Research Proposal: Integrated Project Teams

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Integrated Project Teams

Sir John Egan's reports "Rethinking Construction" (1998) and "Accelerating Change" (2002) identified the importance of the integrated process and supporting integrated teams for national and international projects. Compare and contrast the issues surrounding integrated project teams. Give an example where the supply has incurred delay through poor integration of the process.

Integrated project delivery (IPD) teams emphasize 'lean construction,' with a focus on eliminating waste, cutting costs, improving productivity, and creating positive outcomes for all of the involved parties on a construction project. "This approach to project delivery does just as the name implies by integrating all team members -- owner, architect, construction manager, engineers, and subcontractors -- to form a collaborative effort. IPD uses a three-pronged platform with the owner as one entity, the architects and engineers as the second, and the contractors or builders as the third. The owner, architect, and contractor act as the core group to manage the integrated project delivery process" (Carbasho 2008). In general, IPD produces shorter delivery times than a traditional design-bid-build approach. In a traditional approach, designers independently create products, which are then bid upon, and built, and each aspect of the process is overseen by a separate entity.

In contrast, integrated project delivery methods deploy relational strategies of production and contracts. Agreements are signed by the owner, architect, and contractors so that everyone has an equal investment in the final project and all share the same vision. Integrated project teams engage in collaborative strategies of decision-making, make contingent decisions, and incentives are given for team performance. Having relational contracts "creates an environment where all team members share risks and rewards based on reaching targets" (Carbasho 2008). Targets are set for the project as a whole, rather than for individual entities to facilitate and improve performance. "Team-working is characterized by mutual trust and openness, where problems and risks are shared and resolved collectively by the integrated project team" because it is impossible for one part of the project to be judged a success while another aspect of the project fails ("Achieving excellence," 2009, p. 5).

Previously highly segmented construction methods created win/lose scenarios, where individuals on the same projects would compete amongst one another for authority, rather than complement their mutual efforts. Designers might try to bully builders, or certain contractors might demand more financial resources allocated to their part of the project than to other parts, even though both components were equally crucial to the project's completion. "Relational contracts often include an incentive clause based upon the notion that potential savings would be shared among the IPD team, or the designers and contractors, and then shared between them and the owner. An incentive pool could be established strictly with money that is saved on contingency and/or labor costs" (Carbasho 2008).

For example, in one case, "extensive coordination and communication enabled specialty contractors to manufacture a significant amount of their work in fabrication facilities off the job site….the mechanical systems were assembled at the mechanical contractor's plant and brought to the project site in sections. Pre-fabrication results in less waste, less expense, and a quicker installation time. This also makes for a safer job site because more work is done in a better organized and controlled workspace" (Carbasho 2008). Both the owners as well as the contractors benefit from the savings, as both receive a financial reward in an IPD system. "Team-building is an essential prerequisite of team-working. It involves all parties in the team exploring their collective strengths and weaknesses and specific areas of responsibility; agreeing how they will work together in practice; identifying how progress and issues will be reported" to foster a sense of mutual accountability ("Achieving excellence," 2009, p. 5).

One of the most famously inefficient construction projects of modern times, one that was characterized by a total lack of accountability, was spawned in the United States: that of the 'Big Dig' in Boston. In the U.S., public entities in most states, cannot use IPD due to the state-legislated bidding process (Carbasho 2008).The Big Dig was "Massachusetts's three-decade-long quest to bury and expand the Central Artery, Boston's major interstate highway, and carve out a new underwater tunnel to Logan Airport" (Gelinas 2007). The design of the project, however, was based more in political exigency than efficiency: "Massachusetts's task was partly northeastern politics as usual. Unions knew that they'd benefit from a 'project labor agreement,' through which their workers would agree not to strike if contractors, even nonunion ones, would hire through union halls. Police officers would get tens of millions of dollars annually in overtime, since local law mandates that a policeman watch over any work site," but these entities had an interest in extending the completion time of the project, rather than shortening it and saving money (Gelinas 2007).

Ultimately, the 'Big Dig' ended up costing over $14.8 billion dollars, in contrast to its estimated $2.3 billion for taxpayers. Much of the blame for the project's failures, many believe, lie in the diffusion of responsibility from the state government to the Massachusetts Turnpike Authority, "an unaccountable public entity" which added a new layer of bureaucracy to the project, and made no single politician or group "ultimately accountable" for the entire project (Gelinas 2007). Ineffective oversight over the piecemeal process lead to poor use of resources and design and even to unsafe construction strategies, most tragically manifested in the tunnel's 2006 ceiling collapse (Gelinas 2007).

Question 2

Identify and discuss the typical insurances, bonds and warranties that may be needed for a project.

Contractors' insurance companies offer a variety of bonds insurance. "A bond is quite simply a three-way contract between the contractor (the principal), the owner (the obliges) and the bonds insurance company (the surety). The surety is typically always a company licensed by several various insurance departments to write bonds. In some cases, a private person can also act as a surety" ("Bonds Insurance," Contractor's Insurance, 2009). The contractor is referred to as the principal in bonds insurance because the contract is his or her primary responsibility and the bond insurance company guarantees that if the contract is not performed according to the specified terms, the company will subsequently pay damages if the principal cannot. The owner does not sign the bond but has certain obligations he or she must perform, most notably payment of the agreed-upon sum to the contractor. If he or she does not, the contract is invalid. Many bonds are created to protect someone commissioning work against purchasing inferior quality goods and services or work that does "not comply with local building codes. You will find that most commercial banks, insurance companies and institutional lending companies not only recommend contractors to secure bonds for large jobs, but typically require them" when subcontracting ("Bonds Insurance," Contractor's Insurance, 2009).

It should be noted that bonds insurance is not a replacement for other types of required insurance. "Bonds are not adequate insurance policies. Insurance policies such as general liability insurance, worker's compensation, and other types of business insurance are required for all builder/development type companies. & #8230;Bonds insurance merely provides an extra level of financial resource backing the contractor" ("Bonds Insurance," Contractor's Insurance, 2009). There are two basic types of bonds: "License and permit bonds are the bonds that are most often required by state law, municipal ordinance, or by federal regulation. In some instance, the federal government or its agencies will require this type of bonds insurance. In order to be licensed, a contractor must have a bond, as well as the proper insurance coverage" ("Bonds Insurance," Contractor's Insurance, 2009). These bonds are for the benefits of laborers or contractors, while "performance bonds insurance refers to the promise by a third party (the bonding company) to pay, or often perform, if the designated contractor fails to complete the contract. It covers… [END OF PREVIEW]

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