The impact of delivery methods on the profitibility of commercial construction
Herndon, Michael Brett
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According to September 2011 information from the U.S. Census Bureau, the construction industry in the United States is valued at nearly eight hundred billion dollars annually. A 2004 collaborative study by Construction Industry Institute and Lean Construction Institute suggests that as much as fifty seven percent of time, effort, and material investment in construction projects do not add value to the final product. When compared with twenty six percent wastes in the manufacturing industry, it becomes obvious that the construction industry has a problem. Construction projects that come in over budget and behind schedule have become the rule rather than the exception, leading to contentious business relationships and costly litigation. This study will strive to identify and analyze the primary sources of these problems. Research and industry experience point to a lack of communication and cooperation among the various entities required to complete a construction project as the leading causes of waste in the industry. Further analysis suggests that traditional forms of construction contracts encourage adversarial and non-cooperative behavior between parties. Additionally, poor communication between various contributors opens the door for additional wasted cost. Fortunately, the development of tools such as Integrated Project Delivery (IPD) and Building Information Modeling (BIM) present new options to construction professionals that are proving to help address some of the challenges the industry faces today. IPD as a project delivery method creates a culture of collaboration and teamwork, where a culture of risk avoidance and conflict once stood, while BIM provides a platform for better communication among parties. When used together, these tools can reduce or eliminate many of the major sources of waste within the industry. This thesis will provide descriptions, analysis, and case studies that demonstrate the use of these tools and the potential they have to make a positive impact on the construction industry.