Difference between Alliancing and Integrated Project Delivery (IPD)

As Stated by Peter Raisbeck et. Al. The alliancing form of contracting differs from the integrated project Delivery form since Alliancing does not use Building Information Modelling (BIM) which is in contradiction to IPD where all teams use BIM. BIM is the fundamental platform which enables 3D modelling and data sharing between the team members (Raisbeck et. al, 2010).

Local Experience Literature

Contractors with the capability to execute design (FEED) have in the past designed and then participated in construction bidding. The strategy of contractor design followed by construct was stopped recently by some owners, because the contractor either withheld critical information in the design (FEED) so that it was not released to competitors or sometimes inflated the requirements in order to mislead competitors. Alternatively, a contractor executing the design could have more details that their competitors leading to the submission of a higher but more inclusive bid. This would lead to very competitive pricing from other bidders and eventually after the award of the EPC construction to another bidder, change orders or disputes for compensation would begin. This is why participation of a single contractor during the FEED design is discouraged by owners.

Major lessons learned workshop was conducted in 2013 in ADCO, UAE to identify the major causes behind delays of the last five Giga projects. Workshops included the majority of key stakeholders, including owners’ project management teams (PMT), EPC contractors PMT, project management consultant teams and major vendor representatives. The main objective of the workshop was to allow the EPC contractors to express the factors caused by owners. There was a consensus from three of the contractors that a lack of information during FEED, over design and poor FEED design led to major uncertainties and high risk assumption. These collective factors were similar to the construction project factors; therefore, the

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workshop factors were added to construction project factors. It was discovered locally that many factors that related to construction projects also related to Oil & Gas, however not all factors were mentioned in the Oil & Gas discussion, therefore to enhance the list they were added.

Amongst the factors received from all the participants from Owner, Consultant, Contractor and sub-contractors it was highlighted that majority of the factors were carried forward from the design phase of the project. Several of these factors could have been resolved very early in the project such as conflicts in drawings and specifications, Design changes, disagreements or modifications in specifications, high performance or quality expectations, improper codes used for design, inaccurate material estimates or increase in quantities, lack of integration at early stage of planning or design, material changes in type or specification during construction, overdesign, poor qualification of consultant engineer’s staff, time extension, unrealistic client requirements and insufficient information. It was suggested by the participants that all the design and early planning and estimation related factors can be resolved early with proper inputs from Owner and having qualified engineers during design with design as well as construction related experience. Even though construction related experience was not a usual skill set amongst designers it can be substituted with additional stakeholders who can share their construction related experience with the design team early in the project. Conflicts or contract related issues sighted by the participants as the reasons for delay or cost overrun in the project, were attributed to unclear or errors in design during FEED, Changes in client requirement, improper bidding instruction, improper drafting of the contractual terms for EPC contract or contractor negligence or errors. All these reasons are again linked with the improper communication, coordination or documentation.

The other construction related factors were identified such as delay by construction contractor, such as delay in site preparation, delays in construction, changes in project or sub-contractor staff, improper construction milestone definition, inadequate progress review, which again points towards the insufficient or underqualified progress monitoring team and shortage of equipment. All the

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factors under construction contractor were considered to be resolvable if the Construction contractor is given sufficient time to study the project before estimating the cost and schedule for bidding for the project. Unrealistic schedules dictated by client is not challenged by contractor during bidding because of insufficient design information, ineffective communication, errors by contractor in estimation or insufficient time for bidding. Also improper planning by contractor and improper selection of sub-contractor for the EPC can be controlled by the contractor provided he clearly understands the design and client requirements and get sufficient time to do the pre-construction preparation work.

Table (2.3) Delay factors were captured from local Lessons Learned workshop

Delay factors from Lessons Learned workshop

Conflicts during construction Improper construction milestone definition

Conflicts of the Drawing and Specification Improper technical study by the contractor during the bidding stage

Contract modifications Inaccuracy of materials estimate

Contract negotiations Inadequate progress review

Delay caused by contractor Increase in Quantities

Delays in construction Lack of integration of skills at early stage of planning & design

Delays in site preparation Liquated Damage

Design Changes Location

Disagreements or Modifications on specifications

Materials changes in types and specifications during construction

Excessive contracts and subcontracts Overdesign

Failures Poor qualification of consultant engineer’s staff assigned to the project

Frequent change of project staff Regulatory changes

Frequent change of sub-contractors

because of their inefficient work Shortage of equipment High performance or quality expectations Time extensions;

Improper Codes used for design Unrealistic client initial requirement

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Literature Review Summery

During the literature review, the researcher was focused to understand the current O&G projects practices and execution strategies. I was found that the sector has very wide range of processes and practices implemented and utilized. The Stage gate is one of the key processes utilized by the industry and it has resolved many issued related to the quality and deliver the projects systematically. Stage Gate process is providing the assurance to the owners to allow them to proceed with investments and move to the next phase. The Stage Gate disadvantage is yet does not bring the stakeholders early in the design phase to integrate and collaborate in order to improve the quality of deliverables. The gas still is exist and getting wider between stakeholder since the Stage gate require to pass the phase in order to engage the construction contractor and this keep the integration between stakeholder poo due to lake of integration.

The Literature has identified the factors behind poor performance and has recorded them very well. Factors were found repeated in majority of the gega size projects despite the projects are executed in difference countries. Literature also listed and ranked the factors and their value and impact on the projects. The researcher also tried to look for the factors behind poor performance in the general construction industry and factors were found repeated and they were ranked by some literatures.

The IPD was addressed in several literatures however, it was newly developed and there was more need to understand its contractual basis and requirements. More literatures are required with implementation lessons and improvements. IPD definition, advantages, disadvantages and guidelines are well recorded however implementation examples in the O&G sector not found.

Project execution strategies were found extensive and well explained in the literature. Examples also were presence in the literature. Design-Bid-Build, Design-Build and Construction manager at Risk, all were found well explained in the literature with advantages and disadvantages. Other approached such as

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alliances and partnering were found in the literature with examples. Local experiences were also found in the literature and recorded in conferences for O&G sector.

The researcher in the next chapter will understand the research methodology and the strategy to use in this research. The researcher will focus to opt for the best research strategy where the data collection will add value. Research will record, filter and group these factors in various methods to give them ranking and extract the factors, which are impacting the performance and frequently repeated. Grouping based on their category, such as design related factors, communication based factors, construction based factors, planning based factors and contract based factors will be provided. Also the researcher will group the factors to their phase of occurrence, i.e. were they happened during the design phase or bidding or construction phase.

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