diff --git a/app/controllers/bundle_contexts_controller.rb b/app/controllers/bundle_contexts_controller.rb
index c9ab1aa7..5ef50f6f 100644
--- a/app/controllers/bundle_contexts_controller.rb
+++ b/app/controllers/bundle_contexts_controller.rb
@@ -5,6 +5,9 @@ def index
 
   def create
     @bundle_context = BundleContext.new(bundle_contexts_params)
+    
+    # TODO: present a nicer error in the app than default Rails error page (#310)
+    #   (there is a before_save callback to create the bc.output_dir)
     if @bundle_context.save
       render :create
     else
diff --git a/app/models/bundle_context.rb b/app/models/bundle_context.rb
index dcb65e80..f26c6a03 100644
--- a/app/models/bundle_context.rb
+++ b/app/models/bundle_context.rb
@@ -1,6 +1,9 @@
+require 'fileutils'
+
 class BundleContext < ApplicationRecord
   belongs_to :user
   has_many :job_runs
+  before_save :verify_output_dir
 
   validates :bundle_dir, :content_metadata_creation, :content_structure, :project_name, presence: true
   validates :staging_style_symlink, inclusion: { in: [true, false] }
@@ -44,37 +47,41 @@ def assembly_staging_dir
     Settings.assembly_staging_dir
   end
 
-  def normalize_bundle_dir
-    self[:bundle_dir].chomp("/") if bundle_dir
+  def output_dir
+    @output_dir ||= "#{normalize_dir(Settings.job_output_parent_dir)}/#{user.sunet_id}/#{bundle_dir}"
   end
 
   def progress_log_file
-    '/dor/preassembly' # FIXME: (#78)
+    @progress_log_file ||= File.join(output_dir, "#{project_name}_progress.yml")
   end
 
+  # TODO: See #274. Possibly need to keep for SMPL style projects (if they don't use manifest?)
   def stageable_discovery
     {}
   end
 
+  # TODO: delete everywhere in code as single commit (#262)
   def accession_items
     nil
   end
 
+  # TODO: Delete everywhere in code as single commit (#227)
   def content_exclusion
-    # FIXME: Delete everywhere in code (#227)
     nil
   end
 
+  # TODO: Delete everywhere in code as single commit (#228)
   def file_attr
-    nil # FIXME: can get rid of this (#228)
+    nil
   end
 
+  # TODO: delete everwhere in code as single commit (#230)
   def validate_files?
-    false # FIXME: delete everwhere in code (#230)
+    false
   end
 
+  # TODO: find where this is used as a conditional and delete code that won't be executed and this method (#231)
   def content_tag_override?
-    # TODO: find where this is used as a conditional and delete code that won't be executed (#231)
     true
   end
 
@@ -98,8 +105,8 @@ def manifest_rows
 
   def manifest_cols
     {
-      label: 'label',
-      source_id: 'sourceid',
+      label: 'label', # only used by SMPL manifests
+      source_id: 'sourceid', # only used by SMPL manifests
       object_container: 'object', # object referring to filename or foldername
       druid: 'druid'
     }
@@ -107,12 +114,39 @@ def manifest_cols
 
   private
 
+  def job_output_parent_dir
+    @job_output_parent_dir ||= Settings.job_output_parent_dir
+  end
+
+  def normalize_dir(dir)
+    dir.chomp('/') if dir
+  end
+
+  def normalize_bundle_dir
+    self[:bundle_dir] = normalize_dir(bundle_dir)
+  end
+
+  def verify_output_dir
+    if persisted?
+      # FIXME: or should we just try to create it?
+      raise "Output directory (#{output_dir}) should already exist, but doesn't" unless Dir.exist?(output_dir)
+    else
+      raise "Output directory (#{output_dir}) should not already exist" if Dir.exist?(output_dir)
+      begin
+        FileUtils.mkdir_p(output_dir)
+      rescue SystemCallError => e
+        raise "Unable to create output directory (#{@output_dir}): #{e.message}"
+      end
+    end
+  end
+
   def verify_bundle_directory
     return if errors.key?(:bundle_dir)
     errors.add(:bundle_dir, "Bundle directory: #{bundle_dir} not found.") unless File.directory?(bundle_dir)
   end
 
   def verify_content_metadata_creation
-    errors.add(:content_metadata_creation, "The SMPL manifest #{smpl_manifest} was not found in #{bundle_dir}.") if smpl_cm_style? && !File.exist?(File.join(bundle_dir, smpl_manifest))
+    return unless smpl_cm_style?
+    errors.add(:content_metadata_creation, "The SMPL manifest #{smpl_manifest} was not found in #{bundle_dir}.") unless File.exist?(File.join(bundle_dir, smpl_manifest))
   end
 end
diff --git a/db/schema.rb b/db/schema.rb
index 6f48cccf..bf30d58a 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -12,13 +12,16 @@
 
 ActiveRecord::Schema.define(version: 2018_09_14_014133) do
 
+  # These are extensions that must be enabled in order to support this database
+  enable_extension "plpgsql"
+
   create_table "bundle_contexts", force: :cascade do |t|
     t.string "project_name", null: false
     t.integer "content_structure", null: false
     t.string "bundle_dir", null: false
     t.boolean "staging_style_symlink", default: false, null: false
     t.integer "content_metadata_creation", null: false
-    t.integer "user_id", null: false
+    t.bigint "user_id", null: false
     t.datetime "created_at", null: false
     t.datetime "updated_at", null: false
     t.index ["user_id"], name: "index_bundle_contexts_on_user_id"
@@ -27,7 +30,7 @@
   create_table "job_runs", force: :cascade do |t|
     t.string "output_location"
     t.integer "job_type", null: false
-    t.integer "bundle_context_id", null: false
+    t.bigint "bundle_context_id", null: false
     t.datetime "created_at", null: false
     t.datetime "updated_at", null: false
     t.index ["bundle_context_id"], name: "index_job_runs_on_bundle_context_id"
@@ -40,4 +43,6 @@
     t.index ["sunet_id"], name: "index_users_on_sunet_id", unique: true
   end
 
+  add_foreign_key "bundle_contexts", "users"
+  add_foreign_key "job_runs", "bundle_contexts"
 end
diff --git a/spec/controllers/bundle_contexts_controller_spec.rb b/spec/controllers/bundle_contexts_controller_spec.rb
index bd612c15..c0985490 100644
--- a/spec/controllers/bundle_contexts_controller_spec.rb
+++ b/spec/controllers/bundle_contexts_controller_spec.rb
@@ -38,7 +38,11 @@
 
     context "POST create" do
       context "Valid Parameters" do
-        before { post :create, params: params }
+        let(:output_dir) { "#{Settings.job_output_parent_dir}/#{subject.current_user.sunet_id}/spec/test_data/smpl_multimedia" }
+        before do
+          Dir.delete(output_dir) if Dir.exist?(output_dir)
+          post :create, params: params
+        end
 
         it 'passes newly created object' do
           expect(assigns(:bundle_context)).to be_a(BundleContext).and be_persisted
@@ -53,10 +57,12 @@
           expect(bc.bundle_dir).to eq "spec/test_data/smpl_multimedia"
         end
         it "persists the JobRun" do
+          Dir.delete(output_dir) if Dir.exist?(output_dir)
           expect { post :create, params: params }.to change(JobRun, :count).by(1)
         end
 
         it "fails if job_type is nil" do
+          Dir.delete(output_dir) if Dir.exist?(output_dir)
           params[:bundle_context].merge!(job_runs_attributes: {"0" => { job_type: "" }})
           expect { post :create, params: params }.not_to change(JobRun, :count)
         end
diff --git a/spec/models/bundle_context_spec.rb b/spec/models/bundle_context_spec.rb
index c9a8ccc7..a90e0457 100644
--- a/spec/models/bundle_context_spec.rb
+++ b/spec/models/bundle_context_spec.rb
@@ -48,6 +48,10 @@
   it { is_expected.to validate_presence_of(:content_metadata_creation) }
   it { is_expected.to belong_to(:user) }
 
+  it 'bundle_dir has trailing slash removed' do
+    expect(bc.bundle_dir).to eq "spec/test_data/images_jp2_tif"
+  end
+
   describe '#bundle' do
     it 'returns a PreAssembly::Bundle' do
       expect(bc.bundle).to be_a(PreAssembly::Bundle)
@@ -63,12 +67,6 @@
     end
   end
 
-  describe "#normalize_bundle_dir" do
-    it "removes the trailing forward slash" do
-      expect(bc.normalize_bundle_dir).to eq "spec/test_data/images_jp2_tif"
-    end
-  end
-
   describe "#content_tag_override?" do
     it "is set to true" do
       expect(described_class.new.content_tag_override?).to be true
@@ -93,8 +91,19 @@
     end
   end
 
+  describe 'output_dir' do
+    it 'returns "Settings.job_output_parent_dir/user_id/bundle_dir"' do
+      # Settings.job_output_parent_dir for test from config/settings/test.yml as 'log/test_jobs'
+      # bc.user.user_id above as 'Jdoe'
+      # bc.bundle_dir above as 'spec/test_data/images_jp2_tif'
+      expect(bc.output_dir).to eq 'log/test_jobs/Jdoe/spec/test_data/images_jp2_tif'
+    end
+  end
+
   describe "#progress_log_file" do
-    skip("Need to figure out where to set this path via planning meeting 9/10/18")
+    it 'is project_name + "_progress.yml" in output_dir' do
+      expect(bc.progress_log_file).to eq "#{bc.output_dir}/#{bc.project_name}_progress.yml"
+    end
   end
 
   describe "manifest_rows" do
@@ -129,4 +138,44 @@
       )
     end
   end
+
+  describe '#verify_output_dir (private method)' do
+    before(:each) do
+      FileUtils.mkdir_p(bc.send(:job_output_parent_dir))
+    end
+    context 'bundle_context is new' do
+      it 'creates directory' do
+        bc.bundle_dir = 'i_do_not_exist'
+        Dir.delete(bc.output_dir) if Dir.exist?(bc.output_dir)
+        expect(Dir.exist?(bc.output_dir)).to eq false
+        bc.send(:verify_output_dir)
+        expect(Dir.exist?(bc.output_dir)).to eq true
+        Dir.delete(bc.output_dir)
+      end
+      it 'raises error if directory already exists' do
+        bc.bundle_dir = 'i_exist'
+        FileUtils.mkdir_p(bc.output_dir) unless Dir.exist?(bc.output_dir)
+        expect(Dir.exist?(bc.output_dir)).to eq true
+        exp_msg = "Output directory (#{bc.output_dir}) should not already exist"
+        expect { bc.send(:verify_output_dir) }.to raise_error(RuntimeError, exp_msg)
+        Dir.delete(bc.output_dir)
+      end
+      it "raises error if directory can't be created" do
+        orig = Settings.job_output_parent_dir
+        Settings.job_output_parent_dir = '/boot'
+        regex_exp_msg = Regexp.new(Regexp.escape("Unable to create output directory (#{bc.output_dir}): Permission denied @ dir_s_mkdir - /boot"))
+        expect { bc.send(:verify_output_dir) }.to raise_error(RuntimeError, regex_exp_msg)
+        Settings.job_output_parent_dir = orig
+      end
+    end
+    context 'bundle_context is not new' do
+      it "raises error if directory doesn't exist" do
+        Dir.delete(bc.output_dir) if Dir.exist?(bc.output_dir)
+        bc.save # creates output dir
+        Dir.delete(bc.output_dir) if Dir.exist?(bc.output_dir)
+        exp_msg = "Output directory (#{bc.output_dir}) should already exist, but doesn't"
+        expect { bc.send(:verify_output_dir) }.to raise_error(RuntimeError, exp_msg)
+      end
+    end
+  end
 end