BIM AS AN OBJECT FOR PROACTIVE CONTRACTING

Building Information Modelling and the results of digital models are becoming gradually a commonplace practice in Finnish building profession trough the large building companies, such as Skanska and YIT corporations. Nevertheless challenges in using BIM still exist. The BIM practices are still fairly technology oriented although our focus is on the combination of different models. The architects, building designers and civil engineering are developing their own models (Fig. 3).

Figure 3: The current BIM situation in Finland

In designing an addition to a building or a renovation for a building, the original building plans are essential. The original building plans are not only necessary for scale, style, and dimension, but current building plans are necessary in order for the local building commissioner to approve

the building addition, as building specifications need be met to ensure aesthetic conformity, code compliance, etc. Right now, regeneration of building drawings for purposes of a building addition or renovation is considered copyright infringement and, thus, project prohibitive. Advanced drafting programs, such as BIM, exacerbates and complicates the issue by regeneration through a new medium, and a medium in which alternative designs can be easily displayed, thereby creating derivative works. [Branka, C. 2011]

Contracting is a process of the market-based exchange of privately held legal rights and goods (Fig. 4). Contracts and contracting are private economic activities and thus a subject of economists and business scholars. As it lies at the intersection of legal rights and economics, it often captures the interests of the economists and legal scholars who study the interaction of law, economics and institutions. Famous works by Coase highlighted the presence of transaction costs, i.e. the costs of monitoring and enforcing contracts, in addition to production costs. He argued that efficient market exchange can be hindered by the presence of transaction costs and the role of institutions is to reduce them. Coase also identified firms, the market and law as alternative institutions and modes of coordination for minimizing transaction costs and this observation opened the way for new institutional economics. [Coase, R. 1988; Nystén- Haarala, S. et al. 2010]

In civil law, the ideal law is to be the same for everybody and an object of interpretations separated from politics. When the law is seen as a continually-developing process of understanding, both the reactive and proactive ability and sensitivity of the system are increased. Consequently, the law system becomes more self-reflexive. Processes of change are often slow and gradual. Traditionally, ideal laws and contracts have been viewed as final. Their task is to bring clarity and stability and even though it is known and understood that circumstances and understandings change, laws and contracts are not usually constructed to be responsive to change in a considered manner. Even though it is known that changes will come, systems are not prepared for them in a proactive way. In contracting practice, change management is receiving an increasing degree of attention. Clarity of goals and in the rules invented to realise them supports the achievement of those goals. This demands dialogue and creativity. The logic of our present law is not suited to all of the tasks given to it, and all of the targets that have been set cannot be reached by employing legal logic and legal tools. [Haapio, H. 2010(1)]

Figure 4: Contracting and business processes [Nystén-Haarala, S. et al. 2010] 4.1 Good-quality contracts

Contract quality can be viewed from many different angles, including content, presentation, process, and outcomes. Defining desired outcomes, allocating and communicating the parties’ roles and responsibilities clearly, and providing incentives for the parties to fulfil their responsibilities then become key characteristics of good-quality contracts. Additional aspects of good-quality contracts are that they contain unambiguous requirements, divide costs, tasks, and risks clearly and fairly, provide for predictable outcomes and effective contract administration, and allow flexibility where needed. Proactive Contracting seeks to merge the different good-quality criteria of contracts.Having seen occasions when things went wrong, lawyers typically consider silence in contracts as risky and dangerous; gaps in contracts can cause unexpected costs and liability exposure. Gaps may relate to the core of the deal, for example scope, time or terms of delivery or payment, or to issues such as liabilities and remedies. [Haapio, H. 2010(1)].

Good-quality contracts build on proper planning and careful communication, ensuring a true and shared understanding of the business arrangement and the parties’ goals. The good-quality contracts are the main goal of Proactive Contracting. Good-quality contracts can be characterised as entities that i) produce what they are expected to produce, ii) provide with the involved individuals the needed information for performing their work, iii)ensure that plans and actions are based on express knowledge (rather than vague or implied, “invisible” terms), and iv)provide a readable roadmap of how to proceed. [Haapio, H. 2010(1)].

Proactive Contracting facilitates informed decisions that lead to increased legal certainty and a reduction in overall risk exposure. With the inhabited building BIM working together, proactive lawyers and their clients can put in place tools, systems and training that help secure sound contract crafting – both online and off-line – and successful contract performance.

Proactive law then translates into everyday actions, helping clients to take better care of their deals and relationships. Change management included into BIM Contracts with different BIM status will lead to continually maintained Good-quality Contracts.

5. CONCLUSIONS

This paper is addressing how proactive contracting can help in negotiating contract with BIM. The proactive negotiation also uses contracts for risk downsizing and conflict prevention. Good-quality contract are the target for Proactive Contracting. Avoiding legal problems is an important aspect of proactive law. However, helping clients to achieve their objectives and promoting business success are even more important. Proactive law aims at joining the forces of lawyers and business people in an effort to not only stay out of legal trouble but also to take full advantage of the opportunities the law and contracts provide. The proactive negotiation of contracts can connect preventive jurisprudence and quality management.

Figure 5: Contractual Terms – Puzzle Analogy. [Haapio, H. 2010(1)]

The legal component is just a one piece of the puzzle, albeit a quite important one (Fig. 5). Contracting success requires much more than legal knowledge and skills alone. Managerial and technical skills come to the fore, not only at the implementation stage but also when contracts are planned and put together. The input of managers and engineers with intimate knowledge of the relevant businesses and technologies as well as of the management challenges involved in such exchanges is needed in key areas in order to lay the foundation for the deal and construct operationally efficient contract term. But the wrong sort of flexibility in a contract may lead to higher costs and frustration; the right sort of flexibility may enable better commercial relationships. The goal is to find ways to enhance positive flexibility, without introducing disruption and potentially extortionate renegotiation of contract terms. [Haapio, H. 2010(1); Nystén-Haarala, S. et al. 2015]

BIM technologies are gradually moving towards the field of construction operations and site processes. Therefore it is getting more and more important to have a close look at the needs of key parties and professionals. As an example, in the future, the building information modelling contracts would also need to ensure that the construction of the data model version is saved in the electronic data/document management systems (EDMS) to manage the concatenation of the data model of exclusive rights. In the same way the construction contracts should be stored in the project EDMS, so that all parties have an equal opportunity to check their own starting

positions in proactive contract law. The used EDMS solution should be accessible also to those in charge of contract preparation e.g Legal Architects. Different versions of the designs are completed, stored as individual or combined models in the project EDMS and checked by the inspection program. The agreement provides for the merger and who amendment makes the data model.

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