Solicitors Francis Ho, head of construction at Olswang; May Winfield, senior associate at Kennedys; and Sarah Rock, associate at RPC, on the impact BIM is having on contracts and projects.
How critical is the form of contract for the success of a Level 2 BIM project?
Francis Ho: It’s obviously helpful to have a standard form contract which not only caters for Level 2 but includes design, communication and insurance provisions which are “BIM-ready”. Unfortunately, only the CIOB Complex Projects Contract currently does this. If our industry is serious about promoting minimum requirements, then it’s vital that standard forms play their part.
At the moment, clients and contractors are having to prepare bespoke provisions each time. As well as slowing down negotiations this hurts the establishment of market standards.
May Winfield: BIM requires significant changes to procedures and mindset. Such disruption to a long-standing industry requires a clear and supportive contract to establish certainty, consistency, efficiency and reliability.
Standard form contracts do not comprehensively deal with this required BIM-enabled contractual framework, and even the common protocols (while good starting points) have crucial gaps. It is critical that the contract framework supports and clarifies the BIM process to avoid future disputes.
Sarah Rock: While the form of contract sets the tone for the project I don’t believe any particular type of contract can ever be seen to be the reason for a project’s success. Partnerships and collaboration are crucial for BIM and while these can be encouraged through certain forms of contract it is the bodies on the ground that make the partnerships and collaboration work, or not, and therefore a project a success, or not.
Are you seeing bespoke clauses relating to BIM added to contracts?
FH: Yes, most notably in relation to major UK projects based on JCT and NEC contracts. Often they originate from lawyers or architects acting on behalf of employers and are then presented to other parties on a take it or leave it basis. We’ve not seen much of the CIC’s BIM Protocol in the wild, but it has its uses, probably chiefly in relation to mid-size projects. Again, clients would prefer standard forms to address BIM within the core clauses rather than applying a workaround solution. That would make things easier all around.
MW: Yes. Most companies/firms using BIM have their own bespoke suite of BIM contract documents, even if based on the available standard form protocols. I have myself drafted various bespoke BIM clauses and contracts, and advised on the application of bespoke clauses.
Still, a significant number of BIM-enabled projects lack comprehensive BIM contract terms, which leads to an ongoing risk of misunderstandings, differing expectations and unnecessary disputes.
SR: Yes and understandably so in my opinion. Most standard form contracts have not been fully updated to incorporate clauses for BIM. There is guidance from JCT, NEC etc, but no standard BIM clauses as yet. The exception being the CIOB Complex Projects Contract, which does contain BIM drafting. For the rest, simple drafting amendments are required to incorporate the protocol, define the project information manager and so on.
Are you seeing any BIM-related issues arise mid-contract?
FH: Issues have so far been rare. A large part of this is because BIM has tended to have been used on large projects where the main participants are experienced and aware of their obligations. We also underscore in negotiations with the construction team members that they must understand and can satisfy the BIM requirements. As BIM becomes more mainstream I expect to see more issues arise where sufficient consideration isn’t given to liability and insurance risks.
MW: So far, parties are generally endeavouring to progress BIM-enabled projects with a positive mindset. However, anecdotally I am aware of issues arising mid-project regarding, in particular, ownership of models, extent of reliance on models/BIM-information and the resulting liability risks. This is usually due to a lack of clarity in the contract on these issues.
SR: I have not seen any BIM-related issues as such, but have seen associated issues. Some parties have shown concern that BIM changes their design responsibilities and liabilities. This can lead to a breakdown of relationships and process if not properly managed and explained. Best practice in this scenario would be to have everything clearly set out in the protocol including responsibilities and handover dates.
Is BIM being referenced in any disputes you are aware of, in the UK or other countries?
FH: We’ve not come across any significant disagreements yet, but the potential is there. Think about a client that wants to adopt BIM but has little experience and intends to engage a similarly raw construction team. Unless it knows what it hopes to achieve, brings in a strong BIM adviser or manager from the outset and has knowledgeable legal advisers who can guide it through the issues, then there are going to be problems down the line.
MW: I am not aware of any disputes in the UK. This is most likely because most BIM-enabled projects (apart from pilot projects) are still yet to reach completion. Even in the US, where BIM is longer established, there is only one reported decision – due to the contractor being unaware a section had to be constructed in a certain order. However, popular opinion accepts this had little to do with BIM and everything to do with general poor communication.
SR: I am yet to see a dispute which has referenced BIM. This may be because everything is relatively new and so it may yet come out in the wash. However, it seems to me that the parties utilising BIM are like minded in that they want their projects to work and they are willing to trust each other and work together.
How do you think contracts might evolve as we near the era of Level 3 BIM?
FH: Contracts generally evolve slowly. We’re also some distance away from Level 3, which demands extensive collaboration and transparency within the team and a balance of project risk that would point towards using integrated project insurance. Having said that, the increasing deployment of Level 2 may serve as the catalyst for change as users become familiar with the adjustments they have to make and the benefits that result.
MW: The one-model environment envisioned at Level 3 will require significant contractual changes to deal with the resulting issues, responsibilities and risk allocation of all designers inputting (and relying on) information into a single live source.
Digital Built Britain’s Level 3 stages anticipate contracts becoming more focused on performance/outputs and data-centric. Performance-based contracts are already in use but this would still require a considerable shift in the common standard forms (JCT in particular) and development of contractual and procedural safeguards against the resulting risks.
SR: Level 3 is a game changer contractually. The level of collaboration and multi-party contributions, intellectual property issues, responsibilities and payment are a few of the subjects and related clauses which will need to be addressed to ensure all parties are protected. As with all elements of BIM, I would like to see us all get Level 2 right before we worry about this.