The Integrated Project Delivery (IPD) in integration with Building Information Modelling/Management (BIM) is an optimal approach for delivering construction projects. This is, however fraught with complications, due to the inability of current cost management practices to determine fair risk/reward ratio in IPD arrangements. Previous research has established the advantages of Earned Value Management-based (EVM) method for risk/reward sharing, as well as, how Activity Based Costing (ABC) method can facilitate automating the sharing process. This study proposes an innovative approach to exploit the capabilities of these techniques coupled with BIM in automating/optimising the process of IPD risk/reward sharing. This includes providing mathematical equations for risk/reward sharing and developing a model that strengthens IPD parties’ relationships. The process is enhanced through developing an EVM-Web grid that enables the participants to easily track their costs on computers and mobile devices. To demonstrate the applicability and validity of the proposed model, it is applied on a real-life case and displays promising results in terms of flexibility in allocating risk/reward for varying scenarios.

Introduction

Traditional project delivery systems have proven inefficient in improving overall performance [48]. In response to this, Integrated Project Delivery (IPD) has been proposed and used in projects across the construction industry [85]. IPD provides a new contractual, behavioural and organisational context for delivering construction projects, through enhancing integrated and collaborative practices [62]. It is an innovative project delivery method, characterised by early, collaborative, and collective engagement of key stakeholders across all phases of delivering a project [3,4]. Evidence, however, shows that the percentage of real-life projects using IPD is small [25,61], mainly due to the negative influence of barriers that hinder widespread use of IPD [23,73,75]. Successful delivery of a project through IPD is not easy, and IPD requires fulfilling a wide range of requirements and establishing various support systems [21]. Failure in establishing these support systems creates barriers. Examples are flawed IPD compensation model, resistance to information sharing, ineffective decision-making regimes, and disagreement on liability waivers among stakeholders [32,72]. Of these, the IPD compensation model, also called risk/reward compensation, is of cardinal importance [46]. It is described as a key principle of IPD [83], that plays a pivotal role in stimulating creativity, motivating collaboration, and sustaining performance [42,85]. Lack of a proper IPD compensation model is seen as a formidable barrier to the use of IPD on construction projects [84].