Beginning with trust: We are an industry built on competition backed by lawyers and insurance policies to protect us in a competitive environment. You could say trust and competition are analogous to oil and water. For example, health care organizations (AKA owners) compete with other owners for the business and the profits associated with caring for people, as well as for research funds for future health care solutions. In pursuit of health care growth, owners have building programs and capital projects that must be built, and these owners will follow the 20th-century “request for proposal” (RFP) process to procure needed services to go forward with project.
SCORING THE PROCESS
Lead design firms (usually architectural companies) will follow a similar RFP process reaching out to consultants to back-fill missing in-house skills in the architect’s office. Construction firms do the same thing soliciting bids from trade contractors, who in turn solicit bids from subcontractors (e.g., sheet metal) and equipment manufacturers. Even after the project is built, O&M organizations frequently receive an RFP to compete for selection as the facility management company. So right away the mindset of each of these potential team members is to “not show all your cards” when bidding as if they are in a poker game. Score: Trust = 0 / No Trust = 1.
Next, the owner has received several design team bids from the RFP, and the final selection will probably be based on lowest fee/price, although best-value based on qualifications and price sometimes occurs. If the owner has to go through his own purchasing department, you can be pretty sure the selection will be on low price and not best value. Score update: Trust = 0 / No Trust = 2.
While the lead design firms may have submitted their prices to the owner after competitively soliciting bids from sub-consultants and/or discounting the sub-consultant’s fee, the contractor bid process is even more aggressive. Prime contractors or construction managers follow the same RFP process to get their whole construction package estimates based on what the design team produces for construction documents. I’ve seen firsthand from the construction firm point of view that much, if not all, of the trade contractors are competitively bid, and even then, the contractor will discount the prices they receive, figuring that if they are awarded the job then they are in a good position to renegotiate downward the quoted prices from the trades. Score this re-bid process: Trust = 0 / No Trust = 3.
Further down the food chain, the trade contractors know the game and will receive sub-contractor quotes and equipment manufacturers discounts, both to give themselves a better chance at being considered knowing the successful contractor may return for a new, reduced quote. Score the trade contractor: Trust = 0; No Trust = 5.
AND THEN THERE IS THE CHANGE PART
So what does this all mean to IPD? Well, gathering all the key team members early in the project (concept phase, design criteria phase, and detailed design phase of the seven phases of IPD) and expecting them to immediately alter how they do business is a culture change. They will all find it difficult to overcome the need to trust the other team members after years and years of routinely responding to RFPs and requesting others to provide their best price and then to request a second and third best price.
Change is never easy, and in fact it is downright hard to do. Most people don’t want to change, but over time the building industry does overcome obstacles, even if we bring these individuals along kicking and screaming. We saw it with construction management project delivery method over design-bid-build, with computerized drafting, and with building information modeling (BIM), to mention just three major industry changes.
It takes a special group of professionals to truly embrace IPD, and I’m not seeing much of that yet. Change is particularly hard if you have spent years not trusting those who you have provided quotes for in the past. The good news is that with more projects going IPD and more owners, designers, and builders working together in that environment, I’m confident we will be able to provide the optimum project delivery method. But it is just going to take time, trust, and change. ES
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