Project Delivery Methods
True Integrated Project Delivery requires early involvement of the Constructor. Multi-Party Agreements, in the contractual forms of a Project Alliance, Single Purpose Entity, and Relational Contracts, define the process, decision-making procedure, sequencing of tasks, compensation, risk management, etcetera to be followed.
In a multi-party agreement (MPA), the primary project participants execute a single contract specifying their respective roles, rights, obligations, and liabilities. In effect, the multi-party agreement creates a temporary virtual, and in some instances formal, organization to realize a specific project. Despite the custom nature of multi-party agreements, three general forms have emerged: Project Alliances; Relational Contracts; and Single Purpose Entities.
In a Project Alliance, the owner guarantees the direct costs of non-owner parties, but payment of profit, overhead and bonuses depend on project outcome. Significant decisions are made by facilitated consensus and the parties waive liability, except in the case of willful default.
A Single Purpose Entity (SPE) is a temporary, but formal, legal structure created to realize a specific project. In an integrated SPE, key participants have an equity interest based on their individual skill, creativity, experience, services, access to capital or financial contribution. Equity owners are paid for the services they provide, with additional compensation tied to overall project success.
In Relational Contracts, the parties agree to limit their liability to each other, but it is not completely waived. Compensation structures have project-based incentives. Decisions are developed on a team basis, with the owner retaining final decision rights in the absence of team consensus.
In some instances, participants may be required to use a delivery model that does not allow a constructor to be involved early in conceptualization (i.e. Design-Bid-Build). Other models, however, rely on earlier constructor involvement and would be more amenable to utilizing IPD methods (i.e. Construction Manager at Risk and Design-Build). Each of these traditional delivery methods present unique challenges to integration.
Design Bid Build is the most prevalent construction project delivery model in the U.S. and also here in the Middle East. DBB offers the owner the market advantage of a regimented design phase followed by separate bidding and construction phases. The project is designed with little input from the parties actually constructing the project. In many markets, and especially those with goverment mandated BIM, publically procured contacting requirements interfere with or prohibit early involvement by the Constructor. A Design-Bid-Build delivery model is somewhat antithetic to the goals of BIM and IPD.
To alleviate these restrictions, owners may choose to tender the project at an earlier stage. The consequence of early bids is a loss in their accuracy and the necessity to accept bids with large contingencies. This strategy may also result in added amounts of redesign, requiring an adjustment to the designer's compensation.
IPD
It has been eight years since the National AIA and its California Council published the guide to Integrated Project Delivery. Its introduction states, "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."
The 2007 document was the impetus for development of LOD definitions and for the current AIA Digital Practice documents including Building Information Modeling and Digital Data Exhibit (E203).
The guide contains reference to the now well-known MacLeamy Curve, which was first debuted in 2004. This graphic is famous to BIM users because it depicts the shift of effort which we know as "front end loading". The justification for the shift is the fact that effort is moved to an earlier stage, when the cost impact (risk) of making changes is less.
In addition to shifting design decision making forward, redefinition of phases is driven by two key concepts: the integration of early input from constructors, installers, fabricators and suppliers as well as designers; and the ability to model and simulate the project accurately using BIM tools.
Integrated Project Delivery does not require BIM. The 2007 guide states that "BIM is an evolving technology and is not used consistently in the industry at the present time." In the near decade that has passed since its publication, these statements about IPD have become the framework within which BIM users have strived to bring about change within the AECO industry.
Integrated delivery strengthens the project team’s understanding of the owner’s desired outcomes. IPD allows constructors to contribute their expertise early in the design process resulting in improved quality and financial performance. It allows the designer to benefit from early contribution of the constructor’s expertise, increasing the likelihood that project goals will be achieved.
Integrated Project Delivery is built on collaboration, which in turn is built on trust. Trust-based collaboration encourages parties to focus on project outcomes rather than their individual goals. Innovation is stimulated when ideas are freely exchanged among all participants. In an integrated project, ideas are judged on their merits, not on the author’s role or status.
Key participants are involved from the earliest practical moment. Combined knowledge and expertise is most powerful during the project’s early stages where informed decisions have the greatest effect. The thrust of IPD is not to reduce design effort, but rather to greatly improve design results, streamlining the much more expensive construction effort.
IPD represents a behavioral sea change in the industry by breaking down the silos of responsibility, requiring close cooperation among all participants. The focus is on collectively achieving shared goals rather than meeting individual expectations. Success is measured by the degree to which common goals are achieved.
Traditional contracting contemplates project participants operating within their own separate silos of responsibility. IPD seeks to break down these barriers by having all major participants focus on achieving shared goals. Most traditional construction contracts seek to limit the parties to whom duties are owed. In direct contrast, IPD proceeds under the theory that projects run more smoothly where all parties formally recognize what exists in practice – that every construction projects is a network of inter-linked roles, commitments and mutual promises.
Source: "Integrated Project Delivery: A Guide" published by the American Institute of Architects, National and California Councils, 2007.
True Integrated Project Delivery requires early involvement of the Constructor. Multi-Party Agreements, in the contractual forms of a Project Alliance, Single Purpose Entity, and Relational Contracts, define the process, decision-making procedure, sequencing of tasks, compensation, risk management, etcetera to be followed.
In a multi-party agreement (MPA), the primary project participants execute a single contract specifying their respective roles, rights, obligations, and liabilities. In effect, the multi-party agreement creates a temporary virtual, and in some instances formal, organization to realize a specific project. Despite the custom nature of multi-party agreements, three general forms have emerged: Project Alliances; Relational Contracts; and Single Purpose Entities.
In a Project Alliance, the owner guarantees the direct costs of non-owner parties, but payment of profit, overhead and bonuses depend on project outcome. Significant decisions are made by facilitated consensus and the parties waive liability, except in the case of willful default.
A Single Purpose Entity (SPE) is a temporary, but formal, legal structure created to realize a specific project. In an integrated SPE, key participants have an equity interest based on their individual skill, creativity, experience, services, access to capital or financial contribution. Equity owners are paid for the services they provide, with additional compensation tied to overall project success.
In Relational Contracts, the parties agree to limit their liability to each other, but it is not completely waived. Compensation structures have project-based incentives. Decisions are developed on a team basis, with the owner retaining final decision rights in the absence of team consensus.
In some instances, participants may be required to use a delivery model that does not allow a constructor to be involved early in conceptualization (i.e. Design-Bid-Build). Other models, however, rely on earlier constructor involvement and would be more amenable to utilizing IPD methods (i.e. Construction Manager at Risk and Design-Build). Each of these traditional delivery methods present unique challenges to integration.
Multi-Prime
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| Multi-Prime |
Multi-Prime is commonly utilized within a Design-Bid-Build process. In this form of project delivery, the owner contracts directly with multiple contractors or trades. The owner acts as the general contractor on its own project. Multi-Prime project delivery requires that the owner provide substantial management services, and accordingly must have extensive experience and internal resources to perform the tasks which are typically managed by a general contractor or construction manager. When Multi-Prime is used for Design-Bid-Build, it offers few opportunities for IPD.
Construction Manager at Risk
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| CM at Risk |
In CM at Risk the construction manager is hired early in the design process to deliver an early cost commitment and to manage issues of schedule, cost, construction and building technology. Design remains the responsibility of an architect, who is independently contracted with the owner. A fully integrated CMc project might see the architect and constructor working with the owner to establish project goals, utilize BIM, and adopt other principles of integration and implementation techniques. Because work performed by trade contractors is typically bid, CMc satisfies the bidding requirements of most public procurement codes.
Design-Build
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| Design-Build |
Design-Build is characterized by a single point of responsibility for design and construction. Many owners choose Design-Build in order to reduce project-based risk. This risk is borne by the design-builder, in exchange for retaining any cost savings that are realized. Costing in the traditional Design-Build agreement is usually fixed early in the form of a Guaranteed Maximum (GMP) or lump sum. Project success is measured by improved delivery time or cost savings as compared to the agreed-upon Guaranteed Maximum Price. Linking compensation to project goals such as building performance, sustainability, and accelerated delivery can be used to promote greater collaboration and better outcomes.
Design Bid Build
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| Design-Bid-Build |
To alleviate these restrictions, owners may choose to tender the project at an earlier stage. The consequence of early bids is a loss in their accuracy and the necessity to accept bids with large contingencies. This strategy may also result in added amounts of redesign, requiring an adjustment to the designer's compensation.
IPD
It has been eight years since the National AIA and its California Council published the guide to Integrated Project Delivery. Its introduction states, "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."
 |
| The MacLeamy Curve |
The guide contains reference to the now well-known MacLeamy Curve, which was first debuted in 2004. This graphic is famous to BIM users because it depicts the shift of effort which we know as "front end loading". The justification for the shift is the fact that effort is moved to an earlier stage, when the cost impact (risk) of making changes is less.
In addition to shifting design decision making forward, redefinition of phases is driven by two key concepts: the integration of early input from constructors, installers, fabricators and suppliers as well as designers; and the ability to model and simulate the project accurately using BIM tools.
Integrated Project Delivery does not require BIM. The 2007 guide states that "BIM is an evolving technology and is not used consistently in the industry at the present time." In the near decade that has passed since its publication, these statements about IPD have become the framework within which BIM users have strived to bring about change within the AECO industry.
Integrated delivery strengthens the project team’s understanding of the owner’s desired outcomes. IPD allows constructors to contribute their expertise early in the design process resulting in improved quality and financial performance. It allows the designer to benefit from early contribution of the constructor’s expertise, increasing the likelihood that project goals will be achieved.
Integrated Project Delivery is built on collaboration, which in turn is built on trust. Trust-based collaboration encourages parties to focus on project outcomes rather than their individual goals. Innovation is stimulated when ideas are freely exchanged among all participants. In an integrated project, ideas are judged on their merits, not on the author’s role or status.
Key participants are involved from the earliest practical moment. Combined knowledge and expertise is most powerful during the project’s early stages where informed decisions have the greatest effect. The thrust of IPD is not to reduce design effort, but rather to greatly improve design results, streamlining the much more expensive construction effort.
IPD represents a behavioral sea change in the industry by breaking down the silos of responsibility, requiring close cooperation among all participants. The focus is on collectively achieving shared goals rather than meeting individual expectations. Success is measured by the degree to which common goals are achieved.
Traditional contracting contemplates project participants operating within their own separate silos of responsibility. IPD seeks to break down these barriers by having all major participants focus on achieving shared goals. Most traditional construction contracts seek to limit the parties to whom duties are owed. In direct contrast, IPD proceeds under the theory that projects run more smoothly where all parties formally recognize what exists in practice – that every construction projects is a network of inter-linked roles, commitments and mutual promises.
Source: "Integrated Project Delivery: A Guide" published by the American Institute of Architects, National and California Councils, 2007.
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