Contractual Risks and Other Legal Considerations When Using Building Information Modeling Technology

by: Harry “Zack” Rippeon III

Technological advancements are playing a crucial role in the development of virtual jobsites, transforming and streamlining a project’s management and construction with the help of smart devices and wireless services.  Current programs offer the ability to design, procure, schedule, clarify, approve and pay for projects without the need for bulky rolls of blueprints and cabinets of project files.  One such technology, Building Information Modeling (BIM), allows for a collaborative effort in the design and construction of interrelated systems and details.  The rapid advancement and introduction of these new technologies have outpaced the important legal considerations that construction professionals should take into account when using the BIM system.

During the construction phase, BIM is most often incorporated in the production, submission and approval of “coordinated” shop drawings.   As the technology has progressed, however, many preconstruction activities are implementing the various modeling techniques as early as project design and bidding.  This allows each aspect of the project design to be loaded into a model to identify any conflicts among the various elements and resolve issues before being encountered in the field.  Depending on a party’s role in the project, this carries additional risk.

For instance, the architect and/or engineers involved in the design will surely seek to protect their ownership rights in relation to the BIM model.  Likewise, the project owner and any participating contractors will want to “own” any data they contribute to the model.  If one party patents a new BIM methodology, the question arises as to whether all other participants would then need to purchase a separate license in order to participate.  Standard form contract documents, such as ConsensusDocs 301 and the AIA E-202, have been created in an effort to outline the roles, rights and obligations of each party with respect to creating and updating any BIM models.  These should be carefully reviewed if incorporated into your contract to ensure that the ownership provisions mirror the parties’ intent.

Another major concern to be addressed when BIM models are utilized is the potential liability for errors, whether in the model itself or in the application of the model.  For instance, if a contractor has the ability to run “clash detection” on the architect or engineer’s model prior to bidding or construction, can that contractor later charge for a conflict in the field?  From the contractor’s standpoint, clear contract language should be incorporated to ensure that any preliminary review abilities do not constitute an obligation to correct design errors.  Similarly, if a group of contractors participate in developing and updating a BIM model with the design team and a conflict later arises, which party bears the liability for that conflict?

On many construction projects, contractors have no direct contractual relationship with members of the design team. When contract claims are asserted by a contractor related to the project design (separate and apart from simple negligence claims), architects and engineers are traditionally successful in defending against such claims based on that lack of contractual privity.  When all parties have collaborated in creating and updating a common BIM model, the design professional may have more difficulty in escaping contract liability.

Another legal principle, known as the Spearin doctrine, may also have some applicability to BIM modeling.  The Spearin doctrine is, in summary, the principle that a contractor can rely on the construction documents provided by the owner and design team to be accurate and complete such that the project can be adequately constructed.  Failure to provide adequate and accurate drawings and specifications can lead to design liability.  When the contractor has participated in developing those plans or specifications in a BIM model, similar to a design-build arrangement, liability under the Spearin doctrine is more difficult to prove.

Development of, and participation in, BIM modeling can provide a variety of opportunities for contractors to more efficiently complete their scope of work; however, it also poses unique risks when conflicts arise.  To some degree the use of BIM transforms every project into a design-build contract structure.  Contractors participating in a BIM model may be required to carry additional insurance policies, specifically a professional liability or design policy, as standard general liability policies typically exclude coverage for design-related damages.

It is equally critical to identify how subsequent changes to the BIM model are to be handled once it has been approved and construction has begun.  Similarly, any effects that the creation of the BIM model has on the overall project schedule should be considered.  For example, where does the model development fall on the schedule and what logic relationships are dependent?  Should one party/individual be responsible to manage the independent BIM efforts?

Preliminary contract review should focus on the type and amount of risk being assumed and how to effectively shift that risk to other parties.  With respect to BIM, it may be advantageous to outsource the requisite in-house engineering for a particular scope of work.  At a minimum, the contract should include some limitation of potential liability which may arise from participation in a BIM model.  Regardless of what role your company plays on the project, if BIM or other new technologies are incorporated, be sure to undertake a thorough review of the associated contract language and understand the potential risks.

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