Building Together: How Integrated Project Delivery Creates Shared Value

As technology and innovative processes continue to evolve the construction industry, the need for openness and collaboration among teams and stakeholders has increased significantly. Traditional project delivery methods, such as design-bid-build, are being challenged by approaches that promise greater efficiency, collaboration and quality outcomes through unified team structures. 

Integrated project delivery (IPD) is a delivery method that aligns the interests, objectives, and practices of all stakeholders, including owners, architects, contractors and trade partners. IPD is all about shared risk and shared reward. Success of this delivery method is based on the ability of project stakeholders to collaborate effectively, generally through outlined contractual agreements.

IPD started as a lean construction process and aims to minimize waste in terms of time and materials, while also improving quality and encouraging stakeholders to work together toward a common goal. 

In this article, we explore the advantages and challenges with IPD, who’s involved and best practices to execute this delivery method for overall success.

Understanding Integrated Project Delivery

Unlike traditional project delivery methods, the collaborative environment that IPD fosters redefines stakeholder roles on projects. IPD requires all stakeholders to work as a cohesive team from the start. 

While design-build and construction manager at-risk (CMAR) both provide similar benefits, IPD contracts often take collaboration a step further through an Integrated Form of Agreement (IFOA) that aligns the interests of all parties to the project, including the owner.

“Both design-build and at-risk CM can be classified as integrated project delivery models," Barbara J. Jackson writes in Construction Management Jumpstart. "However, there is also an IPD approach that has a unique contracting format known as an Integrated Form of Agreement or IFOA. An IFOA is a mutiparty agreement, whereby the owner, architect, and contractor (O/A/C) all sign one agreement and share liability for the development and delivery of both the design and construction of the project. In this sense, the owner is actually accountable for the delivery of their own project, and may benefit from financial gains, or suffer financial losses, associated with the project’s performance.”

Contract structure

Integrated project delivery typically involves a single, multi-party contract that includes the owner, architect, contractor and sometimes other key stakeholders such as engineers and subcontractors. Contracts may include performance-based incentives that align with project objectives, such as schedule, budget and quality targets.

Additionally, IPD contracts are centered around shared project goals and value, rather than individual deliverables. This further incentivizes teams to work together, instead of independently to meet project objectives. 

Building the right team

In IPD, the focus shifts from individual achievement to collective success, which can be seen as contradictory to traditional mindsets in the industry. When putting together the project team, it’s important to have leaders who are open to collaboration, adaptability and willing to engage in transparent communication. 

Integrated project delivery requires team members to be committed to the project’s overall success, often requiring them to look beyond their specialized roles, and be willing to work closely with others to solve problems. 

Fostering a collaborative culture

In traditional contracts, risk often cascades from the owner down to the general contractor (GC) and then to the trade partners, creating a divisive risk waterfall. Typically, the GC ends up shouldering the burdens that the owner doesn't want to take on and trade partners take on risks that are passed down from the GC.  

With IPD, it’s helpful for owners to be engaged and work closely with other stakeholders on the project, including the general contractor, and possibly the trade partners. Encouraging openness and unity from the top down sets the tone for the project and allows teams to work together to hold one another accountable. 

Building trust among stakeholders strengthens the opportunities for further collaboration and transparency on projects, which allows teams to work together to solve problems and achieve overall project goals. 

IPD vs. Traditional Project Delivery Methods

There are several ways that integrated project delivery is set apart from traditional delivery methods in construction. The table shows some of the most common differences between IPD and other project delivery methods. 

Challenges with IPD

Although integrated project delivery offers significant benefits in terms of collaboration and shared responsibilities, it is not without its challenges. 

Shared risk

One of the main pitfalls in IPD is the shared risk that all parties assume, especially when the project outcomes differ from what is expected. For example, project delays due to supply chain disruptions, design changes after the project begins or subpar quality work can all negatively impact the parties involved. 

Due to the interconnected structure of IPD,  these setbacks can strain relationships and result in financial losses that could be particularly damaging to trade partners who may not have a significant amount of cash flow.  

Higher upfront costs

The initial costs associated with IPD can be higher compared to traditional methods, mainly due to the investment in collaborative processes, technology and early involvement of all stakeholders. This could cause some project owners who are focused on startup cots to be hesitant to adopt this approach.

Resistance to change

Implementing integrated project delivery requires a shift in mindset and practices, which can be challenging for individuals who have not accepted the collaborative and open nature of this method. On top of the unified team approach, incorporating innovative practices such as prefabricated materials may also receive some push back leadership. 

Need for constant communication

The success of IPD heavily relies on continuous communication and coordination among all stakeholders. This can be challenging to maintain consistently, especially without software management tools that can store project information and communication in one, single place. Emails, spreadsheets and physical documents can easily be misplaced or take additional time to get a needed answer across the project team. 

Stay updated on what’s happening in construction.

Subscribe to Blueprint, Procore’s free construction newsletter, to get content from industry experts delivered straight to your inbox.

Subscribe

3 Ways to Effectively Adopt IPD

Making the switch from traditional project delivery methods to integrated project delivery takes time. Both leaders and project teams must be on the same page about the level of communication and collaboration that IPD requires. Being intentional about a few key factors when implementing this delivery method can help with efficient execution. 

1. Involve stakeholders early.

   Bringing all key players together at the beginning to align goals and expectations for each phase of the project establishes transparency and a culture of trust and collaboration for the team. It also allows teams to foresee and address  any potential issues or conflicts that can result in potential delays or financial hiccups. 

2. Invest in training. 

   Proper training on how to properly integrate IPD principles can alleviate hesitancy and opposition from both leaders and team members. Making sure that everyone fully understands the process and objectives of the project, how to use the required tools and how to work collaboratively with others helps break down barriers and any fears about new changes. 
   
   Hiring consultants or leaders from other companies who’ve successfully implemented integrated project delivery may help with mentoring and walking teams through the process. 

3. Use technology to collaborate.

   Project management software encourages teams to communicate and work together on a single, shared platform. Sharing updates and information in real time with tools like building information modeling (BIM), artificial intelligence or reality capture tools cuts down on processing times and can improve both quality and efficiency on projects. 

Embracing Change Fuels Success for IPD

Integrated project delivery offers a collaborative framework that drives successful project outcomes through shared goals and collective accountability. Adopting this delivery method involves a commitment to change, but with strategic planning and careful implementation, construction companies can streamline their process and strengthen relationships across teams to boost efficiency and quality on their projects.

Written by