It is not entirely clear how the BIM protocol is supposed to be passed down the supply chain, raising important questions about who owns what risk
It is easy to think of the Construction Industry Council’s BIM protocol as something that just slots into main contracts between employers and contractors. It is important to remember, however, that the BIM protocol is intended to be employed by everybody involved in the use, production or delivery of the project BIM models. Clause 3.1.1 requires the employer to arrange for a protocol in “substantially the same terms” as the protocol in the main contract to be incorporated into all the contracts it enters into. Clause 4.1.3, meanwhile, states that project team members should arrange for the protocol to be incorporated into any subcontracts they enter into “to the extent required to enable the project team member to comply with the protocol”.
In practice, however, an employer will not enter into direct agreements with all of the parties that will have an input into the models used on the project. Such arrangements are usually made between the contractor and its subcontractors. Consequently, the protocol is going to be incorporated, wholly or partly, into the supply chain agreements. How will it work in this context?
The first thing to remember is the amount of negotiation over contract terms that takes place in the supply chain. The transfer of risk down the chain is common practice. This is relevant to the protocol because on at least one occasion (clause 4.1.1) it makes express reference to the level of skill and care “required under the agreement”. This is in relation to the production of models to the relevant level of detail specified in the model production and delivery table.
If the employer is not prepared to agree to the residual risk, it may seek to negotiate a change and pass it back to the contractor
In the context of the supply chain it is not clear what “the agreement” might mean - it is defined in the protocol as the agreement between the employer and the project team member to which the protocol is attached. As mentioned above, however, the employer will not enter into direct agreements with most of those involved in the design, so in this case presumably “employer” actually means the contractor or subcontractor that has a contract with the next party down the supply chain.
Are there likely to be amendments to the protocol itself? For example, as mentioned above, clause 4.1.1 expressly refers to the level of skill and care required under the agreement when a project team member is producing the specified models. However, clause 4.1.2 refers to an obligation to “use reasonable endeavours” when a team member is delivering the specified models, using the project team models and complying with information requirements. This could in fact be a different level of skill and care to that required under clause 4.1.1. I can see this being the subject of some argument if a dispute arises about the project team member’s obligations.
In addition, under clause 5, the project team member does not warrant, expressly or by implication, the integrity of any electronic data delivered in accordance with the protocol. Nor does it have liability to the employer in connection with any corruption or unintended amendment or alteration of the data in a specified model that occurs after it has been transmitted by the project team member (unless that arises as a result of the member’s failure to comply with the protocol). Accordingly, residual liability for the integrity of the electronic data rests with the employer. Again, assuming
for the moment that this document is replicated down the supply chain, ultimate residual liability will pass back up the supply chain to the original employer.
Is this a risk that employers will be prepared to accept? Other protocols locate such residual risks elsewhere: for example, a number of US protocols leave it with the contractor. If the employer is not prepared to agree to this residual risk, it may seek to negotiate a change and pass it back to the contractor. Will we find it making its way back down the supply chain?
I am not setting out simply to criticise the way the protocol is drafted. It is easy enough to appraise from a distance and far harder to draft something from scratch, and indeed a number of these observations could apply to any supply chain contractual arrangement. It is, however, worth bearing in mind that the protocol will be used primarily in a supply chain context and that it would be unwise to assume that such issues will not arise. Sadly, things are never that simple.
Simon Lewis is a partner in the construction and engineering team at Bond Dickinson