An Updated Working Definition

INTEGRATED PROJECT DELIVERY:

AN UPDATED

WORKING DEFINITION

VERSION 3 UPDATED 7/15/14

1 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

INTRODUCTION

THE AMERICAN INSTITUTE

OF ARCHITECTS,

CALIFORNIA COUNCIL

1303 J Street, Suite 200

Sacramento, CA 95814

916/448-9082

916/442-5346 fax

E-MAIL: [email protected]g

WEBSITE: www.ipd-ca.net

INTRODUCTION

This document,

Integrated Project Delivery: An Updated Working Deﬁnition

contains the recommendations of the AIA California Council’s Deﬁnitions

Committee of the Integrated Project Delivery Task Force. Several years have

passed since the initial development of this document in 2006. While the

original document, on the surface, is surprisingly intact, there is recognition

that the document could beneﬁt by refreshing the deﬁniton and principles

based on implementation of actual Integrated Project Delivery projects. To

date, we are aware of over 200 projects that use multi-party contracts to

incentivize and reward their teams in project execution, with likely 100s or

even 1,000s that use the principles of Integrated Project Delivery to improve

project outcomes.

It is largely this proliferation of projects using IPD principles that has

prompted this Updated Working Deﬁnition. Projects using incomplete models

of integration, often called “IPD-ish,” have caused much confusion in the

industry. This document proposes drawing a line in the sand as to what is IPD

and what is not IPD. This document identiﬁes what IPD is; either a project is

providing all the ingredients and it is IPD or it is not.

The organization of the

Updated Working Deﬁnition

is similar to that of the

original document, with the addition of a section containing a comparison

between Integrated Project Delivery and more traditional delivery models. This

document also amends the text with real world experiences from the use of

Building Information Modeling, large collaborative project spaces, aka “the big

room” and implementation of risk sharing/incentive rewards on projects that

have gone well.

The Task Force will continue to use the

Updated Working Deﬁnition

as the

basis for developing recommendations for best practices, integrated project

delivery models, and risk allocation. Why is the document still a “Working

Deﬁnition?” Integrated Project Delivery is still in its infancy.

When this delivery model is being used more commonly, there will be

sufﬁcient data to clearly deﬁne the boundaries of Integrated Project Delivery.

Until then, the group invites you to comment on the

Updated Working

Deﬁnition

, by writing to [email protected]g.

“Projects using incomplete

models of integration,

often called “IPD-ish,” have

caused much confusion in

the industry. This document

proposes drawing a line in

the sand as to what is IPD

and what is not IPD.”

3 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

TABLE OF CONTENTS

CONCEPTUAL-

IZATION

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

PAGE 8 PAGE 8 PAGE 9 PAGE 9 PAGE 10 PAGE 10 PAGE 10

IPD DEFINITION

PAGE 4

THE VALUE PROPOSITION

PAGE 5

ESSENTIAL PRINCIPLES

PAGE 6

PHASES

PAGE 7

OPTIMIZED IPD

PAGE 11

GLOSSARY

PAGE 16

CONCLUSION

PAGE 15

IN COMPARISON WITH OTHER DELIVERY MODELS

PAGE 13

ACKNOWLEDGEMENTS

PAGE 17

TABLE OF CONTENTS

4 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

TABLE OF CONTENTS

IPD—THE DEFINITION:

Integrated Project Delivery (IPD) is a project delivery method that integrates people, systems, busi-

ness structures and practices into a process that collaboratively harnesses the talents and insights of

all participants to reduce waste and optimize efﬁciency through all phases of design, fabrication and

construction. The Integrated Project Delivery method contains, at a minimum, all of the following elements:

• Continuous involvement of owner and key designers and builders from early design through project

completion

• Business interests aligned through shared risk/reward, including ﬁnancial gain at risk that is de-

pendent upon project outcomes

• Joint project control by owner and key designers and builders

• A multi-party agreement or equal interlocking agreements

• Limited liability among owner and key designers and builders

IPD requirements, as a project delivery model, are noted above. Projects using

components of IPD, not in its entirety, are not IPD. This document’s goal is to state that

projects wanting to use IPD must incorporate all aspects of the deﬁnition for it to be

considered IPD.

Note: Integrated Project Delivery teams will usually include members well beyond the ba-

sic triad of owner, designer and contractor. At a minimum, though, an integrated project

includes tight collaboration between the owner, architect/engineers, and builders ultimately

responsible for construction of the project, from early design through project handover.

Many of the essential elements of Integrated Project Delivery may be applied to a variety

of collaborative project delivery methods, such as Design-Build or CM at Risk, that may

not inherently contain every required IPD element mentioned above.

FURTHER EXPLANATION:

• Integrated Project Delivery (IPD) is a project delivery method: IPD is

a unique and separate project method, distinctly different from Design-Bid-Build,

Design-Build, CM at Risk, and Multiple Prime. All beneﬁts for innovation and efﬁciency

return to the project team as opposed to the individual ﬁrms. All parties agree to the

business terms to share the ﬁnancial savings for optimizing the Owner’s business case.

• Integrates people, systems, business structures and practices: The

foundation for IPD is the development of a virtual project organization. The organization

of “the ﬁrms” includes the individual team members for the owner, designer(s),

consultants and builder(s). The project organization’s mission and responsibilities are

committed to “best for project” decision making, and this commitment is supported by

alignment of the ﬁrms’ business interests through shared risk and reward.

• Collaboratively harnesses the talents and insights of all participants:

The primary purpose of the virtual organization is collaboration. The project ﬁrms and

individuals are committed to create a team culture of joint decision-making. Team

members are formally organized in multidisciplinary clusters responsive to the project

goals. Team members are individually accountable to contribute alternatives to design

and construction issues. Builders’ input is not left until the construction phase, when it

is typically too late to beneﬁt the design.

• Reduce waste and optimize efﬁciency: IPD incentivizes minimization of

waste. In addition to integration and collaboration, the method utilizes formal tools to

achieve maximum results. Typical tools include: Building Information Modeling (BIM),

prefabrication, manufacturing of larger integrated units, process improvement metrics and

LEAN design and construction techniques.

5 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—THE VALUE PROPOSITION

IPD—THE VALUE PROPOSITION:

The owner’s “business case” deﬁnes the need for and the requirements of a capital

project. The ultimate goal for an owner is to complete a project to meet very speciﬁc

business goals within very speciﬁc constraints. Typically these constraints, at

the highest level, are budget, schedule and a level of quality required to support

operations, all within a predicable level of risk. Generally speaking, the industry

suggests that the owner can expect to optimize any two of the three constraints but

not all three; Integrated Project Delivery enables optimizing all three.

Previously, there were four main project delivery models available to owners:

Design-Bid-Build, Design-Build, CM at Risk, and Multiple Prime. Each offers a

different level of predictability to project outcome and risk.

Integrated Project Delivery (IPD) is a ﬁfth delivery model that is gaining momentum.

IPD offers owners the maximum opportunity to optimize their business case within

predicable risks.

WHAT IS THE VALUE PROPOSITION FOR IPD?

1. Flexibility: Consider for example, that a business case

includes additional goals and constraints such as:

aesthetics, sustainability, operating efﬁciency, life cycle

costs, community relationships, local workforce, and

numerous others speciﬁc to an owner’s project. Often

not considered, however, is the need for ﬂexibility to

accommodate change during design or construction

without sacriﬁcing the owner’s constraints! Projects

are becoming more complex; technology, equipment,

innovations in products, manufacturing, and prefabrication

are becoming available faster than projects can be

completed. The owner may require late incorporation to

stay competitive or respond to an unanticipated change

in their business environment. IPD’s shared ﬁnancial

incentives between owner, designer(s) and builders(s) and

integrated and collaborative processes enable the team to

collectively ﬁnd the project solution to optimize and support

the business case.

2. Speed: After an initial investment in learning how an

integrated team works, The information ﬂow on IPD

projects moves more quickly for the following reasons:

First, designers and builders coordinate directly during

design, thus preventing the misunderstandings and poorly

informed design decisions that typically create delays

during construction. Secondly, by fostering an environment

in which the team collaborates well, questions get

answered in the speed of a conversation instead of a paper

trail that starts with an RFI and ends with a change order,

typically taking weeks to process.

3. Less litigation: At the date of publication, no IPD project

has gone into litigation. This is because IPD projects create

a structure wherein all core team members beneﬁt or suffer

together, incentivizing them to help each other prevent

problems. Disputes that typically would lead to claims are

either prevented or settled in a collaborative manner.

6 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—ESSENTIAL PRINCIPLES

WHICH ARE

FOSTERED

OUT OF

THESE

BY THESE

WHICH ARISE

OPTIMIZE

THE

WHOLE

IPD—ESSENTIAL PRINCIPLES:

1 Optimize the Whole, not the parts: The point of integrating

the project team is to deliver the whole project in a way that

gives owners what they value. Whether that is optimized

design solutions, increased efﬁciency over the building’s

lifetime, or a fast track schedule, higher performance

requires that all parties make decisions that are best for

the project, rather than their own slices of the pie.

2 Early and Clear Goal Deﬁnition: In order to optimize

the whole, the team must agree on what the “whole” is.

Project goals are developed early and agreed upon by

all participants. Project budget is set early and the team

designs to the price, rather than pricing a design.

3 Collaboration: In order to optimize the whole, the project

team must collaborate closely, deeply, and continuously.

4 Integration (people and systems): People can’t collaborate

unless they can easily share information, ﬁnd appropriate

times and spaces to communicate, understand how

their different design processes interact, get their billing

departments to work in harmony, and get many other

systems (big and small) integrated together across

company lines.

5 Joint Ownership: Meaningful collaboration requires

participants to have a sense of ownership over the project

and end goals.

6 Respect: Collaboration also requires respect. The project

team mutually commits to treating each other with

respect and valuing each professional’s input. Innovative

solutions can come from any team member, so roles are

not as strictly deﬁned as on traditional projects, but rather

assigned to the best qualiﬁed person.

7 Trust: Meaningful collaboration cannot occur without trust.

Trust is fostered through experience together, as well as

purposeful decisions.

8 Transparency: Trust requires transparency.

Communication among the team is not limited to

traditional silos or top-down distribution. Information of

all types, from design rationale to Building Information

Modeling (BIM) lives in a central location so all team

members have access to accurate and current information.

Often an investment in technology compatibility will be

necessary to ensure that all team members have access to

the information they need to coordinate.

9 Safe Environment: Trust also requires a project

environment in which team members are safe to

experiment and suggest innovations without fear of

being wrong.

10 Shared Risk and Reward: An integrated project depends

on best-for-project decision-making. However, it is very

rare that a ﬁrm will actually sacriﬁce its own proﬁtability

for the good of a project. Under IPD, risk/reward sharing

structures are set up to cost or beneﬁt the participants

according to

project

outcomes rather than

individual ﬁrm

contributions. This aligns the decision-making inﬂuences

– a decision that is best for the project will beneﬁt all

participants, one that attempts to beneﬁt one ﬁrm at the

expense of the project will reduce proﬁtability for all

participants.

11 Good Technology: Integrating systems together across

company lines becomes much easier when using good

technology. For projects requiring high levels of integration,

technology like Building Information Modeling (BIM),

cloud servers, teleconference tools, and others become

crucial to making it all work. It is important to factor in the

investments in both money and time to get these up and

running smoothly.

THE

WHOLE

POINT

COLLABORATION

RESPECT

JOINT

OWNERSHIP

INTEGRATIONTRUST

TRANSPARENCY

SAFE

ENVIRONMENT

SHARE RISK

& REWARD

GOOD

TECHNOLOGY

EARLY & CLEAR VALUE

DEFINITION

YOU NEED

THESE

TO GET THIS

7 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—PHASES

PRE-

DESIGN

CONCEPTUAL-

IZATION

SCHEMATIC

DESIGN

CRITERIA

DESIGN

DEVELOPMENT

DETAILED

DESIGN

CONSTRUCTION

DOCUMENTS

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUT

AGENCY

PERMIT/

BIDDING

AGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADITIONAL DESIGN

PROCESS

IPD—PHASES:

• Who: The project participants

• What: The physical and functional requirements of the

project

• How: The means and methods that will be used to make

the “What” real

• Realize: The act of making the “What” real – i.e. construction

The phases of an Integrated Project differ from traditional

phases (Schematic Design, Design Development, Construction

Documents, etc.) in order to take advantage of two critical

factors:

• In addition to the design expertise of a traditional design

team, expertise in construction aspects (cost, scheduling,

material performance and availability, means and meth-

ods, etc.) is available throughout the design process.

• Building Information Modeling (BIM) tools and processes

enable the team to integrate this broader range of knowledge in

order to provide effective support for design decisions.

These factors enable the team to make better-informed design

decisions earlier in the process and to optimize the design

for construction means and methods. In essence,

how

and

who

are addressed much earlier in the process, enabling

elimination of the traditional overlap of

what

and

how

with

realization

that is typically a source of expensive changes and

rework during construction.

This is not to suggest that there is a rigid, sequential order

to phasing in an integrated project. The expanded knowledge

base and enhanced collaboration tools in an integrated team

allow a great deal of ﬂexibility in the sequencing of the design

effort. A major advantage of the integrated approach is that

the team makes the decisions regarding this sequencing.

In traditional projects design decisions are often deferred -

sometimes even until after start of construction - at the sole

discretion of the designers, without complete knowledge of the

impact on construction. In an integrated project, however, the

availability of both design and construction expertise enables the

team to sequence the design effort to better accommodate such

issues as fast-track delivery or procurement of long-lead items.

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

8 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—PHASES

SETTING THE STAGE

Prior to actual kickoff of the design process,

or concurrent with the very earliest steps,

signiﬁcant preparatory work will need to be

done.

• Key project participants are selected and brought on

board. The actual personnel should be brought in.

• Owner

• Prime Designer

• Key Design Consultants

• Prime Builder

• Key Trade Builders

• Key Regulatory Agencies

• Team communication/coordination processes are set up.

• Collaboration training

• Communication technologies

• The business model for the project is determined

• The risk/reward structure that will best incentivize the

accomplishment of the Owner’s goals for the project is

developed

• IPD contract(s) is (are) negotiated

• Project management structure is set up

• Key technologies are identiﬁed and protocols are set up

for their use. Examples:

• Building Information Modeling

• Change control protocols

• Model management responsibilities

• Performance simulation tools

• Document Management System

• Data exchange protocols

• Extent of co-location is determined, and co-location

facility is designed and set up

1 CONCEPTUALIZATION

Conceptualization begins to determine WHAT is

to be built.

• All key stakeholders are involved in the programming

process; input is obtained from as many participants as

possible.

• Key project parameters are captured, such as:

• Size

• Schedule

• Sustainable or green criteria or goals

• Performance metrics (economic, energy, maintenance

efﬁciency, operational, etc.)

• Initial cost structure is developed. Benchmarks by which

cost targets for the project will be determined are identiﬁed.

• Preliminary schedule is developed.

2 CRITERIA DESIGN

During Criteria Design the project is deﬁned and

the targets and metrics by which the success of

the project will be measured are agreed upon.

• Key project parameters such as the following are ﬁxed:

• Scope

• Basic design (massing, elevations, ﬂoor plans, etc.)

• System selection (structural, skin, HVAC, etc.)

• Quality levels for ﬁnishes

• Target Cost

• Overall schedule

• Building components to be prefabricated

• Sustainability targets

• All key trade contractors are engaged.

• Procurement schedule is developed.

• Cost structure is reﬁned to a system level, in a manner

that enables the team to use the cost information to guide

the design.

CONCEPTUAL-

IZATION

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

CONSTRUCTORS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER BUILDERS

AGENCY

CONCEPTUAL-

IZATION

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

9 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—PHASES

3 DETAILED DESIGN

The Detailed Design phase concludes the WHAT

phase of the project. Note that the Detailed

Design phase is longer and more intense than

traditional Design Development because more

is accomplished. The team will decide the level

of detail required.

During this phase, all design decisions

necessary to ensure that changes during

construction will not be necessary are ﬁnalized,

and the design is fully and unambiguously

deﬁned.

• All building elements are deﬁned.

• All building systems are fully engineered and

coordinated. This includes ﬁnal system coordination that

in traditional delivery models is usually deferred until the

construction phase because trade contractor input is not

available until then.

• Speciﬁcations are developed based on agreed and

prescribed systems.

4 IMPLEMENTATION DOCUMENTS

During this phase, focus shifts from WHAT is

being created to documenting HOW it will be

implemented. At the beginning of this phase

the entire building and all systems are fully

deﬁned and coordinated, so it is signiﬁcantly

shorter than the traditional Construction

Documents phase.

• The traditional shop drawing process is merged into the

design as the contractor, trade contractors, and suppliers

document the construction intent of building systems and

components.

• Prefabrication of some systems can commence because

the design is ﬁxed.

• Speciﬁcations are developed to provide narrative

documentation of the design intent wherever necessary.

• Documents are generated where needed for processes

such as:

• Financing

• Procurement

• Permitting

• Implementation Documents include information for

• Assembly

• Layout

• Detailed schedule

• Procedural information (testing, commissioning)

• Legal requirements (whatever needs to be included to

be legally binding)

5 AGENCY REVIEW

This phase actually runs concurrently

with Criteria Design, Detailed Design, and

Implementation Documents. During the earlier

phases the regulatory agencies provide

high-level compliance information and work

with the team to develop a mutually agreeable

permit submittal schedule. Because of their

involvement in the design process, builders

and trade builders will need to be involved in

submittal preparation and response to

agency comments.

CONCEPTUAL-

IZATION

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

CONCEPTUAL-

IZATION

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

CONCEPTUAL-

IZATION

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

10 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—PHASES

7 CONSTRUCTION

In traditional projects construction is often

treated as the ﬁnal stage of design where

issues that were not addressed during the

design phases are worked out. In an Integrated

Project, due to the availability of construction

expertise as well as the ability to integrate

this expertise into the design using BIM, ﬁnal

design is completed during Detailed Design

and means and methods are worked out during

Implementation Documents.

Some elements of IPD construction

administration will remain similar to traditional

practice. For example:

• Quality control, inspection and testing will be relatively

unchanged.

• Change orders, particularly for owner directed changes,

must be formally negotiated and documented.

• Scheduling and progress will be periodically reviewed.

CONCEPTUAL-

IZATION

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

8 CLOSEOUT

Many aspects of the closeout of an Integrated

Project will be similar to those of traditional

projects. Some examples:

• Finalization of as-built models or other documentation

• Punch list correction

• Warranty obligations

• Occupancy and completion notiﬁcation

In addition, the painshare/gainshare arrange-

ment will be resolved.

6 BUYOUT

The bulk of an IPD project is not “bought out” as

in traditional projects because the major trades

develop their prices during the design process.

In addition, long-lead items are identiﬁed and

deﬁned during design and their procurement is

begun as early as necessary. This Buyout phase

completes the buyout of remaining contracts.

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

CRITERIA

DESIGN

DETAILED

DESIGN

IMPLEMENTION

DOCUMENTS

BUILDERS

CLOSEOUTAGENCY

COORD/FINAL

BUYOUT

CONSTRUCTION

HOW

WHO

REALIZE

WHAT

INTEGRATED

DESIGN PROCESS

TRADE BUILDERS

OWNERS

DESIGNER

DESIGNER CONSULTANTS

AGENCY

11 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

OPTIMIZED SUMMARY

BUSINESS MODEL

Separate Proﬁt from Cost

Establish a ﬁxed proﬁt. Separating proﬁt from units of labor

or materials eliminates the incentive to increase the number

of units to increase proﬁtability. Instead, the incentive should

be to increase margin by reducing the underlying costs while

maintaining a ﬁxed proﬁt amount. Ideally, 100% of a parties’

proﬁt should be at risk. Moreover, the at-risk proﬁt provides

the owner with a buffer against cost overruns, and less than

full proﬁt at risk can result in an inadequate buffer.

Guaranteeing Costs To Perform The Work

There are several reasons for the owner guaranteeing costs

without a cap. First, whenever a cap is placed on costs, the

capped party wisely includes contingencies in its costs to

protect against the potential cost overrun. Second, if there

are any project disruptions, the parties will begin the claims/

change order process to avoid losing claim rights that may be

important if the project continues to suffer additional costs.

This creates an antagonistic project atmosphere—often from

early in the project. Finally, the variable cost guarantee is a fair

trade for the ﬁxed proﬁt being at risk and the limits on change

orders.

Proﬁt Based on Agreed Project Outcomes

Tying proﬁt to achieving agreed project outcomes assures

goal alignment and increases the likelihood of aligned action.

The agreed outcomes can be whatever is most important to

the owner and the team. Often this will be cost and schedule,

but can also be quality, sustainability, functionality, life cycle

costs, owner satisfaction or whatever else the team may agree

upon. By tying proﬁt to project, instead of individual outcomes,

the team is incentivized to collaborate in pursuit of common

objectives and disincentives selﬁsh behavior.

Limited Entitlement for Change Orders

Increasing project costs by change orders is limited to

owner elected changes. Team caused impacts, such as

errors and omissions in the drawings, construction errors

or productivity issues are issues for the team to resolve,

not opportunities for additional revenue. This attribute, in

conjunction with limited liability and proﬁt based on project

outcome, creates a closed system. If problems arise, the

team must collaboratively resolve them regardless of cause.

Entitlement for change orders and claims is largely eliminated

in IPD. Once understood, this attribute leads to more effective

constructability evaluations, coordination and response to

problems as they occur.

CONTRACT STRUCTURE

Early Involvement of Key Participants

The key parties are contractually engaged at the earliest

responsible moment. Key parties are those that have a

substantial stake or material effect on project outcome.

Involving these parties early has many beneﬁcial effects.

First, it increases the overall knowledge base before design

is developed, allowing for coordination and constructability

to be built into the process rather than applied after the

fact, enabling target value design, and eliminating value

engineering. This improves the designer’s understanding

of systems, equipment, alternatives and costs implications

before they initiate design. It also increases the diversity of

opinions and perspectives—a key determinant of creativity.

It avoids much of the rework inherent in the transfer of

design information to builders and can allow for an efﬁcient

distribution of design effort between the licensed design

professionals and the design/assist or design/build trades.

Joint Project Control & Decision Making

Joint project decision making is an essential step in creating a

virtual organization. By empowering the team to jointly manage

the project, decision making is accelerated and situated closer

to the sources of knowledge and information. Because major

decisions are not unilateral, there is a check-and-balance

that reduces the likelihood of errant decisions. Joint project

decision making also increases overall ownership of the

project, leading to higher levels of commitment. It is also fair.

Parties that have placed their proﬁt at risk should have a voice

in project management.

Shared/Risk Reward Based on Project Outcomes

This is the contractual tie between proﬁt based on agreed

outcome and limitations on change orders. By putting both of

these attributes in an enforceable agreement, the business

model becomes an obligation, not an aspiration. This is one

OPTIMIZED IPD

The elements of IPD listed on page 4 are at IPD’s core. Below is a discussion of the

key constructs that enable an optimized IPD project. These constructs comprise the

optimal business model, contractual structures and team behaviors. Also included

is the critical discussion as to how each construct contributes to enabling an IPD

team to be more successful than other delivery models. These constructs are

characteristics that are speciﬁc to those members directly signatory to a single or

multiple interlocking IPD agreement(s).

12 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

OPTIMIZED SUMMARY

of the distinctions between true IPD and other collaborative

approaches, such as partnering, that seek to achieve

behavioral changes—but these can be abandoned mid-project

because they are not a contractual obligation.

Jointly Developed Validated Targets/Goals

The jointly developed and validated targets/goals are an

enforceable “mission statement” for the project. Because they

are used to determine project success—and compensation—

they align the team’s actions to the agreed goals. Agreement to

goals also leads to commitment to achieving them. In addition,

they provide a check, through the validation process, on the

feasibility of the project. Aggressive goals also create the

stress that leads to behavioral change, but because the stress

is felt by all project members, it becomes a shared incentive to

jointly develop new and more effective approaches.

Reduced Liability Among Risk/Reward Members

Reduced liability is an element in closing the system, forcing

the participants to take responsibility for the project rather

than attempting to blame other participants in an attempt

to escape the impact of a problem. But perhaps more

importantly, it removes disincentives to direct and continuous

communication between the parties. Because parties who

suffer because of incorrect information can often claim against

the information provider, project participants (particularly

the design professionals) have become wary of providing

early and incomplete information to contractors. But without

an understanding of where the designers are headed, the

builders cannot effectively plan. Similarly, builders are chary

of providing advice about design that might draw them into a

design issue. But if the team is to be effective, communication

must be rapid, direct, and continuous. Reducing liability among

risk/reward team members removes much of the anxiety

around communication.

ENABLING BEHAVIORS

Optimize the Whole, Not the Parts

Essential change in IPD is that the project is viewed as an

indivisible whole. Every action, every decision should be

judged by whether it will lead to improving the overall project

outcome. This is the critical difference from other project

delivery methods as compared to IPD. All participants,

including the owner, designers and builders, in an IPD

arrangement work together to optimize the project result

rather than beneﬁt the individual ﬁrms.

Trust

Trust is a critical element of IPD. But it is not blind trust.

It is trust built on transparency and respect and measured

accountability to meet commitments. When trust is created,

the entire project is accelerated. The parties can trust their

colleagues to perform as they promised allowing everyone

to plan based on those promises. Moreover, the parties can

trust that their colleagues will respect their interests and

ideas, creating a safe environment to extend their capabilities.

Earned trust catalyzes every transaction between the parties.

This kind of trust is seen with ﬁrms that have proven track

records, renown reputations or past experiences working on

previous projects before with other team members.

Integration (information, people and systems)

High performance projects and project delivery requires

integration throughout the process. Integrated information

provides a means for information exchange and developing a

common understanding. Integrated organization melds the

disparate companies and individuals into a virtual organization.

Integrated processes lead to coordinated and efﬁcient action.

Integrated systems enable optimization of the entire project.

Integration creates the possibility of utilizing the capabilities of

the entire team and creating results that are greater than the

sum of the parts.

Continuous Improvement/Learning

IPD is not a static concept. It is a process of continual

examination and improvement. In IPD, learning is not just

the subject of retrospectives. It is a daily process where

learning is turned into action, tested, modiﬁed, tested again,

throughout the project. Processes are studied and challenged,

experiments undertaken, and the results immediately fed back

into the project. The goal of IPD is is to deliver this project

better than originally envisioned.

Appropriate Technology

IPD does not demand any speciﬁc technology and technology

should not be seen as a crutch for failed procedures. Systems

and procedures should be optimized before being automated.

But most IPD projects will rely on appropriate technologies,

particularly Building Information Modeling. BIM is an

important vehicle for collaboration. It is a platform for rapid

prototyping and simulation, creates a common understanding

between the parties and is a tool for identifying and resolving

conﬂicts. Astute IPD teams take advantage of project websites,

simulation and optimization software, 3, 4 and 5D models, and

any appropriate tool that will increase understanding, promote

communication, collaborate virtually, and better achieve

the project objectives. Thus, while no speciﬁc technology

is required, not using technology appropriately violates the

principles of continuous improvement and optimizing

the whole.

Collaboration

IPD requires collaboration, not just cooperation. Collaboration

is working together to achieve the agreed goals by building on

and improving each others’ ideas. It is synergistic and creates

results that exceed what can be achieved by coordination,

alone. Collaboration in IPD is most visibly shown through

co-located activity, where the parties are not just meeting

together, they are performing their daily work together

in cross-functional groups composed of the best suited

individuals drawn from all of the IPD participating ﬁrms. They

engage in a vigorous exchange of ideas and perspectives

to develop solutions to project problems and to achieve the

common goals. Peter Senge and others referred to this

exchange as dialogue. It is not an exchange seeking to win a

debate, but a joint exploration leading to solutions.

13 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—IN COMPARISON WITH OTHER DELIVERY MODELS

IPD—IN COMPARISON WITH OTHER

DELIVERY MODELS

IPD allow for a dynamic, transparent and holistic process that beneﬁts all project participants.

These charts represent qualitative assessments of how IPD can be differentiated from other

delivery models. The delivery models show traditional delivery methods, but do not take into

account various contract models such as Guaranteed Maximum Price (GMP). The delivery

models chosen are comparators to IPD; Design Bid Build, Multi-Prime, Construction Manager

at Risk (CM at Risk) and Design Build represent the predominant delivery models used in

the industry. We did not include Turnkey or Public Private Partnerships as they embrace one

of the four models to deliver the design and construction of the building within the umbrella

of the longer contract for the building operation. The charts were developed from the broad

experience of the IPD Steering Committee members and contributors and do not represent

any research or collected ﬁeld data from any speciﬁc projects. The overarching message, we

believe, will not change with any signiﬁcant research, in that the only delivery model where

all the project stakeholders can beneﬁt in all the studies is Integrated Project Delivery, and

sometimes Design Build.

CHART 1: Who beneﬁts if the costs comes in lower or the schedule shorter depending on delivery

model type?

Owner Designer Builder Trade

Design Bid Build No No Yes Yes

Multi-Prime (hard bid) No No Yes Yes

CM at Risk No No Yes Yes

Design Build No Yes Yes Yes

IPD Yes Yes Yes Yes

CHART 2: Who is incentivized to keep the cost down or reduce the schedule for the owner when

changes occur?

Owner Designer Builder Trade

Design Bid Build Yes No No No

Multi-Prime (hard bid) Yes No No No

CM at Risk Yes No No No

Design Build Yes No No No

IPD Yes Yes Yes Yes

In chart one; one might not understand why the owner does not beneﬁt with the costs coming

in lower than initially contracted. Traditional contracts do not require the sharing of savings on a

project with the owner. Project stakeholders are incentivized to reduce costs for their own beneﬁt,

yet the owner does not always receive this beneﬁt if the contract is not transparent and does not

share these outcomes.

Chart two shows that under traditional methods the owner is incentivized to keep costs

reduced as project requirements change, but the other project stakeholders are not.

This characterization of change is true for both owner generated changes, un-foreseen

conditions and errors / omissions. Under IPD, though, the team is incentivized to keep costs

down on a project when changes occur because the team is all being supplied from the

same source that will reward them. The transparent and single pool of monies in an IPD

model enables ownership from all project stakeholders for project success.

14 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD—IN COMPARISON WITH OTHER DELIVERY MODELS

CHART 3: Who is incentivized to improve construction processes?

Owner Designer Builder Trade

Design Bid Build Yes No No No

Multi-Prime (hard bid) Yes No No No

CM at Risk Yes No Yes Yes

Design Build Yes Yes Yes Yes

IPD Yes Yes Yes Yes

Chart three begins to identify who wants to improve the quality and methodology of how the

project is delivered. Our industry is in a transition to embrace more advanced methods of

making buildings, as other manufacturing ﬁelds have. IPD, and sometimes Design-Build,

offer all the project team stakeholders the beneﬁt when advanced delivery methodologies are

coordinated with others and the impact might not be cost neutral.

CHART 4: Who is incentivized to improve building performance for the lifecycle

Owner Designer Builder Trade

Design Bid Build Yes No No No

Multi-Prime (hard bid) Yes No No No

CM at Risk Yes No No No

Design Build Yes No No No

IPD Yes Yes Yes Yes

Chart four aligns project delivery with building performance. We think the main message is

that only through dynamic, transparent and holistic process beneﬁting all project participants

will our industry be incentivized to move the needle on how buildings perform. Building

system technologies and the actual functional requirements are constantly changing.

Traditional contracts are set up where the requirements and functionality are ﬁxed. In

addition, design fees are also considered to be part of ﬁrst cost competitive analysis by owners

and do not allow for lifecycle design. Since the lifecycle of a building is a signiﬁcant portion of

the building’s cost for the initial capital outlay, our industry needs to provide a methodology

where the project delivery can support the eventual operations of the building.

15 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

CONCLUSION

This document refreshes and hones what IPD is. Speciﬁcally, it requires that for a project to

call itself an IPD model it must embody the minimum characteristics previously stipulated on

on page 4 for all key participants:

• Continuous involvement throughout the project

• Aligned business interest

• Joint project control

• Interlocking agreements or Multi Party Agreements

• Limited liability

We believe this is a necessary clariﬁcation to distinguish IPD from other delivery models

that offer some of these improvements, but do not use the whole system to achieve full

integration.

As stated in the introduction, this is a working deﬁnition, and in the future, we might ﬁnd

reason to further deﬁne, or broaden the requirements of what stipulates an IPD model. The

goal of this document is to be a reference for industry practitioners who want to optimize their

projects and have their entire project team participate with them in concert, as opposed to

other delivery models that have silos where services and work are traditionally provided. We

welcome feedback and hope you can contribute to: ipd@aiacc.org

16 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

GLOSSARY

A GLOSSARY OF TERMS ASSOCIATED WITH IPD

Best-for-Project

Describes a decision making standard where decisions are

measured against shared goals / objectives about what is best

for the project vs. individual stakeholder outcomes.

Big Room

A shared space which includes at a minimum; the owner, the

design team and the constructor to encourage collaboration

and communication between all parties.

Building Information Model

A Building Information Model, (BIM) is a digital representation

of physical and functional characteristics of a facility.

Source: National Building Information Model Standard (NBIMS)

committee. For a more complete deﬁnition, see: http://www.

wbdg.org/pdfs/NBIMSv1_p1.pdf

Buyout

Buyout is the process of obtaining price commitments for all

work packages in a project. There are several methods by

which this can be accomplished, ranging from sealed bids

to direct negotiations. In the IPD approach most of the price

commitments are developed through a continuous effort, with

many of the trade contractors and suppliers participating in

the design and reﬁning their prices as the project progresses.

Builder

Builder refers to the General Contractor who is responsible for

the project by providing all of the material, labor, equipment

and services necessary for the construction of the project.

Builder is also sometimes used to refer to trade contractors.

CM at Risk (Construction Manager at Risk)

Construction Manager at Risk (CM at Risk) is a project delivery

method that allows the client to select the Construction

Manager (CM) before the design stage is complete. The CM is

chosen based on qualiﬁcations, and then the entire operation

is centralized under a single contract. The architect and CM

work together in order to cultivate and assay the design.

Cost Model

A breakdown of the construction and project budget into

detailed “cost targets.” The cost targets are developed

collaboratively by the integrated team prior to commencing the

conceptualization phase of the project process. The structure

provides the benchmark for the team to support continuous

cost management as the project progresses to ensure that it

will be completed within the targeted budget.

Designer

The design professional on the project responsible for

performing and overseeing overall project design. Designer is

also sometimes used to refer to design consultants.

Design Consultant

The professional consultant(s) on the project responsible for

performing and overseeing design in speciﬁc areas of the work

(i.e., structural, mechanical, landscape, electrical, civil, etc.)

Integration

The coming together of primary participants (which could

include owner, designer, constructor, design consultants, and

trade contractors, key systems suppliers, etc,) at the beginning

of a project, for the purpose of designing and constructing the

project together as a team.

Interlocking Agreements

Agreement(s) used in an IPD project between the owner and

key designers and builders establishing shared risk/reward,

joint project control and limited liability.

Multi-party Contracts

Bind all the parties — client/owner, designers, constructor and

trade partners — into a single agreement which requires them

to share risks and rewards. This encourages everyone in the

team to think of the project ﬁrst as their commercial interests

are clearly bound up with the overall success of the project. In

turn this means that leadership and decision making is both

more inclusive and distributed.

Multi-Prime

A method of contracting for construction wherein an owner

contracts directly with several (usually major) trades under

separate contracts to perform their work either simultaneously

or sequentially without employing a General Contractor to

be in overall charge of the work. The owner may provide the

management of the project, or hire a construction manager

to provide construction administration, coordination, and

scheduling of the work of the different trades.

Open Book

Contractual rights owners have to review and audit the

ﬁnancial records of contractors performing cost-plus

contracts, may also include key team members.

Trade Builder

The party on the project responsible for performing and

overseeing construction for speciﬁc building systems on a project.

17 INTEGRATED PROJECT DELIVERY - AN UPDATED WORKING DEFINITION

IPD STEERING COMMITEE

ACKNOWLEDGEMENTS

The following members of the design and construction industry served as

authors, editors and contributors of this document:

AIACC 2014 Executive Committee

Brian Dougherty, FAIA

President

Lee Salin, AIA

First Vice President/President-elect

Kim Anderson, Hon. AIACC

VP of CA Council of Component Executives

Bob DeGrasse, AIA

Secretary/Treasurer

Jana Itzen, AIA

VP of the Academy for Emerging Professionals

Greg Izor, AIA

VP of Regulatory Affairs

Bruce Monighan, AIA

Liaison to the California Architectural Foundation

Jason Silva, AIA

VP of Communications/Public Affairs

Don Rudy, AIA

VP of Legislative Affairs

Paul Welch Jr., Hon. AIA

Executive Vice President

IPD Steering Committee

Zigmund Rubel, AIA – Chair

Aditazz

Howard Ashcraft, Esq, Hon. AIACC

Hanson Bridgett LLP

Jim Bedrick, FAIA

AEC Process Engineering

J. Stuart Eckblad, AIA

UCSF Medical Center

Debra Gerod, FAIA

Gruen Associates

Don Rudy, AIA

Don Rudy AIA Architect

Mark Tiscornia, AIA

HGA

Oscia Wilson, AIA

Boiled Architecture

Nicki Dennis Stephens, Hon. AIACC,

LEED Green Assoc.

AIACC

THE AMERICAN INSTITUTE OF ARCHITECTS,

CALIFORNIA COUNCIL

1303 J Street, Suite 200,Sacramento, CA 95814

916/448-9082, 916/442-5346 fax

E-MAIL: [email protected]g, WEBSITE: www.ipd-ca.net