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Raising the Quality Of The ‘Integration’ Debate

The A/E/C industry will benefit greatly from Nadine M. Post’s recent article “Integrated Project Delivery Boosters Ignore Many Flashing Red Lights”. The article raises the quality of the debate about integration’s benefits and how best to achieve them.

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Integrated project delivery (IPD) offers a variety of advantages in aligning the interests of the parties engaged in delivering a project. Its various forms rely heavily on building trust and cooperation among participants while engaging the general contractor (GC) and key subcontractors earlier in the design process. However, very similar results are achieved on traditional, construction management-at-risk projects when the participants, including subcontractors, develop long-term relationships with the same owner over many projects.

Thus, the difference really rests in the types of contracts used between parties. Using contracts to motivate greater alignment may be an improvement, but it is the wrong tool to truly foster integration. Few owners and architects will share the cost of a mistake in a foundation estimate or a poorly erected curtain wall.

IPD contracts do not eliminate clauses that require subcontractors to carry large contingencies. Most specifications still require the contractor to be responsible for the “intent” of the documents, while subcontracts contain clauses like “the scope of the work includes, but is not limited to, the following ... ”

These types of clauses drive up contingencies as the silos continue to try to protect themselves from each other. Now we have documents a GC must sign in order to obtain the building model from the architect, but the documents state the latter does not warrant the model’s accuracy or completeness. So who will? New contract forms designed to encourage cooperation and/or share risk and reward will not achieve the integration we seek.

To attain the real benefits of integration, GCs and architects must assume responsibility for each others’ performance—only then can we mutually guarantee the outcome. We need to jointly assume responsibility for the building information’s accuracy and completeness and warrant that information as such to subcontractors to minimize their contingencies. This strategy would require that we select subcontractors early in the process, contract with them on a transparent basis and heavily rely upon them in the design process, as with IPD. By assuming more responsibility with greater influence over the quality of the information, we can reduce contingencies and guarantee the owner no change orders, aside from scope increases.

The answer lies not in new kinds of contracts but in changing our business models to create a single bottom line between the architect and the GC—and perhaps others. We can accomplish this in a variety of ways, including long-term alliances between firms, joint ventures for specific building types, merging the disciplines at the parent-company level or forming a separate company to perform multiple projects for the same customer, to name a few. Such business models could afford to invest in technologies, mapping protocols, databases, cross-training, etc., the cost of which can only be amortized over many projects, not on a single IPD project with little assurance of the parties working together again. We need to create integrated enterprises to achieve the full benefits of integration, as most industries have done for years.

Peter Beck
Managing Director
The Beck Group
Dallas

 

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