IPD 101: Better Design, Greater Consensus with Integrated Project Delivery
The Canadian Nuclear Laboratories New Builds Project is delivering value and driving design innovation using Integrated Project Delivery. Here’s how:
A “State-of-the-Art” Process ...
Integrated Project Delivery is a collaborative, transparent and continuous improvement-based project delivery format built on a strong foundation of information sharing and shared risk and rewards. By bringing together a diverse team with a broad range of expertise including constructors, designers, ownership, and stakeholders into a shared and open working environment, pre-existing biases and the dreaded "we’ve always done it this way" attitudes are challenged to deliver value on time and on budget. Key features of IPD include:
- Early involvement of key participants;
- Shared risk and reward based on project outcome;
- Joint project control;
- Reduced liability exposure; and
- Jointly developed and validated target goals.
Industry research suggests that most, if not all IPD projects, are high performers, with all parties expressing high satisfaction with overall value delivered.
… For a State-of-the-Art Project
Canadian Nuclear Laboratories, Canada’s premier nuclear science and technology organization, has made a commitment to transform its Chalk River Laboratories campus “through the revitalization of essential site infrastructure, the decommissioning of aging infrastructure and a significant investment in new, world-class science facilities. After helping CNL develop a master plan that reflects these goals in 2017, our HDR team stayed on board to serve as master architect on a suite of three projects, or “New Builds”, focused on the Entry Precinct and the south half of the Campus Precinct — a logistics warehouse, a support facility, and a business hub. Through a joint venture, Sullivan Construction and Chandos Construction are the general contractor on the project.
With the complexities of a multi-stakeholder facility, tight budgets, and a high-profile project in the eyes of the public, CNL established themselves as a leader in contracting innovation by selecting IPD as an optimum path to best align expectations and outcomes across every possible dimension of the CNL New Builds project.
So How Does it Work?
The big distinguishing factor of IPD is the contract. While traditional project delivery arrangements are more hierarchical and can be subject to opaque relationships and competing incentives, IPD relies on a “poly-party agreement” where all key parties sign onto one contract — binding them together through shared risk and responsibility.
And How Does It Impact Costs?
From the outset of the project, project costs are set as the sum of direct costs and overhead. Project profits, agreed upon by the project team, go into a collective pool called the Incentive Compensation Layer, which is shared between all poly-party agreement signatories. With IPD, no matter the outcome, all parties are paid for their expenditures AT COST — and that is audited. Additionally, as project milestones are met, profits in the ICL pool are paid out to the parties so long as the ICL pool remains healthy. The ICL pool is also used to cover over-budget project costs.
As a result, there are four basic scenarios that can play out.
This model fundamentally changes the incentives for all parties. When all parties are bound together in a “shared risk, shared reward” agreement, success is imperative to all. If the project is successful, all parties share that profit and if the project is over-budget, all projects share that loss. All project financials are transparent and collaboration becomes not just beneficial, but necessary to project success.
That’s Great. But How Does it Impact Outcomes?
When executed successfully, the IPD process offers numerous benefits to both the project team and the owner. On CNL and other IPD projects we bring everyone into the “Big Room." In the “Big Room,” the owner, contractor, design team and key consultants (e.g., structural, electrical, mechanical) are all integral members of the design team, and many with a literal financial stake in the project — are working side by side. Architectural concepts are vetted and analyzed holistically for how they affect building systems, cost, construction and materiality. Computational design tools and our Data Wrangler are used to help visualize and analyze options in an iterative and efficient way.
For the CNL “New Builds” project, the Big Room has fostered close coordination with all team members which has been critical to design innovation. Given the types of buildings in the “New Builds” project and their location at a nuclear research facility, the initial design concepts all assumed the use of steel and concrete structures. While mass timber is both beautiful and sustainable, it was assumed there would be a cost premium associated with it that the projects could not bear. However, collaboration in the Big Room allowed the team to undertake a careful study of the different structural options and ramifications. What we found is that while mass timber as a material is more expensive than steel, when we broadened the comparison and factored in fire protection, interior finishes and speed of construction, utilizing mass timber actually drove the total project cost down.
Other examples of deriving project value that can be traced back to collaboration in the “Big Room” are featured below:
The underlying concept of “shared risk, shared reward” has numerous benefits that make IPD an advantageous project delivery model to explore for any institution embarking on a major, multi-stakeholder project. The key benefits derived for the project team and the owner are outlined below:
There are many other tools and strategies utilized with IPD that can help make it a more successful process and we will discuss these in future articles. However, it is imperative to remember that any process is only as good as its execution. Successfully executing an IPD project requires (1) that the right team with the right background and expertise are included, (2) the right knowledge and information is incorporated into the process and (3) all team members come to the project with the right attitude where “trust” is an over-riding principle. Steven Innes, Director of New Builds at CNL further supports this sentiment by stating “IPD is a contract model that opens the door to innovation. However, like any project, it is the team that makes it successful. Both strong companies and strong individuals are needed to bring the best out of each other, and challenge the status quo.”
Contributors
Susan Croswell, OAA, MRAIC, is an award winning project architect with over 27 years of diversified experience. Her expertise in both architectural design and technology allows her to excel in the profession from concept design through to contract administration. Susan’s ability to deliver complex projects and documentation on time is a hallmark of her work and is achieved through effective leadership and teamwork. She has developed a reputation as a highly competent, efficient, effective and approachable project architect who loves the challenges that each and every project brings to the team.
Justin Perdue, OAA, MRAIC, is an award-winning architect with over a decade’s experience. He is passionate about design, and firmly believes that the design of the built environment has a tangible and significant impact on our happiness and productivity. He pushes his design teams to develop a clear design thesis for each project, and then to measure each decision against this thesis. He has a particular aptitude in working with client stakeholders to clarify needs and build consensus.
