You Name It
IPD, or Integrated Project Delivery, is one name used to describe a particular team—centered approach to building a project. I recently received an invitation to attend a seminar called Collaborative Project Delivery. In my opinion, giving a name to how projects are delivered or constructed has had little impact on improving subcontractor profitability. This is because the same problems occur on IPD and non-IPD jobs.
When we peel back the onion we find that project teams set unrealistic, fixed start and end dates for each construction activity, most of which are overlapping activities. When the schedule begins to slip, owners and general contractors begin a schedule recovery process, which typically results in subcontractors performing work out of sequence. This results in inefficiencies, including delays, disruptions, congestion, trade-stacking and acceleration. Once this chaos begins; subcontractors begin to see their budgets negatively impacted.
The two biggest stressors on a job are not enough time and not enough money. I think we can all agree that not having enough money or time to complete our work systematically is the result of unrealistic scheduling. As a result, waiver and release language on lien releases and change orders on IPD jobs are no different from what they are on non-IPD jobs. As you know, most lien releases and change orders contain waiver and release language in which subcontractors release the owner and general contractor from cost impacts related to delays, disruptions, accelerations or other inefficiencies experienced through the date signed.
As well, subcontractors on IPD and non-IPD projects contractually agree that the general contractor will control the project scheduling, and that the subcontractor will perform the work as scheduled by the general contractor.
When the schedule slips, the chaos begins. And when the chaos begins, profit margins begin to decline. At the point the chaos begins, subcontractors should be asking what or who caused the schedule slippage and how the chaos is going to affect their margins.
In other words, knowing what caused the chaos (delay, disruption, congestion or acceleration) gives you the ability/opportunity to submit a cost for the chaos. If you don’t submit a price for chaos, you either:
- Included a chaos cost factor in your original bid
- Don’t want to make waves
- Are numb to chaos, so it feels normal
Today, we have all sorts of delivery and construction processes—IPD, LEED, LEAN, BIM—all of which, on average, have not improved subcontractor profits. These methods and processes fail when there isn’t enough time to construct systematically or at maximum efficiency.
Many companies employ communication devices, such as Smart phones, tablets and construction software, to keep them more connected than ever before. Yet, these technologies haven’t improved subcontractor profits to the level hoped for. In fact, we deploy these costly technologies for free, not realizing their true cost.
With all these delivery methods and technologies we employ, one would think subcontractors are making more money than ever before. Humbug, hogwash, hooey and baloney, you say?
How About Integrated Project Synchronization
I’d like to offer a new project delivery method, which we will call Integrated Project Synchronization. The name still implies a team approach. However, the team’s optimal goal is to perfectly synchronize each construction activity in order to complete the project on time or early and at maximum efficiency.
I’ve been working with a national general contractor whose vice president of operations has mandated that the company create a new position simply called “project coordinator.” The project coordinator’s overall job description is to quickly identify projects lacking adequate coordination of the work and report these findings directly to the vice president of operations. More on this later.
To integrate a project team is simply to involve all the parties in the construction processes from pre-construction to completion. Basically, everyone agrees to come together in the best interests of the project. I like the phrase, “integrated project delivery” because it alludes to a project’s team coming together as one unified force. However, on average it doesn’t do much to improve subcontractor profitability.
In contrast, when I think of the word “synchronized” I think of synchronized swimmers whose every move is perfect and in unison. I think of soldiers who perform highly complex missions or rescues in which every variable is considered before they execute their plan and how they synchronize each member’s activity during the mission. I think of the conductor leading an orchestra, and I think of a quarterback executing a play.
A synchronized event is all about perfect timing. If a swimmer’s, soldier’s, conductor’s or quarterback’s timing is off, the show, mission, music or pass play is negatively impacted. A synchronized construction schedule is a schedule in which each task is efficiently coordinated. When a project is synchronized or well-coordinated, safety, efficiency, product quality and profitability improve.
For example, when an owner/architect delays in providing critical information, or when a vendor misses a delivery date, or when a subcontractor fails to complete a task on schedule; it should not negatively impact others. However, it does on IPD and non-IPD projects because there is no float time built into each task to absorb such issues.
Changes or change orders on IPD and non-IPD projects can cause a number of inefficacies if the changes are not perfectly synchronized/coordinated into the original work. A well-coordinated change is a change that identifies the impact the change will have on those involved, the original work and the project schedule. If the change delays a trade or multiple-trades, the schedule for impacted trades should be extended rather than compressed.
You’re The Expert
I find it hilarious when a general contractor says to a subcontractor, “You should have expected this or that because you’re the expert.” We may be the experts, but subcontractors have little control over a fixed date schedule. The one and only way to mitigate a schedule in chaos is to make someone other than you pay for the chaos. To that point, if project schedules and the work itself were perfectly coordinated and synchronized, then litigation and claims would decrease. The cost of construction would also go down because the work would be done much more efficiently.
A vice president of operations who wants to create a project coordinator position within his company is putting the company’s money where its mouth is, and that is a core value that says, “We execute projects in perfect harmony.” In order to execute harmoniously, his project team must coordinate/synchronize the work perfectly. He has seen the impact of projects that are poorly coordinated. He has also realized that, besides the financial impact to everyone involved, the relational impacts carry a huge cost.
What does a perfectly coordinated or synchronized project look like? A perfectly coordinated project is a project on which each trade is scheduled to achieve maximum efficiency. If you were to ask a subcontractor how maximum efficiency is achieved, he will say, “Give me the work area clean, and 100 percent ready.”
Now, please don’t get me wrong: I support the use of construction technology to a point, but, in non-technological terms, “clean and 100 percent ready” may not be the best delivery method. It just doesn’t sound as sophisticated as IPD, or IPS-Integrated Project Synchronization.
Until owners and general contractors properly coordinate the work, allowing subcontractors the opportunity to achieve maximum efficiency, subcontractors should be charging for chaos rather than absorbing it.
Remember: Teamwork begins with a fair contract.