The concept of Integrated Project Delivery has been around for over 20 years. But with shifts in supply chains and digital delivery, it makes perfect sense for some sectors today say Americas CEO Joe Cusick and Director Pieter Schaap.
Working under an Integrated Project Delivery (IPD) regime certainly isn’t easier than a traditional contractual arrangement. But there can be a feeling that everybody’s experience and energy is going into creating the best asset possible – rather than wasting time and energy on rework, positioning and conflict.
IPD brings members of a project team together at the feasibility or business case stage. Sitting round a table, they look at the owner’s vision, what value for the organisation the project should deliver and whether it can be done within a given budget. Key specialist contractors and suppliers are brought on board early to feed into decision making which in turn helps pin down schedules and costs.
Crucially, IPD shares risk between the members of the project team, so that everyone benefits if all go to plan – and shares the pain if it doesn’t. This contrasts with some forms of contracting where the risk is transferred to the main contractor and then down into the supply chain. As Soben’s Derek McFarlane warned in a recent blog, this approach to risk allocation is both unsustainable and unfair in many markets today.
IPD also makes perfect sense in an environment where we are designing in 3D and working with BIM. It allows designers to plug in key components from day one, rather than working with generic or assumed elements and then changing them once subcontracts have been awarded further down the line.
An integrated approach plays into greater use of offsite fabrication and modularisation which require details to be pinned down early so that the manufacturing process can be set up. Offsite, where elements are manufactured in a controlled environment, should deliver better quality, efficiencies and shorter time on site. Too often we see these benefits being eroded by delayed design decisions or late changes.
Two decades in the making
IPD has its origins in the early 2000s in the US, when various groups were looking at more collaborative ways of working in relation to lean principles and to new technologies such as BIM. In 2007 the American Institute of Architects, California Council published a set of IPD principles and standards.
Since then, IPD has been used on many healthcare, life sciences and pharmaceutical projects in the US. It has also been deployed to some extent in the UK and parts of Europe with elements of IPD principles in the form of alliances explored in Australia, New Zealand and Canada. Recently, players in the data centre sector have started to engage with more collaborative approaches and the deployment of offsite fabrication and modularisation.
IPD requires a shift in mindset so that client and supply chain partners are working collectively towards the desired outcomes for a project. This means that culturally some regions can more forward more easily with this type of approach.
In the UK, the Institution of Civil Engineers (ICE), working with a group of major infrastructure clients, has developed Project 13, aimed to limit the schedule and cost overruns that most major civil engineering projects experience, with trial projects currently underway.
In terms of risk and reward sharing, an IPD contract sets out the terms for this but the idea is that everyone is incentivised to work collectively towards the goals of the project. Some of the Project 13 trials have some pretty hefty performance monitoring regimes with key performance indicators (KPI) linked to delivery against client outcomes, milestone dates and payments and behaviour of individual partners.
Smooth on site
One of the big benefits of IPD should be that projects run very smoothly on site. Bringing in key trade partners and equipment suppliers to assemble the design, alongside the main contractor – or integrator in Project 13 speak – means that interface and constructability issues are flagged up early and resolved. It also encourages specialist contractors to introduce innovations, since they benefit directly in terms of profit if they can improve efficiency, speed or quality.
At Soben, we often come across constructability problems at the Bills of Quantity stage which have not been picked up and ironed out. Because our teams come largely from construction backgrounds, we can flag these up, which saves time and money down the line. Removing those issues altogether, through an IPD process, is even more efficient.
Working collectively on designs and programmes also means that items with long lead times can be taken into account. From day one, the schedule and sequencing can be set to accommodate those restraints.
With experienced project professionals in short supply in many parts of the world, IPD offers a way to attract the best people, and to make the most of them. One of the criticisms of large infrastructure projects in the UK, and elsewhere, has been the amount of resource wasted on checking – and then on checking the checkers.
Although it is designed to reduce the risk of problems on site, IPD should also come into its own if things do go wrong. Some things just can’t be planned for, as recent world events have demonstrated. The best teams naturally come together in these circumstances, whatever the type of contract, to problem solve. However, IPD means that all parties are incentivised to work that way and that the right cultures and relationships have already been established.
IPD is not for the faint hearted. It requires maturity all round, especially from the client or owner. It also requires good governance and controls – which will differ somewhat from those we use on a traditionally delivered project.
At Soben, our role on IPD projects in the US has been to work for both client and project team, monitoring what is being delivered, ensuring that the scope still fits the intent and expediating payments when they are due.
As with every contract, we see our role as an enabling one, helping to get the job done as efficiently as possible and looking ahead to what’s coming so that the right decisions can be made.
A word or two of warning though: the learning curve for anyone new to an IPD project is steep. And this way of working won’t be for everyone. It doesn’t suit all company cultures or all personalities. Getting all the stakeholders in a project aligned early can deliver benefits, whether a formal IPD approach is adopted or not. Soben can support clients and projects looking to go down this route.
Interested in learning more? Book a chat with our team here.