Historically, the design and construction industry has created silos around the owner, designers, and builders in an attempt to protect each from liability. While this may have reduced exposure in some instances, it has resulted in a lag in innovation and productivity in the industry. Owners have experienced this firsthand, and many forward-thinking owners are embracing a variety of collaborative delivery models, including Integrated Project Delivery (IPD), Integrated Design Build (IDB), Integrated Form of Agreement (IFOA), Tri-Party Agreements, and other similar models which share risk and reward to break down the traditional team silos, reduce waste and optimize productivity.
This AIA Trust risk report focuses on the unique risks and rewards that architects may face when participating in IPD or other collaborative delivery models. It examines some common contract terms which might create uninsurable risks for design team members. It also explores strategies to help mitigate those risks including why risk and reward sharing can benefit teams but especially benefit owners. A real-life risk scenario is outlined to help better define those risks that some teams could face, concluding with a summary on the importance of team culture and other strategies for successful outcomes.
In many of these collaborative delivery models, project risks are proportionately shared along with rewards for the team members who participate in risk and reward as part of their contracts. Design firms and construction companies need to understand each other’s businesses and how the business of the collective enterprise will be successful, not just their individual parts. There are important steps that teams can take to more effectively manage their collective risks so that everyone can succeed.