The U.S. civil construction world is continuing—to varying degrees—a broad shift from transactional to relational forms of contracting, with proponents citing examples of how Integrated Project Delivery (IPD) and alliancing have saved projects.
While collaborative project delivery has been around for over two decades, “we have muscle memory to overcome” in embracing it, said Mike Tracey, vice president of infrastructure markets and strategy for Kiewit. Speaking at a Transportation Research Board session this month, he added that collaborative project delivery “is completely foreign to what had been done for 100 years” but that “we are finally making progress.”
A $180-million, 4,000-ft precast girder bridge project in Kingston, Ontario, would have been scrapped in 2018 when U.S. steel tariffs caused costs to skyrocket, he said. But the alliancing method and a collective investment in the Waaban Crossing project’s success enabled the team to pivot to a concrete alternative—with the steel provider voluntarily recusing itself from the profit-risk pool, he noted.
Alliancing means “designing the job to the level of the right risk and contingency—not just to 30% design” before going out to bid, he noted. “Leave your business cards, titles and egos at the door,” he said of the process. “It’s about committing to overcommunication.”
Mike Dubreuil, managing partner with PTAG, noted that IPD salvaged an $800-million phase of the Canada Keystone pipeline project that was projected to finish a year late. “We talk to each other, criticize safely and share ideas,” he said. The project came in two weeks late. He said that out of 324 industrial projects using IPD, largely in Australia and the North Sea, only one was deemed a failure.
The emergence of multi-phase progressive design-build and construction manager/general contractor project delivery methods has gone a long way toward addressing the often contentious allocation and sharing of risk, particularly in large, complex projects, but past experiences and a currently busy market have made contractors more cautious and selective about participating, observed WSP USA senior vice president Kenneth Beehler in another TRB session. “Because these firms have a lower appetite for fixed price, lump-sum projects, you [want to find] ways to entice them to participate and lower risk. The opportunity to add certainty to pricing makes them more favorable to collaboration.
But the success of the approaches remains highly dependent on the agencies and contractors involved. John Carlson, vice president and strategic business director for transportation at Sundt Construction, says that mutual trust is the most important element of the processes, and sometimes their biggest challenge.
“It affects speed and cost, but also requires culture change and training,” he says.
In an academic study conducted by researchers from South Dakota State University, University of Kansas, Colorado State University and Iowa State University, 42 state transportation departments responded to a survey, with 18 responding that they have to some extent been evaluating the performance of alternative contracting methods, said Christopher Harper, associate professor at Colorado State University. The Contracting Alternatives Suitability Evaluator (CASE) web tool offered by the Federal Highway Administration is “starting to grow,” he added.
But he noted that only California responded that it was comparing design-bid-bid against alternative project delivery, and that only 22% of contractors were involved in post-project evaluations.
