Lean IDP Flashcards
Project Delivery System - Contract Strategy
1.Lump-sum
- Cost Plus
- GMP (Guaranteed Max Price)
- Unit Price
- Target Price (EMP - Estimated Max Price)
Project Delivery System - Selection Method
- Low Bid
- Best Value: Costs
- Best Value: Fee
- Qualification Based Selection (QBS)
Project Delivery System - Delivery Methods
Design-Bid-Build
Design-Build
CM @ Risk (GC/CM)
IPD (Integrated Project Delivery)
Design-Bid-Build
Traditional method.
Design fixed before contractor selection.
Popular for public projects with low-bid selection
Design-Build
Single contract for owner.
Coordinates design and construction.
Enables fast-tracking, best-value selection, single responsibility
CM @ Risk (GC/CM)
Two-staged:
Preconstruction contract (design phase)
GMP contract (construction phase).
Fast track, popular for commercial buildings
Preconstruction Activities (Fast Track Projects)
Design Assist
Value Engineering (VE)
Estimating (conceptual + detailed)
Acquiring Permissions
Level of Collaboration
Level 0: Design-Bid-Build
Level 1: CM @ Risk
Level 2: Design-Build
Preconstruction Problems - Good Ideas Held Back
Late involvement of specialty contractors (SCs) leads to lost time and innovation opportunities
Preconstruction Problems - SCs in TVD
Challenge: How to engage specialty contractors (SCs) in Target Value Design (TVD) effectively?
Observed Issues in Traditional Methods
Designer/constructor disconnect.
Specialty trades/suppliers not involved in VE.
Results in many RFIs/Change Orders during construction
Estimated Maximum Price (EMP) Mechanism
Direct Costs (DC)
Project Overhead (POH)
General Overhead + Profit (GOH + Profit).
Options: A+Split, A, B
IPD - Definition
A project delivery method aligning primary team members’ interests for optimal performance through integration
3Es of IPD
Everyone: Team includes all players (e.g., major subs).
Early: Begins in Schematic Design (SD) with analysis/simulation.
Everything: Information shared (e.g., BIM model)
IPD Components
Organization: Early involvement of specialty contractors.
Commercial Terms: EMP or GMP, Shared Pool.
Selection Method: QBS or Best Value with Fee
IPD Contract Types
IFOA (Integrated Form of Agreement).
Consensus Doc 300 (3-Party Agreement).
Features Pain/Gain sharing via EMP and Shared At-Risk Pool
Shared At-Risk Pool
Components: Contingency + GOH + Profits.
Shared among designers and contractors (e.g., “Your fault is our fault”).
Example: $40M pool for $400M project, consumed as contingency
IPD Contract - Reliable Promising
Clear objectives for promisor/receiver.
Promisor has competence or access to it (tools, materials, etc.)
IPD Contract - Objectives
Relatedness of IPD team members.
Collaboration throughout design/construction.
Network of commitments.
Optimizing the project as a whole.
Continuous improvement
IPD Contract - Building Information Modeling (BIM)
Collaboration, communication, visualization.
Cost estimating, scheduling, trade coordination.
Quality, safety, minimizing construction issues.
Long-term building management
IPD Contract - Trust
Mutual trust and cooperation.
Success tied to others’ performance.
Work in spirit of collaboration for project benefit
Current IPD Variations
Full Version vs. IPD-ish (for public projects, e.g., WA laws limit multi-party agreements).
GMP vs. EMP.
5-Party vs. 3-Party Agreements
IPD Process - #1 Planning & Selection
Business Case: Goals, performance criteria, allowable costs.
Selection: Two-phased, based on SOQ (technical competitiveness, cultural alignment)
IPD Contract - Team Formation
Collaborative team (Owner, Designer, Contractor, Subs, Suppliers).
Major trade contractors join early in Basis of Design phase
IPD Process - #3 Design (TVD)
Set Target Cost.
Aggressive Value Engineering.
Collocation (Big-Room).
Set EMP at 70-75% DD
IPD Process - #2 Validation
Go/No-Go decision (feasibility).
Compare Expected Cost vs. Allowable Cost.
Options: Approve, modify scope, or drop.
Includes conceptual schedule, some schematic design
IPD Process - #4 Construction
Aggressive fast track.
Last Planner System (reliable planning).
BIM.
Lean Supply Chain (Pull).
Shared At-Risk Pool control.
Minimal RFIs/Change Orders
IPD Advantages
Effective Value Engineering.
Reduced RFIs/Change Orders.
Lower total project costs and time.
Enhanced teamwork
IPD Disadvantages
Early stages take longer.
Upfront costs for consulting team/constructors.
Questions about “best price” with early constructor involvement.
Industry/regulatory resistance
Summary - IPD Mechanism
Organizational integration.
Alignment of interests.
Use of Lean/BIM
Summary - Suitable Projects for IPD
Highly complex or innovative buildings.
Projects with uncertainty or large scale
