(Recognizing and Managing the Risks of BIM and
IPD)
Craig C. Coburn
Richards Brandt Miller Nelson
(* – With apologies/thanks to Jimmy Buffett.)
© COBURN 2009-2010
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Traditional project delivery and related design process
models (e.g., design-bid-build and design-build):
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Seek to establish clearly-assigned roles and related
practical and legal responsibilities
Foster an inherently competitive, often adversarial,
and sometimes distrustful working environment
Typically result in unnecessary and excessive costs,
frequently result in client/owner dissatisfaction and,
all too often, result in project claims
Building Information Modeling (BIM) utilizes
cutting edge digital technology to establish a
computable representation of all physical and
functional characteristics of a facility and its
related project/life-cycle information, and is
intended to be a repository of information for the
facility owner/operator to use an maintain
throughout the life-cycle of the a facility.
National Institute of Building Sciences
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Design (incl. LEED, LC)
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Design Quality Control
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Constructability
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Quantity/Cost Estimating
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Scheduling
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Life-Cycle Costing
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Facility Management
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Renovation/Remodel/Expansion
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Design Firm
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Design Team (lead A/E and subconsultants)
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Contractor/subcontractor
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Owner – Design Firm/Team
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Project Principals (Owner, Lead Designer and
Contractor)
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Project Team (Owner, Design Team, Contractor and
Major Subcontractors and/or Vendors)
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Contracting:
 AIA: E202 with standard AIA documents
 ConsensusDocs: CD301 with standard
ConsensusDocs forms
Design Responsibility/Control:
 AIA: not specified
 ConsensusDocs: lead A/E effectively has
‘responsible control’
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Scope/Protocols:
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AIA: element designs assigned per CSI divisions;
BIM protocol contemplated but not specified
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ConsensusDocs: traditional roles/relationships;
BIM Execution Plan (protocol) required
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Phasing:
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AIA: traditional, IPD or custom
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ConsensusDocs: none
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Model Elements:
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AIA: CSI divisions
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ConsensusDocs: none – uses Model variants
Model Management:
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AIA: manager not designated; protocol for file
access, storage, etc.
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ConsensusDocs: lead A/E = manager; protocol for
file access, storage, etc.
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Model Reliance:
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AIA: per element designer’s Level of Development
(LOD) designation (LOD100 – LOD500)
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ConsensusDocs: ad hoc at time of posting per
‘Contributor’s Dimensional Accuracy Representation’
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IP Rights:
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AIA: none granted, save for limited license to use on
project, subject to LOD limitations
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ConsensusDocs: none granted save for limited license
to use on project – designer HH/I/D for infringement
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Risk Allocation:
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AIA: only as to unauthorized use or modification of
design element (user to HH/I/D element designer)
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ConsensusDocs: Spearin doctrine preserved;
traditional allocations; mutual waiver of
consequential damages; e-data insurance required
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Technology (cont’d.):
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Risks:
 Multiple/evolving products/ versions =
compatibility issues
 File size/complexity can overtax some IT systems
 Software defects = limited recourse/remedies
 Modeling vs. reality (e.g., sequencing)
 Malware/sabotage
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Technology (cont’d.):
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Risk Management:
 Require/confirm compatible products/
versions
 FTP sites
 IT security
 QA/QC (expect and look for errors,
omissions, gaps, overlaps, redundancies,
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etc.)
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Firm Acquisition/Implementation:
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Risks:
 Lack of commitment to training/use
 Learning curve – inadequate training; technology
savvy ≠ design savvy
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Risk Management:
 Principal commitment (top-down acceptance and
integration)
 Structured/formal training
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Firm Acquisition/Implementation (cont’d.):
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Risk Management (cont’d.):
 Mentor-up/mentor-down
 Internal alpha/beta testing
 Structured implementation (internal vs. external
use; be selective re access, project ‘partners’,
project type, project size, etc.)
 QA/QC re training/implementation/use
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Design Control/Responsibility:
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Risks:
 Multiple ‘contributors’ (i.e., intelligent access) =
blurred roles/responsibilities; difficult to
monitor/track changes/authors
 ‘Responsible control’ = enhanced liability (NCARB
revisiting)
 ‘Wet-stamp’ requirements/realities
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Design Control/Responsibility (cont’d.):
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Risk Management:
 Contracting (AIA CSI-based approach, incl. seals)
 File access/use/management protocol
 Intelligent access = need-based (Protocol: Who?
What? Why? When? How?)
 File reliance protocol – AIA LOD
 Master model possession, access, security, etc.
 Model variants (identify/track/manage)
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Intellectual Property (IP) Rights:
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Risks:
 Inadvertent relinquishment of IP rights
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Risk Management:
 Identify each participant’s intellectual property
 Confirm/define IP ownership or transfer
 Establish limitations on other’s use, reuse,
modification, etc. of intellectual property
 HH/I/D re nonpermissive use, modification, etc.
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Insurance:
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Risks:
 Your design E/O likely covers your subconsultant’s
BIM error/omission
 Your design E/O coverage may not cover other
design contributor’s design errors/omissions
 Design E/O coverage (yours and subconsultants)
may not cover software defects
 CGL and/or e-data coverages (yours and
subconsultants) may not cover BIM risks
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Insurance (cont’d.):
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Risk Management
 Confirm your coverages/exclusions with broker –
fill gaps
 Confirm subconsultant coverages/exclusions with
broker – fill gaps
 Require/confirm design E/O, e-data and/or other
coverages from other design ‘contributors’
 Special gap coverage?
 Project policy?
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Contracting:
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Risks:
 Failure to document the deal (e.g., protocols)
 Failure to appropriately allocate responsibilities/
risks and manage same
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Risk Management:
 Document protocols in contract
 Allocate responsibilities/risks to participant in
position to best control/manage them or share
equally
 Reject responsibilities/risks you can’t control/
manage
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Contracting (cont’d.):
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Risk Management (cont’d.):
 Share in project upside (e.g., cost savings)
 Additional compensation for enhanced risks (e.g.,
‘responsible control’)
 Limitation of Liability (blanket or as to certain risks)
 Establish insurance requirements; confirm compliance
 Establish IP rights/limitations/remedies
 Global waiver of consequential damages
 Manage based on contract (i.e., enforce contract)
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QUESTIONS
IS USE OF BIM THE STANDARD OF CARE FOR
DESIGN PROFESSIONALS IN UTAH?
ELSEWHERE?
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Integrates people, systems, business structures
and practices into a process that collaboratively
harnesses the talents and insights of all
participants to optimize project results, increase
value to the owner, reduce waste, and maximize
efficiency through all phases of design,
fabrication, and construction.
Leverages early contributions of knowledge and
expertise through the utilization of new
technologies, allowing all team members to better
realize their highest potentials while expanding
the value they provide throughout the project lifecycle.
American Institute of Architects
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Organization:
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AIA: transitional or Special Purpose Entity (SPE)
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ConsensusDocs: tripartite agreement (Owner, A/E
and Contractor)
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Subcontracting:
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AIA: traditional or by SPE as contracting entity
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ConsensusDocs: traditional
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Management:
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AIA Transitional: Owner working with Architect and
Contractor
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AIA SPE: Owner-controlled Governance Board;
Project Management Team
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ConsensusDocs: Management Group and Project
Delivery Team
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Phases:
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AIA Transitional/SPE:
 Conceptualization (enhanced Programming)
 Criteria Design (enhanced SDs)
 Detailed Design (enhanced DDs)
 GMP/Buyout
 Implementation Design (enhanced CDs)
 Agency Review
 Construction
 Close-out
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ConsensusDocs: none
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Cost:
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AIA Transitional: GMP based on Detailed Design
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AIA SPE: Owner-approved Target Cost Proposal; SPE
consensus to change; cost overruns shared pro rata
per SPE %
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ConsensusDocs: Management Group sets Price
Target Cost Estimate; cost overruns may be
allocated per culpability or shared per agreement
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Schedule:
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AIA Transitional: Contractor-proposed/Owner-approved;
change by CO
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AIA SPE: Contractor-proposed/Owner-approved; change
by SPE member consensus
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ConsensusDocs: Contractor-proposed/Owner-approved;
change by Collaborative Project Delivery Team or
Management Group
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Incentives:
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AIA Transitional: optional
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AIA SPE: cost savings shared pro rata based on SPE %
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ConsensusDocs: optional
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Dispute Resolution:
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AIA Transitional: initial decision maker; mediation;
binding arbitration
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AIA SPE: Project Management Team; Governing
Board; DRB (binding)
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ConsensusDocs: Collaborative Project Delivery
Team; Management Group; Neutral or DRB
(binding?); mediation; arbitration, litigation
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Insurance: traditional (all)
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Risk Allocation:
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AIA Transitional: traditional/as-assigned; waivers of
subrogation (property) and consequential damages
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AIA SPE: Risk Matrix (per ability to control); qualified
immunity and SPE indemnity; waivers of claims and
subrogation (property)
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ConsensusDocs: qualified immunity or traditional/asassigned; waivers of consequential damages and
subrogation (property)
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Because many of the risks associated with BIM are also
associated with IPD, IPD risk management has many of
the same features as BIM risk management, including:
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Design file access/sharing
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Other protocols
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Risk allocation
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IP rights
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Insurance
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Etc.
Some features (and related risk management issues) unique
to IPD include:
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IPD requires even more participant diligence and
collaboration at all levels (e.g., contracting, participant
selection, protocols, insurance)
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Pick your IPD partners wisely – development and
evolution of IPD teams/firms (i.e., design team and
construction team) likely
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Opportunity to truly break the ‘business as usual’ model
and adopt ‘we-sink-or-swim-together’ model (e.g.,
qualified immunity principles; shared risks – shared
opportunities)
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IPD models which retain risk allocation/management
features of D/B/B or D/B (e.g., Risk Matrix) are more
likely to unravel when tough issues arise
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Detailed ‘on-the-ground’ protocols will be essential to
making IPD work as intended
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Real-time dispute resolution protocol, incl. neutral thirdparty decision-maker, may be needed
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IPD unlikely to work unless participants fully embrace
and invest in IPD principles and agree to abandon
contrary principles associated with traditional delivery
models
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The insurance industry develops products to insure
against risks presented in the marketplace. BIM and IPD
represent fundamental changes in the design/
construction marketplace and associated risks.
Accordingly, the insurance industry is in a holding pattern
… waiting to see how using BIM and IPD plays out in real
life … waiting to identify, define and price the BIM and IPD
risks that it will be asked to insure.
Anecdotal information (XLDP) suggests that the industry
may be developing project-specific insurance products
(i.e., project policies) to insure the new risks presented by
BIM and IPD. Likely will require project-specific
underwriting. In the meantime, it’s business as usual.
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BIM is a tool – a tool that affords project participants
an opportunity to refine project design to a level
which facilitates project success at all levels and for
all participants.
IPD is a process – a process that affords project
participants an opportunity to focus on overall
project success to the mutual benefit of all project
participants.
Neither BIM nor IPD have realized their potential.
Acceptance and use has been measured and
cautious, particularly as to IPD and particularly on a
project-wide basis.
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BIM use is widespread and growing fairly quickly,
but is not being used as envisioned (yet). Projectwide use of BIM has been slow in coming, likely due
to uncertainties regarding its potential and liability
risks.
Construction industry reportedly more accepting of
BIM principles and processes than design
professions.
IPD use has come more slowly, again likely due to
these same uncertainties, but also because habits
and prejudices are resistant to change.
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Both BIM and IPD present many new and largely
undefined risks – including some yet to be identified –
the management of which will require new risk
management tools.
Because BIM and IPD use are in their early stages, real
life experience with BIM and/or IPD projects ‘gone bad’
is very limited. Accordingly, how BIM and IPD will be
treated by the law and the insurance industry remains
to be seen.
BUT, just as design and construction are contractintensive, so too are BIM and IPD. As such, their risks
can be managed in large part by those who do their
due diligence regarding BIM or IPD contracting, project
team selection, protocols and project management.
Ultimately, before BIM and IPD deliver on their promise,
attitudes developed over generations of using traditional
project delivery methods and related design models –
‘traditions’ that have tended to erect walls between project
participants – will need to change, and change at such
fundamental levels comes only with time and experience.
This said, BIM and IPD were borne of economic common
sense and, given today’s economic realities, are likely here to
stay.
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Craig C. Coburn is a senior shareholder in the Salt Lake City
law firm of Richards Brandt Miller Nelson. A practicing
attorney since 1980 with an undergraduate degree in civil
engineering, his primary practice encompasses all aspects of
business and professional risk management for design
professionals, including business continuation, mergers/
acquisitions, transactions, claims, government relations and
dispute resolution. Since 1985, he has been General Counsel
to AIA Utah, Special Counsel to ACEC Utah, and an adjunct
professor in the College of Architecture & Planning and Dept.
of Civil Engineering at the University of Utah. He has also
maintained an active mediation/arbitration practice since
1985 and is member of the American Arbitration
Association’s National Mediator and Arbitrator panels,
including AAA’s Large Complex Construction case panel.
Contact: (801) 531-2000; www.rbmn.com; or craig-coburn@rbmn.com
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