Friday, June 1, 2012

Alternative Project Delivery Models Gaining Traction


Institutional owners - both public and private - continue to embrace alternative project delivery models.  While CM at Risk and Design-Build dominate the headlines, Integrated Project Delivery, accompanied by the right legal framework, remains the best delivery model for integrated teams seeking to produce BIM enabled infrastructure.

The ENR article excerpted below highlights the continuing trend.  As more owners become more aware of their options expect to see legislators approving IPD as an acceptable project delivery model as well.


The modest growth in alternate-project-delivery revenue has to do mostly with the continuing sluggishness of the overall construction market, as the acceptance of CMR and design-build continues to gain momentum. This is especially true for design-build as states continue to pass authorizing legislation allowing design-build to be used on public projects.

The latest state to pass design-build legislation was Connecticut, which on May 7 passed and sent to Gov. Malloy (D) Senate Bill 33, authorizing design-build to be used by the state Dept. of Transportation. Malloy has vowed to sign the bill. In November, New York enacted a law authorizing design-build contracts by that state's DOT and several other agencies.

"We are now down to only three states that do not authorize some form of design-build in the transportation market," says Lisa Washington, executive director of the Design-Build Institute of America (DBIA), Washington, D.C. She notes that only Iowa, Nebraska and Oklahoma do not specifically authorize design-build in transportation.
This growing trend toward enabling legislation has expanded the market for firms offering alternate-project-delivery systems. But the recession has resulted in a buyer's market, and construction firms are competing fiercely. So, many public agencies, facing declining tax revenue or user fees, have opted for more hard-bid proposals, trying to drive prices down.


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There has been a lot of interest in integrated project delivery (IPD) as a delivery method. For example, IPD "has enabled us to maximize the practical applications of [building information modeling]," says Anthony Consigli, president of Consigli Construction. He says that, on one corporate headquarters project, the client colocated the entire team—owner's rep, CM, architects and key subcontractors—from the project start. "This approach facilitated an accelerated design process, with the team working side-by-side to incorporate all the information we need in the BIM model to estimate, schedule, procure and actually build the project in the field," he says.

However, IPD brings some uncertainties. "Insurance and legal requirements are significant barriers with IPD," says Steigerwald of Messer Construction. It also requires early integration and collaboration at all levels, and the various parties have to understand and get used to the new processes and attitudes necessary for IPD to succeed, which is challenging, he says.

Messer currently is working on a major IPD project—a $98 million fit-out of the Simon Family Tower at the Riley Hospital for Children at Indiana University Health. Steigerwald says the project is using an IPD contract with a multiparty agreement. It is achieving a significant return on investment, he says.

Alternative Delivery Models Gaining Traction

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2 comments:

business advisor melbourne said...

As a australian business consultants Expert I agree with you that the modest growth in alternate-project-delivery revenue has to do mostly with the continuing sluggishness of the overall construction market, as the acceptance of CMR and design-build continues to gain momentum.

Aarna Reddy said...

I am also related with construction industry...thanks a lot for sharing construction news here...