Talking About a Revolution: Alternative Project Delivery With Jim Whitaker
Q: You’ve described Alternative Project Delivery as the most revolutionary advancement in the A/E/C industry today, akin to Amazon’s disruptive business model that has transformed the retail industry and how consumers shop. In what ways is Alternative Project Delivery different than traditional design-bid-build projects?
Alternative Project Delivery (APD) is called “alternative” for good reason. Everything is different. The social psychology of team dynamics is different. Contractual arrangements of who is contracted to whom is turned on its head. The preconceived notion of designers’ roles, e.g. architects and engineers, is radically changed. The construction contractor’s role is expanded and modified. Instead of operating in respective silos, only communicating and collaborating when required, teammates must continuously, effectively communicate. In APD projects, the whole architect-engineer-contractor (AEC) team is reconfigured. Is APD disruptive to norms? Yes. Is APD disruptive? Absolutely. Is APD the future of the AEC world? Absolutely. It’s very exciting.
Q: Who or what is driving this massive change in how we deliver projects?
Disruptive changes in any marketplace is often influenced by many stakeholders. First and foremost, clients want better results; many are demanding change. Empirical research shows that the AEC industry can be an inefficient and ineffective use of capital to get to the end result: the built building. Studies from McKinsey & Company conclude that the AEC business is barely more efficient that the labor-intensive mining industry, and labor productivity has increased barely 1% per year compared to 2.8% in the global economy. Simply put, AEC has not kept with the worldwide demand for its services, and in its current form, isn’t keeping pace now.
And for sure, technology—from the basic tools of computer-aided design (CAD) and building information modeling (BIM) to more exciting tools such as artificial intelligence (AI) and virtual reality (VR)—has radically changed how design services are delivered and makes groundbreaking evolution possible. For the first time in history, people who invent and harness technology are flooding venture capital and applying brainpower of new technologies to the AEC business.
Q: There are so many variations and hybrids of Alternative Project Delivery — it seems like the many alternatives could cause confusion for the uninitiated. If you were to describe the top three benefits to a client, what would they be?
Yes, there can be confusion. A watershed study of process improvement is the 1998 Construction Industry Institute/Pennsylvania State study that conducted a broad review of various projects, and design-build project delivery, and the conclusions are powerful: it is 6 percent less expensive when compared to design-bid-build (DBB); 12 percent faster in construction duration and 33 percent faster in overall project duration; 5.2 percent less cost growth; 11.4 percent less schedule growth; and overall, higher owner satisfaction ratings. So, yes, design-build is “cheaper, faster, and better;” but more importantly, design-build and other forms of alternative project delivery where the best and brightest minds are collaborating, APD has the ability to deliver more built value per dollar spent that other traditional delivery methodologies.
Q: On the flip side, what would you say are Alternative Project Delivery method’s three biggest challenges today?
Change can be hard. Change means a different way of working that gets people of out their comfort zones. And so it is true with Alternative Project Delivery. To use an economic euphemism, creative destruction is an uncomfortable experience. I believe ADP’s biggest challenges to greater adoption are psychology and resistance to change; training, technology, and experience in different contracting and operating environments; and in some locales, there are statutory and regulatory barriers.
Q: Does ADP more readily apply to some project types? Are we seeing adoption of APD on some project types more than others?
APD works for all project types, sizes and complexities. There are no limitations.
Q: You’ve said Alternative Project Delivery makes architects nervous. Why is that?
Yes, rethinking the design process is a big deal. What we architects do is important — it’s not just protecting health, safety and welfare for building occupants, but creating spaces, both indoor and outdoors, that enhance the human experience. Architects assume the thought leadership role and significant responsibility to serve as the problem-solver, the special role to transform a space into a three-dimensional design solution. An environment. A space. A vibe. The creative design process is iterative; the design process is part art and part science; and importantly, the design process is highly personal.
With the preamble above, I think it is fair to say architects and engineers are sensitive to changes of circumstance in how they deliver their respective professional services. What architects do is important. And, change is difficult. But history has taught that early adopters and current practitioners in APD projects are happy architects — many are catching on and through experience, are realizing that APD offers incredible opportunity to provide high-impact brainpower earlier in the process to better effect.
Q: Final question. We think of architects as having the market cornered on the creative aspects of our business, and that the contractual and execution side of our business is simply business as usual. But what you’re describing is quite the opposite: there is great opportunity, creativity and flexibility when it comes to collaborative teaming, contractual frameworks and project delivery. How is this innovation reshaping our industry?
Success in all forms of APD is really a wide-open opportunity of shocking innovation, incredible creativity, and infinitely more collaborative, communicative and effective design and construction. The client wins. The AEC community wins. The building occupant or end-user wins. Architects are uniquely qualified to be key contributors and thought leaders in an evolving new world order.
