Why do we need IPD?
The Indian construction sector contributes 8.2% of the national GDP. Around 16% of the nation’s working population depends on construction for their livelihood (Wikipedia, 2021). However, construction projects in the country are constantly failing to meet delivery deadlines because of construction delays. Statistics published by PropEquity in 2018 showed that housing projects of values ₹ 3.3 trillion (46 billion US dollars) faced severe time overrun. The integrated Project Delivery (IPD) system which is built on trust, collaboration, and pooled risk-reward sharing has been devised as an effective solution to the major project delivery challenges almost a decade ago. However, until now its adoption rate in the Indian construction sector remained very low. Some of the benefits of IPD that need to be reaped in the country for improving the current situation are as follows:
- Better communication
- Increased transparency
- Fewer change orders and RFIs
- Greater innovation
- Lower project costs
- Less wasted time and materials
- More profits for better outcomes
Learning from other’s experiences, adopting best practices, and step-by-step implementation through proper policy formulation are some of the early actions that can be taken at this moment.
Learn from other’s experiences
As USA has taken the lead role in IPD implementation and possesses the maximum number of successful IPD projects, a total of 21 case studies from USA and one from Canada can be referred. Twelve of these cases were published by AIA in (2012) and another ten were published by the Lean construction institute (LCI) and Integrated project delivery alliance (IPDA) and compiled by Cheng and Johnson in (2016). Some of the IPD components adopted in these projects are shown in this table. Along with other success factors, the most important aspect of all the successful projects was that all parties willingly collaborated in the project to achieve the common goal.
✔ = Effectively Implemented; ⦸ = Effectiveness to be improved; x = Insufficient information.
How to perform better?
IPD adoption path in developing countries like India is not smooth at all because of various cultural, technical, and legal issues. (Roy et al. 2018) and (Charlesraj and Gupta 2019) highlighted some of the major challenges as follows.
- Resistance to change
- Developing mutual trust & respect
- Lack of experience of working together
- The requirement of a new legal framework
- Equitable distribution of gain and loss among team members
- No uniformity in the accounting system followed by the owner, and other firms (designer, contractor, etc.)
- Cost-based vs. Value-based selection
- Involving subcontractors early in the team
- Lack of motivation for a common goal
- Lack of BIM standards and practices
Solutions to these problems are inevitable for the full-fledged implementation of IPD in the country. The lesson learned from the success stories, the existing IPD frameworks (Fischer et al. 2014; Yee et al. 2017), and guides (AIA 2007; AIA 2014) led to the formulation of an IPD adoption framework that can address these challenges. The framework consists of 4 distinct phases.
Preparation phase: For creating an ambient environment for IPD adoption in the country, certain preparation is needed. This preparation includes creating IPD awareness among the stakeholders, extensive use and policy formulation for using effective collaborative tools like BIM, and more importantly change in the existing legal framework to accommodate some of the important aspects of IPD such as risk-reward sharing, value-based selection, etc. The preparedness needs to be assessed regularly as good preparation will ensure a smooth transition to the next phase.
Involvement phase: Any change doesn't happen overnight but a steady move with tiny little steps can bring one close to the destination with time. If not full IPD implementation in the first step, projects can start adopting IPD as a philosophy in “lean construction” practices. Later with better preparation, they can move to IPD-ish (some IPD principles are adopted) and True IPD adoptions. More IPD awareness and success stories within the country will involve more parties with time.
Policy formulation phase: Country-specific policy formulation is needed basing IPD principles suggested by AIA 2007. The IPD team is captained by the owner who needs to take the initiative of adopting IPD and promoting collaboration, mutual respect, and trust among the team members. A common project goal with utmost transparency needs to be defined by the stakeholders. Subcontractors need to be involved early in the process. A clear risk-reward sharing and contingency allocation criteria need to be set and agreed upon by all parties. Legal and commercial considerations like contract selection, entity formation policy needs to be established in this phase.
Implementation phase: The successful IPD implementation depends on various tools and techniques. These tools can be broadly classified into three categories: lean tool, collaboration tool, and contracting tool. Lean tools include Target Value Design (TVD), Last Planner System (LPS), visual management tools, A3s, Big Room, and so on. BIM works as a major collaboration platform among the stakeholders throughout the lifecycle of the project. The team is bound through multi-party contracts instead of the owner having transactional contracts with each party. ConsensusDocs 300 and AIA versions of IPD contracts are helpful for customizing the multiparty agreement terms. Risk transferring practice needs to be changed to pain and gain sharing.
The lesson learnt from the success stories indicates that IPD is only 20% technical but the rest 80% is about culture. Developing nations need to build the culture of collaborative working with mutual trust and respect among the owner, designers, and contractors for achieving the common project goals. To build such a collaborative work environment in the country, this framework suggests to increase IPD awareness among the stakeholders, establishment of BIM implementation standards, and the adjustment of the legal frameworks for accommodating IPD principles such as value based selections, risk-reward sharing, etc. If not full implementation in the first place, the IPD adoption journey needs to be started with the implementation of lean practices and then moving towards IPD-ish project delivery.
Pal, A. and Nassarudin, A. 2020. “Integrated Project Delivery Adoption Framework for Construction Projects in India.” In: Tommelein, I.D. and Daniel, E. (eds.). Proc. 28th Annual Conference of the International Group for Lean Construction (IGLC28), Berkeley, California, USA, doi.org/10.24928/2020/0018, online at iglc.net.
AIA (2007). Integrated Project Delivery: A Guide. American Institute of Architects.
AIA (2012). “IPD Case Studies.” AIA California Council, March.
AIA (2014). “Integrated project delivery : an updated working definition.” AIA California Council
Charlesraj, V.P.C., and Gupta, V. (2019). “Analysis of the perceptions of beneficiaries and intermediaries on implementing IPD in Indian construction.” Proc. 36th Int. Symp. Autom. Robotics in Constr. (ISARC2019), Banff, Alberta, Canada, 937-944.
Cheng, R., and Johnson, A. J. (2016). Motivation and Means: How and Why IPD and Lean Lead to Success. Lean Construction Institute and Integrated Project Delivery Alliance. Minnesota, USA, https://conservancy.umn.edu/handle/11299/198897
Fischer, M., Reed, D., Khanzode, A., and Ashcraft, H. (2014). “A simple framework for integrated project delivery.” Proc. 22nd Ann. Conf. Int. Group for Lean Construction, Oslo, Norway, 1319-1330
Roy, D., Malsane, S., and Samanta, P. K. (2018). “Identification of critical challenges for adoption of integrated project delivery.” Lean Construction Journal, 1-15.
Wikipedia (2021) “Construction industry of India”, https://en.wikipedia.org/wiki/Construction_industry_of_India#cite_note-1, Accessed on 03 Jul’ 2021
Yee, L. S., Saar, C. C., Yusof, A., Chuing, L. S., and Chong, H. (2017). “An Empirical Review of Integrated Project Delivery ( IPD ) System.” Int. J. Innovation, Management and Technology, 8(1), 1-8