Integrated Project Delivery Can Work Well But Is Still No Utopia
Since 2006, lawyer Howard W. Ashcraft has structured nearly 80 multiparty integrated-project-delivery agreements for more than 30 owner-developer clients. He is such a believer in the ultra-collaborative, risk-and-reward-sharing model that, at times, he even has skin in the IPD game.
Of Ashcraft's 77 IPD projects, 75% are exceeding contractual targets for schedule, cost, quality or profitability, says the Hanson Bridgett LLP lawyer. "IPD projects are gorgeous," he adds.
All those experienced with IPD stress that success with the radical contract model hinges on project-first, not me-first thinking. "The biggest challenge is the culture change" to a collective swim-or-sink mentality, says Bart Bodway, a construction manager for IPD newcomer PCL Construction Services Inc.
Egos must be checked at the door. "That's why you don't see IPD at the starchitect level," says John Tocci, chief enabling officer of Tocci Building Cos. "Starchitects don't want to put fees at risk or have anyone question design decisions," says Tocci, who, as an IPD program manager, also risks his fee at times.
The ranks of IPD advocates are slowly growing, as beginners become veterans and early qualms disappear. "All four of our projects have been very successful, with extremely happy clients," says Jay Halleran, a partner with NBBJ—an early player in the IPD game. Jobs have come in on or under budget, ahead of schedule, and exceeded team design goals, he adds.
Successes aside, many agree an IPD utopia is a long way off. For starters, IPD is difficult because it requires more individual thinking and group problem- solving, says Dave Kievet, group president of the Boldt Co.
IPD is not for everyone. Even Ashcraft recommends against IPD—especially for simple projects, even if they are big. He also advises against it if the owner doesn't have ability to or interest in engaging in the design-construction process and if a client does not have legal ability to join the architect and contractor contractually.
Though IPD may not be spreading like wildfire, its sphere of influence is expanding. Many owners, fearing IPD's pains but wanting its gains, are going the IPD-ish route, encouraging the behaviors of IPD within traditional delivery models.
"With the right team, any contract method can be successful," says Timothy M. Gunn, construction vice president for Alberici Constructors Inc.
Other IPD proponents agree, but say IPD, if done right, offers the greatest benefits. Under other models, there is no way to enforce collaborative behavior, says Eric R. Lamb, executive vice president of DPR Construction.
IPD is distinguished by a single contract between—at minimum—the owner, design professional and builder. Main subconsultants and subcontractors are often signatories, as well, swelling the ranks to 10 or more.
Each project is organized much like a business. The model relies on early involvement of key players and team decision-making and control—though the owner retains veto power. Signatories agree, by signing liability waivers, not to sue each other, except for gross negligence and willful misconduct.
"Removing liability encourages you to focus on producing an economical design," says structural engineer David J. Odeh, a principal at IPD newcomer Odeh Engineers Inc.
In an IPD scenario, the owner pays signatories' direct costs and overhead, theoretically stripped of profit. Designers and contractors contribute to a profit pool, based on a target price. Profit is capped by the agreement.