Using MWBEs on Job Order Contracts (JOC)

In 1998, the voters of Washington State approved Initiative 200. One of the impacts of I-200 is that it prohibits public agencies from granting preference in the award of public contracts based or race or gender considerations. Since the passage of I-200, the percentage of participation by MWBEs (Minority and Women’s Business Enterprises) in the state has dropped dramatically. Public agencies continue to wrestle with how to help provide business opportunities that encourage the use of MWBEs in the expenditure of public contracting dollars.

One tool that holds some promise for using MWBEs is the use of Job Order Contracting (JOC). JOC “means a contract in which the contractor agrees to a fixed period, indefinite quantity delivery order contract which provides for the use of negotiated, definitive work orders for public works as defined in RCW 39.04.010.” Not all public agencies in the state are authorized to use JOC.

Under a JOC work order, the contractor is required to subcontract out 90% of the work, and may select any qualified subcontractor as long as the price for the work order is consistent with the unit prices originally bid in the JOC and the quantities that are negotiated with the public agency. In theory, a contractor could make efforts to subcontract work to MWBEs, thus increasing the participation by these firms on the overall contract. Because work orders are limited to $300,000 and 90% of the work must be subcontracted, these subcontracting opportunities may be ideally suited to MWBEs that are generally small businesses.

Prior to issuance of the first work order, the public agency must approve an MWBE outreach plan by the Job Order Contractor. During the term of the contract, it’s important for the public agency to monitor the actual progress by the contractor in meeting its objectives and plans as outlined in the outreach plan.