Integrated project delivery (IPD) is a collaborative delivery model that ties the owner, the designer and the builder together under one agreement, pricing the work on a cost-plus basis against a shared target rather than each party protecting its own fixed price.
The standard Canadian form is CCDC 30, the Integrated Project Delivery Contract, which CCDC describes as addressing "issues specific to integrated project delivery (IPD) projects including scope allocation, payments, changes, conflict management, termination, insurance and contract security, and liability allocation." Pricing runs on "a cost plus with a target price" model, under which "the profits of the design/construction team are identified and allocated to a risk pool that remains at risk subject to the achievement of mutually agreed project objectives" — in plain terms, the design and construction teams' fees are only fully paid out if the project hits the numbers everyone agreed to up front.
CCDC 30 also sets out the governance structure an IPD project needs: a senior management team, a project management team and project implementation teams, with defined roles across four phases — validation, design/procurement, construction, and warranty. That governance layer is the practical difference from design-build: in design-build one firm is accountable to the owner; in IPD, the owner, designer and builder are jointly accountable to the project's own risk pool.
A hospital owner, its design consultant and its construction manager sign a single CCDC 30 agreement for a new patient tower, with a jointly-developed target price and a shared risk pool covering each party's profit. Mid-project, a design change adds cost. Under a traditional stipulated-price contract, that change would likely become a claim between the owner and one party. Under CCDC 30, the added cost is absorbed against the shared target first, and it is in every signatory's interest to solve the problem collaboratively, because their profit pools rise or fall together.
See also: Design-build, in one page · Value engineering: savings or scope cuts?.
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