Developers and facilities owners nationwide are spearheading the Integrated Project Delivery (IPD) movement in the design and construction management industry. Due to long-term ownership and aggressive goals of high performing buildings at lower costs toward energy and potable water expenditures, an increasing number of building owners are constantly seeking new avenues to streamline risk and opportunities associated with standard contractual relationships such as Construction Manager-At Risk, Owner-Architect Agreement (AIA-B141), and Owner-Contractor Agreement (AIA-A101).
Long-term developers and facilities owners nationwide are spearheading the Integrated Project Delivery (IPD) movement in the design and construction management industry. The definition of IPD, as described by the AIA California Council is, “a project delivery approach that integrates people, systems, business structures, and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction.
“IPD principles can be applied to a variety of contractual arrangements and IPD teams can include members well beyond the basic triad of owner, architect, and contractor. In all cases, integrated projects are uniquely distinguished by highly effective collaboration among the owner, the prime designer, and the prime constructor, commencing at early design and continuing through to project handover.” (AIA and AIA California Council, January 2010)
Due to long-term ownership and aggressive goals of high performing buildings at lower costs toward energy and potable water expenditures, an increasing number of building owners are constantly seeking new avenues to streamline risk and opportunities associated with standard contractual relationships such as Construction Manager-At Risk, Owner-Architect Agreement (AIA-B141), and Owner-Contractor Agreement (AIA-A101). Each contractual relationship offers a variety of risks and rewards for the entire project team, however, with the advent of LEED (Leadership in Energy and Environmental Design), rising demand for building materials, petroleum and natural gas as well as increasing labor costs, all add additional layers of complexity and potential risks for the client and project team.
With additional potential risks threatening the project objectives, the Integrated Project Delivery (IPD) method provides a refreshing and radical alternative to standard construction contracts – one that results in mutual risk and reward sharing among all major team members. IPD offers an alternative in design and construction management in which obstacles between project team members are removed, encouraging open dialogue , and reducing inter-disciplinary conflicts by using BIM (Building Information Modeling) technology and an open-book approach. As IPD develops, more building owners, architects and contractors are discovering that committing to IPD allows for favorable adjustments to the process itself that would benefit the project as a whole.
In January of 2010, the American Institute of Architects (AIA) California Council compiled a study on Integrated Project Delivery, which was led by Jonathan Cohen, FAIA, LEED AP. The study is an in-depth (and objective) report on the benefits and issues confronting the IPD process and numerous developers, facility owners, architects and contractors were interviewed – all offering different perspectives and opinions of the process itself.
The major Integrated Project Delivery principles stated by AIA California Council that are vital to the process’ success are:
- Early Involvement of Key Participants
- Shared Risk and Reward
- Multi-Party Contract
- Collaborative Decision Making and Control
- Liability Waivers Among Key Participants
- Jointly Developed and Validated Project Goals
More contractors and architects are finding out that getting started with the IPD process does not require an all – or – nothing commitment. The IPD process allows for modifications that are best suited for each individual project, depending on its needs, requirements and associated risks. Modifying the IPD process can be done by one or more project team members in the executive level, even if all parties aren’t on board. Contractors, in general, have been much more open and interested in learning IPD than architects as the contractors have displayed a willingness to collaborate and innovate on both design and construction management processes. In this recessionary period, architecture firms have noticeably taken on increased roles in the construction administration process and it is my belief that architects would quickly learn that benefits of the IPD process greatly out-weigh the risks, and as a result, we will see an exponential growth in the use of IPD process among architects over the next 5 to 10 years.
The IPD process is not without its supporters and critics. Supporters point out that one of IPD’s biggest strength is the increase in predictability of cost and schedule, which lowers shared risk among various project team members. Another potent benefit of IPD is that it also eliminates prepared and unknown contingencies, which as a result, saves the client a lot of money and allows the flexibility of transferring monetary resources into other areas of the project if needed. Also, the IPD process encourages financial incentives for the three major team members – Owner, Architect and Contractor, that can be achieved through higher coordination levels of quality assurance / control, risk management, schedule tracking, cost control, and monitoring.
The major downside, at least financially, with the IPD process is that more inter-disciplinary coordination and effort is required up front so IPD will appeal to owner-operators such as long-term developers and facilities mangers and not so much to commercial developers who are looking for quick profits and have low tolerance for high first costs. Another concern for architects is the legal implications of transferring the BIM model to the Construction Manager (CM) at the job site, where the project team members meet for weekly project performance reviews. Once the BIM model is in the hands of the CM and several modifications are added to that specific BIM model, the model itself no longer belongs to the architect, for liability reasons. Also, some architects have concerns with the BIM model itself falling into ownership confusion. To properly address the BIM concerns, preventive actions should be established by drafting a special agreement either adding into the IPD contract or Errors & Omissions insurance policies regarding sharing BIM models with the CM.
With a growing number of developers and state / local government regulations now requiring a certain level of LEED certification (or IGCC ASHRAE 189.1 equivalent) for new construction and existing renovations, the IPD process can greatly assist the project team’s capabilities in achieving the project’s LEED objectives. LEED points are awarded for both design and construction quality and management that an integrated project team can better navigate through the arduous LEED process, predict costs and forecast savings with greater accuracy.
The main contributions to the success of Integrated Project Delivery are the development of trust and respect among various team members – trust between the developer, facility owner, architect and contractor that their shared actions and shared risk / rewards are in the project’s best interests. Respect is developed through a healthy balance of sharing knowledge on subject matters, listening to all project team members, and cohesively developing an effective and open communication management plan.
In summary, the Integrated Project Delivery method is a work in progress that will be revisited, fine-tuned, and improved through lessons learned, and information sharing – which will result in financial and operating benefits for the design and construction industry.
Engineered Systems (ES) Magazine---Learn the real dedication to Lean that requires a focus on change, the identification of areas of improvement across the enterprise and a commitment to monitor continuously. The real challenge to Lean, however, requires this first change, a shift in the culture. Consumer products manufacturers are early on in their Lean journey compared to companies across industry, with 56% less than a year to 3 years into it. By leveraging external expertise and taking small steps in their Lean programs, these manufacturers are setting their sights on reducing cost, driving down inventory, and sustaining a culture of Lean throughout the enterprise. But success is being found by those Best in Class consumer products manufacturers that go the next step by tying their Lean objectives into business opportunities, and by measuring the impact of the Lean program. These companies are placing more emphasis on monitoring the metrics that are tied with success, including inventory and on-time delivery, to truly maximize the competitive advantage to be responsive to the customer. Request Your Free Subscription to Engineered Systems (ES) Magazine!
© 2010 – 2011, Ed LeBard. All rights reserved. Do not republish.