Integrated Project Delivery Model Offers Many Benefits

The Integrated Project Delivery (IPD) model of construction isn’t new. But in an increasingly competitive and risky building environment, it’s been gaining in popularity in recent years.

As an alternative to the traditional design-bid-build construction model, IPD focuses on the collaboration of all project parties throughout every stage of a job.

Shared Risks and Rewards

The American Institute of Architects (AIA) publication, Integrated Project Delivery: A Guide, defines IPD as a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction.

Under design-bid-build, parties tend to have quietly adversarial relationships, with each striving to minimize its own risk and transfer risk to the others. By providing that team members share risks and rewards — and be held clearly accountable for their contributions — IPD creates the potential for various benefits, including:

• • Lower costs,
  • Fewer errors and delays,
  • Greater efficiency,
  • Minimal waste,
  • Reduced change orders, disputes and claims, and
  • Higher profits for everyone.

There are many ways for parties to a construction project to structure an IPD arrangement. These include using a suite of contracts, such as those created by the AIA, or forming a limited liability company or similar entity. The key is for the owner, architect or engineer, and general contractor to collaborate from the outset, agreeing on project goals, target costs and allocation of responsibilities, risks, and compensation. In some cases, subcontractors and suppliers may be involved from the beginning as well.

To promote collaboration, decisions are usually made by unanimous consent, subject to arbitration or mediation in the event parties can’t agree. Typically, parties waive liability for certain types of claims against one another, which promotes transparency and candid communication.

Technological Impact

Building Information Modeling (BIM) is often used on IPD projects. BIM uses software to create a 3D or even 4D model of the intended building or structure, so parties can view it from different angles to better understand the spatial relationships between components.

It also incorporates specific materials and other building information into the design phase. This enables parties to create an optimally efficient schedule and visualize how potential changes would affect the job.

More Than a Little Different

Naturally, IPD is far from risk-free. It’s legally complex, highly technologically dependent, and may require a major shift in mindset and culture for contractors accustomed to design-bid-build. So, if your construction company encounters one of these jobs, look before you leap. Contact us with questions.