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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Questions?

Mark Voigtmann, Partner | Faegre Baker Daniels Joseph Cleves, Partner | Dressman Benzinger LaVelle, Cincinnati