Integrated Project Delivery is a hot topic in the construction industry as firms look for ways to improve productivity as the labor shortage continues. As one of the many project delivery methods, it’s important to research which method benefits your project. As project delivery methods change, Integrated Project Delivery and Integrated Labor Delivery show promise in improving productivity and reducing rework.
What is Integrated Project Delivery
Integrated Project Delivery (IPD) is a way of building projects. Unlike traditional Design-Bid-Build models, IPD is a collaborative effort. The owner, construction manager, and architect work together to plan and prepare the project. IPD came about because of the inefficiencies in traditional construction models. Often times the plans for the building weren’t constructible in their current form. Because of that, contractors would have to make many changes to complete the project. However, they’d also raise the price from their original bid.
Integrated Project Delivery changes that, because the construction manager, owner, and architect can work together. The stakeholders form a shared risk-reward contract, which creates an agreement. This agreement dictates the goal of the project and what constitutes a success. The stakeholders are all financially invested in the outcome of the project. Often this means creating a contingency budget. Stakeholders can pull from the contingency budget if there are cost overruns. The contingency budget can be used as a bonus if the stakeholders complete the project on time and on budget. This incentivizes all stakeholders to ensure the project is constructible, and to stick to the schedule.
Benefits of Integrated Project Delivery
The quick overview of IPD showcases many of the benefits that stakeholders have when they use it. However, it’s deeper than the promise of higher profit margins. Integrated Project Delivery can be an incredibly useful delivery method. Here are some of the benefits from IPD.
IPD is one of the best ways to increase the transparency throughout the construction process. Because of the early stakeholder contracts and discussion, it’s clear to what the objectives are. Integrated Project Delivery also requires stakeholders to share information. The stakeholders must discuss any hang-ups with the group, rather than letting them fester.
No Knowledge Dumps
Within IPD, there is one stakeholder team. Because of that, it’s easier to share information. The owner isn’t communicating with the general contractor or architect through a third party. It’s easy to get clarification on a specific part of the project and understand the goals. Contractors and architects are better connected to the project through the free flow of information.
Lower Project Costs
In traditional methods, the owner pays the general contractor and construction manager based on the amount of time spent on the project and the amount of work done. Other than the general contractor’s additional workload, there isn’t too much incentive to finish on time and to cost. However, when they’re sharing in the risk and reward it’s easier to stay on budget.
Owners and other stakeholders can see the value in IPD pretty quickly. Not only is there a lot of motivation to finish the project on time and budget, but there’s motivation to do it right the first time. And there is motivation to not over-promise on the project.
How Integrated Labor Delivery is Different
Companies want to improve efficiencies throughout their projects and supply chains, and Integrated Labor Delivery offers to do just that. Integrated Labor Deliver (ILD) is similar to Integrated Project Delivery since both want to connect owners and contractors better. However, Integrated Labor Delivery hopes to join the owner, architect, general contractor, construction manager and trade contractors. ILD can be very beneficial to all of those on a project and is promising great returns on a project.
Benefits of Integrated Labor Delivery
Integrated Labor Delivery has many benefits for the construction industry. Here is a quick overview of the greatest benefits to project stakeholders.
By including, subcontractor and trade contractors in the project delivery method projects are more likely to be constructible. Architects and engineers design wonderful projects that aren’t always feasible. And general contractors and construction managers aren’t always familiar with specific trades. However, including trade contractors in early makes it easier to avoid the typical pitfalls. Including trade contractors improve the overall constructibility of a project.
Including subcontractors and trade contractors not only improves constructibility, but it also reduces rework. By improving constructibility, projects can improve their profit margins. So not only is it easier to complete projects on time and to budget, but there won’t be a lot of rework.
Many trade contractors don’t just build buildings; they sometimes service them as well. This means that a trade contractor brought early into a project could be responsible for any warranties and additional maintenance. ILD makes the hand-off easier. Since the owner involves subcontractors in the designing and planning phase, it’s easier to service and maintain.