Volume 50, Issue 3 - March 2015

Integrated Project Delivery

Are the Incentives for
Glazing Contractors Strong Enough?

by Megan Headley

For many years, glazing contractors have pursued design-build contracts to lock in work on projects in their initial stages. By serving as a resource to the architect early in the design process, these savvy subcontractors could minimize installation problems, helping keep projects on budget and schedule.

However, today’s focus on efficiency is just one of many factors shifting how buildings are designed. Some owners want a greater role in the design process as they focus more on the life cycle of the entire project. They look for construction teams that share these goals. As a result, integrated project delivery (IPD), a design-construction model that was just gaining traction before the economic crash in 2008, has re-emerged in a big way.

Whether you think of IPD as a way to deliver multiple products and services to a project or as an emerging contractual model, you might not recognize the value IPD could be adding to your bottom line.

“If glazing contractors found a way to communicate the value they really bring to owners, I think they would be compensated more. IPD would be a great vehicle to actualize that,” says Will Ikerd II, PE, CM-BIM, LEED AP, principal of Ikerd Consulting in Dallas.

A Philosophy
and a Contract

In its 2007 guide on the topic, the American Institute of Architects describes it as an approach that “integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste and maximize efficiency through all phases of design, fabrication and construction.”

In its own IPD work, Oldcastle BuildingEnvelope® points to data from the United Kingdom’s Office of Government Commerce that estimates construction savings of up to 30 percent when integrated teams promote continuous improvement over a series of construction projects. The company notes that IPD gets to the heart of inefficiencies within the construction industry by bringing together all the knowledge, skill and expertise to ensure that individual needs are aligned with the project goals. (See related sidebar on page 44.)

In fact, the key to IPD is collaboration.

“For us to be able to execute IPD type projects, we try to engage early on with the design team and work collaboratively throughout the design and shop drawing process,” explains Marty Trainor, vice president of preconstruction for Ventana Design-Build Systems, the Chicago-based glazing division of the AEC firm Clayco. “It’s a matter of getting in early and working collaboratively throughout, not waiting for the architect to draw something, then having them wait for us to draw something. When a project is really complex, it tends to stretch out a lot longer if you’re not working collaboratively with the design team.” Such collaboration may extend to working with surrounding trades in order to reduce or limit field errors, Trainor adds.

Attila Arian, president of Schuco USA LLLP in Newington, Conn., offers a supplier’s perspective on the collaborative benefits. “We see in IPD the opportunity to bring our engineering know how to the project at an earlier stage, which will reduce the margin of error, the need for re-design, avoid cost escalations and reduce schedule impacts. In the world of complex designs and tight schedules it gives us the opportunity to create additional value by providing tools to our medium-sized fabrication partners and the installers, which will empower them to participate in larger scale projects.”

Although these principles can be applied to a variety of contractual arrangements, including traditional design-build, some glass professionals are seeing the use of formal IPD contracts, while others are working more “in the spirit of” IPD.

Trainor has worked with many different contracts that fall into each of these categories. “It can be a design-assist contract, where if we hit the budget we can do the project, or we have a contract that basically says we’re doing the whole thing, and it includes a design-assist portion where we help develop the details,” he says.

IPD contracts move beyond the more familiar design-build contracts to bring parties — typically the owner, designer and general contractor, but potentially other subcontractors as well — into the early design phase. It also locks these parties into an agreement to ensure that all members are committed to creating a building on time, on or under budget and with an eye toward optimizing the building’s performance over its life cycle. Everyone involved shares some risk because all are responsible for the building’s creation and performance, a motivation for keeping an eye on quality. But they could also share a financial reward by splitting up to half of any contingency funds saved by the construction team, a motivation for delivering projects under budget.

If you’re one of the many contractors promoting IPD on your website without having signed the first multi-party contract, you’re not alone. According to the Design Build Institute of America, this IPD contractual model has not yet gained wide acceptance. Among other limitations, public projects currently can’t accommodate IPD contracts. But glazing contractors applying an integrated approach to projects may still see some of the rewards.

“One of the biggest benefits of the IPD model is the collaborative spirit that the highest-functioning teams are able to achieve,” explains Kent Doss, principal/regional vice president based in the Philadelphia office of Array Architects. “What I’ve found is, when the project is structured such that individual success is dependent upon and sublimated to project success, contract tiers become less important. Creating this kind of high-functioning team is really the big challenge of IPD — to make it a reality for every team member, all parties should share in the risks and rewards. Incentives should be linked to project performance, not individual performance.”

The Henry J. Carter Specialty Hospital & Nursing Facility was a collaborative success thanks to an emphasis on preconstruction work and the use of building information modeling tools.

The Case for
Glazing Contractors

Not all trades add the value needed to get a seat at the owner’s table in the early stages of a building’s design, but façade contractors certainly have a case to make.

Cladding is one of the more expensive systems on a building, and IPD can keep costs as budgeted.

Ventana achieves this through continual estimating, which, Trainor explains, “basically involves identifying every cost variable on the façade and tracking it through the design. This way we avoid working with the architect on design for two months and then realizing we are over budget.”
Arian agrees. “Through a collaborative design approach, we [are] able to identify in an early stage of a project if any customizations to our system are necessary. The sooner we know about unavoidable alterations the more options we have to mitigate schedule and potentially cost impacts,” he says.

“Owners who build a lot of buildings are aware of this,” Ikerd says of this cost benefit. And those owners—for example, large medical systems or private, financially stable universities that are constantly expanding their campuses—are the ones turning to IPD.

“I could see a glazing contractor being able to make the case that they provide enough quality and impact to schedule that it makes sense to bring them early and incentivize them,” Ikerd adds. “No interior finishes can really start going in until the building is enclosed, and that skin is a critical path.”

Designers using IPD realize this
as well.

“Getting the building envelope to the ‘dry’ stage allows so many other interior construction activities to get started, so I really like having a façade contractor who can participate deeply in the pull-planning that happens early in the process,” Doss says.

That early planning can prevent future problems.

“For architects, the advantage of including glazing suppliers and contractors in the IPD team is developing the construction documents with the people who are actually going to build the project. This leaves very little room for glazing suppliers and contractors to interpret what the architect meant, and can help eliminate guesswork associated with more traditional project document delivery, bid and build scenarios,” says Chuck Knickerbocker, curtainwall manager for Technical Glass Products in Snoqualmie, Wash.

On top of cladding’s inherent challenges, such as the potential for leaks, designers who create increasingly complicated designs set themselves up for even more. Adoption of new technology, from building information modeling (BIM) to parametric design tools, is paving the way for more complex façades. In addition, demand for glazing with specific performance factors, such as low-E lites that are both hurricane- and fire-resistant, adds to the challenges.

“We feel design assist, or IPD, is the superior delivery method for complex façade projects, and we believe the owner gets better value and ultimately gets a better building in the end,” Trainor says.

Doss has seen evidence of this. “I’ve seen a curtainwall schedule fall apart when it was discovered at a late stage that wind-tunnel testing would be required for a specific component and the testing laboratory didn’t have an opening for 12 weeks,” Doss says. “When the entire team can understand the intricacies of individual component requirements, everyone can work together to create an optimal work plan—sometimes that might be as simple as reserving testing times early enough, and sometimes it might be a complete change of systems.”

All in all, façade contractors specializing in custom and complex glazing have a solid case for getting in on the design early and reaping the benefits later.

“A savvy glazing contractor could sell the value that they bring to the job, and have incentives allocated toward the building opening on time, dried in on time and the quality of the construction and how it’s going to pass the required test,” Ikerd says. “For a good glazing contractor, IPD would be a wonderful arena, because they could get compensated for the risks that they take on, whereas in design-bid-build, it’s a more formal and traditional contracting method.”

Integrated Project Delivery:
A Manufacturer’s View

USGlass magazine asked Oldcastle BuildingEnvelope®, a market leader in integrated project delivery, design build and Building Information Modeling, to comment about the role of those processes in construction.

Since 1964, the productivity rate within the industrial and manufacturing market sectors has more than doubled. Yet during this same time, the productivity rate within the construction industry has fallen by nearly 50 percent. Despite all of the advancements in equipment, technology and materials, the construction industry is less productive today than it was in 1964.

Current conventional construction delivery practices such as design/bid/build, design/build, and construction management services do very little to address inefficiencies within the industry. More often, they mask them and give owners a false sense of economy.

In fact, United Kingdom’s Office of Government Commerce (UKOGC) estimates that savings of up to 30 percent in the cost of construction can be achieved where integrated teams promote continuous improvement over a series of construction projects. UKOGC further estimates that single projects employing integrated supply teams can achieve savings of up to 10 percent in the cost of construction. (Office of Government Commerce, Achieving Excellence in Construction Procurement Guide, Vol. 5, at p. 6 (2007) .)

Integrated Project Delivery (IPD) begins to get at the heart of these inefficiencies that exist within the construction industry by bringing together all of the necessary knowledge, skill and expertise in a manner that ensures that individual needs are in alignment with the project goals.

Tools such as BIM IQ® from Oldcastle BuildingEnvelope® are designed to help those involved in building projects work more collaboratively.
In addition, “Technological evolution coupled with owners’ ongoing demand for more effective processes are resulting in better, faster, less costly and less adversarial construction,” says Ted Hathaway, CEO, Oldcastle BuildingEnvelope®. Leveraging leading-edge technologies such as BIM IQ® (an Oldcastle BuildingEnvelope® exclusive), everyone in the construction chain from the owner, architect, building envelope consultant, general contractor and glazing work collaboratively and in the same environment, to not only see the design, but interact with it by sharing markups in real time. That saves critical time and reduces risk by mitigating the chance for errors and costly delays.

And because BIM IQ® leverages a robust and government validated energy engine, it calculates the performance from any material change and its effect on the entire building operating costs—which significantly reduces waste.

“In order to work collaboratively, manufacturers need to be invited early in the design stages, but in order for that to happen, they need to bring more to the table than just manufacturing products. Our customers value tools like BIM IQ® as they see us a part of the solution not the problem, and
they value the tangible results these tools deliver,” adds Hathaway.

Creating Your Team

Glazing contractors aren’t the only professionals with a case to make for IPD, however. In the spirit of integrative delivery and teamwork, suppliers and consultants also have a role to play in the early design phases.

“You need someone who has the installation experience, you need someone who has the fabrication experience, and someone with a lot of experience with waterproofing and construction. I don’t know of any one person who knows it all, and I definitely haven’t seen many firms that have it all in-house,” Ikerd says. “As building designs become more complex, I really believe it takes a team.”

Doss agrees. “Ideally, I like to see the design-assist model implemented so that the façade/glazing contractor and the product manufacturer(s) are brought into the process at a very early stage,” he says. “This model helps ensure that expectations are aligned with technical and budgetary capabilities from the beginning and informs the design and construction teams of challenges and opportunities that the design might present. A thorough understanding of issues such as prefabrication and unitization opportunities, special testing requirements, product lead times and local market conditions can have a dramatic impact on the IPD team’s ability to perform the work within the project’s fiscal and schedule constraints, so discovering and analyzing these variables as quickly as possible helps minimize the potential for disruptive rework at later stages.”

IPD is all about working together, so glazing contractors are one part of a network of glass professionals.

TGP is one supplier seeing more IPD projects come up on the boards.

“We submitted one of our first IPD project bids this last December,” says Knickerbocker. “So far, our experience is the process resembles aspects of design-build projects,” he adds, although he notes that the company is still in the early stages.

For this project, TGP priced its materials to three different glazing subcontractors. “We’d obviously be working for them and would take direction from them as it relates to the architect and general contractor, should we get the job,” Knickerbocker says.

While IPD pulls glazing contractors and suppliers in early to serve as consultants, glazing consultants still have a role.

“It certainly looks like this scenario could reduce the consultant’s role in many situations, but it will likely vary by project and the suppliers and contractors in the IPD team. For example, if the suppliers and/or glazing subcontractors can do the work the consultants have filled prior to the issuance of contract documents, why would the consultants need to be involved? The answer is going to depend on how much confidence the owner and architect have in the abilities of the glazing subcontractor and its suppliers, and what those parties bring to the table. If the owner and architect aren’t certain of these capabilities, they could still avail themselves of the opportunity to hire a glazing consultant,” Knickerbocker says.

Ikerd admits he has a bias. His experience has shown that IPD can magnify the need for a third-party consultant. “You’re bringing together the opinions and ideas from a lot of different entities, and it helps to have a third party come in that’s going to provide some other ideas,” he says. “If the consultant is good, then they’re going to earn their keep.”

Ikerd and Doss both agree that a consultant might have a different role in an IPD project, and some are focusing on new skill sets to help fill in gaps for glazing contractors.

“When a glazing consultant is needed as part of the team, I do see their role evolving (especially in the design-assist model) to more advisory and less documentary,” Doss says. “The beauty of the design-assist model for IPD is twofold: the people who have intimate knowledge of the products are responsible for documenting them, and the need to have multiple entities draw and hand-off for redrawing and submittal (i.e. the traditional shop-drawing process) can be eliminated. So, in this model, I see the glazing consultant as more of a systems expert that can act as an expeditor and facilitator.”

Ikerd notes that IPD is paving the way for more use of collaborative 3D modeling, and consultants are focusing on this area.

“If you are going to bring a team together and really achieve [IPD benefits] and get everyone working together, then you would want to use modern technology, meaning combined 3D models that help you solve the problems that a glazing contractor and owner are going to face in their enclosures. While IPD doesn’t necessarily require BIM in practice, any intelligent group using IPD would also be active in using BIM,” Ikerd says.

There’s a catch, however. There’s an upfront cost to BIM.

“There’s the software, there’s the hardware and then there’s the people,” Ikerd says. “It takes years to get someone up to speed.”
Ikerd says more independent consultants are cropping up to fill this gap for glazing contractors who are just beginning to create a 3D modeling group.

IPD’s Achilles’ Heel

IPD is not for everyone or every project, in part because the possible rewards may not always be worth the risks.

As Arian points out, “To my knowledge there is no viable insurance program that covers a collaborative design and integrated delivery method. The project participants all have to make sure that their contributions to the IPD effort do not expose them to liabilities. Thus they are usually driving with one foot on the brakes. In the U.S. everybody is afraid to get sued, which puts a damper on promoting unusual approaches.”

And because the heart of the IPD model is the close working relationship between each party, it’s not necessarily a practice that a firm can simply jump into.

“IPD is not a panacea for all ills,” Ikerd says. “These contracts are, at the end of the day, just sheets of paper. It’s only the relationships around them that are going to make them win or fail.”

In fact, he says this is his biggest critique of IPD: “Everyone wants to do it, but they don’t want to invest time in relationships. What it takes for an IPD to work is what it takes for design-bid-build to work … good people are going to [build relationships] anyway, whether they have a contract that incentivizes them or not.”

Ikerd has worked on design-bid-build projects where he had known many of the team members for a decade. That history made for a much more integrated experience than his other contractual IPD projects where there were no pre-existing relationships. “You cannot contractually create trust, and that is one of the Achilles’ heels of this whole IPD concept. How you get there is going to take relationships,” he says.
The good news is that the good glazing contractors are already investing in this trick of the trade.

the author

Megan Headley
is special projects editor for USGlass magazine. She
can be reached at mheadley@glass.com.

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