Incentives

Integrated Project Delivery

(IPD) establishes the right
relationships and incentives
to achieve success
IPD is a value driven process based on
principles that promote collaboration
between organisations. Its foundations
are built around shared risk and reward,
collaborative decision-making, no blame
and earlier involvement of key participants
and stakeholders.
This delivery method breaks down
adversarial relationships and considers
decisions in the design phase that reect
the whole-of-life of the project with inputs
from owners, architects, consultants,
contractors and asset managers from
concept to completion while maintaining
a competitive tender process.
Collaboration is encouraged through early
involvement of all organisations to deliver
the project within budget and schedule
while meeting or improving upon the project
specications. This process is incentivised
through shared prot that is released in
tranches upon meeting agreed milestones.
Individual interests are aligned with
project interests, thereby encouraging
collaboration in order to achieve
self-interest goals.
It is imperative that the right organisations
and individuals are selected to deliver
the project in order to reduce prot-loss.
Adversarial behaviour that leads to lesser
outcomes must be avoided otherwise all
participants may be penalised nancially.
Given that nancial risk is pinned to
collaboration, it is not beyond consideration
that psychometric testing of the project
team be conducted by the responsible entity
seeking to mitigate future conicts.
Establishing a physical co-location
environment where all project participants
reside immediately reduces risk associated
with silos of information and opens
communication. Benecial use of this space
relies on all key project team members
participating in decision-making exercises,
seeking improvements in design, delivery
and cost savings that would not typically
be found in the fragmented process of
traditional project delivery.
Further identication of construction
efciencies can be achieved through
Virtual Design and Construction (VDC),
aided by the technology component of
Building Information Modelling (BIM).
The ability to virtually test sequencing
and quickly verify cost impacts from design
alternatives enables the project team to
rene the project and potentially increase
shared prot.
A commonly cited barrier to the adoption of
IPD is contracts. IPD continues the evolution
of collaborative contracting that began in
the UK oil and gas industry in the 1990s
and has since evolved through alliance
contracting in Australia during the 2000s.
The key difference is IPDs exclusion of
liability; this eliminates the threat of
being sued.
By removing liability as a distraction, the
project teams vision becomes focused on
reward driven innovation.
Team selection also plays an important part
in who is selected to participate in a project.
If the lead design and build teams waive all
potential claims against each other (with
the exception of fraud or gross negligence),
it becomes increasingly important that the
right organisations and people are selected
for the project.
Insurance underwriters capacity to provide
services supporting collaborative delivery
models has matured over the past 10 years.
Although this is now understood by the
legal and insurance industries leading IPD
delivery, there is more limited awareness in
the wider construction industry both from
owners and the delivery market.
Mediation proceedings can also be
introduced if an issue arises between
project teams that would typically escalate
to legal proceedings. An agreement between
parties regarding the process of mediation
is agreed at the commencement of the
project and included within the contractual
arrangements.
A desire to overcome years of fragmented
delivery processes, coupled with a
society-wide structural change towards
transparency are driving construction
markets towards increased collaboration.
Steve Appleby
Practice Leader BIM
steve.appleby@aecom.com
PROCESS
The Blue Book 2013
Target
Cost
Build Team
(Labour and Overheads)
Design Team
(Labour and Overheads)
Shared
Contingency
Shared Prot
(Incentive
Compensation
Layer)
Compensation Structure Positive Outcome
1
Negative Outcome
2
1
Positive Outcome Successful delivery of the project that exceeds set metrics (ie schedule, cost, operation targets, etc)
has the capacity to earn the entire shared prot margin.
2
Negative Outcome Projects that fail to meet set metrics could, in worst case scenarios, result in fees associated with labour
and overheads being withheld after the shared contingency is expended.

Shared
Contingency
Shared
Contingency
Build Team
(Labour and Overheads)
Design Team
(Labour and Overheads)
Build Team
(Labour and Overheads)
Design Team
(Labour and Overheads)
Owners Contingency
Maintained Separately

Shared Prot
(Incentive
Compensation
Layer)
Shared Prot
(Incentive
Compensation
Layer)
Early Planning Setting
Conditions for Success
Goal denition
Involvement of key participants
Incentives to Drive Behaviour
Change
Mutual respect and trust
Shared risk and reward
Integrated innovation
Collaborative decision-making
Open communication
No blame agreement
Provide co-location space
Suitable Project Structure
Leadership
Teams
Processes
Technology
Lean construction
IPD Incentivising Collaboration
Shared Risk and Reward Incentivising Collaboration
State of Play
The rate of Building Information Modelling
(BIM) adoption across Australia and New
Zealand continued to escalate in 2012.
However, recent US reports indicate that the
number of rms offering BIM services has
increased by 400 percent since 2007, with
contractors now leading architects. Globally,
the BIM market is expected to grow from
$1.8 billion in 2012 to $6.5 billion by 2020.
Can the Australian and New Zealand
markets overtake these adoption rates?
There are indeed many promising signs of
greater BIM adoption moving into 2013.
The rise in the number of requests from
clients for BIM projects and the increase
in industry events with BIM topics point to
greater industry interest in Australia and
New Zealand. As more projects use BIM
through design, construction and operation,
the benets will be better understood by
a wider audience. A sharp increase in the
number of BIM projects is anticipated
over the next 18 months, constituting a
signicant market transformation well
beyond achievements to date.
It is important to also dene what level
of adoption is occurring. Our AECOM
Global Sentiment Survey research forms a
snapshot of where the industry differs in
terms of the extent to which BIM is being
embraced by local industries. Some markets
displayed greater disparity. For example, in
the Middle East, Australia and New Zealand,
average levels of take-up are closer to
BIM Level 1 (where there is no proprietary
exchange of formats); however, the industry
leaders in these regions are striding ahead
to BIM Level 3. In contrast, industry leaders
in Europe were not as advanced.
Australia
The Australian Commonwealth Government
and buildingSMART have released a
strategic report outlining the support
needed to drive the construction industry
into a new efcient, low-carbon era of BIM.
The National Building Information Modelling
Initiative (NBI) Report was commissioned by
the Built Environment Industry Innovation
Council, with the ndings presented in
Sydney in August 2012. The next stage of the
National Initiative is yet to receive federal
funding but industry proponents remain
positive that this will be forthcoming.
Even though the Commonwealth is yet to
mandate BIM, several state governments
have begun to implement BIM on their
projects. South Australias Department of
Planning, Transport and Infrastructure (DPTI)
is developing BIM guidelines for government
agencies, consultants and contractors to
ensure that design and documentation
occurs based on collaborative working, open
standards and in alignment with national
standards. DPTI plans to initially implement
this strategy on major projects (>$10m)
before rolling it out across all projects. From
1 January 2013, NSWs Health Infrastructure
mandated BIM deliverables on all projects
over $30 million.
Across the country, there are at least eight
state-funded hospital developments
underway, either in design or construction,
with BIM providing efciency gains.
Another initiative, BIM in Practice, aimed at
increasing industry knowledge of BIM was
led by the Australian Institute of Architects
and Consult Australia. This joint venture
pooled experts from across the supply chain
to produce a series of brief documents
providing everyday advice for those
implementing BIM.
New Zealand
New Zealand has also made progress on
BIM implementation in 2012. It held the
inaugural BIM Summit in New Zealand in
2012, attracting participants from across
the industry. The chair of the Productivity
Partnerships Construction Systems
Work Stream a partnership of industry
and government, established in 2010
through the Department of Building and
Housing opened the conference with an
announcement supporting the roll-out of
BIM.
BIM is one element of their plan to
encourage widespread use of smart
technology to enable knowledge sharing
and faster and more efcient construction
processes. Productivity Partnerships
National Technical Standards Committee
is keen to encourage the faster uptake of
smart ways of working in the building and
construction sector.
The GeoBuild initiative is one example of this
and will bring together three systems:
Building Information Modelling
The proposed National Online Consenting
System
A location-based information modelling
system being developed in partnership
with Land Information New Zealand a
common approach to location information
interoperability, allowing the reuse of
information in 2D and 3D. It provides
users with a graphic representation of
underground services, such as sewer
pipes and telecom cabling.
The Committee is selecting open industry
standards for data for building and location
data for all of these systems so that they are
interoperable and can be rich sources for
data mining.
BIM Adoption by Region
Source: AECOM Global Sentiment Survey
Level 0
Australia
Asia
Relative Strength of Industry Leaders
Typical Industry Level
Middle East
New Zealand
Level 1 Level 2 Level 3
Europe
North America
Level 0 Unmanaged CAD with pdf les as the main form of data exchange.
Level 1 Managed CAD in 2 or 3D with a collaborative data environment.
Level 2 Managed 3D environment with proprietary exchange formats. May include 4D program and 5D cost data.
Level 3 Fully-open process with a single project model and data exchange using Industry Foundation Classes standards.
AECOM The Blue Book 2013
BIM Management Roles and Responsibilities
BIM Roles Advisor and Model Manager The BIM Management Project Timeline
explains the difference between a Model
Manager and a BIM Advisor or Manager.
It is crucial to the success of BIM projects
that clients, consultants and contractors
all appreciate the differences between how
these roles operate together. Further steps
are critical to the successful delivery of a
BIM project:
Eliminate Confusion
Educating the market is still a signicant
BIM hurdle. Industry needs to work
towards a more coherent denition of BIM
so clients are not confused. We need to
break down what BIM means to our clients
during design, construction, fabrication,
maintenance and operations.
Standardisation and best practice
guidelines will also help. NATSPECs
National BIM Guide and a BIM Management
plan template provide useful terminology
and common standards. The NATSPEC
template is a great base document for the
management of the BIM process and will
help the industry adopt a more uniform
approach.
Focus Teams on Client Returns
Overlooking practical details is one of
the quickest ways to undo any potential
project gains. A model content plan is
an excellent way to introduce a project
team to the requirements of BIM. This
should be established at the start of every
project through a brieng session with the
client and project team. This ensures they
understand what can and cannot be done
in the current market, what the likely costs
are going to be and what returns should
look like. A further workshop should then
be held with the design team on
appointment to ensure they understand
these client demands.
Get the Procurement Details Right
It is very hard to get value for money
with BIM using traditional contractual
frameworks and procurement. In the
BIM world, a design is produced and all
discipline models are merged and, in theory,
clashes are resolved ahead of tendering to
a contractor. However, when the model is
handed over, it includes a string of caveats
that are meant to protect authoring parties
from litigation. Also, traditional 2D drawings
and schedules are still the contractual basis
for the tender price. In reality this limits the
extent to which the contractor can benet
from the model/s received.
The appointment of project teams must
shift from an adversarial environment to
one that is incentivised and collaborative in
nature. After years of pursuit of the lowest
bid, a shared risk/reward process allows
room for improved initiatives and innovation
by project teams. This cannot be organised
in arrears it must be agreed during the
appointment of each team member.
BIM Management
BIM Advisor Model Manager
Application
of BIM
Independent from the design team.
Separate engagement.
Discipline-led. Design team
member or subcontractor
team member. Engaged for
design authoring.
P
r
e
-
C
o
n
s
t
r
u
c
t
i
o
nProgramming
Cost Estimate
Energy Analysis &
Simulation
Stakeholder
Engagement
Coordination
Visualisation
Inception Brief client on suggested BIM scope
Report implications of time, ROI, cost and
metrics.
Engage
Consultants
Write project brief, consultant scope, BIM
deliverables. Draft BIM Management Plan
(BMP)for design period.
Schematic
Design
Coordination
meetings
bi-weekly.
QA model
elements.
Author discipline
specic models.
Issue to BIM Advisor
for review and
federation.
Design
Development
Brief
shortlisted
tendering
Managing
Contractors.
Attend coordination
meetings.
Resolve any
conicts.
Contract
Documentation
Prepare
BMP for
construction.
Issue models for
costing.
C
o
n
s
t
r
u
c
t
i
o
nProgramming
Cost Estimate
Clash Detection
Logistics &
Scheduling
Digital Fabrication
Visualisation
O
p
e
r
a
t
i
o
nAsset Management
Building
Automation
Systems
Redevelopment
Operations Handover of virtual building deliverables,
integrated with Facilities Management
software.
Training of FM/O&M staff and production of
associated process documentation (security,
work order execution, record keeping).
Periodic review and optimization, using
captured performance metrics.
LOD - Level of development in the model
LOD100 General/generic dimensions, locations and materials
LOD200 Performance criteria to be specied and designed
LOD300 Manufacturer and/or model specication
LOD400 Shop drawings/models, including processes
LOD500 As-built data, with performance-related data, manufacturer and model specications
Source: AECOM
LOD100
LOD200
LOD300
LOD400
LOD500
AECOM The Blue Book 2013
The Future of BIM
It is clear that BIM is set to become
increasingly relevant in the construction
industry, not only for early adopters on larger
building projects, but for most businesses
involved in construction. Companies will
have to develop at least a minor degree of
BIM capability in order to be considered for
public work. The next few years of industry
development will be critical as larger
construction businesses in particular will be
increasingly expected to have developed a
signicant BIM capability.
The increased take-up will help
promote benets of BIM more widely.
Our AECOM Global Sentiment Survey
research demonstrates that many in
the industry already understand the
signicant advantages BIM enables at
the design and construction phases of
an assets development. But there is little
understanding of how it can provide value
during the assets operational life.
To maximise these operational stage
benets, local capability is required early
on in the BIM process to ensure sufcient
information is incorporated into the model.
Otherwise it will not be optimised for
long-term use and integration into building
automation systems.
What does the future of BIM look like?
Industry Perceptions of BIM Benets by Asset Stage
Source: AECOM Global Sentiment Survey
Source: AECOM

Unrealised benets in the
use of BIM to enhance
asset management are
considerable.
-1.0
-0.5
0
0.5
1.0 Signicant
benets
Moderate
benets
No
benet
Design Costing Construction Operations
Industry understands and has dened BIM for design and construction leading to
an availability of data to enable industry benchmarks for the cost of construction
Varying combinations of cloud-based hosting of projects are widespread, early
adoption issues (security and data ownership) are resolved
BIM adoption rate hits 60 percent
Australian Government mandates BIM
Australia and New Zealand have established ISO BIM Standard(s)
BIM protocols well-dened and understood
Mobile computing is prevalent on construction sites
Project insurance policies cater for BIM and IPD
Prefabrication and modularisation are standard practice for many building
Augmented Reality (AR) makes signicant headway in the property industry
Virtual Australia and New Zealand (VANZI) provides a portal to the virtual world
Ground Penetrating Radar (GPR) technology used for surveying subterranean
assets
Tier-1 design and construction companies offer more whole-of-life services to
clients; other organisations resort to collaborative contracting models to compete
and offer better service
BIM integration with building management and computer-aided facility
management systems is commonplace
New material technology continues to impact on whats possible and associated
methodologies
Collaborative, digital prototyping becomes the new standard for all infrastructure
projects, not just buildings
BIM adoption rate hits 80 percent
Model-based contract deliverables are commonly sought by clients (in addition
to drawings)
Advanced data validation tools enable fast and transparent QA checks
Digital ID and sensor technology used for material and equipment transportation,
physical properties assessment and construction progress tracking
Robots augment humans in construction (for survey, manufacture, transportation
and fabrication), improving productivity and safety
Off-site manufacturing prevalent as companies realise that design for
manufacture and assembly is a no brainer
Design information provided direct through supply chain to manufacturing
BIM adoption rate hits 90 percent
Emergency services organisations have access to digital building information for
better disaster responses
Robotics replace some human workers in construction
2016
2018
2023
AECOM The Blue Book 2013