Integrated Project Delivery Theory and Practice

SIDNEY J. SANDERS
Vice President, Facilities & Construction, The Methodist Hospital System

CHARLES B. THOMSEN, FAIA, FCMAA charlesthomsen@charlesthomsen.com

Monumental buildings designed by educated elite, built by employees and craftsmen.

America needs larger buildings. Design separates from construction. Professional institutions and licensing emerge.

Design-bid-build emerges.

Industrialization increases.

Management separates from construction, becomes profession. CM professional institutions and certification emerge.

Clients become serial builders with AEs on staff to manage programs.

The U.S. construction industry

$1.2 trillion, 28% of the $5.2 trillion world market 8% of the gross domestic product 1,250,000 companies, 98% are fewer than 50 people Average life of a subcontractor is 2.8 years 44,000 individual code jurisdictionsno national code 130,000 architects, 17,000 firms

Specialization will continue. More individuals and more companies will participate in a building program. Integrated Practice will be used to capture their value.

User User User User

User User

User

User User User User User Executives User User User User User

User Board

User User User CEO User User Executives User User Accounting User User

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User User User User User User User User User User User User User User User User

User

User User User User User User User User

User User

User

User User User User User

User

Legal Director Facilities

User

User

User Standards

Program

Estimating Owners PM

QC Traffic Engineer

Permitting, regulation & entitlement

Scheduling

PMAC PM Estimating Inspection CM/GC Architect

Formwork Fire Stopping

Concrete

Grading& Excavation Erosion Control

Flooring Curtainwall Soil Treatment Ductwork Hauling

HVAC Plumbing Toilet Accessories Ornamental Iron Carpeting Electrical

Testing& LifeSafety Insptetion Consultant Parking Hardware Mechanical Consultant Kitchen Consultant GeoTech Graphics& Engineer Consultant Consultant Signage Acoustical Cost Sanitary Consultant Food Consultant Interiors Engineer Service Architect Structural Audio Roofing Engineer Visual Security Consultant Consultant Electrical Engineer Network Consultant Glass& Glazing Misc.Iron &Steel Paving Electrical Casework Skylights Casework Roofing Insulation Kitchen Equipment Metal Fabrications

Civil Engineer

Curtainwall Painting Vacuum Systems Sheetmetal Fire Protection

Sprinklers Demolition Fencing

Masonry Reinforcing
Manufacturer

Clearing& Striping CleanUp

Flashing& Manufacturer Sealants

Building Finish Specialties Drywall Manufacturer Wall Carpentry Manufacturer Manufacturer Stucco& Manufacturer Manufacturer Manufacturer Tile Acoustical Manufacturer Coverings Curtains& Manufacturer Flagpoles Plaster Manufacturer Roof R.O. Supplier Tile Doors& Supplier Blinds Fire Manufacturer Counter Supplier OverheadManufacturer Manufacturer Hatches Manufacturer Water Manufacturer Frames Manufacturer Protection Tops Doors Manufacturer Manufacturer Manufacturer Manufacturer Supplier Supplier Manufacturer Manufacturer Manufacturer Supplier Manufacturer Supplier Millwork
Manufacturer

Rough Framing

Supplier Supplier Supplier Supplier

Supplier Supplier Supplier

Manufacturer

Manufacturer

Manufacturer

Supplier Supplier
Manufacturer

Manufacturer

Manufacturer

Supplier

Supplier Supplier Supplier

Supplier

Manufacturer

Supplier Supplier Supplier

Supplier Supplier
Manufacturer Manufacturer

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Supplier Supplier Supplier

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Work processes differ

Design is decision intensive and iterative with no limit to the effort that can be spent on refinement. Many improvements require doubling back to make changes.

Construction is production intensive with defined needs for the resources of time, labor and materials. It is linear and sequential and can be managed logically.

Integrated Practice: a working definition

A collection of concepts, practices and tools applied in part (rarely in whole) to improve collaboration and integration among an extended project team The purpose is to make better buildings faster for less.

Methodist System overview

Willowbrook

West Houston San Jacinto

Medical Center

Sugar Land

The Methodist Hospital Research Institute 438,000 GSF 12 Floors $233,000,000 Surgical Training Vivarium BSL 3 labs Office Imaging center Program Manager Jacobs Engineering Architects Watkins Hamilton Ross and Kohn Pedersen Fox MEP engineer Affiliated Engineers Inc. Civil Engineer Walter P. Moore Structural engineer Haynes / Whaley Construction Manager; Harvey Builders Curtain-wall subcontractor Hayley Greer Plumbing subcontractor Gowan Inc. MRI manufacturer Philips Shielding subcontractor Nelco Inc.

West Houston, Hospital and MOB 644,000 sq. ft. 192 Beds, 6 Floors TPC $336.7 M Program Manager Parsons Architect Page Southerland Page MEP engineer Page Southerland Page Structural engineer Haynes / Whaley Construction Manager Austin Commercial Mechanical plumbing sub Dynamic Systems, Inc. Electrical subcontractor Walker Engineering Curtain wall subcontractor Haley Greer, inc.

Methodist Capital Program

Goals Sophisticated healthcare facilities Tight schedules and budgets Institutional requirements for transparency and accountability Challenges Highly complex and developing technologies in an environment of change, price volatility and limited subcontractor supply Thousands of design decisions, hundred of suppliers and many subcontractors

Common themes in IPD projects

1. 2. 3. 4. 5. 6. 7. 8. Legal relationships among core team members Management committees Incentive pools No-blame working environments Collaboration software: BIM and PMIS Design assist Lean construction Integrated leadership

Common Themes.

1. LEGAL RELATIONSHIPS
Partnering Multi-party contract Joint Venture LLC or other legal entity Collaborative selection

Project delivery strategies proliferate. Architects must learn the legal implications and the behavioral characteristics of organizations under different contract forms.

Partnering
In 1427, when Brunelleschi was constructing the Cathedral in Florence, tensions became so great among the artisans that they were made to take an oath to forgive injuries, lay down all hatred, entirely free themselves of any faction and bias, and to attend only to the good and the honor and the greatness of the Republic, forgetting all offences

Legal Relationships

Design-bid-build
Prime contracts with the Owner

Liability: Independent, compartmented responsibility, liability and finger pointing Taxes: Independent tax responsibility Administrative cost: No increase Integration culture: Traditional tensions

Legal Relationships

Multi-party
Prime contracts with each core team member (traditional concept)

Liability: Allocated risk and responsibility with defined obligations to one another Taxes: Independent tax responsibility Administrative cost: a management committee Integration culture: Shared incentive pool and collaborative leadership

Legal Relationships

Joint Venture
Partnership among core team members who may guarantee costs and services to the JV and share profits or losses Liability: a partnership with joint and several responsibility; partners define responsibility to one another; liability to third parties is shared Taxes: JV must file; no tax due if all profits distributed Administrative cost: minimal increase for JV accounting and tax preparation Integration culture: strong incentives for partners to help one another
AE

Owner

JV

CM/GC

Consultants

Subs

Legal Relationships

Limited Liability Corporation

Prime contracts with each core team member (traditional concept)

Liability: LLC provides protection to shareholders; wise Owner will require corporate guarantees; third parties may pierce corporate veil Taxes: LLC profits are taxed if not distributed to shareholders; state franchise taxes Administrative cost: More accounting, more filing Integration culture: Shareholders bill at cost, share profits, pull together

Owner

LLC

Consultants

AE

CM/GC

Subs

Legal Relationships

Collaborative team selection

OWNER

ARCH

CM

ENG

SUB

SUB

Legal Relationships

Typical Methodist contract structure

Methodist PM Team

AE

CM/GC

Consultants

Consultants

Consultants

Subs

Subs

Subs

Common Themes

2. MANAGEMENT COMMITTEE
Core team members with significant stake in the outcome Owner participation Unanimous decisions

Management Committees

Management teams
Owner PM AE Global Push scheduling CM Granular Pull scheduling

Design Assist Team

Meets weekly to coordinate design and documents Team does clash detection

Field Coordination Team

Meets weekly to plan and coordinate work to be installed Focus is on short term: 2 to 4 weeks

Common Themes

3. INCENTIVE POOLS
Cost goals Absolute goals Contingencies Satisfaction fees The biggest incentive: repeat work

Incentive Pools

Components of a GMP

Incentive Pools

Different goals produce team conflict

Goal: design excellence Pressure: decrease cost

Pressure: increase budget

Incentive: shared savings

Incentive Pools

Compensated goals produce reactions

Incentive Pools

Hypothetical award fee approach

$100,000,000 4,000,000 6,000,000 5,000,000 $15,000,000

Construction Cost CM/GC OH&P AE OH&P Subs OH&P Total OH&P

Assume that 20% of the Teams total OH&P ($3,000,000) is allocated as an Award Fee

Incentive Pools

Hypothetical award fee approach

$1.5 M

0 Target Price GMP

50% of award fee is for meeting the Target Price

Incentive Pools

Hypothetical award fee approach

$.75 M

0 Target Schedule Schedule

25% of award fee is for meeting the Target Schedule

Incentive Pools

Hypothetical award fee approach

25% of award fee (.75M) for goals that may include meeting commitments, quality, sustainability, community relationships, user relationships, etc. Performance is reviewed quarterly. Owner makes subjective evaluations. Assuming a 48 month schedule (192 quarters) there is $15,625 per quarter that may be awarded. The value is the message, the communication and the desire of the project team to show the report card score to their own executive management.

Common Themes

4. NO-BLAME WORKING ENVIRONMENTS

Owners and project teams are devising ways to limit their liability to one another but will not limit their liability to the public. However, if the extended project team is in the same liability boat and reviews one anothers work, the potential of errors decreases.

No-blame Working Environments

Sugar Land Hospital Expansion

900 sheets of non-integrated documents

2000 RFIs

650 submittals 300 technical bulletins

Common Themes

5. COLLABORATION SOFTWARE
The Internet PMIS BIM

Collaboration Software

Collaboration Software

Phases of BIM
1. 2. 3. 4. 5. 3D tool for design and standards Design team integration (MEP, structural, etc.) Shop drawings integration Supply chain integration Virtual construction: Clash detection and construction analysis (4D and 5D)

Collaboration Software

Methodist project software portfolio

Program Management Information System E-Builder Autodesk 3D Revit: Managed by Design Team Architecture Structure Autodesk 3D Building Systems: Managed by Design Team MEP NavisWorks: Managed by Mechanical Sub 3D modeling and collision detection Web Site: Managed by Design Team File sharing between Design Team and Construction Team

Collaboration Software

Collaboration Software

A Hypothetical Project Definition Scope

Collaboration Software

Research Institute Building

Relocation of chilled water lines

Civil Engineer mapped the existing utilities on the future building site and modeled the site in 3D Architect, Civil Engineer and structural engineer coordinate design with with 3D model Plumbing subcontractor used 3D model to fabricate large pipe sections for rerouted chilled water lines to run through future building basement

Collaboration Software

Future site of Research Institute

Collaboration Software

Existing and rerouted utilities w/ 3D drawing

New basement with rerouted chilled water lines

Collaboration Software

Research Institute curtain-wall

Curtain-wall subcontractor is selected at Schematic Design Architect develops 3D model of building envelope in consultation with curtain-wall subcontractor Curtain-wall subcontractor uses 3D model and refines the design in collaboration with Architect

Common Themes

6. DESIGN ASSIST
Maintain competitive pricing Manage shift from traditional roles Select subs with Design Assist capability Define the appropriate Design Assist strategy

Design Assist

Space and FF&E requirements

Concept design Construction Drawings

Redundant Drawings

Bid Fabrication Drawings

Manufacture

Concept design

Field Construction

Design Assist

Problems with typical CM at Risk integration

More information is needed earlier in project conceptualization Critical technical knowledge, cost and creativity exist in the SC and MFG firms The procurement below the CM-R tends to become design-bid-build (slowest & least innovative procurement) Key parts of project are redrawn in shop drawing process by selected SC & MFG

Design Assist

Typical point of Integration

Cost Curve

Selection of Construction Manager CONCEPT PROGRAM PRELIM. DESIGN FINAL DESIGN BUY-OUT CONSTRUCTION FURN./ COMM.

Influence Curve

Design Assist

Desired point of integration

Selection of Construction Manager Cost Curve

PROGRAM PRELIM. DESIGN FINAL DESIGN BUY-OUT CONSTRUCTION FURN./ COMM. Influence Curve

Design Assist

Design Assist subcontractor selection

Sub Response

CMR

Issues

RF RFQ Q Project Scope

Sub Response Sub Response

Qualifications

Project Team Evaluates and Short lists

Sub Response

CMR

Issues

RF RFP Q SD package

Sub Response Sub Response

Pre-con fee, general conditions and fee

Project Team Evaluates and Short lists

Project Team interviews and short lists subcontractors

SelecBon RF &award Q

1 Step for Pre-con & Installation

Fire Protection Curtain Wall Elevator Integrated Team Executes HVAC/Plumbing Electrical Pneumatic Tube

2 Step contract Part 1 is Pre-con Part 2 is Installation

Design Assist

One-line duct layout

Design Assist

HVAC and plumbing with structure

Common Themes

7. LEAN CONSTRUCTION
Pull scheduling Flow and batch processing Last responsible moment Relationship contracting Honoring commitments Rotation

Lean Construction

Pull fabrication and assembly

Lean Construction

Sheetmetal fabrication

Lean Construction

Construction Productivity

Lean Construction
And more managementwere Then morean owner who There it became apparent was projects was that part of every project required. needed. needed a building and was the same. managed the projects delivery. Programming Program Management

Design

Construction

Lean Construction
So they rotated activities from the project workflow to the program workflow. Program Management

Programming

Design

Construction

Lean Construction
That meant that each project could be done faster, better and for less. Program Management

Programming

Design

Construction

Lean Construction

SIMILAR

KIT OF PARTS

EVOLVING SYSTEMS

GUIDELINES

UNIQUE

Marriott, Target and Wal-Mart have evolving prototypes for mass customization.

Lean Construction

SIMILAR

KIT OF PARTS

EVOLVING SYSTEMS

GUIDELINES

UNIQUE

Hines Interests builds award-winning designs and individual buildings, but constantly refines a set of preferred building systems.

Lean Construction

SIMILAR

KIT OF PARTS

EVOLVING SYSTEMS

GUIDELINES

UNIQUE

MIT rotates only some management controls and landscape standards. Their objective is to build icons of great architecture.

Lean Construction

The amount of rotation depends on the similarity of the requirements and the authority of the program management team. The idea is to understand what can be changed and work to change it, to understand what cannot be changed and live with itand to have the good sense to know the difference.

Common Themes

8. LEADERSHIP
Project leadership Core team leadership

Leadership

Staff to staff, brass to brass

Top Management

Top Management

Middle Management

Middle Management Project Management

Project Management

Risk transfer
Shared and allocated risks and rewards Project Performance

No risk transfer No accountability

Risk transfer

Complete risk transfer No collaboration

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