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IPD shaping the future of Canadian construction project delivery

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by Mary Baxter

It’s a trend not so much to be found in the past 150 years as it will be in Canada’s next 150 years.
IPD shaping the future of Canadian construction project delivery

Five years ago, only one integrated project delivery (IPD) build was under way in Canada. Today, there are at least 10 using the new design and construction delivery model with another 10 to 20 projects in one stage or another of development.

Given the country's current construction activity, that might not sound like a large volume of projects acknowledges Art Winslow, Graham Construction director of lean and IPD, but the statistics show a doubling of projects every year. "There's a trend here that's going to gain a more significant part of the market share than it currently has."

Markku Allison, president of the 35-member Integrated Project Delivery Alliance and director of engagement and innovation at Edmonton-based Chandos Construction, said he's excited by the interest he sees in IPD. "I think it's a real opportunity for Canada."

What makes IPD different from traditional design and construction delivery methods is its focus on shared responsibility. "All project stakeholders are on board at the very beginning of the project," said Allison. They all sign one agreement, set goals together, share information and accept all parties as equals. They share the financial risk — and the reward. "The entire team succeeds or fails together, so one team member doesn't win while other team members lose," he said.

Chuck Thomsen, a U.S. construction industry consultant, credits the petroleum industry for first coming up with the idea. In an essay written a few years ago, he said British Petroleum first used the concept to manage expenses on building a drilling platform in the North Sea. They called it "alliancing" and "were spectacularly successful," he wrote. The Australian government seized the approach in the mid-1990s to apply to the development of the National Museum of Australia.

An Australian National Audit Office performance audit report of the project cautiously declared that the approach "offers potential benefits over traditional construction contracting methodology," and endorsed its use in major public construction projects. But the endorsement came with a caveat: Alliancing "raises new and different risks that have to be managed—in particular, determining the appropriate balance between maintaining the spirit of the alliance and protecting the Commonwealth's financial interests," the report said.

By the mid-2000s, the California chapter of the American Institute of Architects had embraced the concept. Health care was the area in which the approach was honed, said Winslow.

"What it does is it supports owners that are trying to implement more efficient ways of operating the hospital," he said. "When you have an owner that wants to use lean (construction) and other methods to become a more efficient operation, they found that the typical adversarial contracts they were using got in the way of allowing the design and construction to support their vision for having more efficient health care delivery."

Canada's first IPD build was a Five Hills Health Regional Hospital in Moose Jaw, Saskatchewan begun in 2012.  The project delivery method went hand in hand with a Lean construction approach and the use of BIM (building information modelling). The core team for the 19,200 square metre facility included the health authority, the provincial ministry of health, John Black and Associates, Stantec & Devenney Group Architects & Engineers, Graham and Boldt Construction and Black & McDonald (Mechanical & Electrical).

Under the integrated agreement that all core team members signed, designers and builders put their profit at risk but in turn obtained the incentive of being able to share with the owners any cost savings. According to a project summary on the Lean Construction Institute - Canada website, the team devised its schedule by working backwards from target dates for the project's major milestones. Core members shared a "big room," a large office in which they could collaborate on developing construction documents. They held weekly and bi-weekly meetings.

Winslow, who worked on that project as well as the recently completed IPD expansion of St. Jerome's University in Waterloo, said industry is keen and curious about the model. His company is currently seven months into construction on enhancements and expansions to Trafalgar Park in Oakville, and the project team has been visited by at least 10 different owner groups — airport authorities, private companies, universities, etc. — to witness the collaboration as well as the efficiencies and value achieved. The roughly $35 million project involves expanding a heritage arena to NHL size, a community centre addition, building a fire hall and updating the public park on which all of the facilities sit.

Most of the interest comes from public and institutional sectors, both Winslow and Allison said.

"All of the IPD projects that I'm aware of have been in the vertical building space," said Allison. He wasn't aware of the approach being used in road or bridge construction although there is no reason why it couldn't be.

Allison, an architect who originally hails from the United States and was closely involved in promoting and honing IPD in conjunction with that country's national architects' organization, said for him, the model's strength and appeal is its collaborative format. Collaborative methodologies are the best way to solve the complex problems that are common in construction, he said.

Moreover, the approach helps to maximize how design can contribute to a project.

"Most delivery models don't support a full, robust understanding of and ability to really leverage the power of design nearly to the degree that a collaborative model that IPD can do," he said.

One of the biggest challenges is familiarizing people with the process.

"This is a paradigm shift for many in this market," said Winslow. Adversarial relationships have become routine in construction, he said, and it takes a while for people to get into the mindset of trust and respect needed on an IPD project.

The approach makes it possible to focus continuously on creating better flows of work and achieving efficiencies of process. Winslow used the example of the Trafalgar Park project where this year's rainy spring set them behind a few weeks. Rather than adding labour to make up for lost time, the build's partners examined the work schedule to see how it could be streamlined.

One efficiency they found was to use eight or 10-feet insulated concrete forms rather than the six-feet forms that had originally been planned. The approach reduced the setup time. On the St. Jerome project, savings achieved in one area allowed them to use programmed magnetic keys on student residence doors rather than the normal deadbolt locks that were originally planned.

"So it's a different way of thinking," Winslow said.

Winslow also sits on the Canadian Construction Documents Committee task force that has been developing a new IPD contract for the Canadian industry.

Canadian projects currently using the IPD delivery model employ hybrids of contracts that are available in the United States. The new contract, to be called CCDC-30, will speak to the Canadian system and is being designed to other CCDC contracts.

A draft has been circulated for comment to a number of groups within the national organization. Winslow said the goal is to release the finalized document later this year.

IPD's future is bright, these experts, have said, but will it eventually become the standard approach?

"I don't think we're anticipating the IPD model to knock out design build or the CM (construction project management) model," said Winslow, "but we think it's a market that's going to continue to grow and continue to represent a portion, albeit small portion of the market."

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