A Solution for Great Managers: Integrated Project Delivery

Integrated Project Delivery is a thoughtful process designed to enhance productivity, reduce costs and increase collaboration through all design and construction phases. The IPD approach is used by many construction professionals offering it to project owners as an additional benefit during the contracting process.

The Integrate Project Delivery system optimizes collaboration and communication early on to capture savings and changes before it’s too late.

Ideal Situation for Integrated Project Delivery

The IPD process requires participation from the project owner, designer, contractor and architect. This process increases value to all participants while reducing cost and waste during the project execution. The IPD process needs to start as early as possible during the design phase and must continue during the installation phase.

Starting the IPD during the design phase allows for a better understanding about the project requirements and common goals. Since IPD needs to start early, there will be more time during the pre-construction and planning process and less time during the project execution. This solution is applicable to all projects including those who are using BIM during the design process.

Benefits of IPD

The process brings many positive outcome to the project team and owner that translate into savings and efficiency. Using IPD the following benefits are obtained:

• Design conflicts are eliminated during the planning phase.
• Design is completed sooner as the team discusses the project execution plan.
• More visualization implies less construction time.
• Challenging situations are identified earlier during the process, reducing safety hazards.
• Accuracy and pricing improvements are identified during the pre-planning process.
• Scheduling optimization and constructability reviews are completed during the process.
• It serves as a tool to identify long lead items.
• IPD minimizes change orders during the construction process.
• Provides a cash flow projection as construction process gets better defined and planned.
• It is used to validate that the project can be completed within the specified budget.

IPD from the Owner’s Perspective

In addition to the aforementioned benefits, the IPD solution can help the project owner in many other ways. The tool is also used to establish target prices replacing the value engineering process. The schedule is linked and the project is conceptualized in phases reducing the amount of resources and congestion during the project execution.

In addition to schedule, the project team can look into additional features by using the savings to fund the extra items in the project. The IPD is based on just collaboration creating additional bonding between the project team members. BIM is also integrated during the pre-planning process to exploit additional benefits related to the IPD process. The AIA is developing standard that can be used by construction professionals to negotiate and execute an IPD agreement.

The outcome of the process is a high quality design minimizing project risks and contingency costs. The project owner is encouraged to use a QBS (Qualification based sourcing) instead of an open bid process, as the contractor will be engaged earlier in the process, prior to complete the finalization of the design.

Benefits of IPD from the AEC Team

The integrated project delivery implies less design time and more business opportunities by having resources available for future projects somewhat earlier than usual. The way IPD is structured around project financials and contracts also signifies increased revenue to the AEC team. Normally when the process kicks off, the IPD participants set a profit % based on how much the project will save.

Due to the extra planning, team reputation is also at its highest, as errors are reduced and construction insurance premiums will also be reduced. The amount of safety incidents is reduced due to the additional planning and sequencing process during construction.

For the contractor, the IPD presents an alternative of eliminating the bidding process by going into negotiations with the project owner.

Incentives and Cost

The IPD is a win-win situation for everyone. The contracts will present an opportunity to establish target prices or cost plus fixed fee because all the scope has already been reviewed and approved by the contractor. The RFP process can be bypassed and the savings or profits obtained during the process are split prior to start the construction process.

Do you used Integrated Project Delivery approach with starting a new contract? If not, is this an approach that you will implement on your next project? Leave us a comment below with your thoughts.