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Wednesday, August 12, 2009

Integrated Delivery: Forget About the Contract, Focus on the Process

A wonderful piece on IPD over at Design Intelligence.

"Imagine this: The world’s most advanced new jetliner is ready for unveiling. Hundreds of millions of dollars have gone into its development. Millions of work hours have been expended on its completion. A large crowd is gathered for their first glimpse. It’s time. The engines turn. The crowd waits. And then those massive engines grind to a halt. A small puff of black smoke spits out and there is silence. And the fingers start pointing.

It’s inconceivable in this day and age that such an event could happen. Virtually every industry models every aspect and phase of a project using virtual design technology.

Except one — construction. We are one of the few, if only, industries that builds a full-scale model — at full price. Think about that, and then wince.

There’s a reason why many bankers call design and construction the riskiest businesses on the planet from a financial point of view.

The recent downturn of the economy in general and the construction industry in particular has emphasized the need for a reevaluation of how we do business. A recent Mortenson Construction survey of owners shows that 59 percent are resistant to construction capital spending within their organization; 69 percent need cost certainty as early as is possible in order to proceed; and a majority want greater collaboration in design review, revisions, and bid document compilation. Clearly, the approaches we’ve relied on for the past 50 years need to evolve to keep in step with the changing business reality.

Mortenson believes the answer is integrated project delivery. We’re so sure of it, in fact, that we’ve rebuilt the organization around it.

The AIA defines IPD as “A project delivery approach that integrates people, systems, business structures, and practices into a process that collaboratively harnesses the talents and insights of all participants to reduce waste and optimize efficiency through all phases of design, fabrication, and construction.”

Today, as IPD gains in popularity, there remain several misperceptions about it. Some think IPD is just another type of contract. Mortenson’s recent history demonstrates that this is not the case. We have used the approach successfully in design-build, negotiated, CM at risk, three-party, and CM contracts. And some believe that IPD and building information modeling/virtual design and construction (VDC) are one and the same. Mortenson views BIM/VDC as a tool, albeit an important one, that helps enhance IPD’s success.

IPD is first and foremost a promise of partnership, and several key principles form its foundation.

• Early and collaborative involvement by key participants and principals
• Mutual trust and respect among all participants
• A belief in shared benefit and reward as well as risk and downside.
• A commitment by all parties to work as a team in the best interests of the project...Continue Reading..."