Wringing out waste

The core team began designing the building, drawing on information from the end users about workplace strategies and processes for the interior and exterior designs. The interior features 70% collaborative spaces and 30% enclosed areas.

Linenberger says he expects early involvement of team members with IPD will lead to a faster delivery. Linbeck will apply "lean" techniques to increase reliability and reduce waste from the process, particularly during design.

Having contractors and major subcontractors on board from the beginning facilitates informed decisions that stick, eliminating field changes, Sparks says. "Finger-pointing goes away because we are all at the table discussing the systems and the buildings," he adds. "That's not to say we will not make a mistake. But it's the team's job to lift the member who makes the mistake, because it's in the best interest of the project."

Sharing risks and rewards

The core team consulted with the attorney for Sutter Health, a Sacramento, Calif.-based IPD user, to adopt the right contract. Each of the entities on the core team has secured its own insurance coverage. "The core team has developed a program with an established mandatory amount of profit margin built into the program for each member of the core team," Lindenberger says. "Part of the reward portion of the program is based on a balanced scorecard with performance goals above and beyond cost performance."

Darren L. Smith, CEO of Cima Strategic Services in Dallas, an IPD advocate, says that, typically, each member of the team is guaranteed a fee and shares in risks and rewards proportionally to how much each entity contributes to the project. If concrete represents 13% of the cost, the concrete subcontractor will share 13% of the risk if something goes wrong and 13% of the reward if the project is built for less than expected.

Montague adds that if a problem exists, the risk pool, a portion of everyone's profit margin, would be the first source from which it would be addressed. In addition, the team could draw from contingency funds or insurance. "If it's a bigger problem than that, it's the owner's problem," Montague says. Although it seems on the surface that the owner is assuming more risk, Montague doesn't think so. "This process minimizes the risk that is always there on every project," he says.

The core team is developing and still working out the details for a worker-reward portion of the program. "The intent with the program is to push the concept of integrated delivery to the newest mechanic on the project," Linenberger says.

Montague adds that, traditionally, parties have "contracted with the intent to shift risk to someone else, but here the idea is let's work together, trust each other, collaborate and share the risk, and in that process, [risk] should be mitigated."