The following case study, from the AIA Integrated Project Delivery: Case Studies, examines real-world, completed building projects that used Integrated Project Delivery (IPD), a project delivery method distinguished by a contractual agreement between a minimum of the owner, design professional, and builder where risk and reward are shared and stakeholder success is dependent on project success.
The project studied shows the successful application of IPD in a variety of building types and scales and in diverse regions of the country. AIA collected relevant data to measure the completed project against the stated goals of the project team. Through interviews with project participants, it also attempts to tell the story about how each project was conceived and carried out.
CASE STUDY: Autodesk Inc. AEC Solutions Division Headquarters, Waltham, Massachusetts
Owner: Autodesk Inc.
Builder: Tocci Building Companies
Autodesk Inc., a company that creates design software for the AEC industry, wanted to highlight ways in which its own technology could support building information modeling, design-to-fabrication, sustainability, building performance analysis, and integrated project delivery. The company decided to put those goals forward with two of its own projects.
The Waltham project is a 55,000 sq.-ft., three-story interior tenant improvement that uses all of the space in a new speculative office building near Route 128 in Boston’s technology corridor. Program elements include offices, conference rooms, training facilities, a café, and a 5,000 sq.-ft. customer briefing center featuring an electronic gallery of design work done with the company’s products. Requirements of the project included very high sustainability goals (LEED Platinum for Commercial Interiors.) Design and construction was accomplished within an aggressive eight and onehalf month schedule.
Early Involvement of Key Participants
Autodesk conducted a selection process to find an architect/builder team willing to try Integrated Project Delivery. The RFP clearly stated the owner’s direction in terms of scope, budget, sustainability goals and the mandated form of agreement. At first, another team was the front runner but their corporate leadership asked for fundamental changes in the proposed IPD arrangement which Autodesk declined to make. In the end, KlingStubbins and Tocci were chosen because of their qualifications, familiarity with the local market, BIM and LEED sophistication, and willingness to abide by a “true” IPD agreement. But another factor was their proposal to allocate fees and incentives within the fixed project budget. Three major subcontractors were also selected early and included in the risk/reward structure.
The contract establishes an Incentive Compensation Layer (ICL) in which the architects’ and builders’ anticipated profit is put at risk. If specific goals are met, designers and builders receive their normal profit, but jointly, not separately. If they are exceeded in measurable ways the firms are eligible for additional compensation. The ICL could adjust from minus 20 percent to plus 20 percent depending on whether project goals were met or exceeded.
The Integrated Project Delivery Agreement (IPDA) is a three-way contract between the owner, the architect and the builder. Each party’s success is directly tied to the performance of the others. Distinct roles and responsibilities are delineated in contract language and in a “responsibility matrix.” Major subcontractors (mechanical/fire protection, electrical, and drywall) were also brought in to the agreement, worked at cost, and shared in the incentive program.
Collaborative Decision Making/Control
By contract, three levels of collaborative teams were established to manage the project. A Project Implementation Team (PIT) was set up to handle the day-to-day issues of the project. The composition of the PIT included project participants whose work at any given time could impact the project’s outcome. A Project Management Team (PMT) with representation of the owner, architect, and builder, was established to manage the project and make decisions by consensus. If issues arose that could not be resolved by the PMT they were taken to a higher level for final resolution: a Senior Management Team, (SMT) again with representation of the three principal parties.
Liability Waivers Among Key Participants
The parties waived all claims against each other except those arising from fraud, willful misconduct or gross negligence. Disputes were to be resolved by mediation or, if necessary, arbitration. Each party was required to maintain typical insurance but with the provision that policies be amended so that no right of subrogation (the ability to gain the rights belonging to one party against a third party who caused a loss) existed against the other partners.
Jointly Developed/Validated Targets
The contract spelled out specific criteria that would be used to judge success. These included schedule and budget, sustainability, quality of craftsmanship, functionality, and design quality. Owner, architect, and builder jointly selected three comparable projects in the Boston area to serve as benchmarks against which these goals would be measured. It was agreed – after some hesitation from the team – that an independent evaluator (in this case an architecture professor) would be the arbiter of how successfully the project met the design quality criteria. There was a scorecard and the process was made as objective as possible. During the project, John Tocci, head of Tocci Construction, was worried about whether the design quality criteria would be met, and, in an interesting twist on what is usually expected from a builder, went out of his way to make sure that sufficient budget was allocated for quality materials and detailing. In the end, the team received high marks from the evaluator for exceeding design expectations and received the incentive money.
The project was the first IPD experience for the design and construction team. Autodesk had just completed its first IPD project: a 45,000 sq.-ft. corporate office and customer briefing center in San Francisco, also an interior fit-out. Autodesk management wanted the design and build team to self-select; they did not want to “mix and match” architects with builders. Within KlingStubbins there was initial hesitation by partners at the head office about using an untested IPD agreement, but the desire to try something new and exciting overcame the doubts. Meeting the schedule was particularly important to the owner because they had to vacate their existing facilities by a date certain. The entire process of contract negotiation, design, construction and move-in had to be accomplished in 8 1/2 months, a schedule which would not have been possible with design-bid-build or CM-at-Risk, the delivery method typically used by Autodesk.
The design and build team was held to an overall budget, but was completely free to move money among line items. Money could be taken from carpeting and added to design fees, for example. Jack Short, Tocci’s Director of Project Planning, estimates that 55 percent of the project value was added by lean, cost-plus subcontractors within the incentive compensation layer agreement and 45 percent was traditionally procured. One major advantage of IPD for the builder is the ability to enable early procurement of time- and cost-variable materials and services. The ability of the team to move money between line items also meant that savings could be achieved by pooling resources. For example, one lift could be used by multiple trades. Cleanup could be done by lower wage workers at night rather than by highly paid tradesmen during the work day. Savings from one line item could be placed back into the project in another area.
Tocci’s local knowledge of the Waltham area made it possible to call on relationships with building officials to insure that permitting and inspections would not impede the schedule. Plan reviews that typically took four to five weeks after submission were done in three.
A Building Advisory Team was assembled early on to provide programming input from building users. There was a bit of struggle between Autodesk’s software engineers, who wanted maximum privacy, and the goal of LEED Platinum which can only be achieved by allowing natural light to deeply penetrate the space. Ultimately the owner decided that sustainability, as well as a cultural desire for collaboration, trumped privacy. To address acoustical privacy concerns, sound masking and other noise mitigation measures were employed.
A BIM execution plan set ground rules for who modeled what and when. Architect and builder both used Revit, but the large file size – over 100 MB – made remote access possible but slow. After design development, the model was moved from KlingStubbins’ to Tocci’s servers. During design, Laura Handler, Tocci’s Virtual Construction Manager, spent two days a week at KlingStubbins Cambridge office. When the design reached the implementation phase, Sarah Vekasy, KlingStubbins’ project architect, moved to the construction site. At-risk subcontractors were all BIM-enabled. They provided detailed unit costs up front and Tocci assumed responsibility for taking quantities off the model.
Scope changes totaling about 30percent of the original budget were added by the owner during the course of the project. One was the build-out of 5,000 sq. ft. of shell space to accommodate personnel from a small company Autodesk had just acquired. Another was to beef up the shell building’s mechanical systems to accommodate cooling the “regression farm”; a room full of powerful computers doing automated software testing.
Another scope change was purely design driven. Phil Bernstein, Autodesk’s Vice President for Industry Strategy and Relations, and himself an architect, decided that the design lacked a distinctive feature that would show the company’s commitment to good design. He wanted to create a dramatic gesture by cutting a three-story atrium though the space. The decision had to be made quickly so as not to upend the schedule. KlingStubbins began modeling three alternatives and concurrently Tocci studied the impact on cost and schedule. Within a week the team presented the options, using BIM to allow the owner to virtually “walk through” and get a feeling for the space. Thus, the integrated team was able to quickly and comprehensively address an owner request and provide enough information to make an informed decision. It was decided that Autodesk’s business objectives were better served with the atrium and the team was instructed to proceed.
Design-to-fabrication was used for the customer briefing center’s distinctive wood panel ceiling. The curved elements are described by a mathematical algorithm. They were shop fabricated using computer numerical controlled (CNC) machines driven by the design software. They arrived on site and fit together perfectly, thanks to tight BIM coordination of above-ceiling lighting and fire protection systems.
Fundamental to the IPD process, according to Bernstein, is that “the first step should be a scoping exercise taken to the level of conceptual design, in which everyone works at cost until a deep understanding of the project and a level of comfort around the program and budget is achieved by all parties. That’s one of the lessons learned to apply to the next project. The other would be to eliminate the contingency. The IPD design and build team, because of the financial incentives, will want to treat every change as a scope change and not an item to be subtracted from the contingency. By doing that you create some sense of discomfort, and that discomfort is the team’s obligation to design to the target cost.” He feels that the financial incentives were causing unwelcome changes in behavior. That doesn’t mean he would drop the incentives – he believes they are essential to support the right kind of performance. “I can see IPD projects in the future where incentives are paid as an annuity based on long term operational performance and user satisfaction.”
Although all the major players used BIM, “interoperability of systems was a challenge,” says Chris Leary, KlingStubbins’ principal in charge, “because the mechanical, plumbing, and millwork subcontractors used specialized design-to fabrication software rather than Revit.”
Part of the promise of IPD is to deliver to the owner, at the end of the project, a comprehensive building model for use in operations. Charles Rechtsteiner served as Autodesk’s owner’s representative during design and construction. As a selfdescribed “operations guy” he would like all of the building systems information to be more readily available for facilities management. He would like the ability to track actual performance versus specified, do real time energy monitoring and maintenance scheduling as well as other facilities management tasks enabled by BIM. A next step in BIM evolution might enable greater interoperability among design models, fabrication models, and facilities management systems.
KlingStubbins learned that close collaboration with builders made redundant detailing unnecessary. The process also freed architects to spend more time on site and much less time reviewing RFIs and submittals. In many cases shop drawings were eliminated altogether.
Inspiring Design Incentives
Autodesk’s first experiment with IPD was a 16,500 sq.-ft.customer briefing center and 29,300 sq.-ft. office tenant improvement in downtown San Francisco. The San Francisco project was undertaken shortly before the Waltham project began. In this case there were separate architects for the briefing center (Anderson Anderson) and the office space (HOK) with one builder, DPR Construction. Both DPR and HOK were interested in “getting their feet wet” with IPD.
As with Waltham, there was a hurry-up schedule: 3 ½ months for design, six
months for construction. Unlike Waltham, however, no subcontractors were brought into the IPD agreement. One of the “lessons learned” from San Francisco that was applied to Waltham was that for a project of this scope and a schedule this tight, it is preferable to find one architect to handle the entire project. Autodesk corporate real estate senior manager Gail Boettcher says, “With IPD it’s a very dynamic process where you’re designing and pricing in parallel - that creates challenges when you’ve got a short term project to do.” Marc H. Flax, HOK’s principalin- charge agreed, and says “one of the lessons learned is that with IPD it’s crucial to select your architect and builder as a team. There’s a synergy that’s just got to be there.”
Boettcher says she would be more precise in defining “contingency” so that if money is left over there is no dispute about what can be added to the project and what can go into the incentive pool.
For San Francisco as at Waltham, existing projects were selected to serve as
benchmarks for design quality. Flax says, “Wewrestled for several days with that – finding projects with the quality the client wanted but at their budget.” Going forward, Flax thinks IPD works best when the project team is involved in setting the program and budget. HOK’s standard procedure now calls for room data sheets to describe the functional requirements and finish quality for every space. He notes, “Lesson learned: do your program and make it very detailed, up front, before you start the project.”
For the Autodesk Waltham project, the Incentive Compensation Layer (ICL) was structured as follows:
• If the project cost is under budget, 60 percent of the saving is added to the ICL.
• If the project is over budget, the excesscomes out of the ICL until it is exhausted.
• If the project runs over schedule, an amount per day is deducted from the ICL.
• There was no bonus for beating the schedule since this was of no value to the owner.
• The third-party quality assessment process balanced cost and time considerations with design goals.
© Copyright 2010 AIA California Council. Published with permission by AIA. For more detailed background information on IPD, visit www.ipd-ca.net and refer to The Integrated Project Delivery Guide, jointly developed by the AIA’s Integrated Practice Discussion Group and AIA California Council, and Integrated Project Delivery: A Working Definition, published by AIA California Council.