October 2011: Best Practices

October 2011

Best Practices

The Arrival of Integrated Project Delivery

By Diane Haines

Historically, the building process has been extremely fragmented, with architects, designers, contractors and subcontractors working independently. In the last few years, the need for increased collaboration has come to the forefront as a means to reduce waste, minimize construction delays and achieve greater efficiency in the execution of building projects. Integrated Project Delivery (IPD) is a collaborative delivery model that encourages greater communication between architects, contractors and subcontractors at each stage of the building process, from pre-construction to post-construction.

New construction industry trends such as the use of building information modeling (BIM) and other technological developments, as well as owners’ demand for more value for their money, have driven the adoption of IPD. Owners have become increasingly dissatisfied with the demand-bid-build process, and many have pushed for more collaboration. The process can’t stop with asking building teams to collaborate; they need to implement a new system and new tools, which will facilitate their new dynamic. IPD is a system that supports collaboration, and it can be supported with tools such as document management software, which improves communication and provides access to real-time data for all of the teams involved in the building process.

Project management flaws associated with the demand-bid-build process In 2004, the National Institute of Standards and Technology found that the construction industry loses as much as $16 billion every year, due to fragmented software systems. Additionally, a 2004 Construction Industry Institute and Lean Construction Institute study shows that 57 percent of the time, effort and material spent on building projects did not add value to the final project, while 26 percent of the manufacturing sector’s operations added no value. This lack of efficiency is the result of the waste associated with the traditional demand-bid-build process.

This process featured fragmented, hierarchical teams that only shared information on a need-to-know basis and, because compensation was allocated separately, individual teams were more likely to put in the least effort needed for the greatest return. Replacing fragmented teams with a collaborative process, IPD encourages the sharing of important information, as well as the sharing of risk. This keeps all of the teams highly invested in a project, since all of their reputations are at stake. This system is more likely to result in a valuable final product, while using fewer resources, thanks to more efficient communication. Furthermore, the traditional project delivery model relied on paper-based documentation, unlike IPD, which incorporates advanced technology systems that help building teams work better and faster and waste fewer resources.

Maximizing collaboration with IPD The IPD model revolves around uniting all of the parties involved in a building project as early as possible, including designers, architects, contractors, sub-contractors and the future owner of the building. This increased collaboration has changed the contract process for many IPD projects. Multi-party contracts legally require all teams involved in the project to share both risk and compensation, encouraging them to provide a product of better value in order to get a larger reward. Thus, when a problem arises, the teams involved in the project won’t be worried about assigning blame and will be more motivated to fix the issue as a collective unit, instead of individually. IPD projects include a unique legal relationship between teams, a no-blame work environment, integrated leadership, lean construction, collaboration software, and design assistance. In the end, the collaboration facilitated by IPD restructures business relationships within a building project, eliminating the adversarial elements and replacing them with a dynamic of shared risk and reward.

The American Institute of Architects and the Associated General Contractors of America have been working to develop new contract documents that meet the standards of IPD. The new delivery model comes with new legal liabilities and new responsibilities, but the establishment of shared risk should actually lower the legal risks, compared to the traditional delivery model.

Using technology to automate collaboration One of the main tools that has enabled the increased adoption of the IPD approach is BIM technology. BIM allows everyone involved in a building project to see the design at it is developed, creating an environment open to collaboration. While the designer begins the plans for a project, contractors and building owners can review the virtual building and note areas where different materials need to be used, or where more affordable decisions can be made. BIM essentially allows a building to be built twice – once virtually and once in reality.

In order to achieve maximum use of BIM technology, construction firms need to collaborate with their business partners. BIM minimizes risk by providing better and more accurate information throughout the building process. The reduction of risk extends from avoiding the likelihood of materials shortages during the construction phase to lowering the building owner’s risk of budget overruns and schedule delays. Additionally, BIM ensures that the post-construction life of a building is taken into account, which can reduce owners’ maintenance expenses. This supports the goals of the IPD model, making BIM one of the core tools to implement when pursuing increased collaboration. Now the owner, designer and contractor do not have conflicting interests regarding the design process, because they all have the opportunity to voice their concerns.

The preliminary virtual building process helps builders create more accurate cost estimates, since the technology includes every detail of a design, down to each light bulb. Accurate estimates have become increasingly important as the cost of materials rises, and contractors have to operate within tighter margins. Automating estimating processes using software such as Sage Timberline Estimating can ensure accuracy and consistency, while being integrated with BIM processes and software.

BIM, alone, is not enough to support the IPD model. Another important element is providing better access to information related to the project, which can be achieved with document management software such as Sage Timberline Office’s Document Management. Information management tools can index documents, from contracts to material orders, electronically, so that they can be easily located by all of the teams involved, facilitating the communication necessary for successful collaboration.

Conclusion In the wake of the recession, the construction industry is still adjusting to tougher market conditions, making efficiency and standing out from the competition top priorities at most construction firms. This has spurred the adoption of the IPD model, which gives contractors the tools to provide a better quality product and spend less money doing it. Technology, like automated estimating software and document management software, can help building teams facilitate their collaborative efforts and set them on their way to a more effective building process.