With the convergence of high-speed, immediate access information technology and the increased proliferation of business alliances we are seeing the opportunity to reevaluate some traditional paradigms and replace them with more innovative processes and methods in our industry. One such shift is to rethink the way projects evolve from inception through completion. Previously the process has been pretty much linear, with the owner relaying information to the architect, who develops the architectural concepts which are then filled in by the various engineering disciplines and finally are put out for bids and ultimately constructed by members of the construction industry.

Today this whole process can be a collaborative effort from beginning to end with the Owner involving the design consultants and key contracting entities right up front. The underlying objective is to deliver a better project, quicker, at a lower cost, and with fewer hassles. We are learning that a project that develops as a true collaborative effort can come to completion without lawsuits, excessive change orders and claims and with all participating parties strengthening their professional friendships along the way rather than ending up sitting across the table behind their attorneys.

The IPD process is a lot like the traditional “design-build” concept which has been successful in other parts of the country for years. The difference is that everyone, including the strategic subcontractors, collaborates at the earliest stages of the project. The aim is to ensure that all team members fully understand the Owner’s expectations and requirements and that the best, most critical thinking of all team members is leveraged throughout the project. We believe that increasingly this type of delivery method will become more prevalent in the South, and that Integrated Project Delivery™ in one form or another will actually become the preferred method of delivery for the next (20) years or more.

The rapidly emerging global website technology can be used to facilitate this process. All critical information, including drawings, budget changes, schedule impacts, key coordination issues, value-engineering ideas, etc. can be available to all team members, including the Owner, as they emerge. This continual flow of information is tantamount to a continual virtual team meeting. Timely identification of and solving of design and construction issues may shave months off of the construction schedule and thousands of dollars out of the overall design and construction costs. With all issues well explored and resolved in a timely manner, contractor initiated change orders and claims are substantially reduced or even eliminated.

If a single company had all design and construction disciplines under one roof it might be uniquely qualified to offer true Integrated Project Delivery™. (Admittedly, it might be a little unwieldy.)

The reality is that there are a number of highly qualified independent design firms and construction companies that could combine in various ways to offer the Owner a “Dream Team” for his particular project. The problem is that the construction industry is established upon the principle of the contract, which, when signed, is often little more than a declaration of war with the contract establishing the rules of engagement. Each party jealously guards its profit potential. How can such a system ever produce a truly cooperative environment? The critical problem then, is for these companies to organize themselves in such a way that they function as a truly integrated company where everyone shares a common incentive.

We solved this problem by incorporating Integrated Project Delivery™, Inc. (IPD). All of the Design and construction Team Members are equal shareholders in IPD, Inc. We have all been working together on major projects for years and have come to respect and appreciate the abilities of each other. Moreover, we have formed professional friendships that have streamlined the business process. In many ways we have been a team for a long time and have only formalized the relationship with the formation of IPD, Inc.

One of the most unique aspects of IPD, Inc. is that the member companies share cost on the project. Each team member is reimbursed by IPD for it’s direct job cost for the preceding month. At the end of the job the gross profit is distributed to the Team Members based on a predetermined formula that recognizes the cost incurred by each Team Member in each of the cost categories. Thus a Team Member is not penalized for performing more work on the project and everyone is encouraged to apply resources where they are needed for maximum efficiency. This creates an environment where each team Member is vitally interested in the success of each part of the project and has a vested interest in the efficiency of each discipline.

This is perhaps one of the largest parts of the IPD story, that independent construction companies could have such trust and confidence in the integrity and ability of each other that they are willing to tie their profit potential to the success of the other Team Members. Further, as equal owners of IPD and co-indemnities on the performance bond they guarantee each other’s work. Ultimately this will prove to be a great benefit to the public and building owners as well as to our industry. This process will go a long way in restoring respect and professionalism to the construction segment of our industry and will help to restore the pride at the craft levels.

Good designers want good information and good feedback on their projects and their designs. With the collaborative process, and the relationship that they enter into with the installing contractors as co-owners of IPD, Inc., they receive just that. All pricing information is “open book” for them.

With the IPD approach, the contractors will have been a part of the collaborative process that produced the design documents. They will have, in effect, “signed off” on every stage of the construction documents development. Under the collaborative process change orders and claims initiated by contractors are greatly reduced or eliminated and the arbitration and litigation that so frequently follows larger projects will be all but eliminated.

All of the major design disciplines need to be on the team. The contractors that are included are the ones who are involved in making strategic decisions for the project and the ones who would have the most valuable input for the rest of the collaboration team members.

On any given project it might be shown clearly that some trade disciplines such as a concrete contractor, a carpenter, a shingle contractor, a roofing contractor, a glazing contractor, an insulation subcontractor, a sheet metal contractor, a test and balance contractor, etc. would really have little valuable input into the collaborative effort for the project.

On the other hand, those contractors who are intimately familiar with and responsible for ways and means of the major construction, such as the general contractor, belong on the team. Additionally, the ones who have expertise in the highly technical areas that involve numerous possible alternatives and design scenarios such as the mechanical contractor along with those who are central to the support of all the other trades such as the electrical contractor would belong on the team.

At IPD, Inc. we have included the architect, mep engineering team, general contractor, mechanical contractor, plumbing contractor and electrical contractor.

Sophisticated owners and general contractors realize that the true cost of a project is not what is bid but what is finally paid after all change orders and claims have been settled and the last attorney’s bill paid. With the IPD Team we can offer the lowest possible cost for the project. Here are some of the ways the IPD Team will save you money.

No Mark Up On Team Members

The IPD Team will negotiate a low simple mark up percentage to be applied to all job costs. The Owner is only billed for incurred costs and does not pay double mark ups. Each discipline marks its costs up once in accordance with the agreed upon percentage and, unlike the traditional construction management process, there is no additional mark up applied by the IPD Team.

Value Engineering

The early collaboration in the development of the project encourages many other small savings in ways and means that, because of the collaborative process, are easy to interject into the design. By creating “buddies” on the team i.e. the mechanical contractor and the mechanical engineer, the electrical contractor and the electrical engineer, the general contractor and the architect, etc., and through the collaborative process between these team members, the project will be built “as designed”. The “value engineering” ideas that typically come up after the completion of the design process are built right in and budgeted from the beginning.

Design Fees

The design professionals are an integral part of the IPD Team and will perform fast track design for your project for a total fee that is lower than prevailing industry rates. This reduced rate is validation of the efficiency of this approach and the competency of the IPD Team member companies.

Competitive Bids

All segments of the work including subcontracts, equipment purchases, rentals and other major segments of the work are competitively bid throughout the project. The IPD Team defines the mechanical sub bid packages, solicits the bids from qualified bidders and evaluates the bids making appropriate recommendations. The IPD Team process will accommodate any degree of Owner involvement.

Sales Tax

The IPD team members are licensed by the State of Florida to purchase and resell equipment and materials and can accept an Owner’s tax exemption number in lieu of collecting state sales tax. This can save a “tax exempt” Owner up to 6% on all equipment and much of the material without the Owner incurring liability for purchasing direct from suppliers.

Efficient Field Procedures

All of the IPD Team disciplines share cost on the project. It behooves everyone to cooperate fully with each other to minimize project costs. No one is protecting his turf or margins. The only incentive is to cooperate to complete the project as quickly as possible without disruptions or disputes. This concept of “shared costs” is what makes the IPD Team operate as a single company on your project. We can’t over emphasize the importance of this element of the IPD concept.

The development of the budget itself is a collaborative process which begins from day one with each team member completing the sections of the budget that fall under his particular discipline. As the collaborative process unfolds and the integrative project design continues, these budgets are continually updated until they reach a point at which they become very solid numbers. At this point in the process, a GMP is typically established. All planning and budgeting is open and available to the Owner at all times. The Owner is encouraged to take as active a role in the development stage of the project as he wishes to take.

As the construction begins there are few surprises since the contractors involved in building the project have been involved from day one through the collaborative process with the development and design of the project. Everyone will know this project like the back of their hand.

Through this process the Integrated Project Delivery™ team members develop a close working relationship, a sense of ownership and of pride in the project and the process. A working relationship such as this results in strengthening professional friendships amongst the participants. With the basic paradigms removed that tend to cause enmity and friction team members actually function as a team.

First and foremost, the advantage of the Integrated Project Delivery™ method will accrue to the owner. He will realize a quality project, delivered on time and within budget without all the headaches associated with bickering, arguing, lawsuits and claims. With the Integrated Project Delivery™ method he will have a greater chance of getting what he sets out to get. The IPD process will insulate him from the majority of the typical problems of construction.

We at IPD, Inc. believe the time for Integrated Project Delivery™ has arrived. A consortium of quality independent companies with common foundational values working together in harmony to create an unparalleled synergy and excellence to bring a product to the marketplace that will stand alone in quality, economic efficiencies and value to the Owner and to the community. Call us today to learn more about IPD and what it can do for you.