The Integrated Project Delivery Process
Construction delivery methods have been updated and revised over time due to pressures from industry to provide a better finished product, for less cost, while attempting to reduce the risk to the partners involved. Where Integrated Project Delivery (IPD) prevails and comes closer to achieving this goal then any other delivery method so far, is that it encourages a higher level of collaboration and team effort than ever before. IPD places an enormous emphasis on accountability between team members, and when you mix that with a system that is structured so that the partners share in the risks and rewards associated with the project, you get something special.
IPD sets out to recruit the major consultants and contractors during the validation phase or soon after validation has been completed. The validation phase is where the objectives and core values are established. At this point, a base target cost (BTC) (also known as a budget) is identified along with the Validation Report which, upon approval by the owner, outlines the basic objectives including building function and very high-level design.
Once validation is complete, the project moves into design. There are many unique strategies that IPD uses to encourage increased communication, collaboration, and efficiency such as the co-location space, Big Room, and Project Implementation Teams (PITs). The co-location space is simply a large physical work space dedicated to the project where each team member can co-locate during the design and construction phases of the project to increase communication between team members. The big room is a recurring meeting where a person from each team member, including the owner, participates in. Big room meetings can include hot topics, project updates, financial forecasting, construction drawing reviews, and any other related items that are deemed necessary to discuss as a group. PITs are smaller groups of team members, usually broken up by discipline, where more detailed collaboration and decisions are made outside of the big room. Throughout this phase, the budget is continuously updated to match design. Upon completion of the design phase, a final target cost (FTC) is obtained which then the team uses to set out and build the project.
The line between design and construction is not always clearly defined in IPD. At times, design may not be fully finished but construction may still begin. This is another way IPD excels over other delivery methods as it allows a more streamlined construction period. Once construction is fully underway, the big room meetings may die down, but the PITs still occur between necessary groups as needed in order to handle any issues that occur during construction. Requests for Information (RFIs) and change orders are typical of many other delivery methods but are virtually eliminated between team partners in IPD. For example, the contractor no longer needs to issue paperwork to the engineer in order to get a simple question answered, they can simply have a conversation. Conversely, the engineer no longer needs to issue a change order to the contractor and incur high change order prices when something needs to be added. If a cost is likely to occur from the change, a formal write up will still usually be required in order for the contractor to track the price, however all changes are typically done at cost instead of heavily marked up.
The incentive always exists for team members to assist each other because the entire team, including the client, shares in any profits created from coming in under budget. Sometimes scope is even shared across consultants or contractors if it is helpful or more cost effective to do so. Innovation is also encouraged due to the nature of IPD; time can be spent on seemingly unconventional designs with the hopes of reducing construction or material costs down the road. If successful, the contractor and engineer can ‘transfer budget’ between each other to help facilitate this.
The structure of IPD allows the owner’s dollar to stretch further than normal, and this is largely due to the team working essentially at cost, which includes burden, overhead, and a profit layer. The profit layer is predefined and is often determined as a percentage of the base target cost of that consultant or contractor. At project milestones, each team member is issued a section of their profit layer. This structure produces a low risk environment for the team; however it is predicated heavily on having the right team on board which is why aligning values in the validations stage is incredibly important to achieving a successful project.