Lean IPD Risk Reward Plan Negotiations 

Hello, You raise valid points. Many of these are issues within any contract type and my experience is that they are more likely to be resolved to satisfaction within an IPD shared savings model. If there is a defect within a GMP or Lump sum contract, the contractor often needs to fix the defect at their own cost. They lose money fixing defects. In an IPD model, everyone is paid their actual cost so they will get paid to fix the defects (without additional overhead or profit). The amount of the additional cost to fix the defect comes from the project continency first, then team profit (if no contingency left) and lastly paid directly by the owner if all profit is exhausted. This relationship causes two things to happen - 1) there is less trade damage as trades know that damaging someone else's work will result in them effectively paying the other trade to redo it. 2) Defects are a team issue, not just the performing contractor. The team will often rally to find an acceptable, cost effective solution to resolve the defect. The owner is involved in this discussion and is able to approve the solution (so they don't end up with a subpar solution). Check out this IPD case study on a defect from one of my projects for a deep dive into an actual issue: leanipd.com/integrated-project-delivery/case-study-risks/ In short, I think the conflicts are more transparent and the entire team works on them in IPD, where others models are more about who's fault it is instead of how to resolve the defect effectively.

@@LeanIPD Thanks for your time and sharing your knowledge and experience. My point is mostly about corruption in teams. I feel that team profit in IPD might increase actions to finish works with less quality. It is totally correct that doing work right in the first time will cause less cost. But, this is valid for people who are experienced enough and capable of performing the work. Other models have less entity to get direct benefits. Owners and some project shareholders. Maybe a little award a year. Still, there are incorrect actions or hiding failures. With team benefit, most of incorrect actions can be solved. Collaboration and many more issues of other contract types can be handled. However, in my opinion, IPD can increase risks to have quality work due to having more people to earn from project if the project finishes under budget. Designed work can be for 50 years. Mistake done can cause to face problems in 3 or 5 years after operation starts or let's say failure to build as required and can be realized in case of an earthquake. The above is not my experience with contracts, but observation with people who are scared to lose their jobs or do not have honor and integrity. When having these kind of people as a shareholder, what measures can be placed in IPD contract to prevent these. 3rd party inspections, penalties on teams in case they fail to act right or some other measures to have people scared of doing wrong acts to get more at the end of the project. For example, after 5 years of completion, if any failure in building, who is guilty? User or team who built it. I love the idea behind IPD contracts. Clarity, alignment and integration... But, how to manage corruption while we increase shareholders with IPD?