building information modeling: a framework for … information modeling is more than a technology....

Published in Construction Lawyer, Volume 28, Number 3, Summer 2008 © 2008 by the American Bar Association. Reproduced with permission. • 1All rights reserved.This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in

an electronic database or retrieval system without the express written consent of the American Bar Association.

HowardW.Ashcraft is apartnerwithHansonBridgett inSanFrancisco,California. He specializes in construction law; specifically, projectformation, contracts, technology, consultation, and litigation/arbitration.

Building information modelingtechnology has arrived and is beingused by designers, contractors, andsuppliers to reduce their costs,increase quality, and, in someinstances, achieve designs that wouldbe impossible without digital designand fabrication. Public1 and privateowners2 now are requiring BIM, and ithas been widely adopted for complexprojects. Studies by Stanford Univer-sity’s Center for Integrated FacilityEngineering report that BIM use hasrisen significantly andwill continue to

rise in the near future.3 And between 2006 and 2007, the number oflicensed seats ofAutodesk’s flagship BIM product, Revit, doubledfrom 100,000 to 200,000.4 Moreover, McGraw-Hill estimated that atipping point was reached in spring of 2008 where more teams areusing BIM than exploring it.5 Pilot projects now have been complet-ed where the entire structure was built using CNC6 fabrication drivenfrom the design model.7 As the technical issues of standards8 andinteroperability are addressed, the software capabilities will developfurther. This explosive growth has been supported by preliminarydevelopment of BIM standards9 and of related issues, such as elec-tronic data licensing and file transfer.10 BIM is not tomorrow’s vision;it is today’s reality.

The legal and business structures for building information model-ing, however, lag far behind. BIM’s implications are just being real-ized, and few solutions have been developed. Moreover, liabilityconcerns have led practitioners, and their attorneys, to contractuallywall off the building informationmodel—thus depriving themodel ofits greatest benefits.

Building information modeling is more than a technology.Although it can be used without collaboration, such use only scratch-es the surface. Because the model (or models) is a central informa-tion resource, it leads naturally to intensive communication andinterdependence. Building information models are platforms for col-laboration.

Collaboration, however, is not a construction industry hallmark.Rather, the industry, its practices, and its contract documents assumedefinite and distinct roles and liabilities. The insurance products usedby the construction industry mirror these lines of responsibility andliability. However, collaborative processes, and BIM specifically, fos-ter communication, joint decision making, and interdependence thatblur the distinctions between parties. Technology and business prac-tices are in collision.

BIM also collides with traditional professional responsibility prin-ciples. Although virtually all professional licensing regulationsrequire that designs be prepared by a person “in responsible charge,”much in a collaborative design is not supervised or directed by a sin-gle person or entity.

Change is required and change is coming.11 This article discussesattributes ofBIM that conflictwith traditional notions of responsibilityand proposes alternative business and legal structures that supportusing BIM in a collaborative environment.

Building InformationModeling: Definition and CharacteristicsBuilding information modeling broadly encompasses a series of

technologies that are transforming design and construction. Inessence, BIM uses information rich databases to characterize virtual-ly all relevant aspects of a structure or system. It is qualitatively differ-ent from computer-assisted design and drafting (CADD) because itis not just a depiction, it is a simulation of the facility.

The National Institute of Building Sciences12 defines buildinginformation modeling as follows:

A Building InformationModel, or BIM, utilizes cutting edgedigital technology to establish a computable representationof all the physical and functional characteristics of a facilityand its related project/life-cycle information, and is intendedto be a repository of information for the facilityowner/operator to use and maintain throughout the life-cycleof a facility.13

Several aspects of this definition deserve discussion.Although thedefinition references a building information model, in current prac-tice the design is built from a set of interrelated models that canexchange information between their differing software platforms. It isthis federated set of models that comprise the complete digital infor-mation about the facility and, for the purpose of this definition, are thebuilding information model.

The definition is also interesting for what it omits. It does not high-light three-dimensional modeling, although this is one of themost vis-ible and immediately understood aspects of BIM. This omission isexplained in the phrase “a computable representation of all the physical. . . characteristics of a facility.” The computable representation is asimulation of all physical characteristics such that three-dimensionalviews become just one logical manifestation of the model. In BIM,three-dimensional design is an inherent feature, not an enhancement.Moreover, because it is “computational,” the data can be extracted, ana-lyzed, andmanipulated with appropriate software.

The descriptor “all the physical and functional characteristics”expands BIM beyond earlier three-dimensional design tools. In BIM,the building is not just a three-dimensional picture. Instead, it is a dig-ital simulation of the facility that can be viewed, tested, designed, con-structed, and deconstructed digitally. This promotes iterative designoptimization and the ability to “rehearse” construction before evermoving labor, material, and equipment into the field.

The information maintained in a BIM also differs from the level

Building Information Modeling: A Framework forCollaborationHoward W. Ashcraft

PROJECT MANAGEMENT

Howard W. Ashcraft

and type of informationmaintained by traditional design tools. In tra-ditional CAD, a wall or other elements are an assemblage of linesthat, at most, define the geometric constraints of thewall. In BIM, thewall is an object14 that contains a broad array of information in addi-tion to physical dimensions. Rather than draw lines that describedimensions of a design, designers organize intelligent objects into adesign. Figure 1 is a screen shot from RevitArchitecture 2008 show-ing element properties of a wall type (Exterior: CMU Insulated inthis example), as well as values for the specific instance in the design.

In addition to containing detailed information about the element,the building information model contains information about how theelement relates to the design in general and to other objects.This para-metric architecture allows themodel to adjust to design changeswith-out having to individually adjust every individual element. The CMUwall, in the prior example, “knows” that it is supposed to extend fromthe foundation up to Level 1. If either of those parameters is changed,the height of the wall will automatically adjust tomatch.This increas-es design efficiency and reduces the potential for errors.

Because the BIM is a “computable representation,” every mani-festation of the BIM is automatically current. For example, sectionsor elevations are just different manifestations of the BIM informa-tion. If youmake a change in plan view (and, therefore, to the under-lying BIM data), the elevation and section views that are built fromthe same BIM data will automatically reflect the changes. Withoutany further intervention, schedules, tables, and other related datareflect the updated information. This also increases design efficien-cy and makes it virtually impossible for drawings to be internallyinconsistent.

In addition, the BIM contains data concerning the object attrib-utes that can be extracted into schedules, tables, bills of materials, orother data that can be printed, evaluated, or sent to other programs foranalysis. Again, because the information is based on the centralmodel, and reflects the current design, the potential for error isreduced.

The definition continues by including, as information in the BIM,“and its related life-cycle information.” This indicates that the BIMcontains the functional information necessary to evaluate the opera-tional facility and optimize its performance for efficiency, sustainabil-ity, or other criteria.

Finally, the definition states that the BIM is to be a “repository” ofdata for facility management. The BIM is meant to be a living docu-ment that owners can use to manage their facilities, as well as buildthem. BIM’s potential for facility management perhaps is its mostimportant role, but one that is just beginning to be explored.

How Is BIM Being Used?Single Data Entry; Multiple Uses

Traditional construction practices require the same information tobe used multiple times by multiple organizations. Identical informa-tion is entered into different programs that provide specific solutions,such as structural analysis, code compliance, material quantities, orcost estimates. Every repetition is an opportunity for inconsistencyand error. Moreover, even if information is digitally translated fromone program to another, translation can alter or corrupt the data.Ver-sioning can be a nightmare, even with compatible programs. Draw-ing backgrounds is a recurring example of this problem. Thearchitect’s consultants need to upload and maintain the basic design

backgrounds they receive from the architect. These backgrounds,however, will change as the design develops and each party must takeconsiderable care to ensure that each is working with the latest ver-sions of the basic documents. The contractors and vendors must takethe information provided by the designers, often in paper form, andenter it into their systems. As the design develops, changes in oneparty’s documentsmust be transferred back to the others. Errors beginto creep into the documents because updates are incompletely orincorrectly entered, andwork can bewasted because parties arework-ing from outdated information. Figure 2 shows an example of struc-tural design information in the Revit structural design model and inETABS, a structural analysis program.

By consolidating information into a unified data source, the likeli-hoodof data entry, translation, or versioning errors is greatly decreased.

Design EfficiencyAlthough the greatest efficiencies are obtained when BIM is used

collaboratively, BIM design can aid a traditional design process. BIMsoftware can reduce the cost of preparing 2D drawings in a conven-tional project, especially when designs are changing rapidly.15 Forexample, in Revit®, any change in plan view automatically updatesany section affected by the change. In Tekla Structures, changes indimension or geometry automatically update details and related fea-tures. Moreover, using data-rich elements instead of drawn objectsaccelerates creation of contract drawings.

Consistent Design BasesBIM modeling ensures that all parties working from the model

share the same base. Under current practice, not all participants maybe operating directly from the model. However, if the participants areusing software that is compatiblewith themodel, the base informationcan bemoved, imported, or exported from themodel. Moreover, peri-odic imports into 3D visualization software, such as NavisWorks’sJetstream®, quickly expose inconsistencies.

3DModeling and Conflict ResolutionThe BIM model can render the design in three dimensions and

does not require separate software to explore the model visually.This allows better exploration of space, visualization of light stud-ies, and improved communication and understanding of design con-cepts within the team and with project stakeholders.

Conflict Identification and ResolutionOn complex projects, conflict identification and resolution is an

extraordinarily expensive and difficult task. In many instances,designers do not have the time or budget to fully explore and resolveconflict issues. In other instances, full coordination cannot be accom-plished during the design phase because the contractor later willdesign key systems, such as HVAC or life safety equipment, that arenot reflected in the design drawings. Even in a complete design-bid-build project, construction details and layouts may require informa-tion regarding the actual equipment that will be installed.

This information deficit typically is addressed bywarning the con-tractor that the design is “diagrammatic” and that coordinationwill berequired. Traditionally, the contractor coordinates physical drawingsof different systems by overlaying them on light tables to determineif the various systems actually can be constructed in the allowed

2 • Published in Construction Lawyer, Volume 28, Number 3, Summer 2008 © 2008 by the American Bar Association. Reproduced with permission.All rights reserved.This information or any portion thereof may not be copied or disseminated in any form or by any means or stored inan electronic database or retrieval system without the express written consent of the American Bar Association.

space. Alternatively, drawings for each discipline are merged andprinted as color-coded composite drawings. Conflicts that are identi-fied are brought to the designer’s attention through the request forinformation process, where solutions can be developed and clarifica-tions issued. Light table resolution, however, is inherently a two-dimensional process applied to a three-dimensional problem. It isnotoriously difficult and fraught with error, and thus conflicts are aprimary source of contractor claims.

Building information modeling greatly reduces conflict issues byintegrating all the key systems into themodel. DesignBIM systems candetect internal conflicts, and model viewing systems such as Navis-Works®candetect andhighlight conflicts between themodels andotherinformation imported into the viewer.The solution can then be checkedto ensure that it resolves the problem and to determine if it creates other,unintended, consequences.16 In a complex project, the savings derivedfrom coordination can completely offset themodel’s cost.Take-offs and Estimating

Themodel contains information, or can link to information, neces-sary to generate bills of materials, size and area estimates, productiv-ity, materials cost, and related estimating information. It avoids theprocessing of material take-offs manually, thus reducing error andmisunderstanding. Moreover, the linked cost information evolves instepwith the design changes.The estimating advantages are so signif-icant that some contractors will create models on 2D-designed proj-ects to use the model’s estimating capabilities.

Shop and Fabrication DrawingIn some instances, the models can provide construction details and

fabrication information. This reduces costs by reducing the detailingeffort and increases fabrication accuracy. In addition, because conflictsare resolved through themodel, there is greater confidence that prefab-ricated material will fit when delivered. This allows more construc-tion work to be performed offsite in optimal factory conditions.Subcontractors in the steel and MEP trades regularly use models tofabricate their products.

Visualization ofAlternative Solutions and OptionsBecause it is inherently a 3D process, models are excellent meth-

ods for evaluating alternative approaches. Moreover, the ability toevaluate how changes affect key attributes, such as energy use,enhances themodel’s usefulness as a thinking tool. However, the soft-ware interface can interferewith the creative process. In a study of onesystem, users noted that it was not “sketchy,” and therefore impededthe initial creative process.17 This may lead to using freeform designtools initially, with the results being loaded into the BIM system forrefinement.18

Energy OptimizationBuilding information modeling systems such as Autodesk’s®

Revit® can provide information for energy analysis.They can be usedto evaluate lighting design and options, and, in conjunction with theirmaterial take-off capabilities, they can generate documentation neces-sary for LEED™ certification.19

Constructability Reviews and 4D SimulationsUsing the model, the contractor can visualize the entire structure,

gaining a greater understanding of the challenges involved in its con-

struction. By integrating 4D capabilities, the contractor also can sim-ulate the construction process, which significantly increases the con-tractor’s ability to evaluate and optimize the construction sequence.The interaction between scheduling software and the model also canbe used to evaluate construction delays and errors.

Reduced Fabrication Costs and ErrorsThe ability to use information in the model to directly create fab-

rication drawings avoids a problematic and difficult step in the con-struction process. In a traditional workflow, the fabricators mustreview the plans and specifications, prepare fabrication drawings,compare them to other fabrication and design drawings, have themreviewed by the design team, and eventually release the drawings forfabrication. Errors can occur at any stage. By using the data in themodel, dimensional errors, conflicts, and integration errors can beavoided or significantly reduced. In addition, themodel can be updat-ed with as-built information, allowing accurate fabrication of customcomponents, such as building facades.

Facilities ManagementIf the model is properly maintained during construction, it

becomes a tool that can be used by the owner to manage and operatethe structure or facility. Modifications and upgrades can be evaluatedfor cost-effectiveness. Data contained in the model can be used formanaging remodeling, additions, and maintenance.

Functional SimulationsThe 3D and conflict-checkingmechanisms can be used to simulate

and evaluate emergency response and evacuation. For example, Nav-isWorks®was used at the LettermanDigitalArts Center to assure thatfire response vehicles could navigate the parking structures.20

Building information modeling is the most powerful tool yet con-ceived for integrating design, construction, and management of facil-ities. It allows designers to explore alternative concepts and iterativelyoptimize their designs. Contractors can use themodel to rehearse con-struction, prepare cost data, coordinate drawings, and prepare shopand fabrication drawings. Owners can use the data to manage main-tenance and facility renovation.Together, the parties can use buildinginformation modeling as a basis for collaboration.

Commercial Barriers to Building InformationModelingDespite BIM’s advantages, its adoption faces significant barriers.Discussions of BIM generally focus on the technology.Although

this is a fascinating subject, the key question is howBIMalters currentcommercial models. Rather than view BIM as a technology, it shouldbe analyzed as a project deliverymethod, with new risks, rewards, andrelationships. Unfortunately, new business models have not yet sur-faced and early adopters are left attempting to integrate the new tech-nologies into conventional practices.21

Immediate Benefits Do NotAccrue to the KeyAdopter (Designer)The benefits an owner accrues from BIM are seen easily. Using a

flexible model allows design optimization, fewer construction errors,fewer design coordination issues, and, thus, fewer claims. The owneralso can use the model for management and operation of the facility.Contractors also benefit through less coordination and engineeringeffort and reduced fabrication costs. Quality is increased, cost



decreased, and delivery times shortened.For designers, however, BIM’s economic benefits are less appar-

ent. Properly implemented, BIM design systems do increase efficien-cy by reducing duplicative and potentially inconsistent data entry.Multiple use of consistent data and the ability to quickly exploredesign alternatives also promote efficiency and improved quality.However, unless the designer shares in the economic benefits, theowner, not the designer, reaps the immediate rewards. Yet it is thedesigner, not the owner, who must adopt and invest in the new tech-nology.

The asymmetrical rewards of BIMare a significant practical obsta-cle because design professionals are the linchpins of BIM. Designprofessionals must adopt the technology, install the software, traintheir employees, and champion BIM’s use. They need to restructuretheir workflows and reinvent the design process. If they do not share inthe economic benefits, designers will have little incentive to adoptBIM processes. In fact, because BIM can increase the designer’spotential liability, there is a significant disincentive to adopting BIM.This concern is echoed in comments from theAmerican Institute ofArchitects’ Technology Advisory Group, which stated in a recentmonograph:

We fear there will be a tendency, driven by valid concernsabout liability and insurability, to prevent such use of thearchitect’s design data.We believe this is the wrong answerandwould jeopardize the future of architectural practice asweknow it. If the architecture firm is not willing to deliver thepotential value of the digital building model, the owner willseek delivery methods, probably contractor-led, that willdeliver that value.The role of the architect will be diminished.

We believe, rather, that the architecture firms’ role and com-pensation should be enhanced by these technology develop-ments. Obstacles to a free flow of data among the projectparticipants should be overcome so that the architecture firmcan deliver the full value of its work to the client and berewarded commensurately.22

Although designers should logically benefit from BIM, new busi-ness models have developed slowly. TheAustralian alliance model ispromising because it allocates risks and rewards among all parties. Inthe United States, however, few projects are operating under new par-adigms.

Absence of Standard BIM Contract DocumentsLack of standard contract documents also hinders development of

BIM. Standard contract documents perform four key functions. First,they validate a business model by providing a recommended frame-work for practice. As noted above, a consensus business model forBIM has not emerged. Second, standard documents establish a con-sensus allocation of risks and an integrated relationship between therisks assumed, compensation, dispute resolution, and insurance. Cus-tom agreements, unless crafted by seasoned practitioners, often areunbalanced and overlook key issues. Third, standard documentsreduce the effort involved in documenting the roles and responsibili-ties on a project. Designers want to design structures, not structurecontracts. Finally, crafting custom documents increases the transac-tion costs, and thus reduces the profitability of every transaction.Unfortunately, the current standard contract documents are just begin-


ning to address BIM use.For example, regarding electronic information transfer, theAIA

contract language consists of the following:1.3.2.4 Prior to the Architect providing to the Owner anyInstruments of Service in electronic form or the Owner pro-viding to theArchitect any electronic data for incorporationinto the Instruments of Service, the Owner and theArchitectshall by separate written agreement set forth the specific con-ditions governing the format of such Instruments of Service orelectronic data, including any special limitations or licensesnot otherwise provided in thisAgreement.23

After many years, theAIA introduced the “separate written agree-ments” envisioned by the 1997 documents, theDigital Data LicensingAgreement24 and the Digital Data Protocol Exhibit.25 These docu-ments reflect a major shift from using transfer documents to encap-sulate liability to a more open and balanced approach.26 They do not,however, attempt to address BIM’s many legal implications, andAIADocumentA201-1997, General Conditions of the Contract for Con-struction, does not discuss electronic documents, except to state thatelectronic documents provided by the architect are “instruments ofservice.”27 TheAssociated General Contractors also will address thisarea and it is expected that, by the summer of 2008, theAGCwill havereleased its Building InformationModelingAddendum.However, thecurrent drafts do not pretend they are full-fledged BIM contract doc-uments.28 The contract committees rightly believe that business prac-tices must evolve further before contracts can be drafted to documentthe BIM process.29

Legal Concerns Inherent with BIMThe legal issues associatedwith BIMarise either from the technol-

ogy itself or from the way the technology is used. BIM can be usedsolely to produce better-quality design documents without any intentto share information or to use the more extensive functionality thatBIM allows. Used in this limited fashion, BIM is simply CAD onsteroids. However, BIM also can serve as a collaborative framework.Used in this fashion, BIM serves as a catalyst to change the relation-ships between the parties and eventually the fabric of their agree-ments. Collaboration through BIM is a profound change that createsgreat opportunities, but it also creates new issues that need to beaddressed and resolved.

Data Translation/InteroperabilityAs noted previously, there rarely will be a single BIM on a com-

plex project. The architect may have its design model, the structuralengineer its analysismodel, the contractor its constructionmodel, andthe fabricator its shop drawing or fabrication model. In theory, thesemodels will communicate seamlessly. However, under current tech-nology, this is an aspiration, not a reality.

In current practice, there are differences in capability betweenBIMsoftware. Informationmust be translated ormust fit into the standardsfor IFC classes.Translators may not transfer all information from onemodel to another. In addition, some translators cannot “round trip,”i.e., move data from one platform to another and then return it to theoriginal platform after it has been modified or augmented. IFC class-es do not exist for all data types, and there can be data loss if the hostapplication supports functionality not modeled in the IFC class. Thenet result is that differences can be created during translation that

cause model inconsistencies and errors.Software is not perfect, and residual flaws will remain despite

strenuous debugging. Luckily, these bugs are most often annoying,but not harmful. Sometimes, however, that is not the case. InM.A.Mortenson Co., Inc. v. Timberline Software Corp.,30 a contractor’s bidwas $1,950,000 too low because of a software error. In affirming thesoftware vendor’s motion for summary judgment, the WashingtonSupreme Court held that the software warranty contained in theinstruction manual was incorporated into the purchase contract andthat its limitation to the purchase price was valid and not uncon-scionable.31Thus, if errors in BIM software cause economic loss to theuser, the injured party has no realistic remedy. However, the user’sliability to other parties is not similarly limited, causing a liability gapif the errors cause deficiencies in plans or other deliverables.

Data MisuseModels can be created for several uses. However, a perfectly ade-

quatemodelmay cause difficulties if used for a different purpose thanintended. Currency, adequacy, and tolerances are three issues thatneed to be addressed when information in one model is used foranother.

It seems obvious to state that a model needs to be up-to-date. Still,a structural analysismodelmay not need to be absolutely synchronizedwith the architecturalmodel to determinewhether a structure is sound.However, the structural fabricationmodel that can be derived from thestructural model must be synchronized with the architectural modelor dimensional conflicts will exist. Similarly, the detail required in amodel depends upon its intended use. The end user of informationmust understand what information the offered model contains—anddoes not contain. Finally, even if the model is current and adequate,the tolerances required may differ between disciplines. The tolerancesassumed for structural steel, for example, may differ from the toler-ances assumed by a window wall manufacturer. If the tolerances aredifferent, the window wall may not fit when the structural steel isattached. In addition, when performing conflict checking, the modelsmay need to include space aroundmodeled elements to accommodatetolerances or additional material, such as fireproofing.

Intellectual PropertyMany of the intellectual property issues are similar to those that

existed before BIM. However, they are amplified by the amount ofinformation contained in the BIM and its ease of transfer.

At the most fundamental level, who owns the information in theBIM? If the BIM is a collaborative work, then ownership may not bevested in a single party. If ownership issues are significant, theyshould be determined by contract. If information is confidential, thencare must be taken to limit the distribution of information and haveappropriate confidentiality agreements. Confidentiality issues canarise subtlywhen the embedded information is confidential, althoughthe overall design is not inherently confidential. The upshot is thatwho owns the model, who owns information in the model, and whohas access to themodel all should be consideredwhen theBIMproce-dures are developed.

Loss of DataBuilding information models, like all digital data, are susceptible

to data loss. If a party is hosting the information, it must take adequate

steps to protect, and insure, against data loss or face possible liabilityfor the ensuing losses.

Legal Status of the ModelAppendixA to theAmerican Institute of Steel Construction’sMan-

ual of Practice states that the model is the contract document.Although this may be appropriate for steel fabricators and erectors, itis not yet appropriate in all contexts.

As noted previously, current practice uses a series of interlockingBIMs to communicate the design and construction intent for a project.In many instances, the complete design is only visualized whenimported into a viewing program such as NavisWorks JetStream.Moreover, most BIMs do not contain all of the construction detailsrequired for a project.Thus, the contract documentswill include some2D information that is added to the information in the BIM. Finally,many permitting agencies are not yet ready to review digital infor-mation and require traditional submissions. Then there is the peskyproblem of how to stamp the BIM. In practice, these issues are cur-rently resolved by using a printed submission as the contract docu-ment, even if the communication flow has been digital.

If the BIM is not the contract document, what is its legal status?There are several options being followed. The first is that it is a “co-contract document” that is used between the parties but is not submit-ted to permitting agencies. In this case, the contracts need to state howinconsistencies will be handled.Another option is to use the BIM asan “inferential document.” Under this option, the BIM provides visu-alization of the design intent inferable from the contract documents.Finally, the BIM can be used as an “accommodation document” thatcan be used, but not relied upon, by the recipients. This last approachis similar to theCAD transfer liabilitywaivers that designers usewhenproviding CAD documents to contractors. However, limiting relianceundermines the BIM’s utility.

Standard of CareWhen CADwas introduced, it was viewed as a tool for very large

companies and very large projects. Now it is the standard, and, withina few years, BIM will be standard. This will change the standard ofcare with regard to design, especially in complex projects. Physicalconflicts are an obvious example. If we can avoid virtually all conflictsby using a detailed model, we can expect the standard to say that weshould. Resolving conflicts in the field or through postdesign coordi-nation drawings will not be acceptable.

Design DelegationDesign delegation creates issues with licensing and responsible

charge. BIM designs, especially when based on object technologies,can contain embedded information provided by manufacturers andsubcontractors. In addition, some BIM software can react to changesin the model. Structural design software, for example, can changedetails in response to changes in the design. In neither of these caseswill the architect or engineer of record have created the information orprobably have checked the information before it is incorporated inthe model.

A recent case decided in a different context highlights the licensingissue. In Frankfort Digital Servs. v. Kistler,32an individual used bank-ruptcy software to prepare his Chapter 7 bankruptcy. The software,which was not designed by a lawyer, was an “expert system” that pro-



vided advice about filing options and “knew the law” as respects var-ious jurisdictions. A series of adversary proceedings were initiatedagainst the software provider, and using California law, the Ninth Cir-cuit held:

Frankfort’s system touted its offering of legal advice and pro-jected an aura of expertise concerning bankruptcy petitions;and, in that context, it offered personalized—albeit automat-ed—counsel. Cf. Landlords Prof’l Servs., 215 Cal. App. 3dat 1609.We find that because this was the conduct of a non-attorney, it constituted the unauthorized practice of law.33

Design and detailing software also “knows” about the constructionregulations, such as building codes. Moreover, they contain the spe-cialized knowledge of engineering principles that is beyond the ken oflaymen. From a legal perspective, there is little difference betweenFrankfort’s bankruptcy software and advanced BIM tools.

There is a difference in use, however. In most instances, BIMdesign software is used by licensed professionals, rather than a layindividual, as in Frankfort. But this only raises a new issue. In virtu-ally all jurisdictions, the design professionals of record must be in“responsible charge” of the design.34 Responsible charge is generallymet by either performing the work or having the work performedunder the architect’s or engineer’s supervision. In this instance, how-ever, work performed automatically by the software has clearly notbeen supervised by the architect or engineer of record. Moreover, thesoftware or embedded object is probably not prepared by an appro-priately licensed professional. Thus, design work provided by a sub-contractor and embedded in the BIM may, or may not, have beenprepared by a licensed professional.

Architecture and engineering practice will continue to evolve anduse increasingly powerful design tools. However, as the above dis-cussion demonstrates, the legal and regulatory structures have notadjusted to this change in practice.

Information Ownership and PreservationA dynamic model creates challenging issues regarding ownership

and preservation. The model is immensely valuable, but can be frag-ile. Computer software is susceptible to power interruptions, viruses,and physical damage. Although these dangers can be reduced byappropriate backup strategies, there are risks involved with hostingdata, and even small data losses can require significant effort to recov-er or replace. If a failure occurs, what insurance, if any, will respond tothe economic losses?A design firm can purchase “valuable papers”coverage that provides catastrophic loss protection, but this will notnecessarily cover losses to other collaborative users. Coverage underthe designer’s professional liability policy is problematic35 and thedesigner’s commercial general liability policy will not respond topurely economic losses. The difficulty in characterizing and insuringagainst this type of loss underscores the necessity of comprehensiverisk allocation and waivers among all model users.

Data preservation can be challenging as well. We have recentlyseen extraordinary judgments and sanctions levied against corpora-tions that did not appropriately preserve relevant electronic evidence.The duty to preserve evidence ariseswhen litigation can be reasonablyanticipated.36 On a construction project, however, claims are a normalaspect of project closeout, with only some claims proceeding to litiga-tion. Unfortunately, when they arise, claims that are eventuallyresolved by the parties look strikingly similar to claims that result in

litigation.After litigation commences, the likelihood of litigation willlook “reasonably anticipatable” in hindsight.

Even assuming that the design professional could recognizewheninformation needed to be preserved, it is unclear how that should beaccomplished. An advantage of a dynamic model is that it can anddoes evolve. This inherently involves replacing information withnewer information and overwriting or discarding the obsolete data.Although systems can track revisions, they may not be able to accu-rately roll back every change made to the system. Moreover, themodel differs from traditional paper documents (or even electronicword processing files) in that there is no single paper representation ofthe model, and critical information is contained in the relationshipsbetween information. The model, and not its manifestations, needs tobe preserved.

IssuesArising fromHow BIM Is Used—BIM as a Collabora-tive Framework

Our legal systems are essentially individualistic, focusing on indi-vidual rights and responsibilities.We expend great effort to determinewhere the responsibility of one party ends and the responsibility ofanother begins. Many of the most fiercely fought battles in construc-tion law focus on the dividing line between entities.37 Privity of con-tract, the economic loss doctrine, means andmethods, and third-partyreliance are all issues where drawing lines between parties is essentialto determining responsibility and liability. Insurance, because it trackslegal liability, is also focused on individual responsibilities.

In contrast, BIM is essentially collaborative. It is most effectivewhen the key participants are jointly involved in developing and aug-menting the central model. Although roles remain, the transitionsbetween participants are less abrupt and less easily defined. Thus,there is a tension between the need to tightly define responsibilitiesand limit reliance on others and the need to promote collaboration andencourage reliance on information embedded in themodel, regardlessof how it was developed. BIM as a collaborative framework layersadditional issues onto those inherent in the technology.

RiskAllocationUsing BIM substantially alters the relationships between parties

and blends their roles and responsibilities. Our legal framework, how-ever, assumes a less collaborative environment with a clearer delin-eation of responsibility.Aswemove forwardwith BIM projects, riskswill need to be allocated rationally, based on the benefits a party willbe receiving fromBIM, the ability of the party to control the risks, andthe ability to absorb the risks through insurance or other means. Sev-eral key risk allocation issues are discussed below.

Standard of CareDesign professional liability is almost always based on the stan-

dard of care.Tort liability is directly linked to the standard of care andcontracts often reference it as the liability standard. Because roles arechanging, clearly defined standardswill not exist.A key questionwillbe the extent to which the design professional can rely upon informa-tion provided by other participants and, to some extent, by the soft-ware itself. Clearly, the design professional’s agreement shouldexplicitly permit reliancewithout detailed checking of the software orothers’ contributions, but the ability to rely on another’s work may belimited by professional registration statutes and ethics. This may lead


to using risk transfer devices, such as limitations of liability or indem-nity agreements, asmethods to rebalance design professional liability.

Privity and Third-Party RelianceThe extent to which third parties may rely upon a designer’s work

is hotly contested across the United States. Two defenses often inter-posed are that there is a lack of privity and that the designer’s servicesare not for plaintiff ’s benefit. The efficacy of these defenses varieswidely between jurisdictions. However, using a collaborative modellessens the likelihood that the defenses will be successful anywhere.Restatement (Second) of Torts section 552 sets the requirements

for a negligent misrepresentation claim.(1) One who, in the course of his business, profession or

employment, or in any other transaction in which he has apecuniary interest, supplies false information for the guid-ance of others in their business transactions, is subject to lia-bility for pecuniary loss caused to them by their justifiablereliance upon the information, if he fails to exercise reason-able care or competence in obtaining or communicatingthe information.

(2) Except as stated in Subsection (3), the liability statedin Subsection (1) is limited to loss suffered:

(a) by the person or one of a limited group of personsfor whose benefit and guidance he intends to supply theinformation or knows that the recipient intends to supply it;and

(b) through reliance upon it in a transaction that heintends the information to influence or knows that therecipient so intends or in a substantially similar transac-tion.(3) The liability of one who is under a public duty to give

the information extends to loss suffered by any of the class ofpersons for whose benefit the duty is created, in any of thetransactions in which it is intended to protect them.

In a collaborative project, the designer is aware that other partiesare relying on the model’s accuracy. It is a short step from foresee-ability to knowing that the model is intended to provide informationfor the contractors’ and subcontractors’ benefit. Liability under theRestatement only requires that there be intent to influence and reacha group or class of persons.38 For this reason, contractors and subcon-tractors relying on the model will likely be able to bring an actionagainst the designer for damages caused by negligent errors.

Economic Loss DoctrineThe economic loss doctrine is another hotly contested defense in

construction cases. Simply stated, the doctrine holds that purely eco-nomic losses cannot be recovered through a negligence cause ofaction.39As with the privity and third-party reliance defenses, the util-ity of the defense varies among jurisdictions and is dependent uponspecific facts. Note, however, that the Restatement provision dis-cussed above specifically addresses pecuniary losses.Where the par-ties intend to jointly rely on BIM information, it will be difficult toapply the economic loss damage.

Delegated and Distributed DesignThese liability issues highlight concerns that arise from the distri-

bution and delegation of design.Although design delegation issues

can exist with or without collaborative use of BIM, they are clearlymuch more significant when more parties are involved and areinvolved more deeply. In looking at this issue, it is useful to focus onthree questions that highlight the change between traditional andBIMprocesses: What is the design?Who is the designer? and who is in“responsible charge”?

What Is the Design?The new design processes will be fluid and collaborative. Design

elements such as object properties will be created by vendors or soft-ware manufacturers, not licensed design professionals. The designmay be self-modifying, and to that extent, partially self-designed.Thedesign deliverable may be a computer model or simulation, not paperdrawings, andmay be distributed between computer systems operatedby different participants. The complete design may exist in a spacedefined by the Internet, not plotting paper’s narrow confines. Thedesign will be flexible, but elusive.

Project design needs to be clearly expressed. Contractors need toknow what they are bidding on. They need to be able to comparerevised design elements to earlier versions to determine if there arechanges in scope. Owners need to determine whether they havereceived a project that complies with the design. Inspectors must beable to compare physical construction to an objective design standard.Designers need assurance that their services are complete and, if prob-lems later occur, that their designs can be compared against the con-structed condition. Building officials and inspectors need a definite“something” to review, not a moving target.

The design fluidity allowed by new technologies competes withthe precision required for contract enforcement. Contract definitionsof design should address the following issues:

• The contracts between the parties should define the designdeliverables in content, time, and type of electronicmedia used.

• The contract documents should determine whether incorporat-ed submittals, such as objects provided by vendors, are part ofthe designer’s deliverables and which party takes responsibilityfor incorporation and coordination.

Once a design definition is adopted, it will be important for the par-ties, and particularly the designer, to adhere to the definition duringproject development.40

The design should be preserved in “snapshots” at major designmilestones. In some cases, this may be accomplished by printing andsaving these milestone documents. However, in a multidimensionalelectronic design maintained in a diffused Internet relationship, thetotal design package may not be encompassed by printed documents.It may be possible, however, to temporarily freeze this digital designworld and save it, complete with linked documents and locations onsemipermanent media such as CD-ROMs. Revit®, for example, canpreserve snapshots as “DesignAlternatives.”The definitionmust con-sider the needs of inspectors and building officials to have a stabledocument to review or to compare against the actual construction.

Who Is the Designer?Not only is the concept of “the design” becoming less clear, the

identity of the “designer” is becoming equally vague. In the grandsense, we will always know the designer. The prime design profes-sional will maintain responsibility for systems design, the overall lay-out of design elements, the flow through the structure, and “artistic”



building elements.Most disputes regarding design deficiencies, how-ever, have little to do with these design elements.41 Instead, they arisefrom deficiencies in details, inadequate coordination, deviations insubmittals, excessive changes, and failure to meet budgetary or func-tional program requirements.

In a collaborative setting, the design details that create disputesmaywell be provided by subcontractors or vendors through submittalsor object specifications. To this extent, those subcontractors and ven-dors become the “designer.” The distribution and “hiding” of thedesign process raise several significant questions:

• Howwill the contributions of various “designers” be unwoundto determine responsibility?

• Will parties accessing the shared model be able to legally relyupon the contributions of others? Is privity an issue?

• If the software can communicate between objects and causethem to adjust their properties, does the software become a“designer” as well?

• Do the standards committees that develop interoperability pro-tocols and object specifications become project “designers”?

• What are the responsibilities of these secondary “designers”?• To what extent can the design professional rely upon the prod-

ucts of these “designers”?• If these “designers” do have responsibility, do they have insur-

ance for design risks? Do we need new insurance products bet-ter tailored to collaborative projects?

In the immediate future, owners and building officials will look tothe architect and engineers of record as the project’s designers. But,in a practical sense, these parties cannot check and be responsible forthe work of the many “designers” distributed throughout a collabora-tive design process. Just as tomorrow’s designs will be distributed, soshould design responsibility. In developing contract documents, care-ful thought should be given to integrating appropriate limitations ofliability and waivers.

Who Is in Responsible Charge?The professional registration statutes generally require that a

licensed professional be in “responsible charge” of all work per-formed by a design firm. This work must either be performed orsupervised by the responsible professional. The contract documentsare sealed by the responsible professional to signify compliance withthis requirement and acceptance of this responsibility. If designresponsibility is distributed, however, is this even possible?How can aprofessional supervise design contributions by firms that are notunder the professional’s control? How can a design professionalsupervise changes to structural detailing that are performed by thesoftware itself? In the short run, building officials are likely to acceptsealed drawings without considering what portion of the content hasbeen created under the responsible charge of the signing profession-al. But, in the long run, the professional registration statutes must bemodified to reflect the actual practices, and realities, of digital design.

Intellectual PropertyGiven that the intelligent model is an inherently collaborative

work, to what extent can anyone claim ownership of the intellectualproperty? In select instances, the designer’s intellectual propertyrights have been used to preserve the integrity of the design itself.

More commonly, the intellectual property rights are used to enforcepayment obligations or to prevent reusing the designwithout compen-sation. Because the client will ordinarily have access to themodel as itis being developed, care must be taken to ensure that the intellectualproperty rights are not lost because of the open and collaborativenature of model development.

The model also may contain confidential or trade secret informa-tion. For example, a model for a manufacturing plant may disclosewhat a company is planning to build and the processes it will use. Ifinformation is broadly circulated in a collaborative team, howwill thisinformation be protected legally and practically?

SpearinWarrantiesIn 1918, the U.S. Supreme Court introduced the Spearin doctrine,

which allocated liability for defects that occurred during the construc-tion process.42The Spearin court found that “the onewho provides theplans and specification for a construction project warrants that thoseplans and specifications are free from defect.”43 A contractor thatadheres to the project’s design specifications cannot be held liable fordefects arising from the specifications, and can sue for financial costsaccrued for fixing the defected condition.44 Thus, in the design-bid-build process, an implied warranty exists when the contractor isrequired to use a precise, detailed method in executing the contract.

The Spearin doctrine has had mixed results where the contractorhas participated in preparing the design or the specifications.Whencontracts combine design and performance specifications, the courtsstill have allowed contractors to use an implied warranty theory ifdesign specifications authored by someone else “are defective to thedegree that adherence to them results in an article that fails to satisfya stated performance specification.”45 However, in cases where thecontractor could apprehend the potential for defect, the courts havefound that the contractor assumed the risk of defect, and that noimplied warranty exists.46

Where the contractor contributed pertinent information in design-ing a project, an implied warranty may not exist.47 In Austin Co. v.United States, a contractor entered into a contract to design, manu-facture, test, and deliver an innovative, novel digital data recordingsystem.48 The contract already contained some detailed specificationsas to the method of constructing the system, but the contractor deter-mined that the contract would be impossible to perform using thosespecifications.49 The contractor modified the design, but still wasunable to successfully execute the contract.50 The court denied thecontractor the defense of impossibility, finding that because the con-tractor had integrated his own design into that of the original contract,he warranted his ability to successfully perform those substitutedspecifications.51

Although no cases currently exist that specifically discuss howSpearinwarranties are affected by BIM collaboration, it seems clearfrom analogous cases that extensive contractor and subcontractorinvolvement may sharply curtail implied warranties.

InsuranceIf BIM is used solely to prepare better contract documents, there

are few insurance concerns. However, as a collaborative framework, itdoes create possible issues.

Many professional liability policies have exclusions for “meansand methods” and for joint venture liability. The “means and meth-


ods” exclusions are designed to eliminate coverage for constructionactivities. In a collaborative setting, the designers may assist in devel-oping sequences and construction procedures that at least skirt thisexclusion. Sharing risk and reward, a hallmark of integrated projectdelivery, is also a joint venture characteristic and may lead insurers todeny or limit liability if joint venture liability is alleged.

Contractors also face insurance issues. Most standard commercialgeneral liability policies exclude professional services and do notcover pure economic losses. As contractors become more deeplyembedded in the design process, they must consider whether theyshould obtain contractor’s professional liability coverage. Contractorsalsomust recognize that their standard coverage provides little protec-tion from economic claims based on their negligence.

Hosting data can create additional insurance issues. Essentially,data loss more closely relates to valuable papers coverage than tradi-tional construction coverage. Moreover, if the parties are developingcustom software for others’ use, there are product risks involved thatmay not be covered by their customary policies. The insurance indus-try is aware of these issues and may see a market in providing cover-age for collaborative projects. But currently, the parties must workwith their brokers to ensure that the tasks they are undertaking ontoday’s projects are adequately covered by their policies.

Technical IssuesStandards and Interoperability

In its purest form, a BIM project would use a single data modelfor all purposes. Each participant would access the model, addingcontent that could be accessed immediately by all others. Exploration,analysis, and evaluationwould take placewithin themodelwith infor-mation being exported as contract drawings, fabrication drawings,bills of materials, or other information. Still, there are several reasonswhy this goal is only partially realized.

Not every participant uses the same software, and not all softwareis appropriate for all projects or tasks. Designing a software frame-work that can handle any conceivable project is a daunting task andcan result in an overly complex program. Inmany instances,modelingsoftware was developed to address issues affecting specific trades,such as piping, ductwork, or structural detailing. Not surprisingly,software developed for a specific purpose has advantages when usedfor that specific purpose. Thus, there often are multiple models exist-ing on a single project that are optimized to a specific task. In a recentproject in San Francisco, the subcontractor responsible for a complexstructural steel sunscreen used the designer’s 3D model to establishdesign intent and provide baseline data, but entered the informationinto a second model to generate shop and fabrication drawings.52

While the preference to use familiar software is understandable, usingmultiple models undermines the efficacy of the BIM process.

There are three current approaches to themultiple-model problem.First, BIMmodels are becoming more powerful and capable of han-dling larger portions of the project.Additional software modules canbe added to frameworks to customize the framework for specific uses.Second, standards can be adopted to provide common definitions forthe software emulating specific construction elements and systems.The InternationalAlliance for Interoperability (IAI)53 has developed,and is continuing to develop, standardized descriptions through theIndustry Foundation Classes (IFC) and IFC/xml common model.54

Many of the primary BIM software packages are IFC compatible.

Under the IAI vision, information in any compatible program can besaved as an .ifc file and then opened and edited in another compatibleprogram. Information is universal with specific tools being used tomanipulate the common information. The third approach, used byAutodesk’s® Revit®, seeks to capitalize on the advantages of “pur-pose built” modeling systems and lessen the difficulties caused bymultiple models by using adjacent models constructed on a commonframework that are separate, but closely linked. In addition to IFCcompatibility, BIM software often is designed to interact with relatedsoftware, such as structural or energy analysis programs.Althoughthis approach is very effective if a common engine is used, it can beproblematic when merging models built on engines from differentsoftware houses.

From the participants’viewpoint, the plurality of solutions makesit more difficult to develop a BIM project. Although all of the solu-tionsmaywork, as long as participants are committed to different sys-tems, integration will be challenging.

ArchivingArchiving also raises technical and practical issues.Although it is

possible to save the model onto electronic media, this does not guar-antee that the savedmodel will be usable. Properly prepared paper hasan archival life of 100 years and, if carefully preserved, can last longer.We have limited experience with the long-term reliability of digitalsystems.We are aware that most magnetic media have limited lifes-pans. CDs and DVDs can last considerably longer, but that may beirrelevant.When the author began practicing law in 1979, word pro-cessing departments used eight-inch floppies and magcards. It wouldbe hard to find any hardware that could read these formats, let alonerun the software necessary to access and read theDisplaywrite files.Assuccinctly stated by one commentator, “the truth is that our digital stor-age media have a shorter lifespan than an old manwith a goodmemo-ry.”55

Technology obsolescence issues led The Rosetta Project tomicro-etch analog information onto nickel disks rather than entrustthe world’s languages to the fickleness of digital technologies.56 Ifdata are archived on currently popular media, with currently popularsoftware, it may be difficult or impossible to restore or view the datawhen needed. How long do we need to maintain models and howshould this be accomplished?

Integrated Project Delivery:TheWay ForwardBuilding information modeling does not require a collaborative

process. Designers can use the existing software to prepare tradition-al plans and specifications without providing the digital model to thecontractor, its subcontractors and suppliers, or even to the owner itself.Contractors can createmodels for estimating, fabricating, or construc-tion simulation without ever sharing the information. However, doingso wastes the power of building information modeling as a collabora-tive framework and discards the cost and quality advantages of singleentry,multiple uses.This interrelationship betweenBIMand integrat-ed project delivery was reflected in theAIA/AIACCGuide:

ANote on Building InformationModelingIt is understood that integrated project delivery and buildinginformation modeling (BIM) are different concepts—the firstis a process and the second a tool. Certainly integrated proj-ects are done without BIM and BIM is used in non-integrated



processes. However, the full potential benefits of both IPD andBIM are achieved only when they are used together. Thus, theIPDphase descriptions included here assume the use ofBIM.57

Moreover, an insular approach ignores current best practices favor-ing integrated project delivery with building informationmodeling atits core.To use BIM effectively, onemust understand the trend to col-laborative processes.

CURTWhite PapersThe construction industry has long been plagued by fragmented

and fractious project delivery processes. Competitive low-bid pro-curement, guaranteedmaximumprice, and similar contract structureshave fostered an individualistic, zero-sum approach to construction.These processes, in conjunction with other influences, have resultedin declining productivity. CURT, the Construction Users Roundtable,has concluded that wholesale industry change is necessary to achievesuccessful projects.58

In response to these productivity concerns, the ConstructionUsersRoundtable issued a 2004 report implementing a CURT policy favor-ing integrated project delivery methodologies.59 The report proposedfour elements of a new policy framework.

Owner Leadership:Owners, as the integrating influence inthe building process, must engage in and demand that collab-orative teams openly share information and use appropriatetechnology. CURT should establish policy and procedures toimplement change in theAEC industry and encourage otherbuilding owner organizations to join the effort.Integrated Project Structure:The building process cannot beoptimizedwithout full collaboration among all members of thedesign/build/ownproject. CURTand other owner organizationsshould establish policies that support such collaboration.Open Information Sharing: Project collaboration must becharacterized by open, timely, and reliable information shar-ing. CURT should advocate the establishment of proceduresand protocols to achieve this end.Virtual BuildingModels:Effectively designed and deployedinformation technology will support full collaboration andinformation sharing and will lead to more effectivedesign/build/manage process. CURT should endorse estab-lishing technology-based lifecycles that optimize the creation,interaction, and transport of digital information throughoutthe building process.

CURT’s vision of an integrated project built around virtualbuilding information models was sharpened in a later report onimplementing the optimized building process.

Technology/Building InformationModelingDesire for re-use of project information beyond the build-ing design created by architects and engineers will drivemarket adoption of building information models. Standardswill be established for how building information models aredeveloped with regard to content and modeling methods toproduce information supporting downstream BIM automa-tion services that are aligned with the owner’s businessobjectives. Ultimately, for BIM to succeed, owners mustacknowledge that all risk comes from them and ultimatelyreturns to them.

Owners must set the tone for the project by requiring their

design and construction teams to use the latest technologies.Including these requirements in requests for proposals is onesimple step that owners can start using. Further, the ownershould use the technology as well.

Owners should support industry initiatives to create stan-dards where they are needed. Owners should also increasetheir awareness of the technology tools their consultants andcontractors are using on their projects. Owners must recog-nize that the choice of technology solutions will affect theirprojects, not just during the development phase, but also afterthe project is completed and operating.60

Information SharingAn essential elementwoven throughout the vision of transfor-mation to an optimized model is the ability for all parties tocommunicate freely. Current practices of silence for fear ofliability must be eliminated and a new process where deci-sions are made at the highest and most appropriate level ofcompetencymust be established to leverage team knowledge.. . . This issue most certainly is the greatest obstacle to trans-formation and the realization of the optimized project. Own-ers must demand this openness and transparency from theteam entity of which they are a part.61

CURT’smessage is quite clear. Projects should capitalize on the com-petencies of all project participants and should promote open commu-nication using the best technologies available. Building informationmodels should be at the core of the process. However, CURT does notexplain how this radical transformation should occur, or how toresolve the boundary problem.

Industry ResponsesIn June of 2007, theAmerican Institute ofArchitects California

Counsel issued Integrated Project Delivery: AWorking Definition.62

This document sets forth the fundamental assumptions and frame-work for a fully integrated project. Summarized in the graphic63 below,it defines a highly collaborative process where all key participantsare involved throughout the project lifecycle and contribute on a “bestperson” and “best for project basis.”These conceptswere further elab-orated in the jointAIA/AIACC Integrated Project Delivery:AGuide64

and have now been embodied in form integrated project agreementsusing Single Purpose Entity65 andOwner-Architect66/Owner-Contrac-tor67 approaches.

The Associated General Contractors and others have recentlyreleased their ConsensusDocs Series 300 integrated project deliveryagreement, which is based on the earlier Lean Construction Instituteagreement.68 It is a collaborative, multiparty agreement (owner/contractor/architect).

Contractual Frameworks for BIMMany of the legal issues related to collaboration are caused by

duties and obligations that transcend boundaries. When assessingcontractual frameworks, it is useful to compare how they address (orignore) boundary issues.

Status QuoBuilding informationmodelingwill be used regardless of business

models.As stated to the author by a partner in a major international


architectural firm: “We are using it.Wewill use it. Owners should justdemand it.” BIMcan overcome the liability concerns and, in the handsof experienced users, reduces risk even if responsibility increases. IfBIM reduces drawing errors and miscommunications between theparties, the frequency and severity of loss will be lessened even if thepool of potential relying parties is expanded.69 However, little is doneto address boundaries because they are simply ignored.

Design/BuildDesign/build solves the boundary problem by increasing the

boundary’s perimeter until it absorbs the key participants.Thus, infor-mation sharing and reliance issues are resolved by joining the providerto the relying party. For this strategy to be fully effective, the key par-ticipants must be identified and included in the design/build team.This is automatically accomplished if the designers are employed bythe design/build firm. It is more challenging if the designers or key systemsproviders are subcontractors to the design/build firm. In this instance,the additional parties can become part of the “virtual” design/buildteam if their liability is limited and their compensation, at least in part,is performance based.

Single Purpose EntitiesSingle purpose entities (SPE) also solve the boundary problem by

bringing all parties within the boundary.The SPE is a limited liabilityenterprise (corporation, LLC, LLP, etc.) created to design, construct,and possibly own and operate a facility. The key participants sponsorthe SPE and achieve gain by optimizing the SPE’s success. The SPEcontracts with the sponsors for the services required to construct thefacility, with the specifics of scope, responsibility, and liability deter-mined on a project-specific basis. The parties within the boundarymust release each other from most potential liabilities or agree thatany “in boundary” claims will be paid only by project insurance.

Single purpose entities are common in off-balance-sheet asset-financed projects (project finance). Under a classic project financestructure, nonrecourse loans are used to design and construct a rev-enue-generating asset that is owned by the SPE. The asset, and anyguaranteed income streams, secures the loans.As might be expected,there also are many variations with limited recourse, limited sponsorguarantees, and similar features. However, the fundamental economicprinciple of the SPE is that the sponsor’s return is based on creatingvalue in it.

Unfortunately, SPEs burden the project with the additional costs ofcreating the SPE and managing its operations, precluding SPEs forsmaller projects. Research on project finance shows thatmost projectsexceed $100 million and a significant percentage exceed $500 mil-lion.70 Furthermore, because the created value may be locked into theSPE for some time, the structure may not meet the parties’ liquidityrequirements.

Interlocking RiskAllocationInterlocking risk allocations leave boundaries in place but lessen

their importance. Under this approach, the key participants jointlynegotiate specific limitations to their individual liabilities usingreleases, indemnifications, and limitations of liability. The interlock-ing risk allocations lessen the liability fears that accompany free flowof information.

Interlocking risk allocation has three potential drawbacks. First,there is a risk that the provisions will be inadequately drafted orincomplete. Second, some jurisdictions have restrictions on liabilitylimitations or indemnification that could undermine this approach.Finally, although the risk allocations lessen disincentives, they do notcreate any additional incentive to collaborate. To enhance their suc-cess, interlocking allocation should be balanced by performanceincentives.

Relation-Based Contracting (NEC3, Lean Construction)The New Engineering Contract (NEC3) is a contract system cur-

rently used in the United Kingdom that is based on a collaborativemanagement approach.71 The guiding principles of NEC3 are:

The two principles on which the ECC [Engineering and Con-struction Contract] are based and which impact upon theobjective of stimulating goodmanagement are:

o foresight applied collaboratively mitigates problems andshrinks risk, and

o clear division of function and responsibility helpsaccountability and motivates people to play their part.

A secondary but important theme is that people will be moti-vated to play their part in collaborative management if it is intheir commercial and professional interest to do so. Relianceneed not be placed upon exhortation, either within the con-tract or outside it.72

Lean Construction seeks to apply theToyota management principlesto the construction industry.73 This includes recastingToyota’s just-in-time project delivery methodology into the concept of Last Planner,where project management becomes a workflow conversation fromone precedent activity to the next. The Lean Construction approachhas been applied in the Sutter Health system, where it was distilledinto Five Big Ideas.74

o Collaborate; really collaborate, throughout design, plan-ning, and execution;

o Increase relatedness among all project participants;o Projects are networks of commitments;o Optimize the projects not the pieces; ando Tightly couple action with learning.

Relational contracting is based on early and deep collaborationbetween all members of the design and construction process.Although BIM is not required to accomplish these ends, it supportsrelational contracting at a fundamental level. However, neither ofthese approaches directly addresses the liabilities inherent withincreased collaboration. They assume that more collaboration resultsin less risk, therefore less loss.

AlliancingThe alliance approach to contracting has been successfully used

for oil exploration, the delivery of infrastructure, and at least one sig-nificant structure.75A recent definition of alliancing is:

A project alliance is a commercial/legal framework between adepartment, agency or government-backed enterprise (GBE)as “owner-participant” and one or more private sector partiesas “service provider” or “non-owner participants” (NOPs) fordelivery of one or more capital works projects, characterizedby:



o collective sharing of (nearly) all project risks;o no fault, no blame and no dispute between the allianceparticipants (except in very limited cases of default);

o payment of NOPs for their services under a “3-limb”compensation model comprising:- reimbursement ofNOPs’project costs on 100 per centopen book basis;- a fee to cover corporate overheads and normal profit;and- a gainshare/painshare regimewhere the rewards of out-standing performance and the pain of poor perform-ance are shared equitably among all allianceparticipants;

o unanimous principle-based decision-making on all keyproject issues; and

o an integrated project team selected on the basis of bestperson for each position.76

Initially developed for risky projects,77 alliancing has attributes thatare attractive in a broader setting. Three alliancing features work par-ticularly well with building information modeling.

First, in an alliance, the parties agree that they will not sue eachother, except for willful default. Sharing information cannot lead toliability. The liability concerns that impede BIM adoption do notapply in an alliance project.

Second, because a portion of compensation is tied to a successfuloutcome, there is an incentive to collaborate. In this context, BIM isan ideal platform for interactively sharing information, ideas, andsolutions.

During early project development, the parties develop a target costestimate that is used to calculate a target outturn cost (TOC). Theamount of each party’s compensation depends on whether the actualoutturn cost (AOC) matches, exceeds, or is less than the TOC. In allcases, the nonowner participants are guaranteed their direct projectcosts plus project-specific overhead.Thus, if theAOCexceeds theTOC,the nonowner participants forfeit any profit or company overhead(painshare). If theAOCequals theTOC, the nonowner participants alsoreceive their corporate overhead and “usual” profit. If theAOC is lessthan theTOC, then the nonowner participants also receive a portion ofthe difference (gainshare). Thus, there is a positive incentive fornonowner participants to assist eachother.Contractors andvendorswillwant to participate in the design process to root out any source of errorand suggest better, alternative methods of construction. Similarly,designers have an incentive to provide themodel to contractors to allowaccurate take-offs and construction simulations because they willincrease project efficiency, as a whole.When compensation is tied tosuccess, decisions are made on a “best for project” basis. Similarly, ifissues arise during project execution, it will be in everyone’s best inter-est to seek the optimal solution for the project.

Finally, under a “best person” philosophy, design can be delegatedthrough the model, or by using interacting models, to the person,whether designer, subcontractor, fabricator, or supplier, with thegreatest knowledge and skill.

These attributes are tailor-made for BIM. By limiting liability andtying compensation to firm success, alliancing makes boundariesirrelevant. BIM is also tailor-made for alliancing. Because it is fun-damentally collaborative, BIM provides a structure for “best for proj-ect” decision making.

The Promise of BIMBuilding information modeling promises exponential improve-

ments in construction quality and efficiency. But current business andcontract models do not encourage its use and actively inhibit the col-laboration at its core. To bring BIM into the mainstream, we need torecraft business models and contract relationships to reward “best forproject” decision making and to equitably allocate responsibilityamong all construction participants.

Endnotes1.For example, theGeneral ServicesAdministration, theU.S.ArmyCorps

of Engineers, and the U.S. Coast Guard all have BIM requirements.2. During the last six months, the author has been involved in developing

project documents for six hospitals and several major tenant improvementprojects.All of these projects are being implemented in BIM.

3. BrianGilligan& JohnKunz,VDCUse in 2007: SignificantValue, Dra-matic Growth, and Apparent Business Opportunity, Center for IntegratedFacility Engineering, ReportTR171 (2007).

4.Autodesk press releases in 2006 and 2007 reported 100,000 Revit seatssold through June 8, 2006, and over 200,000 seats sold throughMay 4, 2007.

5. Interoperability in the Construction Industry, McGrawHill SmartMar-ket Report (2007), at 11.

6. Computationally and numerically controlled—amanufacturing processwhere the fabrication of components is done bymachines responding to com-puter directives, not human operation. Modern machining is often CNCbecause of its accuracy and repeatability. It also allows creation of complexand curved shapes that would be very difficult to duplicate with manuallycontrolled tools.

7.An example is the Camera Obscura, Phase II at Mitchell Park by SHoPArchitects. The structure was CNCmanufactured from the design model andthen “installed” by the contractor. The “installers” did not use plans; rather,they had instructions, much as might be in a kit, explaining where parts wentand how to connect them. www.shoparc.com.

8. The National Institute of Building Science is currently developing aNational Building Information Modeling Standard(www.nibs.org/newstory1.html), and the InternationalAlliance for Interoper-ability (www.iai-international.org) has long been working on standards fordata exchange between modeling software.

9. Most notably, the National Institute of Building Science’s NationalBuilding Information Modeling Standard V. 1.0, www.facilityinformationcouncil.org/bim/publications.php.As this article is beingwritten, ConsensusDocs is circulating a draft BIM specification that shouldbe issued in 2008.

10. See, e.g.,American Institute ofArchitects standard documents C-106,Digital Data Licensing, and E-201,Digital Data Protocol; and theConsensus-Docs Document 200.2, Electronic Communications ProtocolAddendum.

11.AGC is promoting the use of building information modeling and haspublished A Contractor’s Guide to Building Information Modeling, EditionOne, which is intended to show contractors “how to get started” with BIM.AIA’sTechnology and Practice Committee has long supported the use of dig-ital design tools and building information modeling. InApril of 2007,AIAintroduced its digital practice documents C106 2007, Digital Data LicensingAgreement, and E201 2007, Digital Data Protocol Exhibit.

12. National Institute of Building Sciences is responsible for the NationalBuilding InformationModeling Standard (NBIMS).

13. www.nibs.org/newsstory1.html.14. Terminology varies between software platforms. However, there are

at least three types of objects in any program. Class objects have propertiesappropriate to everything in that family.Walls, for example, are a family. Sub-classes are specific types in a family, for example, an eight-footmasonrywall.Subclasses inherit the attributes of their family and add attributes appropriate


to the subclass. Classes and subclasses are essentially descriptions, not theobject itself. Instances are the individual examples of a subclass in the design.This hierarchy makes it possible for designers to quickly create new compo-nent types by subclassing an existing component type, adding or modifyingattributes, and then creating as many instances of the newly designed com-ponent as desired.

15. In discussionwith the author, design firmswith significant BIMexpe-rience have reported a 50 percent reduction in time to produce drawings ascompared to conventional 2D CAD drawings.

16. NavisWorks®was used tomodel LucasFilm’s DigitalArts Center andidentified several significant conflicts before construction commenced andwas used to check field construction, again identifying mislocated elementsand penetrations.

17. L. Khemlani, Autodesk Revit: Implementation in Practice, ARCWIZ,2004.

18. Supporting graphic creativity is already being addressed by the pri-mary software houses. For example,Autodesk’sArchitectural Desktop® andGoogle’s Sketch Up®.

19. Building Information Modeling for Sustainable Design,Autodesk®2005.

20. Mieczyslaw Boryslawski, Building Owners Driving BIM:The“Let-terman DigitalArts Center” Story,AECBYTES, Sept. 30, 2006.

21. Design-build avoids the tension between collaboration and separate-ness by reducing the number of principal participants.Thus,many of the com-mercial and legal issues related to implementing BIM are obviated in thedesign-build project delivery system or its variants. However, design-build isnot appropriate on all projects and is not permitted on others, such as somepublic agency projects.And in any event, design-build does not address all ofthe issues relating to implementing BIM processes.

22. Intelligent BuildingModels and Downstream Use, Comments of theTechnology inArchitectural PracticeAdvisory Group submitted for the 2007revisions toAIADocuments B141 andA201,AIA 2005.

23.AIADocument B141-1997, § 1.3.2.4.24.AIADocument C106-2007.25.AIADocument E201-1997.26. In contrast, the documents published by the Engineers Joint Contract

Documents Committee (EJCDC) take a very conservative approach towardelectronic information. They disallow any reliance on the electronic infor-mation and place the risk of errors and discrepancies on the receiving party.This approach may be appropriate to the transfer of CAD files, but is totallyinconsistent with a collaborative (BIM) approach. SeeEJCDCC-700, § 3.06.

27.AIADocumentA201-1997, § 1.6.1.28.TheCalifornia Council of theAIA isworking on recommendations for

Integrated Project Delivery that may include recommendations for a fullyintegrated BIM project, but although some contract language may be includ-ed in the recommendations, a complete contract set is unlikely. The NationalInstitute of Building Sciences is developingBIM standards but is not attempt-ing to create model contract documents.

29.AISC is somewhat further along regarding BIM contract practice, pri-marily because it has a narrower focus than the design professional associa-tions.

30. 140Wn. 2d 568; 998 P.2d 305 (2000).31. Id. at 584–88.32. 477 F.3d 1117 (9th Cir. 2007).33. Id. at 1126.34. In California, for example, architects must be in “responsible control”

(CAL. BUS. & PROF. CODE § 5531.5) and engineers must be in “responsiblecharge” (CAL. BUS. & PROF. CODE § 6703). These requirements reverberatedthroughmany other statutes and regulations.

35.At least one insurer of design professionals is currently considering a“technology rider” to expand professional liability coverage to include someinformation technology risks.

36. See Zubulake v. UBS, 220 F.R.D. 212 (S.D.N.Y. 2003) (Zubulake IV),and Zubulake v. UBS, 229 F.R.D. 422 (S.D.N.Y. 2004) (ZubulakeV).

37.Although there are many notable examples, it is interesting that one ofthe Supreme Court’s earliest construction decisions,U.S. v. Spearin, 248 U.S.132 (1918), concerned where to place the boundary between the owner’sresponsibility and the responsibility of the contractor.

38. See comment h to subsection (2) of RESTATEMENT (SECOND) OFTORTS,§ 552.

39. Further exposition on the economic loss rule can be found in paperspublished in 25:4 CONSTR. LAW. (2005) under Taking theMeasure of the Eco-nomic Loss Rule. See alsoAndrus, Gessford & Joce, The Economic LossDoctrine in Construction Cases:Are the Odds for Design Professionals Bet-ter inVegas? J.ACCL,Winter 2008, at 53.

40.We have all experienced clients that will execute contract documentswith detailed provisions governing change, notice, and dispute resolution andthen ignore these provisions during contract performance. Or they will createentirely newmechanisms that deviate significantly from the systems providedin the contract. In this fashion, we must expect deviation from whateverprospective systems we and our clients develop.Technology may change, butpeople do not.

41. In over twenty years of representing designers, the author has onlyonce defended a designer sued because the design was “ugly.”

42. United States v. Spearin, 248 U.S. 132 (1918).43. Kevin C. Golden & James W. Thomas, The Spearin Doctrine: The

False Dichotomy Between Design and Performance Specifications, 25 PUB.CONT. L.J. 47, 48 n.2 (1995) (quoting Thomas L. Patten, The ImpliedWar-rantyThatAttaches to Government FurnishedDesign Specifications, 31 FED.B. J. 291, 292 (1972)).

44. Hercules Inc. v. United States, 24 F.3d 188, 197 (Fed. Cir. 1994).45. R.J. Crowley, Inc. v. United States, 1990U.S.App. LEXIS 21618 (Fed.

Cir. 1990).46. Blake Constr. Co. v. United States, 987 F.2d 743, 746 (Fed. Cir. 1993);

Austin Co. v. United States, 314 F.2d 518, 519 (Ct. Cl. 1963); T. L. James &Co. v.Traylor Bros., 294 F.3d 743, 751 (5th Cir. 2002);Martin K. Eby v. , 436F. Supp. 2d at 1310.

47. Austin Co., 314 F.2d at 520.48. Id. at 519.49. Id.50. Id.51. Id. at 520.52. Federal Reserve Building, San Francisco.Articles describing the proj-

ect are available on the web at www.architechmag.com/articles/detail.aspx?contentID=5154#trades and www.aia.org/SiteObjects/files/morphosis.pdf.

53. The International Alliance for Interoperability is the organizationdeveloping worldwide standards for exchange of building modeling informa-tion. Rather than develop software-specific conduits, the IAI publishes stan-dards for data structures that model the key attributes of building elementsand systems.These data structures can then be read andmanipulated by Indus-try Foundation Class (IFC) compliant building information modeling soft-ware. More information regarding the IAI and the IFC concepts can beobtained fromwww.iai-international.org. In theUnited States, the IAI is repre-sented by the Facility InformationCouncil of theNational Institute ofBuildingSciences,which publishes theNational Building InformationModeling Stan-dard. (www.facilityinformationcouncil.org/bim/publications.php).

54.Additional information concerning the IAI and IFC foundation class-es can be found at www.iai-international.org.

55. M.Wein, being quoted by NorsamTechnologies, the archival vendorforThe Rosetta Project.

56. www.rosettaproject.org/about-us/rosetta-disk/technology.57. Integrated Project Delivery: A Guide, explanatory note at 20,

AIA/AIACC 2007.



58. The Construction Users Roundtable, Optimizing the ConstructionProcess:An Implementation Strategy,WP-1003 (July 2006), at 4.

59. The Construction Users Roundtable, Collaboration, Integrated Infor-mation and the Project Lifecycle in BuildingDesign, Construction andOper-ation,WP-1202 (August 2004).

60.Optimizing the Construction Process, supra note 58, at 14.61. Id.62. www.ipd-ca.net/images/Integrated%20Project%20Delivery%20

Definition.pdf.63. Reproduced with permission ofAIACC.64.www.aia.org/ipdg.65. Standard Form Single Purpose EntityAgreement for Integrated Proj-

ect Delivery,AIA C195 (2008).66. Standard Form ofAgreement Between Owner andArchitect for Inte-

grated Project Delivery,AIA B195 (2008).67. Standard FormofAgreement BetweenOwner andContractor for Inte-

grated Project Delivery,AIAA195 (2008).68. www.consensusdocs.org.69. Risk management can take alternate routes. A person can choose to

insulate him- or herself from liability by contract, thus reducing the risk of

being successfully sued. In the alternate, the person can embrace the risk,man-age it, and avoid the failure that would give rise to the lawsuit.Although bothare rational, they represent very different approaches to riskmanagement.

70. BENJAMIN C. ESTY, MODERN PROJECT FINANCE (2004), Exhibit 2-9, at38.

71. www.neccontract.com.72. Guidance Notes for the NEC Engineering and Construction Contract.73. www.leanconstruction.org.74. WILLIAM A. LICHTIG, TEN KEY DECISIONS TO A SUCCESSFUL CON-

STRUCTION PROJECT, paper delivered at theAmerican BarAssociation Forumon the Construction Industry Fall Meeting, Sept. 2005.

75.Australian National Museum.76. GOVERNMENT OF VICTORIA, PROJECT ALLIANCING PRACTITIONER’S

GUIDE 2 (2006).77.The alliancing delivery systemwas developed for oil exploration in the

North Sea.At the time of these projects, it wasn’t clear they could be accom-plished and atwhat costs.Alliancing guaranteed recovery of costs and createdincentives to collectively manage uncertainty and risk, thus eliminating thefear that causes participants to focus on their narrow self-interests.
