Cost Comparison of Collaborative and IPD-like Project Delivery Methods Versus Competitive Non-collaborative Project Delivery Methods

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2012-07-16

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Abstract

Collaborative project delivery methods are believed to contribute to faster completions times, lower overall project costs and higher quality. Contracts are expected to influence the degree of collaboration on a given project since they allow or restrict certain lines of communication in the decision making process. Various delivery systems rank differently on the spectrum of collaboration. Because collaborative project delivery methods require owners and AEC stakeholders to meet frequently early in the delivery process, they are thought to add additional upfront costs to the project. The purpose of this study is to test if collaborative project delivery methods impart enough value so that the upfront cost incurred at the beginning of project is eventually surpassed by realized savings. Ideally, the extreme forms of project delivery methods, that is, Integrated Project Delivery (IPD) and Design-Bid-Build (DBB), should be compared to test the effects of collaboration on benefits to the owner. Due to difficulty in obtaining data on IPD and similarly scaled DBB projects, for this study, their close cousins, CM-at-Risk (CMR) and Competitive Sealed Proposal (CSP) were compared.

The study engaged statistical comparison of cost of change orders and overall project cost performance of 17 CMR and 13 CSP projects of similar scales by same owner. Project cost performance observed under CMR projects was found significantly more than those under CSP. This study is expected to help boost confidence in the benefits of collaborative project delivery methods. It is likely that the results will encourage acceptance of IPD for public projects. Owners who were previously discouraged by the increased upfront cost of collaborative projects may also find interest in the results of this study.

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