Abstract
Purpose - The amalgamation of Integrated Project Delivery (IPD) and Building Information Modelling (BIM) is highly recommended for successful project delivery. However, IPD lacks an accurate cost estimation methodology at the ‘front-end’ of projects, when little project information is available. The current study tackles this issue, through presenting analytical aspects, theoretical grounds, and practical steps/procedures for integrating Target Value Design (TVD), Activity-Based Costing (ABC), and Monte Carlo simulation into the IPD cost structure, within a BIM-enabled platform.
Design/methodology/approach - A critical review was conducted to study the status of cost estimation within IPD, as well as, exploring methods and tools that can enhance the cost estimation process for IPD. Thereafter, a framework is developed to present the proposed methodology of cost estimation for IPD throughout its entire stages. A case project is used to validate the practicality of the developed solution through comparing the profit-at-risk percentage for each party, using both traditional cost estimation and the proposed solution.
Findings - After applying the proposed IPD’s cost estimation framework, on a real-life case project, the findings demonstrated significant deviations in the profit-at-risk value for various work packages of the project (approximately 100% of the finishing package and 22% of openings package). By providing a precise allocation of overhead costs, the solution can be used in real-life projects to change the entire IPD cost structure and ensure a fair sharing of risk–rewards amongst the involved parties in IPD projects.
Practical implications - Using the proposed methodology of cost estimation for IPD can enhance the relationship amongst IPD's core team members; all revealed financial deficiencies will be considered (i.e. compensation structure, profit pooling), hence, enhancing the IPD performance.
Originality/value - This paper presents a comprehensive solution for integrating BIM and IPD in terms of cost estimation, offering three main contributions: (1) an innovate approach to utilise 5D BIM capabilities with Monte Carlo simulation, hence providing reliable cost estimating during the conceptual TVD stage; (2) mathematical models that are developed through integrating ABC into the detailed 5D BIM to determine the three IPD’s cost structure limbs; (3) a novel mechanism of managing cost saving (rewards) through distinguishing between saved resources from organisation level, to daily task level, to increase trust among parties.
Design/methodology/approach - A critical review was conducted to study the status of cost estimation within IPD, as well as, exploring methods and tools that can enhance the cost estimation process for IPD. Thereafter, a framework is developed to present the proposed methodology of cost estimation for IPD throughout its entire stages. A case project is used to validate the practicality of the developed solution through comparing the profit-at-risk percentage for each party, using both traditional cost estimation and the proposed solution.
Findings - After applying the proposed IPD’s cost estimation framework, on a real-life case project, the findings demonstrated significant deviations in the profit-at-risk value for various work packages of the project (approximately 100% of the finishing package and 22% of openings package). By providing a precise allocation of overhead costs, the solution can be used in real-life projects to change the entire IPD cost structure and ensure a fair sharing of risk–rewards amongst the involved parties in IPD projects.
Practical implications - Using the proposed methodology of cost estimation for IPD can enhance the relationship amongst IPD's core team members; all revealed financial deficiencies will be considered (i.e. compensation structure, profit pooling), hence, enhancing the IPD performance.
Originality/value - This paper presents a comprehensive solution for integrating BIM and IPD in terms of cost estimation, offering three main contributions: (1) an innovate approach to utilise 5D BIM capabilities with Monte Carlo simulation, hence providing reliable cost estimating during the conceptual TVD stage; (2) mathematical models that are developed through integrating ABC into the detailed 5D BIM to determine the three IPD’s cost structure limbs; (3) a novel mechanism of managing cost saving (rewards) through distinguishing between saved resources from organisation level, to daily task level, to increase trust among parties.
Original language | English |
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Journal | Engineering, Construction and Architectural Management |
Volume | 28 |
Issue number | 4 |
Early online date | 10 Aug 2020 |
DOIs | |
Publication status | Published - 28 Apr 2021 |
Externally published | Yes |