GLOSSARY

Integrated Project Delivery (IPD)

Integrated project delivery (IPD) is a project delivery method in which the owner, designer and builder, and often key trade partners, sign a single multi-party agreement, make decisions jointly, and tie part of their profit to how the whole project performs.

INTEGRATED PROJECT DELIVERY: ONE AGREEMENT, SHARED POOLMULTI-PARTY AGREEMENTOWNERDESIGNERBUILDERSHAREDRISK, REWARDProfit rides on project results; parties typically waive claims against each other.
Owner, designer and builder sign one agreement, put part of their profit into a shared pool and make decisions together. Terms vary by contract form. Illustrative.

In most delivery methods each party protects its own contract. IPD tries to remove that incentive. Profit is placed partly at risk in a shared pool that grows or shrinks with project results, the parties usually waive most claims against one another, and decisions are made by a joint management team. Standard forms include the AIA’s C191 multi-party agreement and ConsensusDocs 300.

How it works

  • Early team. Owner, designer, builder and major trades are engaged at the start.
  • Target cost. The team sets a target cost together and designs to it.
  • Shared risk and reward. Costs are reimbursed, and profit depends on meeting cost, schedule and quality goals.
  • Joint governance. A team with members from each party makes project decisions, often using Lean planning tools.

When it fits

  • Complex projects where coordination failures are the main risk.
  • Owners with the staff and appetite to sit at the table throughout.
  • Teams that have worked together before and trust each other.

What to watch

  • Public procurement limits. Many public owners cannot easily select a builder without price competition or sign multi-party agreements.
  • Culture over contract. The agreement only works if the people behave like a single team.
  • Insurance and liability. Waivers and shared pools need careful review by counsel and insurers.

The Parkonomics view

IPD is the most collaborative point on the delivery spectrum and the least common. For most parking owners, progressive design-build or CMAR captures much of the early collaboration with simpler contracts. IPD is worth the effort when a project is complex enough that the cost of misalignment outweighs the cost of the paperwork.

Related terms: Progressive Design-Build (PDB), Construction Manager at Risk, Design-Build, Design-Bid-Build, Public-Private Partnership

Further reading: Procurement Is Still Buying the Past While Parking Has Moved On