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Executive roundtable

Integrated project delivery most efficient way to deliver construction projects

Early collaboration on projects among all parties involved is the most efficient and cost-effective way to complete a product, said a group of construction officials at a recent executive roundtable at The Daily Transcript.

And in this case, the way to go is integrated project delivery.

“It is a new way of thinking,” said Norm Strong, partner at the architecture firm Miller Hull Partnership, at the June 11 roundtable. “Integrated project delivery is basically putting everyone together, including owners, contractors, design teams [and] subcontractors, working for a common goal -- the project.”

Jamie Awford, principal at roundtable sponsor BN Builders, said integrated project delivery also is where there is an actual contractual relationship to create a mindset of behaviors for collaborations, where the risk and reward is shared among owners, designers and contractors.

“If you make decisions that are in the best interest of the project, you are doing the right thing,” Awford said. “And it will put pressure on the contractor, the architect [and] the owner, but you are always striving to improve. Even when the project is 50 percent done, you are finding new ways to do things, and that is the intent behind this delivery method.”

Integrated project delivery has started to pick up some steam, at least in part, because of new technology and software for 5-D modeling that has come out in the last few years.

“With all of us working in Autodesk Revit, we don’t need to be under the same roof to be talking to each together and collaborating on the project,” Michael Akavan, principal and CEO at MA Engineers, said.

Jim Amundson, principal at structural engineering firm Hope Amundson, said what’s encouraging for the building industry at large is that the gap between designers and contractors has been closed because of new technology that lends itself to delivery methods similar to integrated project delivery, like design-build.

“We’re constantly collaborating early on [a project] with subcontractors, with general contractors now,” Amundson said. “And a big part of it is because the technology that’s out there now allows you to share information electronically and virtually.”

This type of 5-D software allows architects, engineers and contractors to build the project virtually on their computers and assess cost, time and even potential clash detections among mechanical, engineering and plumbing systems.

Trey Post, principal at design firm DGA, said integrated project delivery is also gaining momentum because it allows architects and contractor to keep their cost down with today's more constricted project schedules and fee structures not changing.

So why would an owner use integrated project delivery as a method to build new structure and facilities?

Dave Umstot -- president and co-founder of Umstot Solutions, which represents owners -- said it’s all about finding ways to save money to combat escalating construction cost.

And it started in the health care industry.

Umstot explained that health care providers, with Universal Health Services and Sutter Health leading the way, looked at how they could incentivize behavior and use target value design (set cost of project based on case studies).

“If I can’t beat that number, I don’t have a project,” Umstot said. “Or if you are in government entity, what are my funding constraints? 'Here is the maximum money I have, how do I yield the most value out of that?'”

Umstot added that the only way do this is to have all designers, engineers and contractors involved in the project from the beginning to detect where waste can be eliminated.

“Eighty percent of your cost is locked in the schematic design,” Umstot said.

From an owner’s perspective, it’s about how to get the most value out of the project with the available funding.

Integrated project delivery also calls for, via the construction contract, that if the project comes under budget that the difference will be shared among the agreement signatories.

Also, if the project goes over budget, the owner will cover those cost -- but there will be no profit to designers, engineers and contractors.

Umstot was also the vice chancellor of facilities management for the San Diego Community College District from 2007-13. The district is wrapping up two construction bond measures passed in 2002 and 2006 that helped build new classroom buildings and supporting facilities; some did use a very similar form of integrated project delivery.

Due to the state’s public contract code, the district could not enter into a multiparty agreement with architects, engineers or contractors to share risk and reward like the health care providers had been doing.

But what the district could do is incentivize design-build teams to foster collaborative efforts among themselves.

“We started to see an evolution with in the San Diego community, on both the design and construction side, to come up with some very innovative approaches,” Umstot said.

San Diego Mesa College’s new 57,000-square-foot cafeteria/bookstore, which just started construction, is an example of this almost true integrated project delivery and the closest to one in the county.

Akavan’s company, along with Strong’s design firm, is involved in this project.

Umstot said the closest true integrated project delivery to San Diego County is the Temecula Valley Hospital by Universal Health Services.

Amundson said the advantage for owners is that they have an electronic model that has all the pieces and components of the buildings to run it to its top efficiency, and also the foundation to do a renovation or addition to their structure at a later time if needed.

Integrated project delivery is typically only found in the private sector ,because of the constraints public sector entities have in entering into contracts.

Strong said, from an architect’s point of view, trust is a huge factor for integrated project delivery to work to its fullest potential.

“You need to trust the information,” Strong said. “It’s in development. Don’t hold it against us, but here it is [the information]. Some engineers are, to certain degree, concerned about what they are being asked to do.”

Amundson said the closest prevalent delivery method to integrated project delivery is design-build, which is seen on various school and government projects, because awarding of contracts are based more on qualification rather than lowest responsible bid.

“As more owners see the benefits from design-build, the next progression is integrated project delivery,” Amundson said.

Umstot has put together a study on the target value design (set cost) approach at the San Diego Community College District.

Five out of six projects that used this delivery method close to integrated project delivery met the budget with an average saving of 7 percent of the published cost.

Also on these six projects, the cost to operate went from $3.93 per square foot to $1.46 per square foot.

“These are the types of things owners need to hear to say, ‘I can do that,’” Umstot said.

* Related article: BNBuilders pioneers integrated project delivery

Roundtable Participants

Michael Akavan, Principal and CEO, MA Engineers

Jim Amundson, Principal, Hope Amundson

Jamie Awford, Principal, BNBuilders (sponsor)

Trey Post, Principal, DGA

Norman Strong, Partner, Miller/Hull

David Umstot, President, Umstot Solutions

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