IPD provides efficiencies that reduce costs, increase innovation and keep projects on schedule.
Delivering construction projects on time and on budget remains a major challenge for construction companies. According to a global 2017 KPMG survey, only 25 percent of senior construction industry executives have confidence that the industry can do it. The challenge increases with large, complex projects.
New technologies are promising improved efficiency and cost savings, but another solution comes in the form of alternative project delivery methods, in particular, integrated project delivery (IPD).
In traditional project delivery methods such as design-bid-build, the relationships between owners, designers/architects and contractors/builders is often adversarial; each is looking out for their own best interests. In IPD, the approach is collaborative, with the entire team working together, under one multiparty contract (which may include subcontractors as well), to solve problems and obtain the best possible results while reducing waste, maximizing efficiency and meeting deadlines.
In an IPD project, the contract clearly defines the roles and responsibilities of each party and outlines how the parties will work together to get the project done. The risks of the project are shared, and so are the rewards, so it’s in the best interest of each party to ensure that they hold up their end of the deal.
The benefits of the IPD include:
- Better communication. In projects that use traditional delivery methods, the parties involved don’t always get a chance to communicate directly with each other, and that can lead to problems and inefficiencies. For example, if a contractor hears about a change request from the architect, the request may be subject to misinterpretations. In IPD, the contractor can talk directly with both the architect and the owner so there’s less room for misunderstanding and all parties know what they’re agreeing to.
- Increased transparency. Because everyone’s working toward one goal and sharing information, the problem of conflicting agendas and hidden costs goes away.
- Fewer change orders and RFIs. With IPD, everyone involved in the project comes together at an early stage and shares information and input. This enables the team to identify potential problems and find solutions during the planning stages instead of having to react in the field to design conflicts and other unforeseen issues that lead to rework.
- Greater innovation. Up-front collaboration among multiple teams and the opportunity for the project to leverage the core strengths of any team as unexpected setbacks are encountered often leads to more innovative, effective ways of doing the work.
- Lower project costs. Change orders and RFIs drive up the cost of projects and slow schedules. With an IPD approach, costs may be significantly reduced.
- Less wasted time and materials. With everyone’s profit riding on the overall success of the project, all parties have incentive to find the most efficient means of getting the job done. That’s why IPD projects typically use lean practices as well as building information modeling (BIM).
- More profits for better outcomes. Typically, with an IPD contract, if the project is brought in under budget, the contract signatories share in the savings, increasing their profit.
When IPD is the right choice
Integrated project delivery has many advantages, but it’s not right for every project. A case study by Lean IPD concluded that IPD has high benefit when used for projects that are large and complex, moderate to high benefit when used for small and complex projects, moderate benefit for large and simple projects and low benefit for small and simple projects.
Healthcare projects such as medical centers are typical candidates for IPD. Projects that require competitive bidding, which includes most government projects, can’t use the IPD approach.
IPD also won’t work unless the project partners are able to change their thinking and move beyond the adversarial mindset that’s inherent in traditional project delivery methods. It requires each party to consider how their work will impact the project and its success as a whole.
When the project and the partners are right, IPD has proven to be an effective approach that can reliably bring projects in on schedule and on budget.
Freelance writer Mary Lou Jay writes about business and technical developments in a variety of industries. She has been covering residential and commercial construction for more than 25 years.