Q&As

"What is the purpose of the Building Energy Efficiency Disclosure Amendment Act? "

Monday August 3, 2015

The below media release is from July 2015 has been provided by Kathryn Walker, Lynch Meyer Lawyers

What is the purpose of the Building Energy Efficiency Disclosure Amendment Act?

In brief:

What is the purpose of the Building Energy Efficiency Disclosure Amendment Act?
The Building Energy Efficiency Disclosure Amendment Act 2015 (Cth) ("BEED Amending Act") commences on 1 July 2015. It is expected to bring about savings by reducing the regulatory burden on businesses.

DOES YOUR PROJECT REQUIRE BIM?

Building Information modelling (BIM) has been described as many things from: a tool to cut down on rework, a program to improve productivity, and a model to assist with clash deletion; to a minefield of liability.  Whatever your view of BIM, it is here to stay.

The National Building Information Modelling Initiative (NBI) Report produced in 2012 forecast that the Australian economy could be better off by as much as $7.6 billion over the next decade by adopting the NBI recommendations for “the focused adoption of building information modelling, and related digital technologies and processes”.  Supporting this forecast, the Productivity Commission Report on public infrastructure released in May 2014 recommended that for complex infrastructure projects, “government clients should provide concept designs using Building Information Modelling (BIM) to help lower bid costs, and require tender designs to be submitted using BIM to reduce overall costs”.

In response to the Productivity Commissions Report, in October last year the Government accepted the BIM recommendations.

DPTI are also developing BIM guidelines for Government agencies, consultants and contractors with early indications being that the use of BIM will be required on all major projects over $10 million.

It seems almost universally accepted that projects which utilise BIM at high levels of development (or detail) (LOD) have benefits including:

  • Early design and performance analysis;
  • Scheduling, critical path analysis and coordination;
  • Project cost estimation and control;
  • Materials and supply chain timing benefits;
  • Energy efficiency, new technology integration and performance and Sustainability;
  • Standards compliance;
  • Facilities maintenance; and
  • Claims analysis

By its nature, BIM is a collaborative process used to create a three dimensional digital model from multiple data sources which can be shared between all stakeholders and maintained across the life of a building. 

It is the collaborative evolving nature of BIM (depending on the LOD) that makes our eyes bulge with ‘what ifs’ and which gives rise to the need for some specific legal considerations which need to be addressed at the start of a project to ensure that the participants in the BIM process maintain their rights and share the responsibilities.

It is important to understand at the outset, that the use of BIM does not change the duty of care you owe on a project.  It does not alter your obligation to perform work to an appropriate standard in accordance with professional standards. What it does do however is introduce new obligations and require a mechanism to be developed for how those new obligations will be managed under the contract.  Arguably it may change the standard of care as that standard is reflected in best/reasonable professional standards.

To date, Australia does not have a standard form BIM contract.  There are no specific BIM protocols and no standard definitions which means that each time you are working on a project which requires BIM, you are likely to be working with different contractual terms and obligations.  This makes a clear working understanding of BIM harder to achieve and makes consistency with subcontractor obligations tricky.

To understand what obligations the use of BIM may require of you the starting point is understanding the LOD specification your contract requires because this will have implications for what you and your subcontractors are required to deliver on the project.  The LOD of the BIM model reflects the model elements of the BIMs at the various stages in the design and construction process.  The LOD determines how much detail is included in the model and the degree to which it can be relied upon.

Generally, LOD can be:

LOD 100

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3D model of overall building massing such as volume, height, location, orientation – conceptual model

LOD 200

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Generalised systems with approximate elements such as quantities, shape, location, size, orientation – design model

LOD 300

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BIM elements are identified as specific assemblies to prepare construction such as documents, size, shape, quantity, location and orientation – construction model

LOD 400

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BIM elements are accurate, specific assemblies as to quantity, size, orientation, shape, location with complete fabrication assembly and detailing information – fabrication model

LOD 500

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BIM elements are constructed elements, actual and accurate – as built model

 

We all know that architects, engineers and designers have multiple working drawings that are never intended to be shared with others.  What is unique about BIM is that those working drawings will now form part of an interactive, multi-use model which will be available from the inception of the project to its conclusion, and well beyond.  How then can you manage that process so that you have some level of comfort about where, how, and by whom your data is being used and manipulated?  How can you maintain a level of control over your intellectual property and your exposure to the mistakes of others?  The answer is to define how BIM will work on your project.  To do that, there are four key areas which should be considered in contractual negotiations for the use of BIM.

Contractual Requirements and Responsibilities

As with any project, understanding your contractual requirements is vital. If you are entering into a contract that requires the use of BIM at some LOD then you need to ensure that you have the capability to comply with the contractual requirements, that any subcontractors used on the project have the ability to produce a BIM model if the head contract requires it, that a clear protocol for the use of BIM is established and that the protocols are accepted by all those contributing to (and drawing on) the model. 

Each project where BIM is being used will require an understanding of what the model requires of you as a contractor.  For example, are you being asked to use BIM for additions or alterations to an existing building?  If so, understanding the uncertainty that will exist around the current state of the building is a must.  Be specific about who is modelling what and how.  This will enable you to make sure you can deliver what you are required to deliver under the contract.

When entering into a contract that requires the use of BIM, make sure that the contract specifically addresses:

  • How BIM will work on the project;
  • Who will establish and be responsible for the BIM protocol;
  • How the individual BIM model elements and the responsibility of the author of those elements is to be managed;
  • What software and hardware will be used for the model;
  • Who will be responsible for inputting data into the model;
  • Who can make changes to the model;
  • How variations will be managed and added to the model;
  • If multiple models are used, which model takes priority;
  • The security protocols for the model;
  • The transmission and ownership of digital data responsibilities;
  • Who is to maintain the integrity of the various versions of the model as the project evolves;
  • What will happen if there are software issues during the project; and
  • Who owns the intellectual property.

As part of managing these considerations the new role of “model manager” should be created and defined.  The model manager ought be responsible for maintaining the integrity of the model and for managing access, security, transmission, backup files, and determining who will input the data, and how.  The model manager should keep a clear audit trail of who inputs what into the model and all versions of the model should be kept so that any errors can be tracked to a point in time.

Following the above processes will ensure that multiple inputs do not corrupt the integrity of the model. 

The collaborative approach of BIM means that related rights and obligations associated with BIM should flow through to all of the contracts and subcontracts on a project to ensure that the same rights and obligations are imposed on all parties providing information for the model.  So make sure you have the right contract terms in your ‘downstream’ contracts with your subcontractors.

Importantly, your contract documents must make it clear that, despite the collaborative nature of BIM, no contractual privity is intended between the participants (i.e. you don’t want to create a contract with, for example, the principal if you are a subcontractor).

Intellectual Property and Copyright

BIM deals with intellectual property rights; as such it is necessary for appropriate approvals and access rights to be granted from and to all parties involved in the BIM model process.  Permission will be needed to use individual parts of the model and approval should be granted for that use in the contractual documentation at the start of the project.

In circumstances where clients are requesting that the model be handed over at the end of the project, protecting your intellectual property for the life of the project – and beyond – becomes an important consideration.

You should consider:

  • Who holds the intellectual property rights and how, and on what basis, they will be shared or used in future;
  • Ensure you are retaining ownership for your element of the BIM model;
  • If you are able to transfer information/data down to the subsequent user;
  • Whether licences are required and if so, what those licences are and on what basis they might be suspended or terminated;
  • By whom and how will confidential data be managed;
  • How joint authorship of data/IP will be managed;
  • What happens at handover, how will the consent of all joint owners of the intellectual property be given to enable the model to be provided to (and used by) the owners; and
  • What impact moral rights might have on future use of the any copyright.

Liability and Indemnities

Looking at the way BIM works, liability apportionment and indemnities in respect of design errors or data input errors need to be clearly defined.  Establishing the extent to which participants can rely on each other’s contribution, how the quality of contributions will be verified, and excluding responsibility for checking others’ contributions, needs to be clearly spelt out.

Your contract should address:

  • Where a liability starts and where it ends;
  • That each party is responsible only for the data they provide and for any errors in that data;
  • An express exclusion that the model manager is not responsible for checking the entries of other parties or for verifying the specification material provided by the various manufacturers;
  • Indemnities in respect of, and statements of use, for future owners;
  • The status of third party rights and that BIM is not intended to create any contractual relationship with third party beneficiaries;
  • Indemnities from all parties in respect of any third party intellectual property disputes;
  • Releases and indemnities for modifications to the handover version of the model;
  • Clearly defined parameters for extension of time claims where one participant delays the BIM process (and hence the project); and
  • Strictly defined liquidated damages provisions for each participant.

Insurance Implications and Requirements

Once you have defined the scope of work and roles of the participants it is important that you ensure that your insurance policy covers you for the use of BIM.  While BIM is not intended to alter the usual standard of care to be imposed by the various contractors on a site you should check if your insurance covers the use of BIM and that it does not expressly exclude its use.  Remembering that BIM is intended to be collaborative, ask your insurer questions like:

  • Does the policy allow for collaboration of contractors?
  • Can there be more than one insured?
  • Are you covered for the mistakes of others and/or data errors in the model?
  • Is third party reliance on the BIM data covered?
  • Do you require increased cover for consequential (indirect) loss?
  • Will the insurer consider the work to be design, and if so, are you covered for design (usually this requires cover for professional indemnity)?
  • Are you covered for the input of data into the model?
  • Are risk allocation and indemnity clauses allowed under the policy?

For all the complexities in the definition of BIM, its operation overseas at the highest LOD has not resulted in a flood of litigation and the cases that have emerged have centred around communication and payment claims.  BIM has the potential to provide better outcomes through collaboration, provide greater predictability and reduce delays, safety risks and variations. 

If you take the time to clearly define how BIM will work on your project, protect your intellectual property and limit your exposure, the use of BIM will be an asset to your project.

Kathryn Walker, Partner, Lynch Meyer Lawyers

Direct: 08 8236 7632

Email: kwalker@lynchmeyer.com.au

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