assigned additional work. Contractor must meet or exceed performance standards to be assigned additional work. Better quality of Price Proposals Better quality of Price Proposals Time submissions of Proposals and Final Packages Time submissions of Proposals and Final Packages Increased M/WBE participation Increased M/WBE participation High quality construction High quality construction

Representative JOC Projects O’Hare International Airport H/K Apex Food Court Exhaust Upgrades Replacement of roof top exhaust fans at H/K Concourse at Terminal 3. $632, 150 Notice to Proceed Issued = 45 days Emergency Roof Replacement Project Emergency replacement of roof areas through out main terminal areas $ 150,000 Notice to Proceed Issued = 2 days

Representative JOC Projects O’Hare International Airport ARFF 1 & 2 Kitchen Remodel Upgrades to ARFF #1 & 2 Kitchen Area, includes furnishing and installation of new kitchen equipment and cabinets, and all associated plumbing and electrical $218,500 Notice to Proceed Issued = 40 days

Representative JOC Projects Midway International Airport Elevated Parking Structure Green Roof Sustainable initiative to install a green roof system on the Elevated Parking Structure at Midway Airport $ 127,500 Notice to Proceed Issued = 40 days

Representative JOC Projects Midway International Airport Irrigation System on Cicero Avenue Installation of a irrigation system in the area around Midway Airport $ 242,700 Notice to Proceed Issued = 45 days

The JOC Process User Identifies Scope of Project and Funding JOC Project Manager develops a project estimate User Issues a Formal Request to Procure Project with JOC. Request identifies : Project Scope Funding source Schedule Justification for project Design & Construction Division determines if project is suitable for JOC. Scope and Size Availability of Funding Use of Term Contract Use of In-House Trades

The JOC Process JOC Project Manager prepares a Memorandum of Authorization (MOA) Formal JOC Process begins MOA is routed for approval Commissioner of Aviation and the Chief Procurement Officer must approve. Upon approval, the DOA and JOC Contractor Finalize Price Proposal: Joint Scope Meeting Preparation of Proposal Review of Proposal Submission of Final documents

The JOC Process Upon agreement of scope and price, JOC Project Manager prepares a Sub-Order Release (SOR) for approval. The SOR is routed for approvals Commissioner of Aviation and DOA staff approves and sends to Chief Procurement Office for approval City of Chicago issues a Blanket Release that serves as the Notice to Proceed JOC Project Manager issues NTP to the contractor Work begins! Total Time: days

Developing a JOC Program Develop JOC Program based on needs of the Owner Develop JOC Program based on needs of the Owner –Multiple vs. Single JOC Contractor –Guaranteed Minimum Amount/Potential Maximum Amount –Length of Base Term –Types of Factors (Airside, Landside, etc.) –M/WBE Goals –Standards of Performance Establish a clear method for selection of JOC Projects Establish a clear method for selection of JOC Projects –Ideal project size = $25,000 to $500,000 –Project schedule and time constraints –Funding availability Assign a JOC Project Manager who: Assign a JOC Project Manager who: –Skilled at developing accurate estimates to ensure project stays within budget –Manages the procurement process so NTP’s are issued within 45 days –Manages the JOC contractor and oversight of construction

Developing a JOC Program Establish performance criteria for contractors: Establish performance criteria for contractors: –Submit quality proposals –Submit documentation on a timely basis –Mobilize quickly for construction –Manage and utilize high quality subcontractors –Provide quality construction –Establish levels for self-performance Customize the Contract Documents Customize the Contract Documents –Add specific tasks to the Construction Task Catalog R –Include contractual language for: Liquidated damages Liquidated damages Procedure for Ordering Work Procedure for Ordering Work Payment Terms Payment Terms Changes in the Scope Changes in the Scope