Job Order Contracting (JOC)
An indefinite-delivery, indefinite-quantity procurement method where an owner pre-negotiates unit prices with a contractor through a competitively bid coefficient, then issues individual job orders drawing from that pre-priced catalog for a stream of smaller repair and renovation projects over a multi-year term, without rebidding each one.
Why it matters
The coefficient bid a contractor submits to win the JOC contract locks in its pricing for every job order issued over the entire contract term, so an aggressively low bid to win the contract can turn every individual job order that follows into a loss.
On a real project
A school district awards a three-year JOC contract to a contractor after a competitive coefficient bid, then issues individual job orders for classroom renovations and repairs throughout that term, each priced against the pre-negotiated catalog rather than separately bid.
Who this matters most to
An Estimator prices the coefficient bid that determines profitability for the entire contract term, while a Procurement Manager administers the ongoing stream of individual job orders issued against it.
Where this goes wrong
A contractor wins a JOC coefficient bid too aggressively low just to secure the multi-year contract, then loses money on nearly every individual job order priced against that catalog for years, since the coefficient is locked in for the full contract term regardless of how the market shifts.
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