Those of us who work in the design and construction industry have a good idea of what drives a successful project. In short, we see a successful project as one that finishes on time and within the budget. Common sense dictates that the chances of achieving those results increase with team integration and cohesion. If the project owner, design team and construction team are all on the same page, regardless of project delivery method, the owner (and the other members of the team) will likely be more pleased with the outcome.
Earlier this year, the Charles Pankow Foundation and the Construction Industry Institute sponsored a study in maximizing team integration. The study, entitled “Maximizing Success in Integrated Projects: An Owner’s Guide,” is available for free. The study is based on findings related to 204 capital projects completed between 2008 and 2014.
Construction professionals will not be surprised to find that the study’s three critical factors of project success are the following:
- Early Involvement. A significant portion of my practice involves representation of public and private owners of various levels of sophistication. Oftentimes, we are called upon to represent the owner in the drafting and negotiation of the construction contract, well after design is under way or in some cases even completed. At that point, there is very little flexibility regarding method of delivery, schedule, or constructability. Not surprisingly, the study found that bringing the construction team to the project early—as early as prior to the completion of schematic design—was a key indicator of success. Early involvement allows the construction team to provide valuable input into the design (including estimating, value engineering and constructability analysis) and encourages communication between construction and design team members that will prove critical later in the project. Even before selection of the project team, the owner should define the project’s unique goals and attributes, which will be key factors for the owner in the selection of the project team. This leads to the second critical factor . . .
- Qualifications Based Selection. The study also found that the chances of success increase significantly if the project owner selects a team based on qualifications rather than simply based on price. Using a more subjective approach to qualifying the design and construction team means not only selecting the name brand contractor or architect, but taking the opportunity to ensure that the personnel assigned to the project are qualified for the project (e.g. if you are building a school or a hospital, the project team members have practical experience on educational and healthcare projects), and are comfortable working together as a team (e.g. there are no personality conflicts between the lead architect and the contractor’s project manager). Clearly, this is easier to achieve on private projects, but even on public projects, there are opportunities ( e.g. through pre-qualification) to achieve some form of qualifications based selection.
- Cost Transparency. For the most part, closed-book, fixed priced contracts are antiquated. Given the level of complexity in today’s construction, all parties are better served with the idea of open book accounting. With the transparency of an open book process, there is a higher degree of trust between owner and builder. This is common ground for an owner and primary builder (such as a CM), but the study found that this transparency has made its way down to key specialty trades as well. The study also found that shared risk and reward were additional drivers of success, though in my experience I have found that construction teams are far more sophisticated in analyzing financial risk and reward and less experienced project owners can be taken advantage of in negotiating a shared savings or other financial rewards.
The Guide is over 50 pages and includes a number of benchmarks that are available for further review at the website cited above. Clearly, the intent of the study is to promote Integrated Project Delivery (which may not be for every owner and can vary a great deal depending upon how a project team defines IPD) but the Guide contains a number of good talking points that, while seemingly more obvious to those in the industry, can be very valuable in particular to less experienced owners, and even to construction and design teams who are working with project owners for the first time.