Out-Law Guide 4 min. read
15 Jul 2022, 3:37 pm
Businesses will be better placed to improve how they operate infrastructure assets if they change the way they contract for the use of building information modelling (BIM).
Contracts that encourage project owners, contractors, and other suppliers to use BIM in an integrated way will generate data that can help with analysing risks, while reducing the costs of re-work, improving collaboration, the management of KPIs and supply chain interaction, and improving asset performance and safety monitoring. Ultimately, this data can also be used by industry to begin to create digital twins of infrastructure to address the challenges of decarbonisation, building safety and increased defects liability.
Using BIM to its full potential, however, requires a wholesale change in approach to the design and construction process that the industry is used to.
Important issues like ensuring there is sufficient expertise to develop the right BIM model, clarifying responsibilities around developing and delivering that model, and securing appropriate technology licences should all be dealt with at the outset of the procurement process. Getting the phasing and approach to design correct in the procurement and contracting strategy is also vital to maximise the potential of BIM.
To get the full benefits of BIM, detailed information from suppliers of component designed elements needs to be provided virtually, to facilitate coordination with the wider design. Ideally, detailed design inputs are needed early, so that any inconsistencies and challenges can be identified and dealt with before the final design is finalised and construction commenced. This can affect design obligations in the contracts.
For example, suppliers may be careful to limit their responsibility for design and to avoid taking on responsibility for third party design provided within a model. In addition, because the process for design is fully virtual and includes an extended period of collaboration between parties prior to construction commencing, any more traditional contractual design validation processes need to be reviewed to ensure they are still valid and do not cut across any BIM execution and delivery plans.
When BIM is used to its full potential, the design phase is almost wholly virtual. Construction commences on the basis of a fully developed and detailed design. This unlocks many opportunities for efficiencies, including the ability to virtually test overall carbon performance and the ability to plan for increased use of modular construction and other modern methods. This approach does not correspond with traditional design and build contracting, under which design and value engineering continues to take place throughout construction.
Businesses may want to build-in a pre-construction services or early contractor involvement phase to support the virtual design process before construction. Under this approach, the process for notifying changes as a result of the virtual development of the model and how this will be managed with suppliers, and the commercial models supporting any two stage process, will need to be considered.
Under a fully integrated BIM approach, the design is finalised within the model and becomes “fixed” for all suppliers – meaning there will be limited or no opportunity to carry out further design or value engineering. Changes to the design introduced at a later date will cause disruption.
There is a risk, for instance, that changes made to a design would need to be put before the relevant regulator – such as the building safety regulator in respect of buildings in the UK – for re-approval, where the virtual design has previously been subject to the regulator’s review and approval processes.
If changes in design mean consequential changes being required to the scope of works for other suppliers working from the same model, then this can also have a time and cost impact for the developer.
There is an enhanced need for a robust change control culture in the construction phase when using BIM. Change should be avoided, unless strictly necessary and justified. In some cases, this cultural change might all be done through education and client governance rather than contract drafting. In other cases, businesses might wish to make provisions in the contract for procedures and steps to be complied with before changes become final.
BIM-related standard drafting has been around for some time, but there is still a need to consider the terms on a case by case basis to make sure they suit the particular BIM solution and account for new, less well-known, contractual issues.
For instance, it is normal in modern uses of BIM to require the provision of additional data on the components within the model. Carbon and safety requirements are good examples. There is sometimes a misconception that data rights will be governed by intellectual property law and associated contractual drafting relating to this. However, data will often not qualify for protection under the IP laws such as those relating to copyright, databases or trade secrets, so contractual rights to data should be stipulated separately.
Construction contracts also often neglect to make provision for cyber and information security risk and liability. Where suppliers will be working on another’s technology systems, inclusion of cyber and information security provisions, setting out the expectations as well as the process for dealing with incidents, is recommended.
Fully-integrated BIM is the first step in the journey towards having better access to data on the built environment. It generates the potential for a myriad of benefits from efficiency and safety through to a reduction in defects. Enabling BIM to be used fully requires a mindset shift. The contracting and procurement strategy needs to take account of BIM from the outset. It is important to ask the right questions and develop a sophisticated understanding of how BIM will be used and supported. A pragmatic understanding of all of the contractual consequences is also required.
A version of this article was first published by Construction Law magazine.