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City of Kelowna looking toward more effective project development

IPD is a performance contract delivery method for large value and complex construction products
The Canadian Construction Documents Committee has put out a standardized form contract for IPDs (Photo/Marcus R. Donner)

The City of Kelowna is looking to Integrated Project Delivery (IPD) as a more collaborative approach to building development.

An IPD is a performance contract type of delivery method for large value and complex construction products. A traditional tender, or Request For Proposal (RFP), involves a developer hiring a primary consultant to put together a design and construction documents which would then be forwarded to a contractor for pricing.

“At that stage, the contractor has never seen the document, has never had any input,” said Darren Thompkins, purchasing manager with the City of Kelowna. “There are things that are not necessarily as refined as they should be for that set of construction documents. The IPD process brings everyone together early on so all contractors and sub-trades can work collaboratively toward a better design and cost estimates.”

An IPD differs from traditional construction contracts in that it is a multi-partied agreement involving a municipality, developer, general contractor, design architect as well as other consultants and sub-trades that all sign on to one contract, which has an at-risk, reward component.

“The essence behind that is it incentivizes everyone in the contract to have good success for the project overall,” explains Thompkins. “Because everyone shares in the same profit pool. So if a project is done less expensively often there is a sharing of additional profits with all the parties involved.”

Conversely, if the project runs over budget then profits will decrease.

“It’s really a motivating factor to get all the signatories to the contract to pull together,” adds Thompkins.

Integrated Project Delivery is seen as a powerful delivery model because it upends the sometimes adversarial relationship between the parties involved.

“Over the last number of years at the city we have been trying to adopt methodologies and approaches that are more collaborative rather than adversarial, which sometimes can be the old way of doing construction contracts where the developer and contractor may be at odds over certain elements within the contract,” said Thompkins.

While IPD’s have been used for many years in the U.S., they are relatively new in Canada.

“The Canadian Construction Documents Committee has put out a standardized form contract for IPDs,” said Thompkins. “Really what that means is that it’s legitimized in many regards, that this major entity would provide a standard contract.”

Thompkins adds another advantage of an IPD is that it brings all parties to the table to complete a phase of project design called validation.

“It’s almost like a large design team coming together, with all the disciplines coming and working together at a single table to build out a cost estimate for the project. So you have all these layers of expertise, and once the parties agree that they can build for a set value that’s when they sign the contract and get into the final build for construction documents.”

The city is currently searching for a consultant, or firm, to coach, advise and support on IPDs.

“We think here at the city that it’s a valid approach for projects, and we want to learn more about it,” said Thompkins. “Then eventually we won’t need advisers, we will have transferred that knowledge to our own staff and will become part of our routine. IPD will be one of those methods that we have at our disposal.”

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Gary Barnes

About the Author: Gary Barnes

Recently joined Kelowna Capital News and WestK News as a multimedia journalist in January 2022. With almost 30 years of experience in news reporting and radio broadcasting...
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