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Integrated Project Delivery: The New ConsensusDocs IPD Form
and How to Use It
Mark Voigtmann, Partner | Faegre Baker Daniels Joseph Cleves, Partner | Dressman Benzinger LaVelle, Cincinnati
The Process Improvement “Revolution”
IPD is a Sub-Set of Lean (and so is BIM)
Lean
IPD
BIM
IPD Moves from Linear to Collaborative Connection
The ConsensusDocs IPD model
CD300 Sequence
Commissioning and close-out
Construction
Pre-construction
Validation
Formation of team
Project Business
Case Owner’s Program
Allowable Cost
Project objectives
Formation of Team
►Identify initial IPD Team and Core Group
►Execute Agreement ►Initial meeting ►Joint worksite investigation by Core Group
Validation Phase
►Validation Study ► Proposed Expected Cost ► Project budget with Payable Costs ► Proposed Risk Pool ► IPD Team compensation and contingencies ► Project Schedule
►Options if Expected Cost > Allowable Cost: ► Owner can increase Allowable Cost ► Core Group can assist with adjustments to program ► Owner can terminate agreement
Pre-Construction Phase
►Update Project Schedule ►Create a Responsibility Matrix ►Initiate Target Value Design and set a Target Cost
under Expected Cost ►Establish BIM parameters ►Designate design-build portions of Work ►Create a DP Work Plan ►Continuous cost modeling
TVD Process
Protocols Avoidance of re-drawing TVD Clusters
Value analysis Design /
constructability reviews
Built-in Quality Plan
Operations Quality (5S)
Plan
Project Governance
Core Group
Owner DP Constructor
Parties
Trades
Consultants
Joining Parties
Senior Executive Team
Other Operational Elements
►Reliable commitments ► A unit for planning and executing the Project
►Pull planning ► Applies to both design and construction
►Subcontractor selection and self-performance ► Ts and Cs approved by Core Group
►Key personnel ►Meetings
► Use of Communications Protocol
Compensation
►Basics of Compensation: ► Design Professional (DP) and Constructor are reimbursed their
Payable Costs and paid their Profit, subject to the Risk Pool Plan ► Payable Costs detailed in Article 9; paid monthly ► Retainage: TBD in Risk Pool Plan ► Open book accounting ► Risk Pool Plan is team-developed
►Estimated Maximum Price (EMP) not guaranteed unless specifically provided in EMP Amendment
Progression of Cost Setting
Allowable Cost
Validation
Preconstruction Phase
Construction Phase
Expected Cost & Target Cost EMP Actual Cost
Build-up of Benchmarks
►Components of Expected Cost, Target Cost and EMP ► DP’s estimated Payable Costs (inclusive of overhead (O/H)) plus
Profit ► Constructor’s estimated Payable Costs (inclusive of O/H) plus
Profit ► IPD Team Contingency plus any special contingencies ► Escalation allowance plus any other allowances
Cost Overruns
1st 2nd 3rd 4th 5th
Recover costs from available insurance proceeds or responsible 3rd parties
IPD Team Contingency
Undistributed amounts of Risk Pool
Clawback from distributed Risk Pool amounts
From Owner (assuming EMP is not team guarantee)
Changes to Benchmarks
►Limited bases for adjusting Expected Cost, Target Cost, EMP and Profit. Only for:
► Scope changes ► Changes in law enacted after agreement execution ► Differing site conditions ► Allowance reconciliations ► Other circumstances expressly provided in agreement (e.g.,
excusable delays, Owner acceptance of defective work)
Risk Pool Plan
►Risk Pool Plan: ► Included as part of approved Validation Study ► At minimum, involves Constructor and DP ► Profit set as a fixed dollar amount, adjusted for Change Orders ► Plan needs to establish a Target Cost
Risk Pool Plan
►Risk Pool Plan (cont.): ► Needs to address:
►Interim and final distributions of profit ►How cost savings are determined and shared ►How retainage is addressed for different IPD Team members ►Escalation ►Effect of Change Orders ►Costs of post-completion warranty repairs ►Termination of a Risk Pool Member
Risk Management
►IPD Team identifies potential risks early in design ► Evaluates likelihood and impact. ► Identifies potential costs and time impacts. ► Prepares risk register describing
►contingency plans ►person primarily responsible ►role of others
Insurance / Indemnity
►Insurance ► Coordinated insurance program ► CCIP/OCIP –project specific professional ► Specifics and limits established by team ► Options for subcontractor default insurance or bonds
►Indemnity
► DPs and Constructors subject to limitation of liability
Limits of Liability
►Covers any claim by Owner or other Risk Pool Member. ►Eliminates Safe Harbor Concept ►Covers any claim from Work or the Project ►Not to exceed: Member’s profit and share of savings ►Avoids waiver of claims in other IPD Agreements
Exceptions
►Exclusions from limitation on liability: ► fraud or willful misconduct ► covered by insurance ► where recovered from subcontractor, supplier, or consultant ► government fines and penalties ► for failure to pay sums due under Agreement ► default on correction of work obligations
Key Differences with Previous CD300
►Better flow, focus, and organization ►Validation and Target Value Design ►Determining savings ►Risk Pool concept and operation ►Risk identification and management
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Mark Voigtmann, Partner | Faegre Baker Daniels Joseph Cleves, Partner | Dressman Benzinger LaVelle, Cincinnati
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