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/ BUILDING DIALOGUE / DECEMBER 2014
Evolving the Integrated Project Delivery Process
T
he American Institute of Architects Cali-
fornia Council released the latest revision
of IPD: An Updated Working Definition in
July with a focus on continuing to define the
variables that constitute the integrated project
delivery process.
Existing among the many case studies that pro-
mote the IPD process is a varying degree of in-
tegrated delivery methods that address selective
elements of the process but lack the Integrated
Form of Agreement (IFOA) or Multi-Party Agree-
ment (MPA) that is the defining differentiation. The
updated working definition does a thorough job of
calling out case studies that purport to promote IPD,
but have used incomplete models of integration,
which have created confusion in the industry. The
IFOA/MPA is the legal vehicle that binds the par-
ties to each other through an agreed upon risk and
reward collaborative. There is no other contracting
method that attempts to closely align the project
owner, designers, engineers, contractor and key trade
partners to a consolidated business model. The IPD
business model attempts to incentivize collaborative
behaviors through risk and reward sharing that do
not exist among the project teams performing under
the most utilized forms of contracting: design-build
and construction manager at risk.
The 2011 IPD Awareness Survey suggests that own-
ers are unconvinced of the IPD’s value promise and
cite a lack of education and precedent as primary
barriers to using IPD. Owners who have chosen to
venture into the true IPD process, as defined by the
AIACC Guide or alternate versions, have demonstrat-
ed the fortitude to address and work through the
perceived barriers to the process.
Identified barriers include:
• Transparency of the process
• Difficulty developing team trust
• Fear of change
• Potential of paying for others’ mistakes
• Revealing/sharing profit structure
• Cultural misalignments
• Technology issues
• No guaranteed price
• Required liability waivers
Rocky Mountain Institute, respectfully known as
RMI, is a worldwide leader in energy and sustain-
ability and is currently using the HansonBridgett
IPD model for their new building in Basalt. With the
benefit of its experience working on projects nation-
ally under traditional contracting methods, RMI ini-
tially began the discussion to use the IPD process in
2011. Cara Carmichael, design process and budget liai-
son for RMI, is part of the Project Management Team
(PMT) for the project and shares the title equally
with the designer and contractor on the project un-
der the MPA.
“When we chose the IPD process, we were prepared
and understood that we needed to bring people up
to speed,” Carmichael said. Shedding risks from one
party to another is the standard in which most con-
tractual relationships exist. However, RMI’s project
complemented their desire to advance the discus-
sion for the integrated process.
“We were excited to implement the process to drive
higher energy performance,” Carmichael remarked.
“It was a natural fit.”
As the AIA IPD survey suggests, not all owners are
excited about sharing the risks or living with the
insecurity of unexpected overruns toward the end
of the project that are typically controlled under a
guaranteed maximum price. Carmichael advises
not to short change any efforts to understand the
big decisions during the validation process that sets
the Base Target Cost (BTC). “So much relies on un-
derstanding the Base Target Cost. Be clear as possi-
ble regarding performance standards and placeholder
assumptions to ensure you’re achieving the expected
quality,” stated Carmichael when addressing owners’ ex-
pectations of the IPD process. Less experienced owners
may be intimidated by the transparency and openness
of the decision making process.
There are interesting revelations within the IPD
Awareness Survey related to the perceptions within the
surveyed members, such as:
• 19% of respondents have read the IPD Guide and less
than 5% could explain the resource,
• 28%, or 1 in 4, of respondents stated that their firm
lacks trust in industry partners, and
• 43% of the respondents stated a general lack of in-
dustry support for the process.
Experienced IPD contractor Mike Tilbury, vice pres-
ident with JE Dunn Construction, is leading the com-
pany’s efforts on an IPD project. Tilbury advises that
owners should investigate the process thoroughly and
educate themselves on what the process requires to
properly facilitate the team.
“Most of our discussions with owners considering the
IPD model is to ensure they do not underestimate how
important it is to get everyone moving in the same di-
rection,” replied Tilbury. “The typical owner/architect/
contractor meeting becomes a larger community that
includes subcontractors and vendors who are not nec-
essarily accustomed to being a part of the upfront dia-
logue.” One of the driving attributes for the IPDmodel is
the inclusion of key trade partners and vendors partic-
ipating in the multiparty contract or IFOA. Though sev-
eral contract delivery methods include subcontractors
and vendors within early design discussions to perform
preconstruction services, the IPD method allows trade
partners to take a more active role and responsibility as
a project stakeholder and benefiting from the overall
innovation and performance of the project team.
Tilbury adds to be weary of subcontractors who are
willing to sign up to the IPD process without under-
standing how the contract model works.
“Everything is laid out on the table under the IPD pro-
cess. Everyone reveals their fees, per diems, markups and
business cost structure,” Tilbury said. “This type of full
exposure and transparency is a mental hurdle for many
Diane M. Miller
Vice
President of
Marketing,
JE Dunn
Construction
TRENDS
in Construction Delivery
