Indiana University Health and the building team on the Riley Hospital for Children Simon Family Tower at IU Health signed an integrated project delivery (IPD) contract for the design and construction of the 360,000-square-foot hospital addition in 2009. The project team includes IU Health (client); BSA Life Structures (MEP design); Bright Sheet Metal (mechanical and ductwork subcontracting); Cripe Architects + Engineers (equipment planning); Ermco Inc. (electrical subcontracting); HKS Architects (architectural design); Maregatti Interiors (interior design); Messer Harmon (construction manager); North Mechanical Contracting Inc. (plumbing subcontracting); and Ratio Architects Inc. (architectural design). In addition, Baker & Daniels LLP serves as the project team’s legal counsel.

IU Health created an IPD methodology to improve its project delivery process. The methodology is focused on measurable factors that include improving patient outcomes, patient and staff satisfaction, and staff efficiency. The goal is to reduce first-time construction costs as well as lifecycle operating costs.

The impact of IPD on this project included:

Reduced waste and improved energy efficiency: Saved 30 percent in energy costs; consumption was reduced to 203,500 BTUs per square foot from 289,760 BTUs per square foot.

Saved time: Eliminated Requests for Information (RFIs) during construction, resulting in a tightened timeline schedule. The team reports that streamlined communication allowed the project team to field questions and provide clarifications without the traditional redundancy of a paper process. Information was communicated directly in the studio; clarifications were aggregated and issued via bulletins when required. This process allows for one location of information and revisions.

Saved money:

  • Reduced the number of change orders, eliminating unplanned non-owner change orders due to wasteful work, at a rate of 1.6 percent versus the traditional average rate of 6 percent.
  • Saved $1 million (40 items) by re-evaluating IU Health construction and design standards.
  • Saved $1 million in temperature controls costs by using a competitive proposal process.
  • Realized a savings of $144,000 by using different fittings for domestic water.
  • Improved ductwork construction, resulting in a $264,000 savings.
  • Identified eight items through value stream mapping and expanded scenario testing with a “mock-up hospital” review, which, based on the same average cost per change, saved $325,000 in project costs.
  •  Eliminated claims or disputes.

Improved staff and patient satisfaction:

  • Increased involvement of user groups (patients, families, caregivers, facilities/maintenance teams), giving them a say in how their environment was designed and constructed.
  • Provided flexibility through standardized spaces that can now be flexed on a daily, monthly, or yearly basis.

“This IPD project is unique because 100 percent of the team profit is at risk,” said Jeff Sperring, CEO, Riley at IU Health. “Conditions of satisfaction are being used to determine the amount of profit the team earns. Because of this, each team member has a stake in the game.”