Guy Lawrence / ENR
The U.S. construction industry has some of the best managers in the world. They must manage the creative process, owner demands, tight budgets, tough schedules, changing materials prices and site conditions, myriad subcontractors and suppliers, and even the weather, often on razor thin margins. Unlike much of American industry, every construction project is unique and the faces, personalities, and management styles of partners in the process change from job to job.
This wealth of management talent has led inevitably to the mainstreaming of what has been called alternate project delivery. Clients now expect the entire project or their entire program to be managed, allowing for efficiencies to be realized across the traditional lines that that marked the phases of a project.
The depth and impact of American management skills can be seen from an international perspective. “American firms are seeing more and more opportunities overseas because U.S. program managers are seen as the can-do people around the world,” says Bruce D’Agostino, CEO of the Construction Management Association of America, McLean, Va. CMAA currently is working with the Chartered Institute of Buildings in the U.K. to share in formation on international CM/PM standards.
Many firms are benefiting from this international interest. “We are opening up offices in Dubai and Abu Dhabi,” says Mansour Aliabadi, CEO of Vanir Construction Management. And Rise International has turned its interest toward the international market. “We have been active in the U.K. but now are seeing interest from the Middle East,” says Leif Selkregg, CEO. “There’s an intensity in development there that requires a program manager to coordinate.”
One firm that has really taken off overseas is Hill International. “We were lucky in that we got into the international market early,” says David Richter, CEO. He says that the Middle East and North Africa now account for 38% of the firm’s business. “We see some competition in the international market from some of the British quantity surveyors that got into PM, but U.S. firms are looked on as the elite.”
While design-build, CM on an at-risk and for-fee basis and PM have become mainstream, there is a new concept in project delivery that is creating a buzz in the industry: integrated project delivery. With the advent of tools such as building information modeling, owner demands for faster, more efficient projects and a growing shortage of professionals in the industry, more firms and owners are looking toward a more integrated approach to project delivery.
But the problem is that there is a fundamental confusion as to the nature of IPD. For many in the industry, the approach is old hat. “In 1993, we had a poster that read: ‘The world is turning to integrated design and construction’,” says Walker Lee Evey, CEO of the Design-Build Institute of America, Washington, D.C. “We have been practicing that for years, but we just didn’t put a name on the process,” says Paul Tyler, president of the commercial group at he Haskell Co. “Doing as many tasks as possible in the building process in-house increases the level of collaboration and provides a more efficient outcome.”
For many in the industry, the biggest problem with IPD is defining it. “There are two schools of thought on what IPD is,” says Michael Kenig, vice chairman of Holder Construction Co. and chair of the project delivery committee for Associated General Contractors, Arlington, Va. “For many, IPD is a collaborative approach to a project, like with CM-at-Risk. When you add the technology of BIM, you take that concept to a higher level.”
But Kenig says that, for many in the industry, IPD implies a contractual relationship where the owner, designer, and contractor all work under a common contract. He notes the work of Will Lichtig in developing an integrated form of agreement for projects that shares risks and rewards as causing people in the industry to rethink standard construction contracts [ENR 11/26/07 p. 80]. The model documents recently introduced by the American Institute of Architects “is probably the most articulated effort so far to produce standards for IPD contracts,” he says.
Kenig goes on to point out that AIA’s guide on IPD, which was used to help develop the AIA model contracts, speaks more to the collaborative approach. “This approach can be used in a variety of different project-delivery methods,” he says. IPD “is actually more closely related to a CM-at-risk approach since you have three or more separate firm coming together.”
For some, technology is helping to drive IPD. “BIM is a tool. It doesn’t make the process more efficient unless you develop a process to make it so and unless you have all the members of the team willing to participate fully in the collaboration needed to make it work,” says Les Snyder III, COO of Barton Malow Co. and AGC chair of the joint AIA-AGC committee. He says IPD is synonymous with collaboration and that collaboration is generally associated with design-build.
Aliabadi sums the issue up as a logical progression. “First, you have the increase in collaboration and cooperation further up the project schedule, enabled by BIM,” he says. But this increase in integration among the parties causes an increase in concern over issues of control, rights and responsibilities. “The next step is to develop contract models to provide a structure for these rights and responsibilities,” says Aliabadi. “We hope new model contracts will encourage the use of IPD. We must as an industry accept that change is here. The bottom line is that the industry is moving in that direction.”
Project delivery is clearly undergoing changes. The big question is, will IPD become a new project-delivery model or simply an extension of what already exists? This will be the new management challenge for the industry.