Construction Project Delivery - Define it, then own it!

Construction Project Delivery must be understood before it can be practiced efficiently. "Construction" in this case defines any repair, renovation, maintenance, or new build activity for a built structure.

A Construction Project Delivery Process (PDS) defines responsibility, scope, sequence, and compensation, spanning contractor selection criteria (qualification, price, or mixed), type number, dollar value, and duration of contracts between planning, design, procurement, and construction teams (integrated, separate, multiple prime), type of relationships between disparate groups, and cost/payment terms of payment (time and material, target price with incentives, cost plus with a Guaranteed Maximum Price (GMP), unit price, fixed price).

Traditional construction project delivery systems fail to integrate the participants organizationally (owner, designer, and contractor), and do not manage or balance time, cost, and quality effectively. They also do not guarantee a common data environment (CDE) to clarify and document technical and cost information or require collaboration across teams. Instead, each party typically seeks its own interests at the expense of others, or of project performance.?

Research and cast studies have demonstrated that integrating cross functional planning, procurement, and project delivery teams on an early and ongoing process can improve outcomes and reduce traditionally elevated levels of waste by 30%-50%. There are several construction project delivery processes that are readily available to support this approach. All of these promote a discovery–driven process to improve timely cross functional participation involvement of project participants.

Various construction project delivery processes:

Indefinite delivery/indefinite quantity (ID/IQ) - Quantity, supplied at the contracted price, or exact location are not specified

Agency Construction Management (Agency CM) - There is a separate consultant as CM other than architect and contractor, who is not responsible for construction cost risks

Multi prime approach of Design-Bid-Build - A CM manages multiple contractual relations between the owner and several contractors instead of general contractor but is not responsible for the construction cost

Construction Management at Risk (CM @ R) - The General Contractor (GC), as a CM, is responsible for cost overrun over Guaranteed Maximum Price (GMP), and is involved in the preconstruction processes.

Design-Bid-Build (DBB) - Owner selects an architect to design the construction project. The team then gathers construction bids and selects a general contractor from among the bidders. The DBB method requires two contracts, one to cover design and the other for construction. Responsibilities are divided between the three main parties (owner, architect, builder) with the contractor ensuring the project proceeds according to design, the designer defining and enforcing a professional standard of care, and the owner covering any differences between specifications and performance requirements.

Design-build (DB) - One contract covers both the design and construction phases, and the project. Intended to be an integrated process, issues remain as to owner, designer, and builder levels of collaboration and a common data environment is not required. The design-builder is responsible for meeting the contract requirements and spotting inconsistencies between prescriptive requirements and performance standards and reporting those accordingly. Owner must yield control of design details to the design-builder and team, which can be present issues.

Design Sequencing - GC can start construction of a phase as soon as the design of the phase is completed, while the design of the next phase is ongoing. But, the GC usually does not participate in making design of the project

Early Involvement of Contractor and Target Pricing (EIC) - A kind of DB. But it lets GC involved in the predesign phase and uses target pricing with fiscal incentives combined with open account instead of lump sum price, used in a usual DB

Project Alliancing - Selects the whole project alliancing team including architect, GC, and key special contractors based on criteria other than minimum price for construction at the beginning of the project, and adopts financial transparency and unanimous decision making system

Integrated Project Delivery (IPD) - A single agreement among all participants, waiver of right of all participants to sue any of other members.

LEAN Job Order Contracting - An IDIQ contract, and form if integrated project delivery, that uses a locally researched line-item unit price book (discreate tasks, not assemblies) and requires early and ongoing collaboration among owners and design-builders.

Research has supported that more collaborative construction delivery methods lower cost, yield faster project delivery speed, experience less cost and schedule creep that design-bid-build and CM-at-Risk.

When implemented leveraging core LEAN principles, IPD, JOC, and Alliance Contracting can deliver significant improvements versus other project delivery methods. When properly developed, implemented, and managed all...

1. Establish mutually beneficial commercial terms for all parties
2. Integrate appropriate involvement and decision-making for all participants
3. Require owner leadership and management by result

A construction project delivery systems perform best when it 1) Aligns the interests of the parties to the delivery of maximum value to the client and stakeholders within their conditions of satisfaction (time, cost, location, regulations, customs, etc.) 2) Integrates the parties organizationally, so that upstream players are involved in downstream processes and downstream players are involved in upstream processes 3) are executed with a management-by-means philosophy, principles, and methods (specifically, it employs LEAN theory). - STRUCTURING IDEAL PROJECT DELIVERY SYSTEM Seongkyun Cho , Glenn Ballard , Rahman Azari , and Yong Woo Kim?

Learn more....

References:

Associated General Contractors of America (AGC, 2004), Project Delivery Systems for Construction, Washington DC: Associated General Contractors of America

Airport Owner’s guide to Project delivery system (Oct, 2006), prepared by the joint committee of ACI-NA, ACC & AGC, [On line] Available at https://www.acconline.org

Arbulu, R., Tommelein, I., Walsh, K., and Hershauer, J. (2002), “Contributors to Lead time in Construction Supply Chains: Case of Pipe Supports used in power Plants.” Proceedings of the 2002 Winter Simulation Conference. Sandiego, CA, USA, Dec 8-11

Ballard, G. (2000-a). Positive vs. Negative Iteration in design. 8 th IGLC proceedings, [On-line]. Available ate www.leanconstruction.org

Ballard, G. (2000-b). “The last planner system of production control”. Ph.D Diss. The school of Civil Eng., The Univ. of Birmingham [On-line]. Available at www.leanconstruction.org

Ballard, G., and Howell, G. (2003). “An update on last planner.” Proceedings of the IGLC 11th , Blacksburg, VA, USA, July 2003, pp. 329-341

Ballard, G and Gregory A. Howell (2004). “Competing Construction Management Paradigms”, Lean Construction Journal, 1(1)38-45

Ballard, G. (2006). “Rethinking project definition in terms of target costing”. Lean construction journal, 2008, pp. 1-19 Caltrans (2004). “Design Sequencing Guideline Draft”, [On-line]. Available at www.nashtu.us

Cheung, S., Suen, H., and Cheung,.K (2004). “PPMS-a Web based construction Project”, Automation in construction, 13 (2004) 361-376

Chan. A. and Chan, A. (2004). “Key Performance Indicator for measuring Construction success”, Benchmarking an international journal, 11(2), 203-221

Cingle Ⅲ, George and John G wachter (2010), The Project Delivery System Rating Index (PDSRI), [On line] Available at https://www.aist.org

Cohen, Jonathan and AIA California Council Integrated Project Delivery Steering Committee AIA National Integrated Practice Discussion Group, (2010), Integrated Project Delivery: Case studies

Construction Industry Institute (CII, 2008), Benchmarking and Metrics Project Level Survey v.10.3 Construction Task Force (CTF, 1998), Rethinking construction, [On –line]. Available at www.architecture.com

Gehrig, S. David (2009). “Alternative Project Delivery Methods for Public works Project in California”, [On line] Available at www.hansonbridgett.com

Ibbs, Willliam, Young HoonKwak, Tzeyu Ng, and A. Murat Odabasi (2003). “Project Delivery Systems and Project Change: Quantitative Analysis.” ASCE, journal of construction engineering and management. 129 (4) 382-387, July/August issue

Irelend, V. (1984). “Virtually Meaningless Distinctions between Nominally Different Procurement Methods”, Proceedings of 4th International Symposium on Organisation and Management of Construction, Waterloo, Ontario, Canada, Vol. 1 pp.203-212.

Johnson, H. Thomas. And Broms, Anders. (2000), Profit beyond measure: Extraordinary results through attention to work and people, Free Press, New York, NY.

Lichtig, A. William (2006). “The integrated Agreement for Lean Project Delivery”.Construction Lawyer. 26 (3) Summer 2006 issue

Matthew W. Sakal (2005). “Project Alliancing: a relational contracting mechanism for dynamic projects” Lean Construction Journal, 2 (1) 67-79, Apr 2005 issue

Ohrn, L. Greg and Thomas Rogers (2008), Defining Project Delivery Methods for Design, Construction, and other Construction Related Services in the United States: [On line] Available at: https://ascpro0.ascweb.org/

Sanvido, V. and Konchar, M. (1998), Comparisons of US Project Delivery systems, J. Construction Engineering Management. 124 (6) 435-444

Sanvido, V., and Mark Konchchar (1999). Selecting Project Delivery System The project Delivery Institute, Second Edition, State college, Pa, Pp. 35-64

Sounders, K. and Mosey, D. (2005). “PPC 2000: Association of consultant Architects standard form of Project Partnering Contract.” Lean Construction Journal, 2 (1) 62-66, Apr 2005 issue

Thomson C. (2006), Project Delivery Systems, quoted from Ohrn et al. (2008) available at https://ascpro0.ascweb.org/

Trauner consulting service (2007). “Innovative procurement practices, Alternative procurement and contracting methods” Contract No. 53A0104, Prepared for California Department of Transportation

Thomsen, Chuck, Joel Darrington, Dennis Dunne, and Will Lichtig (2009), Managing Integrated Project Delivery, available at https://cmaanet.org

Tsao, C. and Tommelein, I. D. (2001). “Integrated Product-Process development by Light Fixture Manufacturer.” IGLC 9, 6-8 August, Singapore

Tommelein I. D. (2006). “Process Benefits from use of standard product - simulation experiments using the pipe spool model.” Proceedings of IGLC 14th , 25-27 July, Santiago, Chile, pp. 315-319

Tommelein, I. D. (1998). “Pull Driven Scheduling For Pipe-Spool Installation: Simulation of a Lean Construction Technique.” ASCE, J. of Const. Eng. & Management., 124 (4), 279-288 Walsh, K., Hershauer, J., Tommelein, I, and Walsh, T. (2004). Strategic Positioning of Inventory to match Demand in a Capital Projects Supply Chain. Journal of Construction Engineering and Management, 130 (6), 818-826?