"IPD contracts, a new playground for the construction sector", Vincent Moraël, Coeff

And if contracts became more collaborative? For Vincent Moraël, director of Coeff (consulting and engineering firm specializing in lean management in the construction sector), IPD contracts for "integrated project delivery" - or alliance contracts - offer an interesting way for operations complex.

Between the global contracts for construction markets which are now massively promoted by the government as part of the recovery plan (see circular 6244/SG of January 21, 2021) and the contracts of the MOP law, a space promise emerges for IPD (integrated project delivery) contracts. Could the construction market in France find its right balance between architectural design, control of costs and deadlines and quality of life for end users?

The rigidity of MOP contracts

The MOP enloi contracts are binding on those involved in public procurement of public works. They lay down the principle that the missions of the prime contractor and the contractor are necessarily distinct. The order of architects, its president in particular (Denis Dessus, in his recent article "Aimed and perverse effects of global markets", Architectures 288/April 2021), defends this principle on the grounds that the interests of construction companies would be essence contrary to architectural innovation. This bias, however, overlooks the many construction companies that prioritize end-user satisfaction and the quality of the work over economic considerations. And any construction company that wants to be part of the long term and thereby promote the circular economy, sustainable development or ecology is part of this desire. The search for profitability, in the lean management approach to reducing waste, for example, has the sole objective of reducing the non-added value for the customer.

The "confined" part of global contracts

Global contracts (PPP, design-build and global performance contract) currently represent 10% of public procurement and should be developed within the framework of the government's recovery plan. These contracts derogate from the MOP law and the principle of allotment. They bring together in the same team, companies and project management around a detailed and fixed initial program. Their place by essence “derogatory” to public law in fact reduces their field of application.

A space for virtuous collaboration?

Integrated project delivery (IPD) is an innovative contractual method, because it is collaborative, for awarding construction contracts. Originally from North America, it has spread widely in the United Kingdom, Norway, Australia, New Zealand and recently in Canada. The American Institute of Architects (AIA) first published a guideline on the subject in 2007 and defined it as "an approach to project delivery that integrates parts, systems, enterprise structures and practices in a collaborative process that leverages the talents and ideas of all stakeholders to optimize project outcomes, increase value, reduce waste and maximize efficiency at all phases of design, manufacturing and construction" (1).

In French, some use the name of "integrated project realization" (RPI) or "integrated project realization"; it seems wiser to us to speak either of an alliance contract, or to keep the acronym IPD as it is.

At the legal level, this contract can be used in France in the private market because there is no blockage at the insurance level. On the other hand, it is not (yet?) provided for in the Public Procurement Code.

Creation and sharing of added value

Project implementation approach, construction contracting method, "alliance" contract but also methodology, the IPD is a paradigm shift that abolishes the traditional silos of the construction sector. Its objective is simple; it is the creation and sharing of added value. All the actors in a project find themselves contractually and culturally focused on the success of the project, even if this means going against their specific interests. The IPD in fact establishes a good collaboration since whatever happens and by nature, the participants will either all be “winners” or all “losers”. In other words, if a problem arises, it is the problem of all parties (owner, designer and construction company) and they must work together to solve it.

The main objective pursued by the IPD method is the achievement of maximum value on the quality-cost ratio for the project to be delivered. What is interesting and virtuous in this method is therefore that it does not simply aim to improve the profitability of the project, but that, in doing so, it increases its overall value for all.

What playing field is emerging for the IPD?

We will quickly go over the conditions for implementing the IPD which are perfectly described in the documentation (see the help on the right use of the IPD published by AGC “Integrated project delivery – for public and private owners”). It is a whole system, with its particular culture (involvement, communication, creativity and innovation) that must be put in place.

The ecosystem of IPD contracts has a significant cost and constraints, which reduces the type of project where it can be implemented. Given what we have explained, it is clear that the sine qua non condition is that the client attaches decisive importance to the quality and durability of the building. On the team side, the adherence of all employees to the IPD's collaborative approach from the start is essential. There are also team training and organizational costs, investments in software and digital tools to be expected because the IPD method is currently unknown. It is therefore smarter to reserve this mode of collaboration for complex, long-term projects with a large budget (over €15 million), and which require flexible management.

Can the IPD solve the ills of the French construction market?

In the context described by the FFB's economic note last March, we all easily identify the problems of our sector: often ill-defined or incomplete customer objectives, extended study times, significant budget overruns... and often, a fool's game between the various players.

In France, in particular, due to the fragmentation between design studies and the processes of execution studies and construction of the work, the overall process lacks fluidity. Doesn't our system generate a double phase of counterproductive study? The IPD is a radical answer to this problem, as shown in the McLeamy curve below. This comparison between IPD and traditional methods proves in no uncertain terms that the procrastination of the traditional method is expensive.

Curve of McLeamyClose Lightbox

While IPD can never become the main French method of carrying out construction projects, it can occasionally, in complex and large markets, improve profitability and overall value for all.

Beyond the IPD contract itself, it is the whole virtuous system of collaboration that it puts in place that can also be a small revolution for the entire sector. Lean management applied to construction, drawn planning and teams focused on the conditions of customer satisfaction, are all founding stones of the new construction paradigm that we have to create.

(1) Source: translation of the book "Integrated project delivery": a guide, 2007, AIA.