IPD Frequently Asked Questions
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When did you develop and trademark the Integrated Project Delivery (IPD) process?
We developed the IPD process in the 90’s and trademarked it the year 2000. We are proud that today, organizations such as American Institute of Architects (AIA) and other industry groups, have endorsed published papers and held seminars on the IPD process we developed. Over the course of that time we have continually refined and improved our IPD process and business practices. We continue to promote and expound on the virtues of our IPD process and how owners, designers and construction teams across the country can benefit.
Does each member develop an estimate or budget for their portion of the work?
Yes, this is the way we put the job together. Since we are collaborating to produce a single budget we are able to eliminate duplication and identify gaps. The raw budget data in the form of direct labor hours, material costs, equipment costs, rental costs and any other special costs is fed into a pricing spread sheet which produces a unified budget.
What happens if there is a significant overrun in one member’s portion of work?
Any overrun anywhere in the project would potentially reduce the gross profit available for distribution to the Primary Team Members. We think of ourselves as analogous to mountain climbers roped together. If one falters the others pick up the slack, they don’t cut him loose. We can do this because we’ve chosen team members with integrity, character and competency. These are people that we trust. Each team member does not have his own price and his own scope we are all united together under the prime contract. We have one price and that is a price of we’ve given our customer. We have one scope and that is the project scope as defined in the prime contract. There is no accounting among ourselves of who is over or who is under budget but only if we, as a team, are over or under in a specific cost code. If we went back down the road of holding everyone accountable for their own scope and price our system would deteriorate into the system that you now have where everyone is attempting to minimizes his own personal expenditures without regard to the good of the team and the project.
How does each member know where their work begins and ends if there is no individual scope?
As we coordinate the work each Primary Team Member is primarily responsible for the work that was in his portion of the budget. However during the work structuring phase work may be reassigned to other Primary Team Members who may able to more conveniently (cost effectively) perform it. During the construction phase labor is used interchangeably where it benefits the project. Everyone is wearing IPD colors and will pitch in to lend assistance to any Primary Team Member who might need extra hands occasionally. This avoids having to overstaff the project. Likewise rental equipment is shared by all helping us to make most efficient use of it.
One contract is signed. How this impact team commitment and trust?
Our system works because of the trust and confidence that we have in the ability, commitment, character and integrity of each of the Primary Team Members. We’re confident that there is no issue that any single Team Member could create that the team could not collectively overcome.
How are IPD contracts structured with the Owner?
The contract arrangement with the Owner is completely flexible. However, we believe the most beneficial structure is negotiate a Guarantee Maximum Price (GMP) with a open book shared savings arrangement.
Do you have any specific examples of projects where we could get an estimate of the schedule and cost reduction in comparison with a traditional project?
The OUC Events Center Chiller plant provides a good comparison. It was intended to be a replica of the OUC Lake Nona Plant. IPD competitively bid the project against other contractors including the firm that constructed the Lake Nona plant. Our bid price was more than $1.2M lower than our competitors. The end result was over 25% in overall cost reduction and the Owner recieved a direct17% savings. Upon completion of the project the Owner noted the quality and functionality of the plant was greatly improved, stating “Our best plant to date.”
IPD opens subcontracts, equipment purchases and rentals to competitive bids. Is there a weighted formula to select the subs or is low cost the primary factor?
Low bid price is not the determining factor. By now we have learned that there can be a big difference in the “bid” price and the final cost. We are more interested in selecting subcontractors who have integrity and the skills, capacity and mindset to perform well in the design-build arena. Not every contractor or subcontractor has the temperament or corporate culture to do well in design-build and especially in an IPD type environment.
Are the sub-contracts with IPD or the Owner?
All subcontracts are with IPD. We offer the you, the Owner, a complete turnkey project with a single contract.
Efficient field procedures are the norm with IPD. What is an example of how IPD’s field procedures are more efficient than a traditional approach?
On the OUC project the electrical portion of the work could be done with a nominal 5-man crew. However the job would have normally been manned by 6 or perhaps 7 men to have adequate manpower for some labor-intensive processes such as pulling wire. Since the electrical Team Member had the ability to draw labor from anywhere on site he manned the job with 5 men and supplemented as needed from other trades who were not engaged with critical path activities. All Team Members share rental equipment. It is not just that these things happen but it is the free and willing spirit with which they happen that makes the difference. Workers enjoy the atmosphere that results from everyone truly working together and sharing resources on the project.
Do you feel like BIM has a liability implication for early specification, cost estimating, and overall management of the project that may unduly expose the designer?
Not if the IPD project and contract are properly organized. Liability is a function of the likelihood of an error and the size of the consequence should it occur. IPD tends to reduce risk, because it focuses the entire project team on finding and reducing errors. (In an IPD project, the contractor’s profit will be at risk if the project is over budget or delayed.) But even if an error does occur, IPD projects generally limit project team members ability to sue other project team members for economic losses. Thus, this type of risk will generally be limited or entirely waived between owner, contractor and architect with similar waivers flowing through to sub-tier members.
When decisions are made in the field between participants do they have to be formalized to maintain the integrity of the audit trail?
All decisions are confirmed through the use of RFIs that are posted to all involved parties. The “audit trail” is a lot less important on an IPD project than on a traditional project. On an IPD project the field superintendent can pick up the phone and speak to our project architect to directly resolve an issue that might take weeks if we had to follow the traditional paper trail. We solve the problem and document the solution. The design professionals appreciate this new way of working with the construction team members. We are no longer seen as the source of potential back charges or legal action but as partners.
A list of all tasks is made from the schedule and composite work teams are formed to complete work. Could you explain this process in more detail?
In renovating a dormitory to add a fire sprinkler system, central hot water, data terminals, cable TV, and phone systems to each room you find that there are many common work tasks that are performed by each of the subs such as hole cutting, core drilling, fire caulking, protection of floors and walls, clean up, etc. A composite crew can work together to complete a room helping each other rather than having to have each crew provide its own complete contingent of labor. A single person or crew can do all hole cutting or core drilling. It doesn’t matter what the opening is for.
In a traditional project there are usually conflicts with the trades interfering with each other. Do you think that composite work teams alleviate this problem?
Conflicts often occur where each trade is seeking to optimize its own work without regard to the impact on other trades. That is the way the system is designed. With IPD’s shared cost arrangement a joint decision can be made to sequence the work to provide best overall scenario. If the electrician can spend an additional $5,000 to save the plumber $20,000 he will do it. I don’t believe this can happen in any other system that is in use today.
The contractors are involved with the design process. How does is this different from a traditional project? Could you give me an example?
On the OUC project the mechanical engineer stationed a designer in the mechanical contractor’s office to complete the mechanical room piping layout of 20” and 24” pipe. The designer had ready access to the senior contractor designer in the next office and access to the pipe fabrication shop just outside to verify techniques and dimensions. The engineer thus spent more than he normally would have spent to develop the typical design drawings but the result was a mechanical room that was well laid out, and practical to fabricate and assemble. The pipe was put right into the fabrication shop from these drawings without the need for “shop drawings”. What was designed was exactly what was installed. The design professionals concern themselves with constructability and the construction members concern themselves with design.
Does the contractor tell the designer what is needed, what level of detail, and when?
Yes, these are joint decisions worked out early in the project between all Team Members. Together we decide what drawings will be required, what scale will be used, etc. The level of detail is always only that required to permit and build the project. We do not have to produce documents that are designed to attempt to extract a satisfactory project from an accumulation of low bidders with varying degrees of skill, integrity and motivations.
Are there any disadvantages to creating less ornate drawings?
Our drawings do not have to support the bid process. As long as the drawings sufficiently describe the project to allow us to permit and construct it we see no disadvantages. We should always be asking how anything that is put in or on the design documents adds value to the Owner. If no value is added we should carefully consider eliminating it. We will have determined early which major equipment will be used by manufacturer and model number. The design will be specific to this equipment simplifying the design process. The equipment that will be installed is the equipment that the design was built around. Having settled on a specific piece of equipment, detailed specifications describing that piece of equipment are for the most part redundant and add little, if any, value to the project.
There is a high level of planning involved with the process. How would the planning and communication be different if all the members of IPD were working on a traditional project?
If you mean a bid project where we all happen to be the low bidders we would have no overall project planning responsibility, although we might participate in job meetings if asked by the GC. Our focus would be on doing the things required of us by the contract documents and getting adequate compensation for any work required of us that was not defined in the contract documents. Real planning takes a lot of time and resources. The traditional project does not require the subcontractors to do this, but rather relies on the general contractor to plan the work. He will hear quickly if his plan seems to inflict an inconvenience on a subcontractor.