Maximizing Success in Integrated Projects

RES-CPF 2015 Topic Summary
RES CPF 2015

Overview

This robust empirical study of over 200 capital facility projects was co-funded by CII and the Charles Pankow Foundation. Using a variety of statistical methods to model the relationships between project delivery and project success, the primary finding of the study is that owners should consider an overall project delivery strategy when structuring design and construction services, rather than focusing exclusively on the delivery method. By considering how the organizational structure, contract payment terms, and team assembly process can work together, owners can develop a larger strategy. In particular, the study finds that those strategies which align the core project team—owner, designers, primary builder, and key specialty trades—are more effective in meeting or exceeding their cost, schedule, and quality goals. During the implementation phases, the study also finds that higher-performing project teams participate in integrated practices and develop into a cohesive group.
 
While the importance of project teams is likely not a surprising insight for those with experience in the construction industry, designing team performance into the delivery process may seem more like random chance than thoughtful strategy. However, the data from this study show that certain strategies produce repeatable outcomes. Three critical factors emerged for enabling alignment within the core project team:

  • Early involvement
  • Qualification driven selection
  • Cost transparency in contracts


Owners can incorporate each of these factors—early involvement, qualification-based selection and cost transparency—into a variety of project delivery strategies, and the key to successful project delivery lies in designing a strategy that aligns the core project team with the owner’s project-specific goals and needs.

Key Findings and Implementation Tools

1 : What Is an Integrated Delivery Process?

The use of the word integration has grown significantly in recent years, but the term is rarely defined.  Integration is the combining or coordinating of separate elements into a harmonious, interrelated whole or unified system. In the context of the delivery process for a capital facility project, an integrated delivery process is the organizational coordination or combination of design and construction disciplines in support of the project goals. However, an integrated delivery process does not exclusively require a multiparty Integrated Project Delivery (IPD) contract. The evidence from this study finds that the majority of capital facility projects are delivered with conventional contract models (design-bid-build, construction manager at risk and design-build). Pursuing the spirit of integration can be undertaken to some degree in all delivery methods, but the success of implementing integrated practices is far more likely with certain project delivery strategies than others.
(RES-CPF 2015-2, page 1)
Reference: (RES-CPF 2015-2)

2 : What is a Project Delivery Strategy?

A project delivery strategy is a high-level plan for structuring design and construction services.  By selecting a project delivery strategy, an owner is making three critical project delivery decisions: (1) the organizational structure of the core project team; (2) the contract payment terms that define the methods of reimbursement for the work; and (3) the team assembly process.  Additionally, our research finds that the owner has a role in developing an integrated team during the implementation phase of the project, both by encouraging participation in integrated practices and by building cohesion among team members.  Team integration and team cohesion, which were found to be critical success factors in our empirical data, are often an implied, but rarely an explicit, consideration at the initiation of a capital project.   Descriptions of these decisions and success factors are listed below.
  • Organizational structure: The organizational structure defines the hierarchy of the core project team, playing a critical role in establishing lines of communication, defining responsibilities and distributing those responsibilities amongst project team members.
  • Contract payment terms: Significant portions of design and construction contracts are focused on payment provisions, or the method of reimbursement for the work.  These terms define the invoicing requirements, the method of reimbursement (whether against explicit costs or a pre-defined schedule of values) and potentially a maximum agreed upon cost.
  • Team assembly process: Team assembly practices, commonly referred to as procurement or acquisition, include the approach to soliciting proposals or bids, the methods for evaluating a potential primary builder or key trades and the criteria for selecting the core project team. 
  • Team integration: From an organizational perspective, team integration is the degree to which the core design and construction team members are brought together for a common purpose.  A highly integrated team will leverage the expertise of individual team members to improve the value provided in the project delivery process.
  • Team cohesion: The development of group cohesion is a tipping point, where newly formed groups transition into an effective team.  Highly cohesive teams have compatible personalities, demonstrate strong commitment to project goals and can communicate efficiently.
(RES-CPF 2015-2, page 1)
Reference: (RES-CPF 2015-2)

3 : Critical Success Factors

From the 204 projects analyzed, three themes emerged for enabling the critical success factors of team integration and cohesion within the project team:

  1. Early involvement of the core team – Early involvement, not only of the primary builder but also of critical design-build or design-assist specialty contractors, was essential to a successful delivery.  Similarly, participation did not stop at the front end for the designers.  Continuous interaction throughout the construction phase, including co-location and increased sharing of BIM, were found to maintain a high level of integration after design completion.  Seventy-three percent (73%) of the top 40 schedule performing projects engaged the builder during schematic design or earlier, and fifty-five percent (55%) engaged specialty trades for critical systems before schematic design.
  2. Qualification-based selection of core team – When assembling the core project team, higher performing projects in this study did not select the primary builder and key specialty contractors based solely upon a bid or proposal price.  Projects with the most cohesive teams focused more heavily on qualifications and used an interview process to assess the quality of the individual team members.  Selection based solely on price was an indicator of the least integrated projects.  This group of projects averaged four percent (4%) higher cost growth than projects where qualification-based criteria were used to select the core project team.
  3. Transparency in cost accounting – The use of open book accounting in contracts during the delivery process proved invaluable in the development of trust within the core project team.  While most commonly found in the primary builder’s contract, this transparency was sometimes extended to key specialty trades.  Projects using of closed-book payment terms averaged two percent (2%) higher cost growth.  Closed-book projects led to less satisfied owners at project turnover.  Additionally, contract terms that allowed for shared risk and reward, either through financial incentives or joint-management of responsibilities, were common in the delivery of successful projects.
(RES-CPF 2015-2, page 4)
Reference: (RES-CPF 2015-2)

4 : Project Delivery Strategy Workshop

This guide presents information to support a project delivery workshop held by the owner and key project stakeholders.  The objectives of the workshop are to:
  1. Provide a structured approach to selecting a project delivery strategy.
  2. Identify opportunities and obstacles for enhancing alignment in the core project team.
  3. Provide documentation of the decision process.
(RES-CPF 2015-2, page 26)
 
Reference: (RES-CPF 2015-2)
RES-CPF 2015

Key Performance Indicators

Improved quality (reduce errors & omissions), Improved performance/achieved success, Improved operations & maintainability, Improved design, Improved predictability

Research Publications

Maximizing Success in Integrated Projects: An Owner’s Guide - RES-CPF 2015-11

Publication Date: 08/2016 Type: Research Report Pages: 159 Status: Reference

Maximizing Success in Integrated Projects: An Owner’s Guide - RES-CPF 2015-2

Publication Date: 01/2016 Type: Implementation Resource Pages: 54 Status: Tool


Presentations from CII Events

Plenary Session - Maximizing Success on Integrated Projects: An Owner’s Guide

Publication Date: Presenter: Number of Slides: 12 Event Code: AC2015

Implementation Session - Maximizing Success on Integrated Projects: An Owner’s Guide

Publication Date: Presenter: Number of Slides: 45 Event Code: AC2015


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