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Building Virtually for Eternity: Contractual Considerations for the BIM Environment

Lee Baker, HKA

A key challenge is to provide a robust contractual structure that supports the Building Information Modelling (BIM) environment without adverse implications to established principles of entitlement. That structure does not yet exist.

Lee Baker

Divine intellect

Less than a kilometre from my childhood home stands a monument to “divine intellect”. A feat of engineering and mathematical brilliance, an accomplishment so great it is even said to have started the Renaissance: Brunelleschi’s dome over Florence Cathedral (Santa Maria Del Fiore), in Italy.

Nearly 700 years after it was completed, the dome’s construction remains a relevant example for projects implementing building information modelling (BIM).

Construction technology and terminology may have developed, but Brunelleschi would be very familiar with the key BIM concepts of 3D modelling and collaborative working. If these concepts are to enjoy their own renaissance, what lessons do Florence and Brunelleschi teach us and are we learning them?

Procurement in the 15th century

The cathedral’s construction started in 1296, yet by the time the nave was completed in 1380, there was still no viable engineering solution to construct the dome. In 1418, the cathedral’s patrons sought a contractor to design and build the dome.

The project was procured using what modern practice would identify as a two-stage approach. Participants were pre-qualified for technical competency and track record. Those shortlisted then entered into a period of paid design development. Over several iterations the design and requirements were developed and incorporated into a series of 3D models. The contractor, in this case Brunelleschi, was then selected from the final design solutions presented.

Through early contractor involvement, the cathedral’s patrons secured a workable design solution and a contractor with sufficient project knowledge to realise the dome’s construction.

3D design solutions

The 3D models produced in the pre-construction phase were more than just architectural representations: they were engineering solutions. Brunelleschi’s models included the innovative inner-dome and skeletal structure that made the dome’s construction possible. More remarkable is how little the actual structure changed from the pre-construction wooden models. This is a 15th century demonstration of how early contractor design engagement and 3D modelling reduced change and promoted efficient construction. Therein lies the benefit of collaborative BIM: build it multiple times virtually, but only once physically.

Today’s construction industry is inefficient. A 2013 study suggested that 98 per cent of all megaprojects (that is, projects worth several billion US dollars) suffered delay, with an average increase in cost of 80 per cent. To promote efficiency, modern construction is turning to BIM and the concepts of 3D modelling and collaboration.

The Renaissance was more than the rediscovery of antiquity and humanism. Rather than copy the Pantheon’s dome, Brunelleschi studied it then used that learning to surpass it. Likewise, BIM must be more than a 3D representation; it needs to be intelligent. In the words of the NBS’ 2011 Building Information Modelling Report, it must be “a rich information model, consisting of potentially multiple data sources, elements of which can be shared across all stakeholders and be maintained across the life of a building from inception to recycling (cradle to cradle)”.

Collaboration

BIM is collaborative. According to David-John Gibbs et al, in “Building Information Modelling” (Construction Law Journal, 2015), it involves “a collaborative culture; external and internal trust and mutuality; technology and tools; process and integration; and, strategic planning’.

Identifying the link between collaboration and delivery is not new. Early Renaissance Florence was a republic governed by an uneasy coalition between the city’s old aristocratic families and competing artisan guilds, who rose to prominence at the end of the 14th century. The rivalry between the city’s artisan guilds became such a problem that in 1426, a collaboration agreement was deemed necessary. This obliged the oath takers to “forgive injuries, lay down all hatred, entirely free themselves of any faction and bias, and to attend only to the good and the honour and the greatness of the Republic, forgetting all offences received to this day through passions of party or faction or for any other reason.” If indeed it started, this collaboration did not last. Even his obsequious biographer, Giorgio Vasari, would concede that Brunelleschi was anything but cooperative. A notoriously unpleasant character, he refused to provide plans or drawings, stating: “To disclose too much of one’s own inventions and achievements is one and the same thing as to give up the fruit of one’s ingenuity”. Divisively, he would take ill during difficult parts of the build, leaving his rival, Lorenzo Ghiberti, to supervise the works. Days later he would return to site to condemn then demolish Ghiberti’s work.

Brunelleschi highlights that an agreement to collaborate will not survive without appetite or compulsion. It must either be a cultural norm or applied through the parties’ contractual mechanisms. Even when customary, it cannot overarch entitlement to compensation for changes or delays.

The “fission” design effect

Collaborative design development requires careful management and, if poorly executed, can substantially delay a project. This was observed on a project where the 3D design model took over five years to complete.

The project was let on a design-and-build basis. The contractor was to develop the design using a collaborative 3D design process. As was usual for this type of project, the contractor procured various specialist subcontractors, who were also to develop their design using a 3D modelling process. Given its design liability, the contractor controlled all design information, limiting collaboration between the subcontractors.

The result was a “fission” design effect, where a change instigated by one subcontractor caused a chain reaction of change that was difficult to control. For example, a change made by the mechanical and electrical (M&E) subcontractor required the steel subcontractor to revise its design. The modified steel design caused the façade subcontractor to modify its design, which affected the drainage. This requirement was accommodated by the drainage consultant, but required further changes to the M&E design, which restarted the whole cycle.

Contract implementation of BIM collaboration

BIM implementation requires a robust contractual basis to manage collaboration and its associated risks.

BIM is claimed to have been used for over 15 years, yet the standard forms of construction contracts offer little or no express terms for its implementation or for collaborative working. Rather than provide that robust contractual structure for the parties to manage BIM risk, publishers such as the Joint Contracts Tribunal, the New Engineering Contract and he International Federation of Consulting Engineers provide for the introduction and parties’ adoption of a BIM protocol – the most widely known being the 2013 UK government-sponsored Construction Industry Council’s BIM Protocol (the CIC BIM Protocol) and the 2008 American Institute of Architects BIM Exhibit.

These protocols are intended to be contractual documents, with some taking prority over the standard terms. As well as giving rise to potential interpretive difficulties, BIM protocols can simply be incompatible, with potentially significant effects.

This absence of congruity arises for three main reasons. Firstly, the protocols are not comprehensive. Their main conditions are restricted to a limited number of model development and liability issues, for example:

the level of detail to be adopted within the model;

file formats and electronic exchange;

use of the models; and

the parties’ liability in respect of the models.

Secondly, the protocols are more consistent with design and consultancy contracts. The CIC BIM Protocol is expressly intended to be incorporated in agreements between the employer and project team member (defined in clause 1.1.15 of the CIC BIM Protocol as “the person appointed by the Employer pursuant to the Agreement”). The Protocol’s guidelines also advise that it “adopts many of the core principles used in the preparation of the CIC Consultant Appointment and Schedule of Services”.

Thirdly, protocols introduce procedures for model approval and information exchange. No further guidance is provided and the parties are required to develop these themselves. Given the Protocol’s priority, if these procedures take precedence over the contract terms, there is a significant risk that the parties override the contract’s mechanisms. Particularly vulnerable is the variation mechanism and the contractor’s entitlement to be compensated for change.

Entitlement and the variation mechanism

Change is foreseeable in construction projects and contractual provision is made to accommodate it.

A contractor may not vary the works unless required by a competent instruction or acceptance of its variation proposal. Authority to issue that instruction or accept the proposal expressly rests with either the employer or a contract administrator. Contrary to that process, BIM Protocols require the design to be controlled by an information manager, who has no authority under the contract terms to vary the works.

Where a design issued by the information manager varies the works, the BIM Protocol requires the contractor to accordingly modify its own design. That change in design may significantly vary and increase the works’ scope. Given that the Protocol is a contract document, the contractor will be in breach of contract if it fails to vary its design accordingly.

What will concern the contractor more is that this change cannot be a competent variation instruction, as the information manager lacks such authority. As a consequence, the contractor will struggle to establish an entitlement under the contract to be compensated for that variation, and to extend the time for completion – against which liquidated damages may apply.

The same results can occur when a variant design is openly shared by collaborative partners, operating outside of a contractual relationship with each other. Consider variant design information issued directly from an employer’s earthwork contractor to the contractor’s piling subcontractor. The BIM Protocol compels the subcontractor to modify its design, without that being a valid variation under either the contract or the sub-contract.

For a contractor, the commercial risk associated with improper BIM implementation, on top of the capital investment needed to deliver it, should be of great concern.

An obvious answer would be to authorise the information manager to be able to instruct variations, either expressly or by having the contract administrator undertake that role. However, that single-point design flow contradicts BIM’s collaborative ethos, potentially leading to the “fission” design effect discussed earlier.

Two-stage procurement process

Until the standard forms of contract include express terms for BIM implementation, parties wishing to realise the benefits of BIM must either develop bespoke contractual terms or rely on BIM protocols. Neither option is without significant difficulty, given BIM’s complexity and the incompatibility of protocols with standard forms of contract.

A potential solution exists in the two-stage approach used to procure Brunelleschi’s dome. The first stage is a collaborative design development using the BIM Protocol to support a consultancy contract. The resultant finalised BIM environment forms the works for the second stage, using a standard form of contract.

This two-stage approach is supported by the results from the UK government’s BIM trial project, the Cookham Wood Young Offenders’ Institution. This project achieved a 20 per cent cost saving, resulting from early contractor involvement. It is unclear what savings, if any, were attributed directly to BIM.

To split design and construction into separate phases is not universally welcomed. As Sir Michael Latham noted, “the tradition of separation of design and construction has long been a source of controversy”. For employers, two-stage procurement requires greater upfront capital investment and extends the project’s overall conception-to-delivery period.

Expedited project delivery still relies on design being produced “just in time” to allow the ongoing construction work to continue. The inherent risk with this strategy is that design changes cause significantly greater cost and time implications. It was hoped that BIM would directly address this risk by minimising the number and scale of design changes. This would result in expedited project delivery at a reduced cost. The reality is that those benefits are predicated on upfront investment, where BIM can be used to promote collaborative design development without impinging on the contractor’s entitlements.

BIM will, in time, provide significant benefits to the construction industry. Realising this will be challenging; as the Renaissance philosopher Niccolò Machiavelli wrote in The Prince, “There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.”

A key challenge is to provide a robust contractual structure that supports the BIM environment without adverse implications to established principles of entitlement. That structure does not yet exist. Standard forms of contract favour the use of a protocol, which in turn defers to the parties’ own procedures. Without proper guidance these procedures will likely lead to difficulties and disputes. In that event, the construction industry’s willingness to adopt BIM will dissipate and the benefits will be lost, perhaps until a new renaissance.

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