The integrated project delivery method (IPD)

Revision as of 20:59, 28 February 2021

The integrated project delivery method (IPD)

Abstract

Integrated project delivery (IPD) is an approach in construction project management that seeks to engage collaboration and efficiency between relevant project stakeholders, namely project owner, architect, and contractor in all phases of the project. The IPD is especially relevant in the initial and planning phases of the project lifecycle since this is when team members and the appropriate procurement strategy is selected ^[1]. The current form of IPD was created to relief the symptoms that can arise from the lack of transparency, trust, and collaboration throughout the project lifecycle ^[2]. The IPD is not suitable for all types of projects, and should depend heavily on the size, complexity, and the potential risk adversity of the project in scope.

While the IPD can be a valuable method to ensure efficiency and transparency across business functions within a project team, preparing for the execution and implementation of the IPD can be a tedious task. The success of the IPD relies immensely on a set of behavioral and contractual principles, but also on setting specific goals, assigning, and defining the correct team member roles and lastly, setting up a governance model that safeguards the knowledge sharing ^[2].

Understanding IPD

IPD relation between participants (own figure based on Horst Construction [1]

There are two main perspectives of IPD, one being philosophical and the other being a delivery method ^[1]. The simple overall distinction between the two approaches, is that the IPD as a philosophy encourages collaboration although not being bound by a multi-party contractual agreement, instead it functions more as an overall ideology ^[1]. On the other hand, the IPD as a delivery method aligns the involved stakeholders by a single contractual agreement and hence enables the possibility of full knowledge sharing and management of expectations. The more complex distinction between the perspectives is based on the level of collaboration, and according to the paper on Integrated Project Delivery for Public and Private Owners ^[1] there are three levels.

• Level One Collaboration

This is can be explained as the daily and expected form of collaboration between project members/colleagues, as I referred to as “Typical Collaboration.”

• Level Two Collaboration

This is referred to as “Enhanced Collaboration” and can have some contractual obligations.

• Level Three Collaboration

This is the level of collaboration, which is applicable for IPD as a delivery method, where members are bound by a multi-party contractual agreement and hence is denoted as “Required Collaboration.”

The level of collaboration not only applies to whether IPD is viewed as a philosophy or delivery method, it is also what differentiates IPD from traditional delivery methods.

IPD and traditional delivery methods

The purpose of industries such as construction and design has remained the same for many years, but as the world is constantly and rapidly changing, so are the requirements and expectations for new complex projects – this sparked the initial desire for the Integrated Project Delivery ^[1]. The concept of delivery methods as we know them started in the 1940s ^[3], and did not include IPD, but instead more traditional delivery methods such Design Build, Design-Bid-Build and Construction Management.

Design Build (DB)

Design Build is a form of project delivery that is based on a collaborative approach where the designer and contractor are bound by a single contractual agreement. This allows for flexible knowledge sharing and hence an increased overall value ^[4].

Design-Bid-Build (DBB)

The Design-Bid-Build delivery method usually includes three phases namely design, procurement, and construction. The phases are typically carried out sequentially and independent of each other ^[4].

Construction Management (CM)

Introduced in the 1960s ^[3] the Construction Management project delivery approach focuses on the construction manager functioning as a consultant to the project owner in the design phases and hence undertaking the construction related risks ^[4]. Like the DBB this form of project delivery does not rely too heavily on cross-function collaboration.

Owner (O), Architect/Designer (A/D), General contractor (GC), Trade Partner (TP), Construction Manager (CM), Design-Builder (DB).Own figure based on figure from McCOWNGORDON [2]

The traditional forms of project delivery are notably different from the IPD in terms of the level of collaboration. However, this does not imply that the IPD is always the better choice when selecting the appropriate project delivery method. The IPD certainly is very ideal for large and complex projects, but it also requires a lot of time and effort. For smaller and less complex projects the IPD would probably consume too many resources compared to the value it could provide. The benefits and limitations of the IPD is discussed further later in the article. The traditional types of project delivery are therefore still very relevant and often used in various industries.

The participants of the multi-party contractual agreement

IPD bounds project owner, designer/architect, and contractor/construction manager together using a single multi-party contractual agreement. A multi-party contractual agreement is a special form of contract that acts as a framework for a highly collaborative project management environment ^[5]. In this way risks, success criteria and responsibility areas are jointly established by the participants of the agreement.

Owner (O)

The owner is naturally the person with the overall responsibility of the project and should be the one to reinforce the success criteria and goals that have jointly been defined by the project participants. Additionally, the owner steers the direction of the project and ensures that the rest of the project members follow the project pipeline accordingly.

Designer (D)/Architect (A)

For traditional delivery methods the designers are usually not too involved in the actual project management, but rather communicates with the client and based on their wishes provide a design to the project manager. When designers are a part of an IPD, they are much more engaged in the management aspect of the project and acquire a deeper insight into the cost structures, time schedules etc., which can have a positive impact on the quality and lead time of their design deliverables ^[6].

Contractor (C)/Construction manager (CM)

The C/CM is a very important role since the C/CM is responsible for achieving the goals of the project ^[6]. The C/CM should be able to conceptualize the input from the designer and based on that provide the project owner with associated costs and time frames ^[6]. Furthermore, the C/CM needs to understand what direction the project owner is steering the scope of the project, and apply those alterations to the construction work.

Application of Integrated Project Delivery

Integrated Project Delivery is not a tool or a form of analysis that the project owner can apply to ensure a successful project, it is rather a project management style or more specifically a delivery method that creates almost a symbiosis between project owner, architect and contractor. The paper Integrated Project Delivery For Public and Private Owners ^[1] is almost a holy grail of information when understanding the dynamics of IPD, and lists several fundamental principles that should be applied when performing IPD. The paper divides the principles into two categories, namely behavioral and contractual. The behavioral principles relate to human decisions and beliefs, while the contractual principles are much more formal and are included in the contractual agreements. There is no correct way of ensuring or implementing these principles, instead it is through feedback and experience that the principles are reinforced throughout the project's phases. Some of the principles of each category are explained below, while the rest are described further in the paper ^[1].

Behavioral Principles

• Mutual Respect and Trust ^[1]

Ensuring an environment where the participants feel safe and respected can have a major impact on the level of collaboration and hence the outcome of the project. As already mentioned, a very important but also quite tedious task it therefore to create the right teams, not only in terms of skillset, but also social capabilities.

• Willingness to collaborate ^[1]

This principle is closely associated with the principle of mutual respect and trust, since willingness to collaborate is a decision that all team members must make and is presumably directly correlated with the environmental dynamics of the project team.

• Open communication ^[1]

Detecting flaws in the project management design and identifying opportunities for improvement derives from having an open form of communication. This is how the stream of knowledge emerges, and where many benefits from the IPD can arise.

Contractual Principles

• Key Participants Bound Together as equals ^[1]

In the contractual agreement, it should be clearly marked which participants (owner, architect, and contractor) are included in the agreement along with their roles and responsibility.

• Shared Financial Risk and Reward Based on Project Outcome ^[1]

The agreement should denote to what extend risks and benefits are shared amongst the project members to encourage a high and non-biased level of participation in the project’s tasks. This also relates to another principle mentioned in the paper which is concerned with liability waivers within the team, so that the members avoid blaming each other, but rather together seek a sustainable solution to the challenge they might be facing.

• Intensified design ^[1]

Most projects are prone to scope changes during their lifespans, and it can therefore be very beneficial to include a cost buffer for intensified design that might impact the original cost and scope.

• Jointly Developed Project Target Criteria ^[1]

To assess the success of the project and of the project team’s effort, it is quite crucial to include a jointly developed set of target criteria. This will aid in the processes of input, support, and overall acceptance of the direction of the project.

Performance goals

Iron Triangle (own figure)

The principles of IPD should be viewed as a guide or maybe even checklist in the preparation phase. Therefore, the principles are not success criteria but rather necessities for a fully realized IPD. IPD as a delivery method enables a high level of collaboration, but that is not the only goal. Another important goal of IPD is to improve the elements of the iron triangle (triple constraint model). The case study by Association of Engineering, Project, and Production Management (EPPM-Association) ^[3] describes it as:

“IPD seeks to improve the triple constraint (cost, time and quality) outcomes by aligning the project team incentives and goals as well as applying a shared risk and reward, early involvement and a multiparty contract agreement”^[3]

Cost, time, and quality are all improved by the high level of collaboration, since it enables the stakeholders to create design, budget, and time schedule estimations in a transparent and realistic manner ^[3], which are catalyzed by the contractual and behavioral principles.

Application of IPD in project management

Integrated Project Delivery is as mentioned a special method for delivering a construction project, and due to this, the project management roles are of course also carried out in an untraditional manner. However, before getting into how IPD affects project management, one should decide when to even use IPD instead of one of the more traditional approaches. Choosing IPD over other delivery methods, as have been described earlier, should be a consideration and evaluation of many factors such as complexity, ambition, availability of the right IPD participants etc ^[6]. Large and complex project can benefit greatly from IPD, while for smaller projects it might be too time consuming a task. Another important aspect is whether IPD is the right choice for the specific project managers. IPD entails that the responsibility is shared, which might not be the right management style for some project managers.

After having gained a bit more insight into what should be considered when deciding on IPD or another delivery approach, the IPD can be related to the phases of project management. In the British standard for project management “Managing Successful Projects with PRINCE2” chapter 13 ^[7], it is described how PRINCE2 lifecycle consists of a pre-project-, initiation-, subsequent-, final- and post-project stage that are meant to direct, manage and delivery a project. Since project management of IPD follows these same stages as many other traditional delivery methods, the stages themselves are not that interesting to examine, but rather how the stages are managed and who is involved. Typically, the project owner would be the one responsible for managing and controlling in each stage, but with IPD the designers and contractors are equally responsible for these management tasks, although the owner will still have the overall overview. Furthermore, the pre-project- and initiation stages are more time consuming for IPD, since a lot of effort should be put into creating the team, a communication tool needs to be setup, and of course roles, responsibility and shared risks and profits need to be formally defined and included in the multi-party contractual agreement. Conflicts are bound to emerge when so many people are involved in managing a project, and therefore the process of formulating the multi-party agreement should not be rushed.

Benefits and limitations

Benefits

Using IPD as a project delivery method provides a high level of collaboration which results in an environment of open communication, trust and efficiency; however, while these benefits are valuable to all project members and project delivery recipients, the IPD also creates value for each project participant some of which are described in the following:

Benefits for owners

• Designers and contractors together “own” the program and vision with the owner ^[8]

IPD binds designers and contractors to the same standards as the project owner, which means that a benefit is that developing the scope of the project is no longer solely the owner’s responsibility, but is instead shared.

• Continuous design validation and optimization ^[8]

The owner receives on-going feedback from the other participants, which means that everyone sign-off on changes and improvements.

• More cost efficient ^[8]

Keeping track of the project budget is a task that befalls the project owner, and since preforming an IPD reduces miscommunication and is more efficient than traditional delivery methods, a benefit for the owner is therefore cost efficiency.

Benefits for designer/architects

• True Alignment with your Builder ^[8]

The work of the designers and contractors impact each other immensely and can be the reason of delay if not probably aligned. IPD ensures practical and quality alignment throughout the design and implementation process, and hence creates a philosophy of having a joint design.

• Eliminates out of pocket losses ^[8]

When the designer is aligned with the other project participants, unforeseen out of pocket losses are reduced. Also, something that applicable for all team members is that open communication about finances from the beginning can provide great transparency and ensure that all delivery the highest quality within the given budget.

• Liability risk reduction ^[8]

The designer is less likely to be held accountable for undesirable events, since the risk is shared between all participants of the agreement.

• More building for the money ^[8]

When the contractor from an early stage understands the design, it becomes a great deal easier to make cost estimations and hence the possibility for expanding the original vision of the design.

Benefits for contractors/construction managers

• Eliminates conflict ^[8]

Conflicts can for example arise when the design is too out of scope or unrealistic, or if the construction isn’t possible for the given project. IPD allows the contractor to address these issues continuously and receive feedback from the owner and designer, and thereby prevent conflicts.

• Participation in the creative process ^[8]

Contractors work on many different projects and can therefore provide very insightful ideas to the designer and owner in the creative process.

• Lowers risk ^[8]

The risk of delay and mistakes are reduced, and if these challenges should still arise the fault will be shared between the parties of the agreement.

Limitations

IPD requires a lot of effort from the involved parties, and as a result many limitations of the IPD derives from issues within the project team. If the team is created poorly and participants haven’t been matched based on their skills and social capabilities the full potential and benefits of the IPD can’t be realized. Another important aspect is that lack of support from the organization can limit the IPD. The organization will have short- and long-term strategies that are not related to any specific project and can therefore have great influence on the IPD and its outcome.

Lastly, setting up a proper project management tool for communication, knowledge sharing and planning is very important. Many project teams might already have sharepoint solutions or the likes that can handle their internal communication, but for the IPD the communication needs be transparent and easily accessible for participants from different departments, which might pose a technical and legal issue if not handled correctly.

Conclusion

Integrated Project Delivery provide a transparent and efficient form of construction project delivery by aligning project owner, designer and contractor under a single multi-party contractual agreement. Ensuring the right team members and together formulating the terms and roles of each participant into the agreement can be time consuming but will function as a pillar of the project work. IPD should be concerned with the same project management phases as other types of delivery methods but should be managed by all participants.

Annotated bibliography

Integrated Project Delivery, Managing risk and making it work for all parties ^[2]

"Integrated Project Delivery, Managing risk and making it work for all parties" is a paper by KMPG that defines and examines the properties of IPD. The paper provides a brief and concise overview of how gain succes with IPD and the relevant factors one should consider when choosing IPD.

Integrated Project Delivery For Public and Private Owners ^[1]

"Integrated Project Delivery For Public and Private Owners" is a paper by the National Association of State Facilities Administrators (NASFA); Construction Owners Association of America (COAA); APPA: The Association of Higher Education Facilities Officers; Associated General Contractors of America (AGC); and American Institute of Architects (AIA) that acts as an in-depth guide to the different elements of IPD. This paper is very relevant for the readers who seeks to gain a deeper educational understanding of IPD.

Journal of Engineering, Project, and Production Management, Integrated Project Delivery (IPD): An Updated Review and Analysis Case Study ^[3]

"Journal of Engineering, Project, and Production Management, Integrated Project Delivery (IPD): An Updated Review and Analysis Case Study" is a case study by the Association of Engineering, Project, and Production Management (EPPM-Association) which delivers a historical and research based view on IPD as a delivery method.

INTEGRATED PROJECT DELIVERY An Action Guide for Leaders ^[6]

"INTEGRATED PROJECT DELIVERY An Action Guide for Leaders" is a paper by Charles Pankow Foundation Center for Innovation in the Design and Construction Industry (CIDCI), Integrated Project Delivery Alliance (IPDA) that provides a thorough understadning of the IPD, when to choose IPD, what risks that can be avoided or realized, benefits and an introduction to the stakeholders involved. This is also a very relevant paper for readers who wishes to expand their knowledge on an educational level on IPD.

References

1. ↑ ^{1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14} A Joint Effort of the National Association of State Facilities Administrators (NASFA); Construction Owners Association of America (COAA); APPA: The Association of Higher Education Facilities Officers; Associated General Contractors of America (AGC); and American Institute of Architects (AIA), Integrated Project Delivery For Public and Private Owners, 2010, https://www.agc.org/sites/default/files/Files/Programs%20%26%20Industry%20Relations/IPD%20for%20Public%20and%20Private%20Owners_1.pdf'
2. ↑ ^{2.0 2.1 2.2} KPMG, Integrated Project Delivery, Managing risk and making it work for all parties, 2013 https://assets.kpmg/content/dam/kpmg/pdf/2013/10/integrated-project-delivery-whitepaper.pdf '
3. ↑ ^{3.0 3.1 3.2 3.3 3.4 3.5} Association of Engineering, Project, and Production Management (EPPM-Association), "Journal of Engineering, Project, and Production Management, Integrated Project Delivery (IPD): An Updated Review and Analysis Case Study", 2020, 10(2), 147-161 '
4. ↑ ^{4.0 4.1 4.2} Chris Vaeth, Delivery Methods Analysis and Comparison, 2019, https://mccowngordon.com/delivery-methods-analysis-and-comparison/'
5. ↑ The American Institute of Architects, C191- 2009 Multi-Party Agreement - IPD, https://www.aiacontracts.org/contract-documents/18471-multi-party-agreement----ipd '
6. ↑ ^{6.0 6.1 6.2 6.3 6.4} Charles Pankow Foundation Center for Innovation in the Design and Construction Industry (CIDCI), Integrated Project Delivery Alliance (IPDA), INTEGRATED PROJECT DELIVERY An Action Guide for Leaders, https://leanipd.com/wp-content/uploads/2018/06/IPD-An-Action-Guide-for-Leaders.pdf'
7. ↑ Project Management: "Managing Successful Projects with PRINCE2", 6th Edition (2017) '
8. ↑ ^{8.0 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9} AGC of America Project Delivery Committee, IPD: Lessons from the Trenches, 2009, https://www.agc.org/sites/default/files/Files/Programs%20%26%20Industry%20Relations/AGC%20Webinar%20-%20IPD%20-%20Lessons%20from%20the%20Trenches%202-26-09%20-%206%20Per%20Page.pdf '