Integrated Project Delivery (IPD) is a way of contracting and running a project in which the owner, the lead designers and the main builder, often with key trade contractors, sign a single multi-party agreement. Their profit is tied to the outcome of the whole project rather than to their own part, and decisions are taken together from early design. IPD grew in the United States in the 2000s and is closely linked with lean construction and shared models.
At a glance
| Parties | Owner, architect, engineers, builder, key trades, in one agreement |
| Money | Costs reimbursed; profit pooled and paid against shared targets |
| Liability | Often limited or waived between the parties |
| Ways of working | Co-location (the big room), target value design, lean planning |
| BIM role | One federated model the team designs and builds from together |
The parts
- Multi-party agreement: one contract instead of a chain of two-party contracts.
- Shared risk and reward: a profit pool that grows or shrinks with cost and quality targets.
- Joint governance: a senior management team with members from each party decides together.
- Target value design: the design is developed to a cost target set early, rather than priced after it is drawn.
- The big room: a shared office, physical or online, where the team works side by side.
How it is used on projects
IPD is used mainly on complex buildings for owners who want early involvement of builders and trades, such as hospitals and laboratories. The shared model is central: trades model their own systems early, coordination happens in the big room, and the model is used directly for fabrication. Many more projects borrow parts of IPD (early contractor involvement, co-location, shared incentives) without the full agreement; these are often called "IPD-ish" or alliance approaches.
Variations
- Full IPD with a multi-party agreement and a profit pool.
- Project alliancing, a similar model used in Australia, New Zealand and the UK, especially for infrastructure.
- Hybrid approaches that keep conventional contracts but add early involvement and shared targets.
Common misunderstandings
- "IPD is a BIM method." It is a contract and governance model; BIM supports it.
- "Sharing risk means nobody is accountable." Roles and responsibilities are still assigned; only the money is pooled.
- "Co-location alone makes it IPD." Without aligned incentives, a big room is just a shared office.
Where to read more
The AIA's guide to Integrated Project Delivery and its multi-party agreement documents; the Lean Construction Institute; published case studies of IPD hospital projects; the Last Planner System entry for the planning side.