Traditional construction delivery systems, while useful on certain projects, can sometimes lead to the owner, designer and contractor operating in “silos,” with a higher potential for conflict resulting from a lack of communication during the project. On BP’s Emergency Services Building Project in Whiting, IN, Graycor is working alongside A/E firm exp to complete the project using an Integrated Project Delivery (IPD) model. This delivery method differs considerably from Design-Build and other negotiated delivery systems in that the owner is not only focused on program and budget, but is also very involved with every aspect of the design so that all priorities can be aligned.
On this IPD project, contracts were structured differently to keep all participants focused on the end goal. Contracts for exp, Graycor and key subcontractors (considered Trade Partners) were structured as Costs plus Fixed Profit at Risk. Costs were reimbursed and the fee (Profit at Risk) was earned based on the team’s performance. Key Performance Indicators (KPIs) were set based on the team’s priorities for the project: Safety, Quality, Schedule and Cost. Each KPI had weighted measurable metrics such as 0 OSHA Recordable Incidents, 0 punchlist items, schedule reduction from 9 months to 6 and 5% percent savings from the budget. Unlike T&M contracts, which have profit built into hourly rates and material markup so that more hours or more material yields more profit, IPD strips away these elements and only contains Profit At Risk. To truly align each party’s goals with the goals of the project, each party earns the same Project KPI percentage of their At Risk Profit. This results in fewer hours, less material and a combined focus on the Project goals, not each party’s own profit.
The success of this project was based on the collaboration that began during the design phase. Using their highly technical experience, Trade Partners reviewed the 30% complete design drawings prior to meetings and brought suggestions to the table. If the topic was Building Structure, the concrete, steel fabricator and envelope Trade Partners collaborated with the architect and structural engineer. With an open mind, designers listened to their constructability, design and material recommendations. The team, including BP, weighed in and made key decisions necessary for the design to progress. The BIM model was updated weekly to show progress, and a true collaboration of what is needed verses what is possible was achieved.
During design, a total of 133 collaborative items yielded 62 safety benefits, 148 quality improvements, 119 schedule benefits, 119 cost reductions (3% cost savings) or avoidance of additional costs and 53 life-cycle maintenance benefits. Kent Gurley, exp. Sector Manager, PetroChem Services, said “Our design team responded surprisingly well to the concept of Trade Partner input. Designers and their respective subcontractors established good working relationships. We worked through a lot of issues that may not have been realized until later in the building process.”
While Trade Partners, project managers and engineers were valuable during the design process, it is the foremen that are the key players during construction. Given the authority to make safety, schedule and coordination decisions, they put their best foot forward to work together. To do this, they evaluate what is best for the project and make group decisions while addressing schedule constraints such as shop drawing approval, material availability and manpower. Where possible, equipment is shared and work that may have otherwise been sub-subcontracted is simply performed by another Trade Partner through simple transfers of the pooled project dollars. Brent Harting, BP Project Manager said “this process has led to significant savings to the project and provided many other benefits. The work between the subcontractors and their design counter-parts not only saved costs, but avoided significant change orders over a conventional construction approach.This non-adversarial approach led to great solutions to very difficult problems. The project has exceeded our expectations.”
The project has not yet reached completion, but the team is on target to meet all of the KPI goals. Most importantly, the subcontractors, exp., Graycor and BP are excited with the process and plan to repeat it on the next building project. Steve Crowley, Senior Project Manager at Graycor Construction summed it up when he stated, “This was the most collaborative project I have ever worked on. The structure allows for everyone to simply put forth great ideas and work through solutions in a non-confrontational way. Hopefully, the industry embraces IPD or will at least trend in this direction.”