"The risk, as far as losing money, is minimal," says Edwin Najarian, a structural engineer principal with TTG Corp. TTG's profit on IPD jobs has been "the same or a little less" than usual, he adds.

IPD proponents say the best projects combine IPD with the Lean Construction Institute's framework for minimizing waste and rework. Integrated Lean Project Delivery "is not easy, but the benefits are there if you approach ILPD the right way," says John Bennett, senior director, design and construction, of Universal Health Services Inc., an early adopter of ILPD for UHS's acute care and behavioral health hospitals.

The big catch is that IPD, or ILPD, is complicated to organize, manage and execute. Hammering out terms, assembling an insurance package, bookkeeping and validating the target cost is strenuous exercise. Even deciding what constitutes direct costs and overhead is not simple, because, among other things, firms calculate bonuses and profits differently.

For newcomers, orientation, called on-boarding, is critical because IPD's approach, process and vocabulary are "vastly different" from the norm, says Mike Doiel, program director at architect- engineer HDR Inc.

Profit Pools

Though deals vary, the profit pool typically contains 8% to 12% of the target cost. Designers pay in 1% to 2%; CMs and trade partners, 3% to 4% each.

Under IPD, rework, inefficiencies or come-back work is paid by the profit pool until it is used up. That motivates trade partners to train workers to practice built-in quality and to be mindful of hand-offs to trades that follow, says Raul Rosales, a vice president of Skanska USA.

With IPD, if everybody is aligned and focused, "it is very difficult to fail," says Victor Sanvido, senior vice president of mechanical design-build contractor Southland Industries Inc.

Nearly 10 years ago, Southland signed an integrated form of agreement for a Sutter Health project. Sutter, a system of nonprofit hospitals and doctors' groups in northern California, developed IPD as a better way to put in place its $5.5-billion capital program. Sutter's IFOA evolved into a model relational contract form.

Though Sutter has declined to share metrics on its ILPD program, Digby R. Christian, Sutter senior program manager, says ILPD has become a successful model. "We finally have a system we can rely on for on-time, on-budget delivery and getting what we asked for," he says.

Until recently, most IPD projects were in the health-care sector—long considered broken in terms of delivery. Of late, other players are testing IPD waters, including the Walt Disney Co. Projects have expanded to entertainment, academic, sports, life-science, biotechnology and data-center buildings.

IPD also is stretching its legs geographically. At first, most projects were in California, with a smattering in the Midwest. Currently, there are also projects in the East, Pacific Northwest and Canada.

Research is beginning to back up veterans' rave reviews. A report due out soon—based on a 2013-released study of 35 IPD projects completed by the University of Wisconsin's Construction Engineering and Management Program—even compares design-bid-build, construction management (CM) at risk, design-build and IPD. The ratings take into account client relations, schedule and budget compliance, quality and safety statistics, financial metrics and communication among stakeholders.

IPD "demonstrates superior overall performance when compared with other delivery systems," concludes "Evaluating Integrated Project Delivery Using the Project Quarterback Rating," soon to be published by the American Society of Civil Engineers' Journal of Construction Engineering and Management.

"More team integration means fewer surprises, more predictability and better performance," adds Mounir El Asmar, a professor and senior sustainability scientist in the School of Sustainable Engineering and the Built Environment at Arizona State University. As a PhD candidate at the University of Wisconsin, El Asmar contributed to the original IPD research and quarterback rating research, conducted under the supervision of Awad S. Hanna, chairman of the program, which is part of the University of Wisconsin's Dept. of Civil and Environmental Engineering. Wei-Yin Loh, a University of Wisconsin professor of statistics, also contributed to the IPD research.