What is Integrated Project Delivery (IPD)?
“IPD is a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the knowledge, talents and insights of all participants to increase project value, reduce waste and optimize efficiency through all phases of design, fabrication and construction.” (AIA)
Basically it is a process that harmonizes all parties involved in the project to act as a single company. In doing so they share in the profits and pains. But in the end it is a win/win situation for all involved.
How does a CPA firm fit into a construction project?
Sikich performs several tasks throughout the IPD process. Below are the steps we take to make sure everyone is operating in accordance with the IPD contract.
- First and foremost, we operate as the independent third party who verifies that all of the consultants and trade partners who signed on to the IPD contract invoice the project at the correct labor rates. Labor rates are at cost without any profit built into the rates. All parties on the contract agree to have their profit be “at risk” which means that the profit is only paid out upon successfully completing a project within budget. Therefore, we make sure that the labor rates for all parties are at cost only.
- The second task is to review the consultants and trade partners overhead rates used on a project to make sure they are reasonable based upon their individual operations.
- Our third task is to sample the hours billed each month by the various consultants and trade partners and test them back to support such as timecards which would support the hours billed to the project.
- Our last task involved is to review certain support provided by the trade partners and consultants for the ICL (Incentive Compensation Layer) payout.
Having an experienced IPD auditor in place as a third-party reviewer provides comfort to all parties knowing that each party has followed the same set of rules.
How Does it Work?
Interested in learning about the value and benefits that an IPD auditor can bring to your project? Review the case study below to learn about the value delivered on a recent IPD project.