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Procurement (CONS6817) Lara TookeyProcurement (CONS6817) Lara Tookey

INTEGRATED PROJECT DELIVERY SYSTEMS

Procurement (CONS6817) Lara Tookey Procurement (CONS6817) Lara Tookey

Integrated

The Integrated project delivery method combines architectural and engineering design services with construction performance under one contract.

It is generally associated with good cost certainty and a minimisation of risk to the client. One of the key benefits is that design and construction can be overlapped.

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Integrated


Process

• O contracts with a single entity to provide the design and to construct the project (according to that design).

• The contract could be negotiated with a single design‐builder or result from competitive proposals.– Call for proposals (tendering stage)

• Sent to short list of capable D&B contractors• Response includes

– Statement of capability– Sketch plan– Pricing structure


• DB provides the owner with a single point of contact for project responsibilities, eliminating the need to assist in resolving designer – contractor disputes.

• With the contractor playing a major role in design, costs are typically defined to a greater degree.

• The DB’lder makes many decisions that the owner would make under DBB, due to delegated and increased authority.

• DB contracts with all A/E firms and subcontractors.

Procurement (CONS6817) Lara Tookey

Feasibility

Design

Construction

Sketch Plan

Develope

d De

sign

Constructio

n Draw

ings

Selection of D&B contractor

Agreement on price


• Relative speed and cost certainty. However, the design will usually be the responsibility of a contractor and consequently the Client will lose some control over the design process.

Time

Cost Quality


This system should be used when:

• Building is functional rather than prestigious;• Building is simple rather than complex;• Is not highly services and does not require technical innovation;• Brief for scope design is likely to change;• Programme can be accelerated by overlapping design and construction activities; and• Single organisation is required to take responsibility and risk for design and construction.


Design & BuildNovated Design & Build

Package DealTurnkey

Develop & Construct

The main variations of Integrated are


Design & Build (aka Design & Construct)

• The DB system has grown in popularity, and is seen by some in the industry as a solution for addressing the limitations of other methods. For an owner, the primary benefit is the simplicity of having one party responsible for the design and construction of the project.

• Under this system, the owner contracts with a DB team, which can be a joint venture of a contractor and a designer, a contractor with a designer as a subconsultant, a designer‐led team with a contractor as a subcontracted entity, or a single firm capable of performing both design and construction. However formulated, the DB team performs the complete design of the facility, usually based on a preliminary scope or design presented by the owner.

“Design and Build” in Comparison with the Traditional procurementMethod…


• At some point early in the process, the DB team will establish a fixed price to complete the design and construction of the facility. Once underway, the DB team is then responsible for construction of the project, and for all coordination between design and construction.

• Since the DB team is working together from the outset, DB offers the opportunity to save time and money. However, the advantages of the system are offset by a significant loss of control and involvement by the owner and other stakeholders. Accordingly, it is difficult for the owner to verify that it is receiving the best value for its money without having a great deal of transparency in the DB team.

• The owner needs to recognize the effort and completeness that must be behind its initial scope/preliminary design which forms the basis of its contract with the design‐builder. Often, the owner will require additional consultants to help it develop the scope or preliminary design, in the role of a traditional design firm.


• Owners with highly specialized program needs may not find it advantageous to turn over responsibility to an outside DB team without ensuring adequate levels of oversight and communication.

– For example, a government owner constructed a high‐technology research facility involving highly specialized equipment using the DB delivery method. During project development, the DB team made several key design and equipment selection decisions without full involvement of the owner, resulting in an unsatisfactory facility that required costly changes before the facility could be used as intended.

• With this in mind, DB is best suited to conventional projects for which project requirements can be clearly defined and for which expertise is widely available.


Advantages: • DB can produce a project more quickly than a conventional DBB. • There is a single point of accountability for design and construction. • Cost efficiencies can be achieved since the contractor and designer are working together throughout

the entire process. • Change orders would typically arise primarily from owner changes.

Disadvantages: • Less design control and involvement by the owner and stakeholders. • Owner must be highly responsive in its decision making to take full advantage of the speed of DB. • The owner does not receive the benefit of the checks and balances that exist when it contracts

separately with a designer and a general contractor. • May be problematic when there is a requirement for multiple agency design approvals. • May be inappropriate if the owner is looking for an unusual or iconic design.


Novated Design Build

• Sometimes referred to as design, novate and construct.• This is where the contractor takes over from the client a previous contract for the design

work, completes the design and constructs the work.

Novate ~ Law the substitution of a new obligation for an old one by mutual agreement between the parties


Feasibility

Design

Construction

Sketch Plan

Develope

d De

sign

Constructio

n Draw

ings

Appointment of design team Appointment of

Contractor

Design team novated from client to contractor


Package Deal• This method is often used where the contractors competing will use a significant part of

their own proprietary building system or they will be constructing variations of a repetitive theme.

• There is limited scope for innovation when this method is used.

• Some contractors may offer to find a site, to sell, mortgage or lease their product, obtain approvals etc. at a risk to themselves or at a cost to the Clients.

• The precursor & originator of DB.

• Clients wanted to purchase a total package (off the shelf).– To satisfy need for speed and economical pricing

• Nice in theory, but not practical.– Providing adapted standard product means you are unable to fully satisfy the needs / criteria of

clients.


Difference between DB & Package

• Design & Build– Provides bespoke design solution to suit clients specific requirements.

• Package Deal– Uses a proprietary building system in order to produce a scheme.– The building type is often modular so that its size can be adjusted.


Turnkey method

• A variant which includes the process plant within the building.

• Used for projects that are designed, built, and put into operation before the project is turned over to the owner.

• The company providing the turnkey service may:– Secure the land for the project;– Perform / coordinate all aspects of the design;– Arrange / administer the construction contract;– Manage construction;– Staff & train the personal to operate the facility;– Turn the project over to the owner.


Develop & Construct

• The contractor also acts as the developer, or the developer also acts as the contractor and takes responsibility for the development, design and construction phases

– A common variant to this in NZ is the ‘design‐build‐leaseback’ approach to developing industrial buildings.

– The contractor finds an occupier (who leases the finished building), develops a bespoke building for them and then sells it to an investor.


User

Owner

Developer

Designer

Contractor

Subcontractor

Supplier

Financiers

So Far….


User

Owner Developer / Contractor

Subcontractor

Supplier

Financiers

Develop & Construct


Develop and Construct

The developer has their own construction team and plays the role of the construction contractor as well as that of developer.

– Example: Manson Developments Multiplex Industrial building developers


Design – Build ‐ Leaseback

Typically initiated by developer / contractor – most often for industrial buildings

Developer finds client (C1) who wishes to lease a custom designed building. Developer puts together a development proposal which includes C1 as lessee. Developer then sells the development to an investor (C2) as a complete package including

the tenant (C1).


Design – Build ‐ Leaseback

User (tenant)

owner

Developer / contractor

subcontractor

supplier

financiersLease agreement transferred from developer to owner

Contract to purchase the building with tenant in place

Lease agreement initially established between developer and tenant


Fast – tracking – JUST A NOTE!

Fast‐track approach compresses the schedule by sequencing the start of construction on underlying project elements before final design is complete for interior or adjacent elements.

It is NOT a method of delivery, rather it is a management strategy within a delivery method.

While often successful in achieving schedule reductions, problems on fast‐track contracts can create a domino effect on follow‐on contracts for the project.

integrated project delivery systems - weebly

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