Presenting a live 90 ‐ minute webinar with interactive Q&A Integrated Project Delivery Agreements g j y g in Construction Contracting Crafting IPD Contracts Using the AIA and ConsensusDOCS Forms WEDNES DAY, JULY 13, 2011 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific T d Today’s faculty features: ’ f l f S cott R. S leight, Partner, Ahlers & Cressman , S eattle Howard Goldberg, Principal, Goldberg Besche & Banks , Baltimore Richard M. S hapiro, Partner, Farella Braun & Martel , S an Francisco Patrick J. O'Connor, Partner, Faegre & Benson , Minneapolis The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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INTEGRATED PROJECT DELIVERY (IPD) AGREEMENTS IN COUNSTRUCTION CONTRACTING (IPD) AGREEMENTS IN COUNSTRUCTION CONTRACTING July 13 2011 July 13, 2011 OVERVIEW OVERVIEW Presented by: S Scott R. Sleight tt R Sl i ht Ahlers & Cressman PLLC sleight@ac-lawyers.com 206-287-9900 For Strafford Webinars and Publications 5
About Scott R. Sleight About Scott R Sleight Member of Ahlers & Cressman PLLC Practice emphasizes contract negotiation of large commercial projects and critical facilities and i l j t d iti l f iliti d resolution of construction disputes Involved with Lean since 2006 Involved with Lean since 2006 6
Experience with Relational Contracting Experience with Relational Contracting Represented Contractor in negotiation of first t truly integrated contract. l i t t d t t Parties included Sutter Health affiliate, NBBJ and Skanska USA Building Inc. g Represented Contractor in negotiation of Virginia Mason Hospital Addition utilization “Collaboration Guide” to facilitate lean methods Collaboration Guide to facilitate lean methods and Relational Contracting. Assisted with development of NBBJ contract template template. Boeing utilizes Relational Contracting concepts. 7
“Typical Organization For Hospital Project” Typical Organization For Hospital Project Source: McDonough Holland & Allen PC Source: McDonough Holland & Allen PC 8
Structure Structure One Agreement signed by O-A-C g g y “Joined” by jointly selected team members Provides for formation of Core Group Integrated Project Delivery Team Senior Management Group Senior Management Group 9
10 Integrated Team Concepts Integrated Team Concepts Source: McDonough Holland & Allen PC
11 Executive Involvement Source: McDonough Holland & Allen PC Source: McDonough Holland & Allen PC
Integrated Project Delivery Level of Common Understanding Level of Common Understanding Source: McDonough Holland & Allen PC Source: McDonough Holland & Allen PC 12 Courtesy of McDonough Holland & Allen PC
Goals of Lean Project Business Model Goals of Lean Project Business Model Early involvement of key participants y y p p Equitable distribution of risk and reward Compensation structure must incentivize “best for project” Clearly defined responsibilities without inhibiting communication and risk taking communication and risk taking Management and Control structures should be built around team decision making wherever appropriate 13
Restructuring Design Restructuring Design Validated budget as basis for Target Value Design g g g Pause to pursue Process Design Communication Protocols (flow of communication, use of BIM, co-location, virtual meetings) Target Value Design Plan (How) Target Value Design Plan (How) Pull Planning throughout design Elimination of waste (redundant effort, etc.) 14
Restructuring Contracting & Finance Restructuring Contracting & Finance IFOA signed by all major stakeholders C Compensation ti Individual Cost & Overhead Paid Pooled Profit At Risk Incentives/Bonuses (Innovation, Production) Joint IPD Team Contingency Combines A/E “Design” & CM/GC’s “Construction” g (Reduced total because pooled) IFOA eliminates traditional “Negligence” standard as Core Group negotiates a deductible as a % of as Core Group negotiates a deductible as a % of construction costs for “Errors & Omissions” 15
16 Sharing Project Risk Sharing Project Risk
Sharing Project’s Innovation Benefits Sharing Project s Innovation Benefits Source: McDonough Holland & Allen PC Source: McDonough Holland & Allen PC 17
Dispute Resolution Dispute Resolution Notice Notice Negotiations Core Group Core Group Senior Management of Core Group Independent Expert Mediation 18
What Are The Major Challenges? What Are The Major Challenges? Method used to form IPD team Method used to form IPD team Building trust between the Design and Construction industries Accepted contract vehicle for implementing IPD Accepted contract vehicle for implementing IPD Risk Shared Savings Liability Insurance and Surety acceptance Adoption of Lean and BIM as standards of practice Education to promote understanding of the value proposition of Lean Project Delivery 19
Resources Resources IFOA ~ LCI IFOA ~ LCI ConsensusDocs 300 AIA-IPD AIA IPD NBBJ – Integrated Delivery contract template 20
Integrated Project Delivery Agreements in Integrated Project Delivery Agreements in Construction Contracting HOWARD G. GOLDBERG Goldberg, Besche & Banks, P.C. 1829 Reisterstown Road, Suite 120 Baltimore, Maryland 21208 410 ‐ 580 ‐ 9530 410 580 9530
“Integrated Project Delivery (IPD) is a project delivery Integrated Project Delivery (IPD) is a project delivery 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 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.” 22
Governmental data, both in this country and abroad, demonstrates that a very significant portion of the cost incurred in construction results in complete “waste.” In the United States alone, as much as 30% of the total construction cost is consumed by waste, with no value to the project. The construction industry is the only significant industry in the United States which has shown a decline in productivity in the past few decades. p y p 23
With the use of new digital programs tailored to the construction industry, it is now possible to almost build a building “virtually” before the first shovel of dirt is moved at the site With the use of new digital programs tailored to the site. With the use of new digital programs tailored to the construction industry, it is now possible to almost build a building “virtually” before the first shovel of dirt is moved at the site. 24
The A295 Family Consists Of: y • A295 ‐ 2008 General Conditions for IPD Projects • B195 ‐ 2008 Standard Form of Agreement between Owner and Architect for IPD • A195 ‐ 2008 Standard Form of Agreement for Owner and Contractor for IPD • GMP Amendment to A195 Agreement 25
For each of the “phases” of activities, the duties of each of the three participants are integrated and defined, so that each participant can determine that participant’s duties during any specific phase by reading the text relating to that phase specific phase by reading the text relating to that phase. 26
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