A better way for design and building (and it’s not Design and Build)

18 DECEMBER 2020 BY PETER INGLIS

I am passionate about finding a better way of making buildings. The process of making should be life-affirming for all involved.

I believe the Integrated Project Insurance contract (IPI), which is sanctioned by the cabinet office for use on publicly funded buildings alongside D&B and traditional procurement, has real potential to change all that. It’s something Cullinan Studio has been actively following for a while, and is now putting into action on a building site.

We are on site at Dudley College for a new 4,800sqm Institute of Technology building: demonstrably less expensive than D&B, and with project insurance in place assuring no cost over-run for the client. And the process is a breath of fresh air.

The authors of the contract, IP Initiatives, calculated that the root cause of waste on most projects is in inappropriate risk-pushing, without really understanding who is best placed to mitigate that risk. Add to that defensive behaviours, often conditioned by adversarial contracts and competing indemnity insurance policies, and it’s not difficult to see why things sometimes turn out the way they do.

The first big difference on an IPI contract is that all parties – architect, engineers and other consultants, client, contractor and main subcontractors - sign up to a single alliance contract, with conditions that stipulate and incentivise shared responsibility.

The second big difference is that all the usual insurance products covering the parties in the contract are covered by a single integrated project insurance. The insurance covers Professional Indemnity, the contractor’s insurance of the works, latent defects, and project cost over-run.

The third big difference is that the whole team is selected through behavioural workshops, making sure that all the people on the project are capable of working as a coherent team.

One of the most remarkable things about the contract is the way that people and their skills are valued. We know that finding the best, most economical solution to a complex problem can be time-consuming. On a traditional fixed-price low bid contract, there is little incentive for the team to spend time finding the most economical solution for the client. With IPI, the team is working within an overall project cost, so can agree to spend more time on research with suppliers to design out waste if that leads to a lower project cost. The client wins because the building is cheaper, and the team wins because the time spent is valued properly.

As architects we often complain that our input is not recognised properly. On IPI, every task involved in taking the project from inception to post-occupancy evaluation is allocated by agreement within the team with whom it best sits. On the Dudley project we have found that our skills are most definitely valued and beyond a narrow standard architect’s appointment.

This method incentivises the whole design team and contractor to work together with the client to find the best project solution for their budget. The single contract approach removes a lot of the waste and blockages associated with traditional tendering, and works with an overall project budget so that the team can invest time designing out wasteful elements that add no value in the construction process. Pain Share and Gain Share mechanisms are built into the contract.

The project started on site in March 2020, and will be finished by September 2021.

I’d love to work this way a lot more. It demands changed behaviours from everyone, but it’s real and it’s achievable, and I think is demonstrably the best contract balance for quality and economy. You need to leave proper time for planning, but the rewards are clear on site. Please get in touch if you have an upcoming project that is crying out for this new approach.