Harry Humphry Mellon (born September 26, 1946) is a retired Lieutenant Colonel of the United States Army, American businessman, inventor of Job Order Contracting, entrepreneur, and founder and Chairman of The Gordian Group, Inc.
In 1982, Mellon conceived the idea of Job Order Contracting. He was working as the Chief Engineer at the Supreme Headquarters Allied Powers Europe (SHAPE) in Mons, Belgium. In 1985, Mellon implemented the Job Order Contracting concept for the U.S. Army, which was called the "Mellon Plan" at the time. Following implementation at the U.S. Army, Mellon moved the idea into the U.S. Air Force and Navy. In 1990, Mellon started The Gordian Group for the sole purpose of providing the services, software, data and documents that would make facility and infrastructure owners successful at Job Order Contracting.
Early years
Mellon was born September 1946, in San Mateo, California to Commander Hugh and Margret Mellon, USN. The Mellons had five sons and a daughter of which Harry was the eldest. Mellon moved to Hawaii, Chicago and Guam before his family finally settled on Coronado Island in California. Mellon graduated from Coronado High School in 1964. Much to the disappointment of his father, a Navy officer and World War II POW, Mellon enlisted in the Army in 1965. Hugh Mellon's parting words to his son when dropping Mellon off to report for duty was, "Son, this is lowest day of your life, you can go no lower."
Military service
Mellon completed basic training at Fort Polk, Louisiana and Engineer Officer Candidate School at Fort Belvoir, Virginia and was commissioned a second lieutenant at the age of 19. Mellon served in Vietnam as an Engineer Company Commander in the Mekong Delta. His primary mission was the construction of the Đồng Tâm Base Camp for the 9th Infantry Division. Following his service in Vietnam, Mellon was assigned to various Army installations including the Presidio of San Francisco. While serving at the Presidio in 1971, Mellon was responsible for coordinating the massive Federal Cleanup effort after the collision of two oil tankers under the Golden Gate Bridge. Following his service in San Francisco, Mellon attended San Diego State University, where he earned an undergraduate degree in Mathematics in 1973. Mellon was then assigned as the Resident Engineer for the Army Corps of Engineers at Langley Air Force Base, VA, where he was responsible for the timely construction of a number of facilities critical to the activation of the first squadron of F-15 fighter aircraft. While serving at Langley, Mellon earned a master's degree in business administration from George Washington University. Mellon was then selected for an appointment to the faculty of the Department of Mathematics at the United States Military Academy at West Point, NY. In preparation for that assignment, Mellon spent two years at Princeton University earning a master's degree in Civil Engineering. In 1978, Mellon joined the West Point faculty and taught Mathematics for three years. Following West Point, Mellon graduated from the Armed Forces Staff College and was assigned as the Chief Engineer, Supreme Headquarters Allied Powers Europe (SHAPE) in Mons, Belgium where he invented Job Order Contracting. In 1984, Mellon was reassigned as the Facilities Engineer for the United States Military Academy. That assignment was interrupted in January 1985 when Mellon was reassigned to Corps of Engineers Headquarters for the purpose of developing and implementing the Job Order Contracting process for the United States Department of Defense. Mellon retired from the U.S. Army in July 1986 after 21 years of active service.
Job Order Contracting history
1982-1984: The Origins of JOC
Job Order Contracting (JOC) has become a multibillion-dollar industry focused on expedited construction procurement. Mellon invented Job Order Contracting in January 1982 as a way to solve dire repair and maintenance issues at SHAPE. SHAPE Headquarters was built in 1966 following France's decision to leave the military arm of NATO, thereby forcing headquarters to be moved from Versailles, France to Mons, Belgium. The entire process of construction was completed in six months.The History of Supreme Headquarters Allied Command Europe Allied Command Operations, Supreme headquarters Allied Powers Europe
When Mellon arrived at SHAPE, only two options to accomplish the needed repairs and upgrades existed: 1) Work with the in-house workforce who were extremely talented at smaller, single traded projects; 2) Contract out to the local community for the larger, more complex jobs. The process for contracting out stipulated competitive bidding for each requirement, regardless of size, as well as completing full design and specifications in several different languages. Typically, this process took about 12 to 14 months. The other problem that needed to be solved was a lack of control over contractors. Contractors were bidding low in order to win jobs and then making up the shortfall with claims and change orders.
The typical timeframe (12–14 months) was unacceptable, as the backlog of repairs and upgrades continued to grow along with pressure from senior officers to accomplish the work. A more responsive way of contracting out work had to be found, specifically, a solution for jobs ranging in value from $50,000 to $500,000. Mellon's senior staff provided invaluable insight and support in developing various options. That staff consisted of Lieutenant Colonel Hartmut Paul, German Army; Major John F. Miniclier, U.S. Army, Lieutenant Colonel John Baston, Royal Engineers and Chief Warrant Officer Jim Crowley, U.S. Army.
The idea of Job Order Contracts was born out of the concept of on-call contractors similar to the way architects and engineers were hired at the time for miscellaneous work. The main obstacle in procuring on-call contractors was the requirement to award all construction contracts to the lowest responsive bidder. Mellon and his staff looked at existing indefinite quantity/indefinite delivery contracts (IDIQ) being used at the time in which the owner defined the task and quantities and the contractor bids a price for each task. These contracts were often single traded and resulted in an unbalanced bid structure causing an owner to overpay for construction.
At that point, that they decided to do something unique in public contracting: the owner would set the price. For example: the owner would select a particular work task, such as installing a square yard of carpeting. The owner would then establish the price that they were willing to pay for installation of one square yard. The price would include the direct cost of materials, equipment, and labor. The owner would not include any profit or overhead in that price.
Mellon and his team developed a full collection of tasks, approximately 10,000, and then developed prices for each task. The idea was simple, let the contractor bid a markup to the task prices. Not a markup for each individual task price, but a single markup for all of the task prices. The lowest markup would be the lowest bid and the contractor that bid it would get the contract. The concept of the "open end construction contract" was first tested at SHAPE in 1982. The first contract was awarded to the Belgium firm Lixon, S.A.
1984-1986: The "Mellon Plan" becomes JOC
In 1984, Mellon was reassigned as the Facilities Engineer for the United States Military Academy at West Point. Upon arriving at West Point, Mellon noticed the same facility problems that existed at the SHAPE headquarters in Belgium. Since there were no open-ended construction procurement tools, Mellon was forced to use the traditional design/bid/construct model for all contract work. Colonel Bill Badger, USMA Engineer, always aiming to find methods to raise standards and make improvements, was Mellon's supervisor at West Point. Badger and Mellon shared the same frustrations of the standard contracting process. During the course of many discussions about their frustrations of the standard contracting process, Mellon shared the idea he used during his SHAPE project just a few years earlier.
In late November 1984, during the United States Army Corps of Engineers Worldwide Engineers' Conference in Philadelphia, Badger spoke to Brigadier General Jerry Helms, the Southwestern Division Engineer, about the SHAPE project and arranged a breakfast meeting between Mellon and Helms. Prior to the breakfast, Helms mentioned the idea to the Chief of Engineers, Lieutenant General Elvin R. "Vald" Heiberg. Heiberg joined the breakfast meeting with Mellon, Helms, and Badger. Mellon explained the concept of the SHAPE project to the group. Though they were attentive and patient throughout the meeting, Heiberg and Helms did not demonstrate a lot of emotion. Though they remained noncommittal, both Generals did agree that this was an idea worth pursuing sometime in the future.
Heiberg, while speaking later that day at the conference, announced that he had some prepared remarks but he would be putting those remarks aside because the answer to most of the questions people had was the "Mellon Plan." The audience looked around in an attempt to determine who was behind the "Mellon Plan." Sitting next to Mellon was a Corps of Engineers civilian, Jim Lovo. Lovo turned to Mellon, having met him only moments before, and asked, "You wouldn't happen to be the Mellon of the Mellon Plan?" Mellon responded, "Well, as a matter of fact, I probably am." Lovo wished Mellon luck with his new plan, and later became instrumental in the success of Job Order Contracting in the federal government.Legion of Merit Medal for Implementation of Job Order Contracting
Following the lunch and closing remarks of Heiberg, Mellon was approached by Major General Mark Sisinyak, who was the Director of Military Programs for the Office of the Chief of Engineers. Sisinyak ordered Mellon, "my office 8:00 a.m. Monday morning."
Mellon replied quickly, "Yes sir!"
1985: A Rough Start to JOC
General Sisinyak, made the decision that Monday morning to put together a taskforce to go to Europe in the early part of January 1985 to study the SHAPE project and to see how the process worked and what the results were. The task force gave a unanimous recommendation that the Corps of Engineers pursue adopting the same type of program. Sisinyak appointed Mellon to the task of implementing the "Mellon Plan" within the U.S. Army's facilities system, and assigned Mellon to the office adjacent his. A senior executive civilian, Chuck Smith, headed the management group under Sisinyak that Mellon worked with. Also working in that group were Jim Lovo, Pete Amquist and Dave Spivey.
The first order of business was to come up with a more suitable name than the "Mellon Plan." Open ended construction contract was not acceptable because no one in Washington would approve anything "open ended." Dave Spivey said, "You know, when a customer calls the Facility Engineer and issues a work request, the Army generates a job order for that work request, so why don't we call that contract a Job Order Contract?" That was the day, in January 1985, that the "Mellon Plan" became Job Order Contracting or JOC.
The first step in implementing JOC within the U.S. Army's facilities system was to develop a management plan. First, the team needed to determine if the process was legal and solicit support both on Capitol Hill and in the Pentagon. Next, they needed to designate a test base or bases for the concept. Finally, and most critical, they needed to develop the contract documents. Lovo was assigned to work directly with Mellon on the project and the two proceeded to execute the plan.