Construction & Design Survey: Integrated project delivery gains acceptance as it shows results

Integrated project delivery, a building process that gets architects, engineers and construction managers out of their silos and working collaboratively, is gaining momentum as it demonstrates it can cut costs and speed project completion.

Of the 151 companies participating in this year's Modern Healthcare Construction & Design Survey, 51% said they had been part of an IPD team in 2013.

In healthcare, the concept was born partly out of frustration among hospital officials who had to deal with “professionals who weren't acting professionally,” said Andrew Quirk, senior vice president for Skanska USA and national director of its Health Care Center of Excellence in Nashville.

Chicago-based Gilbane Building Co., with 91 IPD projects in its 2013 portfolio, is a leading practitioner of the process. “If properly implemented early in the project, the integrated team institutes open, collaborative, project-oriented goals which result in cost-effective and timely built facilities that are of the highest quality,” Gilbane officials wrote in their survey response.

DPR Construction reported that using IPD led to an “easier to build project in the field” and saved the company both time and money. DPR worked on 21 IPD projects in 2013, including Universal Health Services' Temecula (Calif.) Valley Hospital, completed by the company's Newport Beach, Calif. office. DPR and Turner Construction finished the 140-bed hospital last year at a cost of $1.07 million per bed—far below the state average of $1.8 million per bed.

“IPD contributed to making the hospital one of the most cost-effective hospitals ever built in California and raised the commitment and sense of ownership among the seven-party contractual IPD team,” said Temecula Valley CEO Darlene Wetton.

Members of the American Institute of Architects are credited with codifying IPD principles in a 2007 guidebook.

IPD teams “can include members well beyond the basic triad of owner, architect, and contractor,” the guidebook said. Teams may employ a variety of contractual arrangements, but sharing risk and reward is a unifying tenet of the IPD concept.

Though gaining in popularity, the idea of shared risk causes some companies and hospitals to hesitate before fully committing to IPD, Skanska's Quirk said.

A typical IPD financial model calls for the creation of a project contingency fund.

If a project comes in on time and under budget, contractors are rewarded with a share of the savings. If the fund is depleted by delays and cost overruns, the extra expense comes out of contractor fees—as well as the hospital's pocket.

The Great Recession slowed the IPD movement's momentum. Richard Galling, president and chief operating officer of Brookfield, Wis.-based developer Hammes Co., said some hospital operators were moving toward IPD, but pulled back during the economic slowdown. Some went back to the traditional “hard bid” process, thinking they could get a better price, but ultimately did not, Galling said.

Both Skanska and Hammes reported that they worked on only three IPD projects in 2013. “It's a good vehicle, but it's not the answer for everyone,” Galling said.

The leading healthcare IPD firm in the Modern Healthcare survey was Haskell, a Jacksonville, Fla.-based integrated design, engineering and construction firm.

Haskell reported that it had 100 IPD projects last year.

Last March, Haskell finished work on the Scripps Proton Therapy Center in San Diego, and it has an August 2015 completion date for the Maryland Proton Treatment Center in Baltimore, to be operated by the University of Maryland.

Jim Eaton, Haskell's vice president and healthcare division leader, said the process is a natural evolution of the design-build methods the company has used since its founding in 1965. “The lines between design-build and truly integrated project delivery are going to disappear,” Eaton said. “It's definitely semantics now.”

Follow Andis Robeznieks on Twitter: @MHARobeznieks