Thursday, September 10, 2009

The Cost of the Status Quo: Traditional project delivery models have failed

The status quo of adversarial contractual relationships, E&OE (errors and omissions exempt) plans and specifications, claims for extras and issue resolution via construction lawyers is captured perfectly by the now infamous ‘change order boat’ image.

But these outmoded practices are slowly being replaced and will (in time) disappear. Little wonder that the use of design-build contracts as grown to more than 40% of non-residential design and construction in the US (up from just as reported by the Design-Build Institute of America (DBIA). This reflects the willingness of a design-build firm to take full responsibility as prime contractor for a guaranteed maximum price (GMP) and a guaranteed delivery date along with the risk of significant penalties for late delivery.

Why ? Because owners are no longer willing to accept the finger pointing, risk avoidance, project delays, cost over-runs and litigation involved in traditional forms of project delivery. Witness the industry whitepapers published by CURT (The Construction Users Roundtable) as well as the results of the FMI/CMAA Annual Survey of Owners.

As a result our industry is finally seeking new and better ways to deliver high quality building and infrastructure projects, on time and within budget, more predictably and more profitably.

Leading firms are experimenting with integrated project delivery (IPD) methods defined by the AIA in their publication called “Integrated Project Delivery: A Guide” as: “A project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction”.

For more about IPD as an emerging mainstream project delivery model, also read our blog entry below called IPD: 5 Essentials for Success.

No comments:

Post a Comment