By AIA Contract Documents
March 31, 2022
Integrated project delivery is a procurement approach in which the owner, architect, contractor and possibly subcontractors and suppliers, as well as business structures and practices, enter into a single, multi-party contract. It’s a shared risk agreement that harnesses the talents and insights of all participants to optimize project results, reduce waste and maximize efficiency.
The Sutter Health Eden Medical Center completed over a decade ago was one of the most publicized. It included an 11-party Integrated Project Delivery (IPD) team all sharing in risks and rewards based on one relational contract. There have been very few similarly comprehensive procurements for a number of reasons. Getting a large integrated team to agree on a single contract is a long, involved and difficult process. As well, insurance and legal precedent are not well equipped for this kind of collective agreement.
However, basic collaborative principles and innovative compensation methods are not restricted only for use in IPD. are foundational elements in CM@Risk and design-build procurements. IPD principles include an incentivized compensation structure as well as active collaboration among all parties—owner, architects, contractors, etc.—thus creating a level of nimbleness when issues arise. As well, the use of building information modeling (BIM) and lean principles are core foundations of IPD that are regularly adopted for and adapted to design-build and other collaborative procurement methods.
The underlying value of an IPD agreement is that owners and project teams actively deal with issues in a positive way. Price fluctuations for instance are a common thread of conversation that are better resolved in an IPD-like environment.
Progressive design-build (PDB) draws from the multi-party IPD model in the pricing and schedule guarantees. In a PDB, owners and the core members of the design-build team have greater involvement in a project design. The project benefits from a more informed design before the final cost is decided,, which allows the owner and design-builder to agree on scope, cost and schedule before a guaranteed maximum price is set.
There are IPD contract documents readily available in the industry such as the C191™–2009, Standard Form Multi-Party Agreement for Integrated Project Delivery. AIA documents for IPD can be used on large private sector commercial projects.
AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.