In Integrated Project Delivery governance, which statement best describes risk and reward?

• A. Owner bears all risk alone.
• B. Shared risk and reward among participants.
• C. Firms operate with no collaboration.
• D. Contract structure does not matter.

Answer: (B)

Shared risk and reward among participants. In IPD governance, the owner, design team, and contractor work under a single, integrated agreement where incentives are aligned to the project’s success. A target cost sets the baseline, and savings or overruns are distributed among the core participants, not borne by a single party. This shared financial outcome encourages open collaboration, early involvement, and joint decision-making to manage cost, schedule, and quality. The contract structure is essential because it creates and enforces these shared incentives, building trust and accountability across the team. In contrast, models that place all risk on one party or assume no collaboration don’t fit IPD.