Building Information Modeling (“BIM”) is an intelligent 3D virtual modelling process for the design of buildings and infrastructures which is rapidly becoming the main tool for project realization used by architects, engineers and other construction professionals. The key challenge to the full realization of its potential, however, resides in the free exchange of information within the construction pyramid. This is something which is not provided in the current standard form of construction contracts. For this reason, the industry has been working, over the last decade, to develop specific addenda to standard form contracts which provide for a new, more collaborative approach to construction project management. These new contracts, known in the industry as Integrated Project Delivery (“IPD”) contracts, have been gaining the interest of key sectors of the industry. As a result, last year, CCDC released the CCDC 30 – 2018 Integrated Project Delivery Contract (“2018 IPD Contract”).
IPD is a project delivery approach based on the integration of people, systems, business models and industry practices into a process that manages talent and knowledge in a collaborative way. The objectives are to reduce time and resource waste and to optimize efficiency throughout the design, manufacturing and construction phases. The 2018 IPD Contract is therefore a framework for the IPD in that it creates a collaborative environment in which the parties work together toward the achievement of project objectives. Some of the key innovations of 2018 IPD contract are the following:
Waivers and Releases
In the area of claim waivers and releases, the 2018 IPD Contract provides for a general mutual release by the parties, to which a few specific exclusions apply. The standard CCDC contract, on the other hand, provides the opposite: a release drafted in detail, applicable to each of the parties to the contract.
With respect to payment, the 2018 IPD Contract is predicated on the mutual interest of both parties in the project’s success, as well as incentives for achieving savings. The standard CCDC contract, on the other hand, provides for an adversarial process based on the presumed divergent interests of the parties.
With regard to changes to the work, the 2018 IPD Contract prompts the parties to participate in the project’s development from the outset in order to minimize conceptualization disputes. The 2018 IPD Contract also calls for a collaborative approach whereby the parties review changes during the course of the project. The standard CCDC contract obliges the contractor to identify conceptualization problems early in the course of the contract’s performance, but provides it with no incentive to do so. As a result, the change procedure essentially deals with changes required during the course of the project, as and when the contractor is performing the work.
Finally, the dispute resolution process under each of the two contracts is very different. The 2018 IPD Contract is based on a model where the parties’ participation is maximized throughout the three steps leading from administrative review to arbitration. Arbitration is held before a neutral arbitrator chosen by the parties and before whom they must first submit to mediation. The process under the standard CCDC contract, on the other hand, is strictly tied to the parties’ functions and to the procedures they must follow in order to resolve the dispute. The important roles in this process are played by persons not party to the contract.
In conclusion, BIM technology can be implemented using current contractual models. However, in order for the technology to achieve its maximum savings potential, a new collaborative paradigm is required. The adversarial approach – the traditional way of doing things characterized by compartmentalization and on which standard Canadian contracts are based – needs to be replaced by a model that gives the parties an interest in the project’s outcome and incentives to freely and voluntarily exchange information throughout its performance in order to optimize results. This is precisely what the 2018 IPD Contract is intended to achieve. Future articles will discuss each component of the 2018 IPD Contract in more detail. Stay tuned.