A Way Forward? Integrated Project Delivery

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32: Design Practices Now, Vol. I

Essay

The United States construction industry is in a tailspin, with 25% of the workers in a 1.6 trillion dollar industry—as much as 10% of GDP¹—idle, and similar numbers of architects unemployed. At the same time that the industry faces its greatest economic challenge in generations, the realization that building is fundamentally inefficient, wasting 30% of its resources by many counts,² has inspired much soul-searching and analysis. New methods for designing and building are being investigated not as an academic exercise but as a necessity for long-term economic well-being. Thirty percent of 1.6 trillion dollars is almost $500 billion, exceeding the value of all buildings typically designed by architects in the U.S. in a single year. Capturing that value is a huge economic opportunity for owners, designers, and builders, and the roles and responsibilities of those who make buildings will change as a result. How architects decide to respond will be critical to the survival of the architectural profession itself.

Enter “integrated project delivery” (IPD), in which responsibilities of all the players are defined through service to the project rather than through standard contract scopes of service and traditional “lowest bidder” selection. Simultaneously, the adoption of modern three-dimensional modeling technologies in design, commonly called “Building Information Modeling” or “BIM” is becoming increasingly widespread.³ Early definitions of IPD (circa 2004) failed to distinguish between the technology and the delivery approach, suggesting that the collaborative potential of BIM software alone—in which a single, richly three-dimensional representation made the design so transparent that clarity was available to all—would restructure delivery, solving all the problems of predictability and accuracy. Tools, however, do not a project delivery paradigm make.

U.S. designers and builders have worked toward “process integration” for decades. Various project delivery methods (for example, Design/Build) claim the mantle of “Integrated Project Delivery,” as the phrase has become increasingly popular of late, not unlike sustainable design. But like “green wash,” much IPD talk is marketing, since a “pure” IPD project would include these basic elements: a single agreement between the collaborating parties; a shared risk/reward structure in which profit for contractor and architect is strictly tied to measurable project outcomes; decision-making by consensus of the signatories of the single agreement; and a BIM-based technology infrastructure for transparent information exchange.⁴

Recently various industry associations and a few adventuresome clients (including me) have attempted to define a canonical approach and thus institutionalize IPD as a formal delivery paradigm distinct from other approaches such as traditional design-bid-build, construction management, or design/build. “Pure IPD” projects, adhering to the characteristics described above, assign the architect/engineer and contractor traditional responsibilities but hold them jointly responsible for outcomes, with profits paid jointly accordingly. Successful achievement of those outcomes is the only path to profit for designer and builder, and failure means no profit paid to either. Financial gain is a purely a result of achieving measurable project outcomes defined by the owner in the original contract (for instance, coming in on time and on budget; achieving LEED platinum status; achieving high design quality as judged by a hired independent design inspector). Decisions necessary to progress the work are made by consensus by empowered representatives of the owner, designer, and builder⁵—there is joint ownership of project progress. IPD is designed not to create a socialistic model or to reduce the importance or core responsibilities of the players but rather to ensure that maximum insight about each project decision is brought to bear, and decisions are made in the best interest of the project rather than any of the individual project constituents. This is the theory of IPD that is only now being tested in practice.

Acknowledging the inherently conservative nature of building industry,⁶ the key players in the process—designers, builders, and owners—have both high expectations and strong suspicions about IPD. Everyone understands that the construction process is increasingly complex and difficult to manage, and while traditional means of design representation (construction documents and specifications) are no longer effective, the industry’s normal low profitability and high risk hardly inspire its participants to take on a new approach that could, they think, leave them worse off. Despite this general unwillingness to innovate, the need for change is clear: A 2005 report by the Construction Management Association of America reported that 92% of clients felt that architects’ drawings were not sufficiently complete for construction, and almost 30% of all projects in the U.S. fail to meet schedule, budget, or both.⁷

Architects’ Concerns

More worrisome to architects than a fear of the IPD unknown, however, is the consensus-based decision making that is the foundation of the IPD process: How can the best design ideas, which surely must come from the architect, have any hope of success when they can be trumped at any moment by the owner or builder as frivolous, expensive, or functionally irrelevant? The autonomy of the architect as sole generator of design ideas is certainly questioned under IPD, which demands that ideas survive based on their benefit to the project rather than their source. That’s a scary idea to architects trying to sustain every shred of inspired design or who otherwise feel they are the only creator and defender of the project’s aesthetic quality.

Perhaps more ominous, if less understood, is the dilution of the architect’s inherent power in the building process as the protector, as a licensed professional, of the public’s health, welfare, and safety. Does consensus decision-making water down the architect’s responsibility to the contractor and owner and thereby render professional architects’ duties to the public obsolete? Architects have struggled with the balance of authority and risk for decades, and engagement in IPD may finally call the question for good.

Contractors’ Concerns

Contractors, even those who acknowledge and respect the value of a good architect, bring parallel if obverse concerns. Since outcome-based IPD contracts tie large portions of profit to hitting schedules and budgets, how can the contractor assure that the risks of overruns are not increased by joint decision-making? Does that collaboration transfer design risk to the contractor as a “joint designer” of the project? My IPD project had a “design quality” goal with substantial profit contingent on the judgment of a third-party “design inspector” who had absolute authority to decide if the project design met our goals, both aesthetic and functional, and a portion of the profit on the job (jointly paid to the architect and contractor) was predicated on this conclusion. Is this a bet worth taking, particularly for an important subcontractor (like the mechanical systems sub) who is part of the IPD contract but little involved in aesthetics, when the architect will be primarily responsible for the key ideas that will make or break this outcome? 

The traditional communication barriers between designers and contractors under IPD are completely abandoned, since unfettered communication between the players is contractually required. This can result in some interesting dynamics different from the norm. The architect’s directing of the work of a subcontractor in the field or the building product manufacturer’s recommending design improvement to the architect during construction can both be seen as providing both an opportunity for improvement while violating a basic risk-management tenet of modern construction: Only the contractor directs the work in the field, and the architect is just an interested but vocal “observer for the owner.”

Owners’ Concerns

And finally, owners, who supposedly are the greatest beneficiaries of IPD’s alleged more predictable, higher quality outcomes, have perhaps the greatest trepidations. Most traditional delivery models put a certain distance between providers and consumers: Architects propose ideas and solutions; owners approve or dispose of them. The consolidated representation of those ideas is transferred to builders via the contract documents laden with “design intent.” Those builders further resolve and execute them while assuming much of the technical and financial risk for their efficacy. IPD obliterates these distinctions and demands that sophisticated owners trust their team, participate in every important decision as a collaborator, and share this risk, thereby abandoning the ability to use litigation as their primary enforcement tool, as well as the ability to hold the architect or builder wholly responsible for a failure, real or imagined. (When the owner, architect and contractor decide to hold each other harmless under IPD, the architect’s liability is significantly reduced, since 85% of lawsuits against architects come from their clients or builders.) A central tenet of IPD—that risk must be embraced by everyone and thereby reduced—requires the greatest leap of faith for owners, who have spent years creating contracts, procedures, and instincts designed to transfer as much risk as possible to the other players. Traditionally these risks are heaped on the player in the contract negotiation process least adept in avoiding, but IPD assumes those risks are best understood and diminished by the collective wisdom of the players. Quite a leap indeed.

Tinkering around the edges of building delivery approaches (see “partnering” or various flavors of construction management-based contracts) make little headway in overcoming the inherent weaknesses of building in the U.S., which has suffered from unpredictable results and inefficiencies for decades. There are broader trends that will bridge if not close the builder/designer gap: sustainable design (in which information about building materials and construction strategies are necessary early, and obligations for building performance beyond the ribbon-cutting are established in the design) and digital fabrication of building components (in which originating design information is a necessary precedent to control computer-driven manufacturing equipment) are but two. If integration is inevitable, IPD can be seen as but another experiment, albeit a radical one, to find the answers. Limited examples of success⁸ suggest that the experiment will continue as technology continues to transform both practice and building itself.

Most precariously balanced in this new equation is the role of the architect, and the architectural profession should take heed of the exploration at hand. Traditional delivery models place the architect first at the table and make him or her the project leader before contractors are selected. Every delivery model to evolve after traditional design-bid-build has challenged that authority and has remediated the roles and responsibilities of designer and builder. This trend will continue as IPD is further understood, and as contractors assemble their own internal “virtual construction”/BIM modeling groups to support construction, often staffed by architects. It is a short jump from being a construction company with internal architects creating models to an integrated design and construction delivery firm.

The broader trend toward process integration brings the players around the table much earlier, and everyone’s insights are increasingly valued in the age of integration. “Leadership” in this model becomes a product not of hierarchical control but rather quality of ideas and the ability to synthesize disparate information and influences and draw the most reasonable conclusions—core values of the design culture itself. For this reason, an integrated approach should reinforce, not dilute, good design ideas. Of course, it might be argued that even the best contractors care little about the subtleties of a building’s design. But to the extent that the project is being measured in both practical and aesthetic terms, that contractor will be rewarded under IPD for achieving aesthetic aims. Perhaps a new generation of more attuned contractors will result. Either way, an IPD approach puts both the architect and the builder on the same side of that argument.

The best owners and contractors understand the value and contribution of good architects and know that their role is critical to project success. As IPD is refined in the next period of innovation, architects must continue to insist on and deliver that value. And while IPD may dilute the romantic notion of the heroic designer valiantly defending concepts in the face of mere practical considerations, it is precisely those considerations that IPD purports to include, rather than resist, in the finished product. If a design idea has value, the IPD process should identify and support it.

The current economy has decimated the pipeline of new building projects, and thus opportunities for innovation of any sort (including IPD) in the near term are few. Recession has put further downward pressure on architectural fees and encouraged those owners who still build to shop even more aggressively for the lowest price. Limited work and even lower margins further discourage new ideas from taking root. Further, a lot of industry infrastructure must adjust to meet the challenge of this new approach: Traditional insurance and bonding mechanisms are unsuited to integrated projects,¹⁰ and today’s studio-centric design education pedagogy emphasizes individual ideation over collaboration, particularly in technical integration. Yet the economic imperative for change alone is enormous enough to suggest that the marketplace will shift to address it, and architects represent perhaps the smallest constituency affected by this change. But rather than see the change as a threat, we should consider it an opportunity that we ignore at our peril.

Sidebar: Autodesk’s IPD Project in Waltham, Massachusetts

Autodesk has been at the center of the IPD conversation as a provider of BIM technology to the building industry, so when we had the opportunity to build our own project—offices for our Architecture/Engineering/Construction Division—we decided to implement principles of IPD, BIM, and sustainability. We created a customized, “pure” IPD single contract, hired a consolidated team of designers and builders, and tasked them with creating a project with measured outcomes upon which their profits would be based. The IPD contract specified a budget target, schedule deadline, requirement for LEED Platinum certification, and design quality objectives as determined by a design inspector. Our IPD team accomplished all of these goals for us, delivering a $13.2M project from contract signature to completion in 8.5 months (almost twice as fast as similar projects we’ve completed in the past), on budget, and properly LEED certified. By extracting value from the inherent efficiency of the IPD process itself—which we believed would attack the 30% waste factor inherent in the industry—we were able to increase the effective construction budget of the project by almost 8%, converting those funds into significant enhancement in the design through improved detailing, material choices, and finishes. The project team was paid all profit incentives anticipated by the IPD contract. The project had no change orders, no coordination errors, no workplace accidents, and no claims. We were pleased that this experiment in alternative delivery has had such satisfying results.