Capital Project Solutions – May 2012 The Challenges of Launching an IPD Project Steve Higgs, Senior Vice President Regardless of the delivey model used when launching a major Capital Project, there will be a myriad of strategic and tactical decisions required in order for the outcome of the project to be considered a success.
Developing a
realistic scope, schedule and budget should be the result of these varied and often iterative decisions. With a traditional methodology, these decisions are typically made in a more siloed manner and are often largely dependent on the culture of the organization and the structure of the project delivery team.
“Form follows
function” is as applicable to people systems as it is to the facility solutions that are the output of the very Capital Projects we aspire to complete on time and on budget. While the Architecture, Engineering and Construction (AEC) industry continues to define the Integrated Project Delivery (IPD) Model, the promise of more value and better outcomes continues to lure healthcare owners to test the IPD waters.
Since IPD is not utopia, focusing on the
challenges of launching an IPD Project can provide an elightening and realistic road map for those considering this approach. The Speed of Trust “The dynamism of trust is to act as a mediator, combining past evidence and feeling in moving the individual or organization towards a willingness to pursue a trusting form of behavior towards another party,” stated Dr. Hedley Smyth in his book Developing Client-Contractor Trust: A Conceptual Framework for Management in Project Working Environments.
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Capital Project Solutions – May 2012 While trust is the basis for any successful project, it is absolutely paramount for an IPD project. Since a higher level of trust is required, the first step in launching an IPD project is mostly introspective. Tough questions must be asked of your leadership and board members to ensure that IPD is a good fit.
Begin by asking yourself the
following questions: •
Will IPD receive a warm embrace from the leadership team?
•
Are trust and patience a part of our organization’s DNA?
•
Is there a focus on continuous improvement across the organization?
•
Are we truly committed to improving processes or following the buzz?
•
Is the definition of project success a low bid?
•
Are we siloed or collaborative?
•
Do we fully understand and embrace IPD ideals as a part of our organization’s values?
•
Are we totally risk averse even when the reward can be greater?
•
Are there influencers in the organization that my act as impediments?
Your answers to these questions should reveal your level of readiness and willingess to move forward with an IPD approach. If you are not ready to continue, “Stop, Do Not Pass Go, Do Not Collect $200!” and proceed with your typical delivery method.
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Capital Project Solutions – May 2012 How to Select the Team Team dynamics and the cohesiveness of organizational cultures are crtitical to harnessing success. Setting the proper structure begins with the team selection process. Hiring the right team is the most important step you will take! Traditional methods of selecting a team are often fragmented and inadequate. The decision to hire an architect or construction manager is often based on a response to an RFP (Request For Proposal) followed by an hour long interview. Additionally, the team is usually hired sequentionally, across the continuum of the project, and molded into a team by virtue of the process. While this process has become the norm, we should be asking ourselves whether it acutally leads to the selection of the most effective team? The challenge of hiring the right team to administer, design and construct a new facility utilizing an IPD approach
can
be
even
more daunting and thus requires a shift in thinking. In
IPD,
the
“team”
is
selected as opposed to being formed over time. Instead of issuing an RFP to individual firms, a Request for Integrated Team (RFIT) is issued that includes design services (architectural, engineering, civil, medical equipment, technology) and construction management. Within the RFIT, the goals and conditions of satisfaction, along with the behaviors that must be met and displayed by the integrated team are defined. The participants responding to the RFIT should be allowed to “self select” in order to provide a joint and
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Capital Project Solutions – May 2012 unified response.
After narrowing the list or RFIT
responses to two or three Integrated Teams, consider conducting a series of interactive workshops. This will enable you to see the integrated team dynamics in action, observe their chemistry and behaviors, as well as understand if they would be a good cultural fit for the organization. Selecting a Contract Developing the right contractual and risk model will go a long way to undergirding the tenants of IPD and the appropriate team dynamics. An Integrated Form of Agreement (IFOA) can be the right platform, but it is much different
than
a
traditional
AIA
Architectural
Construction Management Agreement.
and
Getting through
the differences in contracting models will take time and involve critical input from those in risk management, legal, opertations, insurance, project managenent as well as the integrated team themselves. Note that the IFOA intent is to change the risk model, truly influence team behavior and focus efforts toward the project outcomes as defined by the owner. Listed here are a few model examples: •
Traditional Project Risk Model “Conduit approach” Push risk down
•
IPD Approach to Risk Mutual Waiver of Consequential Damages Full Waiver of Subrogation Mutual Indemnification and Hold Harmless
•
Collaborative Risk Allocation Development of risk sharing agreement early Limits risk and provides upside to maximize the potential on the project
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Capital Project Solutions – May 2012 Often, the very form of agreement is what stumps an owner from moving fully forward with an integrated model. If your organization wants to implement this type of approach, but an IFOA is not an option, consider the following: •
Collaborative
language
for
standard
contract vehicles •
Add relational and process language to standard contract vehicles
Always keep in mind that while an IFOA is powerful, trust can never be contracted! How to Maximize the Integrated Team Hiring the right team is invaluable, but maximing the team is even more important. Ultimately, the processes, norms and behaviors outlined in the IFOA will create a platform for the teams effectivenes.
An investment in a robust
Project Initiation Process will yield great dividends. This crucial phase should include the following major elements:
Establishment of the Project Governing Structure
Completion of a Team Alignment Workshop
Risk and Incentive session
o
Determine final IFOA vehicle
o
Evaluate and establish risk equations
o
Determine incentive structure
Detailed Project Gap Analyis and Implementation Plan
The implementation plan should include methods for maximizing the use of lean tools and principles.
These
tools should include 3D Modeling or BIM (Building Information Modeling), Centralized Project Management software, Last Planner Scheduling methods and a process for measuring the project Conditions of Satisfaction. 5
Capital Project Solutions – May 2012 Through deliberate and periodic review, the baseline tools and processes should be evaluated for their effectiveness, making adjustments when necessary Are You Ready to Launch an IPD Project? The answer to that question obviously depends greatly on your experience and comfort level with IPD? By starting with trust and working in a methodical manner toward an implementation plan developed by the right integrated team, the initial challenges of an IPD project can prove to be opportunities for success. For more information on Project Launch and other Capital Facility topics, visit KLMK’s Educational Insights.
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