IPD Owner Team: 4 Biggest Challenges

What are your biggest challenges these days?

Most of us can agree that we get generally poor results with Design/Bid/Build as defined by completing the project within the original timeline and the original budget. In the new book, How Big Things Get Done, the others note that in over 10,000 mega projects studied, only .5% were completed within schedule, budget and originally intended benefits. To say this is bad may be one of the understatements of the century.

Okay, so most projects aren’t mega projects. Many of the projects faced by our project teams are renovations in existing facilities. They are not huge, but they are complex and require real coordination and effort to get them right.

My four biggest challenges as a project owner:
1) Getting a coordinated, buildable design prior to the start of construction
2) Designing and building to a budget
3) Meeting schedule with challenging lead times
4) Developing a team of owner PMs who understand how to work in a collaborative environment

IPD and to a lesser extent, Design/Build and CM at risk are helping three of the four and developing a team is required to make it all work.

1) Getting a coordinated, buildable design prior to the start of construction
Coordinated, buildable design documents seem to be nearly impossible to get these days. It’s not a matter of money either. The best name design firms appear to be overstretched and having trouble finding experienced and knowledgeable staff to do the work. An on-site, above-ceiling investigation is more important than ever but feels like most consider it no longer part of the standard of care. We are practically begging teams to go to the sites and do a real investigation.

Bringing on trades early and getting them above the ceiling is the solution. Only when the person who actually has to climb up there and build the thing, do you get someone who cares deeply enough about getting it right. They will go the extra steps to make sure the design can be built. They will also make sure the drawings don’t show tying into a duct that isn’t there or make sure that we don’t forget to put fire smoker dampers in the drawings where we penetrate rated walls.

These are simple items, but even the best are missing them these days. Trades have more invested in getting it right. Only in IPD contracts, do the designers actually put fees at risk for the quality of their work.  

2) Designing and building to a budget
Designing and building to a budget is more challenging than ever. Every project we bid on is well over budget even with constant cost estimating from third-party estimators and when we have a CM providing preconstruction services. Not until the trades are on board and the design is more complete do we start to see the certainty of pricing. Our goal now is to get to this point as soon as possible. We are rolling out a new design/build agreement which requires the GMP to be set no later than 50% DD. The goal is to require the teams to do more work upfront to get to price certainty early. They can no longer wait to bid on completed designs or they risk losing their fee.

During construction, our projects have countless change orders and time extensions. This is primarily on the design/bid/build projects. They are for discovered conditions, unbuildable details, lack of proper details, and completion of design coupled with some owner-directed changes. Almost more important than the cost impact of these changes is the schedule increases. I’ve signed a change order with 365 cumulative days of delay on complicated hospital remodel projects. This can’t continue.

3) Meeting schedule with challenging lead times
Schedule busts once we’ve started construction are common. Once we complete demolition, it is often clear that the design is incorrect, uncoordinated, and needs to be redone. We are often only looking a few days ahead and can never seem to get out in front of the required design document changes.  

Once we get to the point where we order equipment, we are finding that lead times in many cases are longer than the entire projected duration of construction. We are left thinking about whether to start construction and then stop while we wait for electrical gear or whether we should delay starting. Neither option is appealing.

Again, trades can help with this process. We can identify needs and lead times early, and then start procurement even before the design is complete. Having partners early helps to minimize the risk of ordering the wrong items and gets us to a more complete design quicker.

4) Developing a team of owner PMs who understand how to work in a collaborative environment
We have rolled out new contracts and selection methods to allow for the earlier onboarding of trades. We are also able to start a Target Value Design process earlier than before. I’m learning that we need to upskill our project managers to live in this new world too. They have lots of experience in reviewing traditional change orders, ones that are backed up by RFI’s and amended construction documents. They know how to review schedules, look for concurrent delays, and push back on generous estimating assumptions.

Leading a team through Target Value Design and implementing the Last Planner System is something entirely different. We are encountering a whole new set of challenges now that we have team members on board so early. How do we set targets? What do we do if the targets look to be too far out of reach? How do we push the team to improve the schedule during design and again prior to starting construction?

This is the most interesting part of the work. Developing people is the area that pays off the most, the part of the job that has the highest Return on Investment–both from a training cost perspective but also from the investment in time.

I’m more excited than ever for the future, but feeling more busy than ever too. Change is hard. Embrace the work and don’t forget to celebrate along the way.  

al Thoughts:
Giannis Antetokounmpo with the Milwaukee Bucks basketball team provided this recent postgame interview that speaks to how we should approach our projects. This is a marathon, not a sprint. We will have failures and problems along the way. Not every project will go the way we think it should. Sometimes we’ll do all the right things and still won’t get the outcome we want. Does that mean we failed? No, we only fail if we give up, if we stop improving, if we quit.

Keep going, continuously improving every day, every project, every conversation.

For a comprehensive course on Integrated Project Delivery (IPD) by James Pease, the author of this blog post, CLICK HERE.

And learn more about IPD including case studies, and more of James’ blog posts, HERE.