INTRODUCTION OF INTEGRATED PROJECT DELIVERY AND LIKELY IMPACTS ON PRETENDER COST MANAGEMENT IN GHANA

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1 MASTER THESIS RESEARCH M.ENG INTERNATIONAL BUILDING PROJECT MANAGEMENT INTRODUCTION OF INTEGRATED PROJECT DELIVERY AND LIKELY IMPACTS ON PRETENDER COST MANAGEMENT IN GHANA How Integrated Project Delivery (IPD) can improve the quality of pretender cost management processes in Ghana. Submitted by : Eliezer Salami Student Matriculation Number: Tutors: Professor Jürgen Marc Volm University of Applied Science Stuttgart Drees and Sommer, Switzerland Rev. Dr. Frank D.K. Fugar Department of Building Technology Kwame Nkrumah University of Sciences &Technology

2 ABSTRACT INTRODUCTION In the Construction industry, traditional project delivery and contracts system such as Design Bid Build (DBB) can be literally compared to suits of armor, well drafted for protection of the Client s individual interests (Nestel, 2006). New ways of project delivery have been adopted internationally to facilitate this traditional approach, amongst all these delivery systems; Integrated Project Delivery (IPD) was developed in the 90 s and trademarked in 2000 (IPDC, 2013). This project delivery system seeks to foster challenging collaborative methods with the following key features such as: Early involvement of key participants Shared risk and reward Multi-party contracts Collaborative decision making and control Liability waivers among key participants Jointly developed and validated project goals (AIA, 2007 ; AIA, 2010) Integrated Project Delivery (IPD) seeks to integrate people, systems, business organizations and practices into a process that collaboratively harness the talents and insights of all participants to optimize project results. This approach has taken Design and Build to a whole new level (DBIA, 2013), allowing for special contractual structures and cost sharing approach to facilitate seamlessly unique design and building strategies. Fig 1-1 Existing Traditional Design-Bid- Build and Integrated Project Delivery (IPD) (AIA, 2008)

3 These new project delivery methods have been introduced into various economies with high and rich culture of enthusiasm and technology advancements backing and fostering its introduction and implementation. Ghana, with a relatively stable economy, free of the stereotypical African corruptive political plague, has an advanced infrastructure platform compared to other low-income countries in Africa: Ghana spends about $1.2 billion per year on infrastructure, equivalent to about 7.5 percent of GDP (Foster & Pushak, 2011) The following basic questions stand out considering introducing this delivery system into the Ghanaian industry: Can Integrated Project Delivery (IPD) be introduced to improve the quality of pretender cost management processes in Ghana? Can a local delivery system be adapted to foster implementing IPD in Ghana? The Author researched into how the Ghanaian construction industry accepts the introduction of this new project delivery approach from the perspective of the Quantity Surveyor (QS), making emphasis on how this new approach affects the quality of pretender cost management. Also, observations were made considering the role of the QS after IPD s introduction. The main objectives of this research were: 1. To research into challenges within the traditional Pre-tender Cost Management processes in Ghana. 2. To evaluate the knowledge of IPD among Consultants. 3. To identify the role of the QS in the IPD delivery system. 4. To outline the benefits and challenges of introducing IPD in Ghana. This research examined the Ghanaian QS practices at the pretender stage to examine some defects and to find the real challenges that the QS practice has with the traditional methods. The Author outlined these problems and considered the benefits of using IPD to improve this defects which can change the procurement approach totally in the Ghanaian Industry. METHODOLOGY The aims of this research were achieved by the qualitative research approach to enable the outcomes to be well elaborated. This procedure entailed collection of open-ended data, analysis and representation of findings with figures and tables, in addition implying personal feedback through personal interpretations (Creswell, 2003)

4 Theory Tentative Hypothesis Patterns Observations Fig 1-2 Inductive Bottom-Up Research Approach The inductive approach which is a bottom up method of reasoning, evaluated data collected from the chosen demography to make empirical generalization from the data for necessary conclusions (Nestor & Schut, 2012). The most suitable data collection tool for this research was interviews. The Author anticipated that the Ghanaian professionals might have problems with this unfamiliar research area. This unfamiliarity is best clarified with personal interaction with the professionals. The interviews were mainly focused on QSs and the Design Team (AE Consultants). The QSs constituted 60% to get their perception of the industry and related Cost issues, and the Design Team 40% to further clarify details holistically to prevent one professional bias perception, since both teams form part of the PTMs and key participants during the collaborative process of IPD. The results of the interviews were the Primary source of data used to make analysis and further make a generalization to form a grounded theory. FINDINGS The main findings from the research were that the key characteristic of IPD, which is sharing of risks and benefits is very formidable to the professionals because of the stigma Contractors have put into the industry. Leadership was an issue because the Consultants could not fathom how the IPD system works. The Consultants showed ignorance in the contracts and payment approaches used by the IPD pioneers in the USA. Consultants were not familiar with the BIM collaborative technology. This was a main setback because Building Information Modeling (BIM) and IPD are synergetic From findings, the Ghana procurement system stood as a main barrier to introduce this system at the Government level of projects. The private sector was liberal to modification and introduction of new ideas. The problems outlined from QS Consultants, clearly showed the path

5 and areas of difficulty at the pretender stages, giving a clear idea of what IPD can rectify if introduced into the industry CONCLUSIONS The likely impacts of IPD on Pretender Cost Management Processes were to improve the processes using cost integrity processes of IPD from the ConsensusDOCS300 prior to achieving the Final Target Cost (PTCE). Target Value Design, Lean tools and Cost Modeling processes can be implemented to the traditional processes to achieve better quality in the PTCE and Pretender Costs generally. Fig 1-3 IPD Tools for Monitoring and Maintaining Target Cost (O Connor, 2009) IPD could be implemented to some extent; the main barrier still stands as; lack of knowledge of this new procurement system for implementation. To introduce IPD into the system, education is very important for the anticipated key participants. The BIM tool for collaboration is very necessary for the IPD process, but the setback is the low recognition of BIM in the Ghanaian construction industry and related professionals. The use BIM by the Architects serves as a pathway to encourage the use of this collaborative procurement platform to make the other project and design team members get acquainted to this system of working. The Ghanaian contracts system can be adjusted to incorporate IPD as a procurement system. Most of the local payment methods are compatible with the IPD approach of working. The QS role in this delivery systems implementation was discovered not to evolve totally; therefore the QS stays with the Design Team acting as a Contractor s QS or with the Client as a Professional QS.