Integrated Project Delivery (IPD)
Posted by Murray Guy on
In his book “Broken Buildings, Busted Budgets”, Barry Lepatner provides insight into why a new approach is needed to eliminate the 10% waste that is inherent in the traditional transactional contracting methodology. “Across the nation, construction projects large and small – hospital to schools –are spiraling out of control with cost overruns.” Clearly the construction industry is in need of reform as in North America alone this industry consumes $1.23 Trillion and wastes $123 Billion annually.
In traditional transactional contracting methods like Design-Tender-Bid, Design-Build and Construction Management contractors are forced to compete on price. This low first cost method forces contractors, owners and designers into an ineffective and often confrontational business relationship that is wasteful, stressful and not effective at optimizing value.
In the 1990s a group of Florida businesses developed a new process that applied the processes of lean manufacturing to building construction. They called this process Integrated Project Delivery or IPD. Their approach was defined as “a process where all disciplines in a construction project work as one firm, creating faster delivery times, lower costs, no litigation and a more enjoyable process for the entire team—including the owner.”
This new process, based upon relational contracting, focuses on how teams work together to achieve a best value project and are rewarded collectively for achieving a successful project. The IPD system enables the hiring the best team based upon qualifications and the ability to work together to deliver the best value. For the same budget this approach will enable our industry to build better building and do our part to offset the 40% of greenhouse emissions that come from buildings.
Integrated Project Delivery is now becoming mainstream as the Architects Institute of America have developed all of the documents, contracts and guidelines to make this a legitimate industry standard.
The process that these pioneers have created has the potential to revolutionize the way we do business in the building industry and will enable us to achieve the paradigm shift of performance that we need to achieve Net 0 building.