Job Order Contracts And Joint Powers Agreements. What Are They, Are They Legal And Do They Really Save Public Agencies Money?
By Anthony (Tony) Morelli, Southwestern Regional Compliance Manager. -
These are legitimate questions that CIFAC is continually asked, so hopefully after this explanation you will have a better understanding of these two procurement processes.
Job Order Contracting (JOC) JOC’s are an undefined quantity contract used by Universities, Colleges and Counties. School Districts may use JOC’s if they have also entered into a formal project labor agreement. (PLA) Each task is assigned a quantity of units and the bidder develops a price for a single unit. The bidder is then on-call for the length of the contract (Usually 1 year or less) and performs the work the agency is requesting to be performed at that time or as needed. Some JOC’s stipulate that a minimum amount of work will be performed. In some cases, agencies might establish a maximum individual amount of work for a specific task (i.e. $175k for a specific task out of the entire $1 million JOC awarded to the bidder) regardless, the law stipulates that the maximum dollar amount of work that can be performed as $5 million the first year of the agreement. The annual contracts may be awarded for repair, remodeling, or other repetitive work to be done according to unit prices and shall not include design or contract drawings. Specific to Counties, annual contracts may not be awarded for any new construction. Recently, I observed the County of Ventura’s General Services Agency (GSA) award two JOC contracts to a successful bidding contractor for about $4 million each. I contacted the County with my concerns that the individual projects (that make up the JOC) are not to be used for any new construction per the PCC’s definition. The GSA Director assured me that the projects will comply with those provisions. At this point, we are monitoring the agency’s projects to ensure compliance.
Joint Powers Agreement (JPA) JPA's also known as; Joint Powers Authorities or Joint Cooperative Purchasing Agreements, have been around for a long time and are a formal, legal agreement created when two or more public agencies jointly exercise common powers. The purpose is to share a common power and jointly implement programs, deliver services, or in our industry, for contract procurement. It should be noted that while the California Public Contract Code (PCC) provides a definition pertaining to multiple state agencies JPA-cooperative agreements, the PCC does not govern such agreements. Out of state JPA's are now a current trend used by agencies for contract procurement.
National Joint Powers Agreements (NJPA) were designed to streamline the procurement process for participating agencies by developing Request For Proposals (RFP’s) or Invitation For Bids (IFB’s) for agencies with the intent of their competitive solicitations meeting or exceeding local requirements. The RFP solicitation process usually includes public notice/advertising, a pre-proposal conference, RFP official opening and evaluation based upon established scoring criteria. Award of the contract is to the most responsive/responsible vendor/bidder, all handled by the lead agency, which has an established board who oversee the process. These lead agencies are located out of state as are the public agency officials who sit on their board
Agencies utilize the NJPA process because they believe that it saves them time and money over the traditional method. While that can be debated, frankly… the process is just easier for the agency!
A few months back, the City of Port Hueneme had utilized a NJPA for a grouping of several projects. We contacted the City with our concerns about transparency and proper bidding per the PCC, as their staff report didn’t indicate who the bidders were and we wanted to see who actually bid on this contract. By the end of the day, we received a letter from the City’s legal counsel, advising that; they were a Charter City; that they had followed the legal requirements and that the City was totally comfortable in moving forward with the project, despite our objections. The City did provide proof a few days later that there were in fact several southern California bidders for Port Hueneme’s JPA however this is not always the case.
CIFAC has several concerns about both JOC’s and JPA’s. For starters, that they lack transparency, limit the ability of local contractors to bid and both of these methods do not appear to comply with the States standards and statutes per the PCC. What is CIFAC doing about it? Currently we are gathering information, doing research and looking at legal opinions to determine if these methods and their usage are circumventing the California Public Contract Code and if so, is a way to legally challenge this procurement process.
Bottom line… As of now, both of these procurement methods are legal in California. In regards to whether or not the JOC or JPA actually saves the agency money, well that’s a discussion that I think will be debated for some time.