Integrated Project Delivery (“IPD”) is a project deployment method that aims to guide the interests of all parties while using the values of cooperation, communication and trust. The DPI contract contains (i) a mechanism for parties to share project risks and rewards, and (ii) a waiver of most claims against each party, with a few exceptions. As part of the contract, a project management team (“PMT”) is formed and appointed by each contracting party. This team, in collaboration with a senior management team (which includes one from each party), provides project direction and supervision, while project implementation teams (“PITs”) (which are designed as interdisciplinary and multi-functional teams) achieve the project`s objectives. Integrated Project Delivery (IPD) is gaining popularity with owners, contractors and design teams to drive creativity, promote reliability and successfully complete complex financial projects. While contractual relationships are well structured, the IPR approach has repeatedly been shown to reduce the number of requests for information, amendments, delays, litigation and claims in the project.  The risk of these contingencies is managed collectively by project participants, who prioritize the owner`s objectives rather than protecting their profits. As noted in this article, the DIP approach facilitates this objective by directly linking the financial incentives of project participants to the achievement of negotiated, agreed and measurable objectives related to the owner`s objectives. Signatory: The contract is still signed by the owner, Lead Designer and Lead Builder.
Some owners choose to have more than 3 signatories to the agreement, which attracts other design and trade partners as key signatories. If the other parties are not signatories, they are usually awarded under one of the main signatories and the language is inserted into the sub-contract to bind them under the IPD master`s agreement. A subsequent blog post will examine the pros and cons of tripartite counter-poly agreements (more than 3 signatories). Management team: The contract defines a management team responsible for providing the project in the long term, budget and quality of the quality desired by the owner. Some agreements call it the central group or the project management team (PMT) and there are certainly other names. The important concept is that the project is run jointly by a representative of the owner, architect and contractor. Other people can be added to this management team. For example, a representative of the user (customer) or other representatives of risk/reward partners. The risk/reward parties: IPD contracts have a common risk/return component based on the financial result of the project.
Signatories and other risk/return partners agree to jeopardize their profits in exchange for a guarantee of their costs and common savings if the project goes well. These companies agree to be reimbursed on the basis of transparent costs, plus overhead and profits. This structure emphasizes one of the main possibilities in which the DPI model differs from traditional deployment models. An IPD team uses the target cost design proposal to develop the final design of the project. In other words, cost dictates design. On the other hand, the more traditional approach requires the general contractor to establish a cost estimate based on the design information available at the time. The traditional approach is ripe for cost overruns, as the contractor is encouraged to submit an offer (often based on incomplete information) as low as possible, while leaving room to fill deficits through exclusions, modification contracts, hidden contingencies or a number of other mechanisms.