Risk Profiles

IPDEducation: know better...do better

Risk Profiles (Why manage in a new way?)

As our Industry's associations change from the Traditional Owner+Designer vs. Builder to the new Owner vs. Design+Builder, so must our recognition and management of emerging roles, risks, activities, and control tools used to deliver projects. The graphics below demonstrate the 'linking' of risks, activities, and control tools of the role players on either side of a 'project contract'. In the Traditional Model, the Owner and Designer are linked. In the Performance-Based Model, the Designer and Builder are linked. Since 'liability and accountability' (responsibility) can be seen as the justifiable connection between one's role/risk/activity/tool (vertical association), by moving the 'black line' (contractual relationship) the Owner no longer directly controls design and the Builder is now accountable for design.

So what is the impact of this "IPD" re-association?

You are 'linked' to the risks of your partner:

Since the Builder is now liable to the Owner for design, Builders must now "manage" design (Modules 5 & 6), not necessarily "do" design

The Owner does not "directly" control Plans & Specs:

Owners must control their project via the RFP/Contract Documents (Modules 1 through 4)

What's the same:

Each player (designer-owner-builder) maintains virtually the same responsibility (resolve-verify-follow)

What's different:

Each player...

The Traditional 'Risk Profile' of the Owner, Designer, and Builder is represented by this graphic. Under this Traditional Delivery Concept, the Owner and Designers are 'contractual' connected: i.e. The Owner warrants to the Builder that the 'plans & specs' are complete and free of error. The graphic's vertical black line represents this 'contractual' separation (Solution vs. Builder) and the union of the Owner & Designer: while identifying the primary risks, activities, and control tools used by each of the 3 dominant players (Owner-Design-Builder).

Traditional Design-Bid-Build Delivery Model

	Document the Problem & Create a Solution		Implement the Solution
Role	Owner	Architect/Engineer	Builder

Risk	Fulfilling the Mission	Errors & Omissions	Schedule & Safety

Activity	Define the Project (Scope)	Design	Construction

Control Tool	Select A&E (RFQ)	Plans & Specifications	Means & Methods

Responsibility	Verify Direction	Resolve Direction	Follow Direction
Back	The Owner is primarily concerned with completing the project's mission. The mission of the project dominates the 'risk' management concerns; goal #1, fulfill the Mission. The primary activity for the Owner is translating the Mission into a Program Brief, included in the RFQ used to select an A&E. With the Owner, the A&E then develops a solution considered to fulfill the Program and, in turn, the Mission. Standard or custom form Agreements defines the roles, responsibilities, and activities of the other two players (designers & builders).	Designers (architects & engineers) are at risk for the errors and omissions inherent in their work. "Inherent" because a perfect set of 'plans' does not recognize reality. The primary activity which mitigates the errors & omissions inherent in plans & specs is 'careful design'. Thoughtful, experienced, and comprehensive design helps eliminate E&O while solving the Owner's problem: Fulfilling the Mission. The tool used to mitigate the A&E's risk, while assuring scope satisfaction, is the collective Project Plans & Specifications.	The Builder (while implementing the Solution) must control the Project Schedule and Site Safety. Both fraught with Risk. Controlling the Means and Methods of establishing, tracking, and adjusting schedules to meet the Substantial Completion Date, along with establishing, tracking, and adjusting the Means and Methods of the actual construction activity are the primary tools available to the Builder.

The Performance-Based Design-Build 'Risk Profile' of the Owner, Designer, and Builder is represented by this graphic. Under this Delivery Concept, the Owner no longer depends on the 'plans & specs' to define the scope of the project. Rather, the Owner must now depend on their RFP Document to comprehensively define the scope of the project: a new challenge indeed. The graphic's vertical black line represents a new 'contractual' separation (Problem vs. Solution) and the union of the Designer & Builder: while identifying the primary risks, activities, and control tools used by each of the 3 dominant players (Owner-Design-Builder).

The Performance-Based Design-Build Delivery Model

	Document the Problem	Create & Implement the Solution
Role	Owner	Architect/Engineer	Builder

Risk	Fulfilling the Mission	Errors & Omissions	Schedule & Safety

Activity	Define the Project (Scope)	Design	Construction

Control Tool	Select IPT (RFQ/P)	Plans & Specifications	Means & Methods

Responsibility	Verify Direction	Resolve Direction	Follow Direction
Back	The Owner is primarily concerned with completing the project's mission. The mission of the project dominates the 'risk' management concerns; goal #1, fulfill the Mission. The primary activity for the Owner is translating the Mission into a clear and achievable Scope-of-work, then documenting the Scope within the RFQ/P. Once documented the Scope defines the roles, responsibilities, and activities of the other two players (designers & builders). What's Different: There is no direct control of the plans & specs because "Resolving the Direction" is now on the other side of the contract. Therefore a more clear, achievable, and comprehensive RFP Document (Contract) to control & verify the "direction" of the designer/builder decisions is essential.	Designers (architects & engineers) are at risk for the errors and omissions inherent in their work. "Inherent" because a perfect set of 'plans' does not recognize reality. The primary activity which mitigates the errors & omissions inherent in plans & specs is 'careful design'. Thoughtful, experienced, and comprehensive design helps eliminate E&O while solving the Owner's problem: Fulfilling the Mission. The tool used to mitigate the A&E's risk, while assuring scope satisfaction, is the collective Project Plans & Specifications. What's Different: Because competitive procurements involve limited (pre-award) access to the owner/user; demanding the Owner provide a more clear, achievable, and comprehensive RFP Document (Contract) to establish "Project Expectations" is essential.	The Builder (while implementing the Solution) must control the Project Schedule and Site Safety. Both fraught with Risk. Controlling the Means and Methods for establishing, tracking, and adjusting schedules to meet the Substantial Completion Date, along with establishing, tracking, and adjusting the Means and Methods of the actual construction activities are the primary tools available to the Builder. As a designer/builder Team Member, the Builder now can decide the direction to be followed. What's Different: Because "resolution" of the design direction is now a contractual "responsibility", the demand for active management of the 'Design Process' is essential. This new "responsibility" allows complete control of the design & construction decision-making process; allowing the alignment of cost, scope & schedule.

Back to IPD Education/Home