Project delivery methods have evolved from the more traditional approaches of design-bid-build, design-build, and construction-manager-at-risk into what is known as Integrated Project Delivery (IPD) in response to an increasingly demanding industry. But what exactly is IPD? And how does it help take project delivery to the next level?
What is Integrated Project Delivery (IPD)?
IPD (integrated project delivery) is a project delivery paradigm centred on a collaborative partnership of stakeholders who share risk and reward. It involves all of the project’s essential participants (the client, architect, contractor, and so on) signing a single contract that promotes collaboration, improves results, reduces waste, and maximises efficiency and competence.
- Project goals, finances, risk allocation, and compensation are all determined by the stakeholders together. The contract usually describes the stakeholders’ individual tasks, but it also enshrines collective accountability for the project’s successful completion.
- A ‘leadership team’ consisting of the client, lead designer/architect, and contractor often signs the IPD contract agreement. They are generally in charge of meeting the client’s budget, schedule, and quality expectations for the project.
- Other stakeholders, such as subcontractors, may agree to become ‘risk/reward partners’ or they can be contracted on conventional sub-contract agreements.
- If the project succeeds, risk/reward partners agree to be reimbursed on a cost plus overhead and profit basis. At the point where the contract amount is negotiated and agreed upon by the stakeholders, the profit is fixed as a lump sum figure.
- If the project runs behind budget or time, the risk/reward partners may lose some or all of their profit, and the contract will specify the circumstances of this loss. The client would typically agree to pay for the project at cost if all profits are lost, allowing stakeholders to restrict their losses to the profit they would have otherwise gained on the project.
How is Integrated Project Delivery Beneficial?
The IPD technique has the advantage of removing obstacles to collaboration and innovation by combining incentives for the entire project team rather than having each individual pursue increasing earnings from the project. The communal rewards are determined by the overall outcomes rather than individual achievements or failures.
- By openly communicating project goals, risks, and rewards, the major parties can have a more reliable flow of information, resulting in knowledge and technology sharing. The project can also benefit from construction techniques, such as overlapping design and construction phases, and so on.
- Improved communication. Traditional delivery methods don’t always give the people involved the opportunity to speak directly with one another, which can lead to issues and inefficiencies. If a contractor hears about a change request from the architect, for example, the request may be misinterpreted.
- In IPD, the contractor can speak directly with both the architect and the owner, reducing the chance of misunderstanding and ensuring that all parties are on the same page.
- Transparency is improved. Conflicting objectives and hidden expenses are also eliminated because everyone is working toward a common goal and sharing information.
- There are fewer RFIs and modification orders. Everyone involved in the project gets together early on and shares information and input with IPD. Instead of having to respond in the field to design conflicts and other unforeseen challenges that lead to rework, the team can detect prospective problems and find solutions during the planning stages.
- Change orders and RFIs drive raise project costs and cause delays. Costs could be greatly lowered with an IPD strategy.
- There will be less time and materials wasted. Because everyone’s profit depends on the project’s overall success, everyone has an incentive to find the most efficient way to complete the task. As a result, methods and building information modelling are frequently used in IPD projects (BIM).
If a project is delivered under budget, the contract signatories typically share in the savings, thereby boosting their profit.
When IPD is the Right Choice?
Although integrated project delivery has many benefits, it is not appropriate for every project. After years of integrating IPD into their projects, many project delivery experts have noted that IPD has a high benefit for large and complex projects, a moderate to high benefit for small and complex projects, a moderate benefit for large and simple projects, and a low benefit for small and simple projects.
- IPD is commonly used in healthcare projects such as medical centres. The IPD technique cannot be used for projects that require competitive bidding, which includes most government projects.
- IPD won’t function until the project partners can shift their mindsets and get past the antagonistic mindset that comes with traditional project delivery methods. It necessitates that each stakeholder assess how their work will affect the project’s overall success.
- IPD has shown to be an effective technique for bringing projects in on time and on budget when the project and partners are suitable.