In Jon Broome's view, use of the BIM Protocol is a contractual car crash waiting to happen, whether used with JCT or the NEC3 forms. In this comprehensive blog, Jon outlines the BIM Protocols deficiencies and, when working at BIM Level 2, what and where to include relevant contracts terms under the NEC3 forms and detail a sensible contract strategy for BIM level 3.
The BIM initials stand for ‘Building Information Modelling’. The BIM Protocol is a published set of contractual terms to add on to a standard form of construction contract.
- give a layman’s overview of what BIM is;
- review the BIM Protocol’s ‘fitness for purpose’ as a contractual document, in particular as additional conditions of contract when used with members of the NEC3 family;
- when working at BIM Level 2, give constructive direction on what terms to use and where to locate them in the contractual documents under NEC3; and
- if working at BIM Level 3, suggest a simpler alternative contract strategy to those suggested in the literature.
This paper was sponsored by MPS who operate the cloud based CCM contract management system for use with the NEC3 forms of contract.
Why NEC3, BIM & the BIM Protocol?
As someone who is fairly knowledgeable on the NEC and contracts & procurement generally, I was asked by MPS how NEC is affected by BIM, which I knew very little about. This was because they in turn were being asked by their clients how BIM affected the operation of the NEC3 family of contracts and the use of their system. To answer this, I had to do some reading and thinking, which have led me to some conclusions and recommendations which go against conventional wisdom.
An outsider’s view on BIM
There are various levels of BIM.
BIM Level 2 (BIM2) is where design information on a potential building or asset is shared through a common file format, which enables any contributing organisation to combine that data with their own to develop a 3 dimensional model (a federated BIM model) which avoids clashes with other services, structures etc.
However, in the meantime, another organisation might have used that space, so when these federated models are dropped into the central model at the end of a ‘Stage’, the IT system identifies any clashes and they are resolved by the participants. The next Stage then goes down a level of detail and the process is repeated.
It should therefore result in a physical asset being able to be built without these clashes being reactively resolved as the asset is being constructed. This should lead to better solutions, less change and hence fewer delays and additional costs, as well as a better all-round asset due to the ability to visualise prior to construction.
Achieving BIM Level 2 has been set as a minimum target by the UK government for all public-sector work by 2016.
BIM Level 3 is where the same IT system is used by all participants at the same time, so the resolution of any clashes is done in ‘real time’. This compares with BIM Level 2, where clashes are identified when the federated models are brought together. The current UK government’s target date for public-sector working at BIM Level 3 is 2019.
Confusingly - to me initially at any rate - you have the different dimensions: BIM 3D is in 3 dimensions. BIM Level 4 or BIM 4D is where BIM data is used to analyse time; after this comes ‘5D’ which includes cost management, and ‘6D’ for facilities management (FM) purposes. It almost goes without saying that, a bit like the NEC3, BIM requires collaboration to work effectively, but also pushes to people to work collaboratively.
This article only considers the contractual impact of BIM Level’s 2 and 3.
For a general understanding of BIM, go to : https://www.youtube.com/watch?v=MMMbPpCHfhI
For a more detailed understanding of the different levels go to : http://www.thenbs.com/topics/bim/articles/bim-levels-explained.asp
Having got an initial understanding of what BIM is, I started thinking about the contractual issues - only to find that most are encapsulated in the ‘BIM Protocol’ , which can easily be found by searching on-line. When analysing this, I was also thinking about how it interacted with the existing NEC3 contract documents.
- The Employer’s and Each Project Team Members contribution, including the level of detail required (think RIBA stages); when they are to provide it by and what electronic format they are to do it in. This is covered in detail in the ‘Information Requirements’ which sets “out the way in which Models shall be produced, delivered and used on the Project, including any processes, protocols and procedures referred to therein”. In NEC speak, this is the Scope (in the professional services contracts) or Works Information (in the engineering and construction contracts), except it is not because the ‘Information Requirements’ would be an additional contract document! The relationship between the Information Requirements documents and other contract documents, whether for NEC3 or JCT, is not described in the BIM Protocol.
- What has to be done and when is summarised in the ‘Model Production and Delivery Table’ which specifies the subject matter of each Model, who is to produce and deliver each part of a Model at each Stage and the Level of Detail for each Model at each Stage. This originates from the Employer and, like the Information Requirement, it is unstated how it relates to not just the Scope or Works Information documents, but also any entries in the Contract Data i.e. Key Dates or sectional Completion Dates.
- It has an ‘Information Manager’ who performs the ‘Information Management Role’ whose role “includes, inter alia, the establishment and management of the processes, protocols and procedures set out in the Information Requirements” . While this is a ‘role’ as opposed to a full-time job, how this role is related to that of the Project Manager in the ECC, the Contractor under a Design and Build arrangement, the Employer’s Agent in the Professional Services Contract or, for that matter, Architect under JCT is not defined but, for me, there is a very real danger of there being two or even three masters.
- Both existing background Intellectual Property (IP) and that created for the project (foreground IP) remains with the ‘Project Team Member’ who created it, but they grant the Employer and other Project Team Members a licence to use their material for the ‘Permitted Purpose’. The Permitted Purpose is essentially the design, construction and maintenance of the asset, but not any extension or addition to it. For design and build contracts, this provides clarity as, in my opinion, the words used in the Engineering and Construction Contract – and subcontract – are deficient in this respect. However, ignoring legal nuances, it is essentially the same position as set out in both the Professional Services Contract and Professional Services Short Contract.
- Lastly liability is covered.
- Liability for corruption of data. Here the BIM Protocol is very explicit with a Project Team Member not warranting “expressly or impliedly, the integrity of any electronic data delivered in accordance with this Protocol” and has “no liability to the Employer in connection with any corruption or any unintended amendment, modification or alteration of the electronic data” after it has been transmitted, except where it is due to not following the Protocol.
- The content of what they produce. Project Team Members are liable for what they have produced, but have no subsequent liability if it is modified by the Employer or another Project Team Member (which can only be done by written permission or as stated in the Information Requirements). While this provides very clear cut risk allocation, it means that if poor initial work is done by one Project Team Member – which may include late or incomplete design - which needs to modified or developed by another in order to expedite the works, then the original party has no liability for it. There is a danger that a ‘no blame’ collaborative environment (which I think they are trying to create) becomes a ‘no liability’ and hence ‘no responsibility’ culture. For example, a party does poor design which needs modifying, but they refuse to modify it, so another party has to modify it and hence the original party is absolved of liability.
- how change is dealt with? While it is an obligation of the Employer to “review and update” the Information Requirements and the Model Production and Delivery Table at each Stage, this falls a long way short of being able to “change” it as, for example, the Project Manager can do with the Works Information.
- what happens if there is clash between two Federated Models when they are brought together and it is not due to either party’s fault i.e. there is overlap in the party’s contribution? One or both parties will then need to do remedial work and it is not covered how this is paid for;
- what happens if the Employer or another designer is late in delivering something to the date stated in the Model Production and Delivery Table?
While this is very worthwhile, I have to ask, why do you need special contract conditions to put BIM Level 2 into practice?
- In the document titled ‘How to use BIM with NEC3’ , NEC3’s publisher indicate in a very toned down way their agreement by stating “care needs to be taken that the terms used in the protocol are compatible with the terms in the NEC3 contract being used. Examples of this include ‘Project Team member’, who would be the ‘Contractor’ or ‘Consultant’.” Despite this, they then give specific contractual words incorporating the BIM Protocol into the contract ‘option Z: additional conditions of contract’ and ‘Works Information’ clauses, whilst not changing the terminology !
- Koko Udom, NBS Contracts & Law Manager, wrote an article titled ‘BIM: mapping out the legal issues’  and stated “in practice the legal terms of the BIM protocol may conflict with the clauses of the principal contract” going on to give an example under JCT.
- Two lawyers, Green  and Winfield , go further with the latter stating that the NEC3 Guidelines have “very limited amendments to the NEC3 contracts themselves. It has not addressed the consequential impact of these limited amendments”.
So the answer to the heading is a quite definitive ‘NO’!
Instead, use the points covered in the BIM Protocol as a checklist, but alter terminology to match that in the relevant contract and
- Put what would be in the Information Requirements in the Scope or Works Information documents;
- Likewise, develop a table summarising what has to be delivered by whom and by when in the Scope or Works Information documents. You may also require the lead Consultant or Contractor (under a design & build arrangement) to update this as part of the programming submission.
- Do NOT have an Information Manager as a separate contractually defined person. If you are going to have someone dedicated to this role, have them as a delegate of the Employer’s Agent under the Professional Services Contract or, if it is the consultant, specify it in the Scope. Under a Design and Build arrangement, it will be the Contractor who will need to appoint someone to this role. I suggest using the words found in reference 2 are used as a starting point to define this role in the Scope or Works Information.
- Keep the Intellectual Property – or ‘Title’ clauses in NEC3 - as they are in the professional services contracts. On design and build contracts, import the professional service contract wording into the engineering and construction contracts, albeit with slight tweaking to defined terminology, as it is much more succinct and, fairly obviously, written in the same style as the ECC compared with the BIM Protocol’s wording.
- Think about liability:
- are you happy that the Employer takes the risk of data corruption? or
- do you want the very clear cut approach of the BIM Protocol which could lead to a ‘no responsibility’ culture or the fairer, albeit more subjective, approach of the NEC3 contracts which could lead to more legal dispute?
Under BIM Level 3, people do not work on separate parts of the overall Model before they are amalgamated; they work on one integrated model in ‘real time’. For this to work, people have to have a highly collaborative mind-set. Ignoring the contractual aspects for a moment, there is a danger that without good project management rigour, especially in defining the Work Breakdown Structure and subsequent change management, that collaboration becomes anarchy as frequent changes are instigated by technical specialists without full consideration of the impact on others and hence on time and cost.
If we follow this through to the contractual situation, there might well be:
- frequent refinements to one part of the design which, while worthwhile, might mean re-work for other parties’ work; and
- moving boundaries as the scope for each parties contribution flexes on the basis of ‘best person / organisation for the job’.
This has led a number of authors   to postulate that BIM Level 3 will not work in traditional contracting structures and that full-on alliancing commercial arrangements must be adopted. The fundamental characteristic of a contractual project alliance is that the individual commercial objectives of the key participants are aligned to the overall success of the project. I.e. there is an alliance target for the overall cost of the project which is only changed under exceptional circumstances and all of the alliance members get a share of any savings on this. Hence, they are motivated to work together for the best project outcomes which in turn is best for them.
- individual contracts between the Employer and each participant, normally cost-based, and then another contract is added on top which all parties sign and join their fortunes together for the success of the Alliance. It also covers how they will work together, common systems, organisation etc.; or
- one contract is signed by all the key parties which covers both the deliverables of each Party and the commercial terms, how they will work together, common systems, organisation etc. This is the approach taken by the PPC 2000 contract and some consultants have labelled such a model as the ‘pure alliance’ or ‘Australian model’.
If you re-ask the question as “if this is appropriate for the majority of 'contracts' involving an element of design e.g. specialist subcontracts and specialist equipment, in construction?” then the answer, in my opinion, is a very definitive “No”.
Going a stage further, literature from American authors   encourages the use of ‘Integrated Project Teams’ to get the most from using BIM. Integrated Project Teams, in an American context, are vertically integrated organisational and commercial structures similar to Special Purpose Vehicles used in PFI and PPP arrangements. Again, these have major costs in setting up.
But let’s step back and re-visit what we are trying to achieve by using BIM on the majority of projects.
- Isn’t it early or more rapid design certainty?
- And shouldn’t this mean that the parties have longer to plan and/or are able to plan on better more certain information?
- So by the time the project enters the detailed design and construction phases, won’t there be more certainty of scope, greater definition and hence less change?
- Consequently, whether a single fully designed contract or a design and build contract with subcontracts, won’t there be higher certainty in each contract package and the interfaces and interactions between them?
Consequently, as a general statement, I would suggest that if BIM has been done well in the early stages of a project, then the need for an alliance type contractual arrangement disappears. Indeed, the management and administration of detailed design and construction contracts should become significantly easier as there should be much less change.
The level of design done prior to entering into detailed design and construction contracts with a meaningful contract Price – whether a lump sum or a target - would depend on project complexity, timescales, uniqueness etc.
- Establish a pot of money or contingency sum based on an, if anything, generous estimate of likely changes due to clashes which should have been picked up by the collaborative use of BIM.
- This pot is drawn on during the project for any changes which are necessary due a lack of collaboration and effective use of BIM.
- Once all final accounts are agreed, the remaining money is split in pre-agreed proportions amongst participants who have made meaningful design contribution. This includes principal designers, the main Contractor and principal Subcontractors.
Or put another way, something like option ‘X12: Partnering’ of the NEC3 family!
This has Partnering Information which describes how the partners will work together, which could include use of a single BIM system; Key Performance Indicators against which incentives can be set for superior performance; a timetable for delivery by the Partners e.g. an equivalent to the ‘Model Production and Delivery Table’ from the BIM Protocol; and governance arrangements.
- Arguments of who owns Foreground Intellectual Property develop as lines become blurred over who actually developed it. An approach likely to cause little dispute is that it is the Employer who owns the Foreground Intellectual Property (IP), who then grants a licence to those who contributed to its development. Those developing the Foreground IP have to positively identify what they contributed that is novel and if there are two or more claims on the same IP – which might be valid – then this is not a problem unless another parties’ contribution is actively disputed. An alternative approach suggested by Koko Udom 7 is to allocate areas of work to a ‘lead author’. Udom then goes on to state “the right of the original author to accept or reject any addition and be saved from any liability for errors where an addition is made without its consent. Where consent is obtained both joint authors would hold rights to the contribution as well as bear joint and separate liability for its errors.” In my opinion, this is more likely to discourage collaboration as participants will want exclusive rights to the Foreground IP they developed and be more wary of their liability if there are errors, which brings us onto the next point …
- Equally, liabilities for poor design could become blurred due to multiple contributors and frequent changes. The obvious answer here is project insurance whereby there is one insurer for the whole project, with the Employer picking up any excess. Parties could still have liability for outright negligence as insurers do typically exclude this from any cover.
Once again, thanks to MPS, owners of the CCM system for administrating NEC3 contracts, for sponsoring this white paper.
 CIC / BIM Pro, Building Information Modelling (BIM) Protocol: Standard Protocol for use in projects using Building Information Models, first edition, 2013.
 For a more detailed description of this role, go to: http://www.bimtaskgroup.org/wp-content/uploads/2013/02/Outline-Scope-of-Services-for-the-Role-of-Information-Managment.pdf
 The phrase ‘time at large’ describes the situation where there is no date for contractual completion, or where the date for completion has become invalid. The contractor is then no longer bound by the obligation to complete the works by a certain date and would then only have to complete the works in a 'reasonable time’. The Employer is then only entitled to damages if they establish that it was not completed within this ‘reasonable time’. Source: http://www.designingbuildings.co.uk/.
 The literal translation is "as much as he deserved". The google search definition defines it as “a reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated …”. The word ‘reasonable’ can have a multitude of interpretations!
 This has obvious advantages across designers and specialist contractors at the same Tier of the supply chain once contracts have been signed. Less obvious, but very significant are the advantages when inviting tenders under a Design and Build arrangement, whereby the system ensures the Contractor’s pre-contract proposals do not spatially clash with the Employer’s. They still need to be checked to ensure the Contractor is providing the Employer with stated functional and performance requirements though!
 Available at http://codebim.com/wp-content/uploads/2013/06/BIMwithNEC3guide.pdf
 Go to http://www.thenbs.com/topics/bim/articles/bimMappingOutTheLegalIssues.asp . It was posted in February 2012.
 Green R, BIM Update, available at http://www.wragge-law.com/insights/bim-update/ . Posted November 2013.
 Winfield M, Building Information Modelling: the legal frontier – overcoming legal and contractual obstacles, published April 2015 and available (for £3) from www.scl.org.uk .
 See, for example, the presentations from an afternoon conference by Beale & Partners titled “Collaborative Working: BIM and Alliancing Agreements”, at http://www.beale-law.com/uploads/files/beale_and_company/publications/imported/Collaborative-Working-seminar-presentation-materials-low-res-.pdf
 Also, go to an article by Chris Hallam, a partner in Pinsent Masons, at http://www.pinsentmasons.com/en/media/press-releases/2014/governments-bim-target-unachievable-says-pinsent-masons-survey/ where in which he states “Many believe that the 'Alliancing' model – a 'no-fault' based procurement route where parties share in the success or failure of a project - is where the industry should be heading” with respect to getting the best from BIM.
 Ashcraft H W (2008), Building Information Modelling: A Framework for Collaboration, A paper presented to the Society of Construction Law International Conference in London, 6th – 7th October 2009.
 Benedict D. Ilozor and David J. Kelly, Building Information Modeling and Integrated Project Delivery in the Commercial Construction Industry: A Conceptual Study, Journal of Engineering, Project, and Production Management 2012, 2(1), 23-36