Integrated Delivery – The Evolution Of Alternative Project Delivery
Alternative Project Delivery has become the predominant procurement model in the current marketplace, making it not so “alternative” anymore. As a leader in the field, our approach to APD offers clients a differentiating value add to projects through the true linkage between Design and Build, something we like to call “Integrated Delivery.”
A commonly used term within the industry to describe non-traditional procurements is Alternative Project Delivery (“APD” for short). Traditional procurements are those called Design-Bid-Build, whereby an Owner identifies infrastructure needs, seeks funding, procures a designer to develop the design and tender package, open tenders the project, obtains prices, awards the project, then General Contractor builds. APD projects, therefore, are anything that is not procured this way, usually involving different contractual arrangements that tie the owner, designer, and contractor relationship in some way to add value to the project. In most cases, either to improve schedule, transfer risk to design-builder, and/or to seek innovation based on an output goal that the owner wishes to attain allowing the designer and contractor to reach that goal through the most efficient ways and means they can establish.
As projects get larger and more complex, what was once APD is no longer alternative but has now become mainstream and are the majority of large procurements.
APD procurement models may consist of Design-Build (and all other iterations of it including Finance, Operate and Maintain), Progressive Design-Build, Construction Manager/General Contractor (CMGC), Construction Manager at Risk (CMAR), Integrated Project Delivery, and Alliance (less used in North America but prevalent in the United Kingdom and Australia). As mentioned before, each of these procurement types leverages differing contractual relationships amongst the owner, designer, and contractor to add overall value to the project. The norm within the industry is for the designer and contractor to be separate companies, working together to achieve goals but each on their own having different corporate objectives.
We identify the shortfall of the designer and contractor being from different companies as goals would not always align and the contractual arrangement would undoubtedly leave stranded risk when unexpected issues are encountered. As such, we refined our APD approach through 30 years of activity in this industry, to something we like to call Integrated Delivery. Parsons is different from other design-builders because of our ability to both design as well as build the infrastructure. Parsons is one of the few firms in North America that is a Design-Builder, an innovative approach not replicable by many. We take this innovation one step further by having design undertaken within the construction team, thereby creating a fully integrated team whereby design and building risks are shared amongst the team, versus segregated risks through different contractual structures. Through true integration, company goals can be aligned therefore optimizing the ability of the team to meet project goals and offering the most value to the owner. Owners equally appreciate a single entity representing design and construction as it simplifies communications and responsibilities versus multiple teams siloed to their respective disciplines.
This, however, is not to say we will only participate in APD projects where we are both the designer and builder. Our experience as both brings the added value of the designer and builder to every job that we are involved in. The primary ingredient is our knowledge of both the means and the methods, allowing us advanced design preparation to address constructability, staging, and traffic management prior to seeking inputs from building partners. This provides for greater focus on optimization opportunities for cost and schedule savings, bringing additional value add to the project. Parsons brings over 30 years of lessons learned developed over 128 APD projects, totaling over US$48 Billion in value, resulting in a comprehensive APD Best Practices handbook which is continuously refreshed as projects are completed. These valuable lessons learned and resulting best practices are what distinguish us apart from our peers.
As APD continues to evolve, owners will seek newer and more innovative models to undertake their infrastructure needs. We will always be a leader in these opportunities, leveraging our Integrated Delivery model to bring added value to projects and more importantly, to innovate and establish differentiators within the contractual framework to allow us to stand out amongst the competition.