Is Integrated Project Delivery the Right Fit for the Next Project with Your Trusted Business Partner? | Joubin Hassanein, Director, IPD & Lean Practice Shawmut Design & Construction
The ancient master builder was considered a design-build individual. The master builder was an oracle of the sciences, arts, crafts, and all things related to the build environment. In the 1900s, the master builder role split into two distinct roles: (1) the architect who was responsible for design only, possessing limited knowledge on how buildings were really built and (2) the contractor who was solely responsible for construction with very little understanding of design. Partially due to this separation, construction labor productivity saw very little gains when compared to other non-farm industries over the century that followed.
In recent years, the delivery of design and construction has changed partially due to the demand on buildings to become smarter and more efficient. The detail of legal and technical knowledge required to design and build today’s projects is too much for one person—even for the old master builder. Instead, a successful strategy is the creation of an integrated master building team—one that is comprised of all the necessary expertise areas but acts as a single enterprise.
While the construction industry clearly recognizes the benefits of early project collaboration, there are still barriers to real collaboration and considering a project as a single enterprise rather than individual P/L silos.
Real and fully integrated collaboration is precisely what the Integrated Project Delivery (IPD) method of contracting aims to accomplish. While there are differences in the forms of IPD contract documents, they all require signatories to behave as one cohesive unit without the traditional barriers.
Beyond just behavior or aspirational promises, signatories align their risks and rewards with the other contracting parties through robust indemnification provisions, shared insurance regimens, and contractual waivers. Importantly, each party to the contract puts its company’s profit at risk if predetermined project cost targets are not achieved. This creates a unity of interest amongst an IPD team that otherwise will not exist on a construction project.
An IPD agreement allow trades to join a project team much earlier than other conventional delivery methods. The separation of profit and direct cost allows trades to be brought on board before there is any design. Trade partners must then distinguish themselves and their teams as candidates that can best help the greater IPD team achieve its goals.
The premise is simple: each member of the IPD team is incentivized to contribute in whatever way is helpful to the greater team because the only mechanism for anyone to do better or worse on the project is for entire team/project to succeed. Great ideas can come from the surprising sources—whether it is the concrete trade partner suggesting something they have seen done by a sprinkler contractor or vice versa. The team leverages the collective experience of all IPD team members to achieve the goals.
Recently Brown University completed an 80,000-square-foot Engineering Research Center in the heart of their campus. The project was built under an IPD contract with seventeen (17) partners, including designers and trade partners. Led by Kieran Timberlake (architect) and Shawmut Design and Construction (CM) the group completely re-invented the project from its feasibility origins. The facility consisted of 20,000 square-feet of lab/research space that had no predefined use or researcher assigned until about half way through the project. In the end, the building was successfully completed three months ahead of schedule.
Since IPD target cost are typically lower than the project cost of similar project using conventional delivery methods, everyone, including the owner, must work together. Teams achieve target cost through elimination of waste (things that are not necessary for the building to function), innovation (finding a better way to accomplish those items that are required) and increased labor productivity through an extended planning phase that involves even the foremen from the trade partners.
The most critical step is for everyone to understand what is valuable. If there is more than one stakeholder representing the owner, they too must be aligned on what is considered valuable. These values will guide teams to make decisions that advance the project toward those values.
Brown University, and other higher education institutions, are becoming industry leaders on the east coast for this collaborative delivery method. Since the start of their Engineering Research Center, Brown University has embarked on four additional IPD projects—including most recently a Performing Arts Center with REX as the architect. In addition, Rhode Island School of Design (RISD) also started their first IPD project with NADAA as the architect. The project consists of a new residence building and renovations of two existing residence buildings. While the design team on these projects are different, many of the trade partners are the same across the projects.
Whether you work for an owner/developer, CM/GC, subcontractor, or design firm, IPD involves a new way of thinking about contractual relations. It will not happen unless there is a firm commitment from the principals and/or senior officers of each IPD team member. IPD is not for everyone. The following bullet points are some common characteristics we have found as it relates to each of team member:
Culture that embraces collaboration, creativity, transparency, and innovation. Flexibility. One common strategy of IPD projects is co-location. Here, representatives with authority to bind their companies work in the same office location at various times of the Project. All members of the team, including Trade Contractors, must be agree to be subject to an audit process to establish direct cost / overhead from profit. Willingness to assign representatives that have the autonomy to made decisions on behalf of the organization. A management team at the project level made up of the owner, contractor and architect need to make majority of the decisions on an IPD project. Any party that has a requirement for executive oversight on decisions would struggle with this delivery method. The team representative of each member must be authorized to make decisions on their entity’s behalf or seek the necessary input from influencers within their organizations so that the team can continuously move forward.
The Owner drives the decision to go to IPD. Higher educational institutions and hospitals have been on the forefront of the IPD contracting method.
Owners that focus on experimentation and/or research are attracted to IPD. If you have a strong relationship with such an experimental owner customer, perhaps you can research this delivery method together to see if it may fit for your next project.
Owners must be able to prioritize their values, in particular competing interest from different departments.
A CM must exhibit a culture that is well aligned with the critical behaviors of trust collaboration. CMs must be open to full transparency. A CM acts more as a facilitator of the collaboration between the various partners. A CM is heavily relied upon to distinguish and evaluate the various players of the proposed trade partners. Since team composition is paramount, a CM plays a critical role informing the selection process. A CM must be open to dedicating their best resources for an extended time period.
CMs along with the Architect and Owner play a critical role in decision making for the project, at the project level as well as at the executive level should it be necessary.
Representatives need to be skilled. In the moment, they need to be capable of estimating, scheduling, understanding/articulating their approach to construction. They must also have a well-developed understanding of the materials of their trade. The Trade Partners must be prepared to accommodate a high time commitment to the project from their skilled representatives.
Designers must be comfortable allowing trades, contractors, and owners in at the early genesis of their ideas, not just when they are partially and/or fully developed.
Designers must be comfortable to allow value decisions to be made by the project management team (owner, contractor and architect). Rather than exclusively within the design professional’s exclusive domain, this triparty group now determines specialty items relating to the design. Again, trust emerges as a key attribute for all parties.
Undoubtedly, not everyone has the resources or interest to take on an IPD project, but for those that do and are looking for a different way to work together, IPD is more than worthwhile. IPD is a means for the construction industry to improve on efficiency, leverage the most that lean construction has to offer, and in many ways return to the days of the master builder.
About the Author
Joubin has extensive experience as a construction professional with a long and successful track record on operational excellence. He has been with Shawmut for more than 11 years delivering authentic leadership with a focus on strong client experience.