#45 – Getting contractual…
Photograph by Pixabay from Pexels.
Smith is back! After a few weeks down the rabbit hole, finally we’re back in business. Today’s topic will partly explain why I’ve been missing…
Something that is certainly not atop the ‘things we want to argue about’ list for any BIM’er, is contracts. Once you cast aside the issues of technical capability and BIM competency, you unfortunately have no choice but to consider who should actually be doing what. A common occurrence, in my experience, is that the ‘who should be doing what’ question is typically not asked until it’s far too late in the project. I’ve recently been facing this very issue, diving head-first into contract documents and scopes of work in an attempt to find what was actually agreed several years ago, right back at the start of the project – it’s taken a while to get my head back above the water. We’re now preparing the delivery of information for stage 6 and still, nobody really knows what they are contracted to do.
All disputes on a project will eventually come back to the contract documents and who has been paid to do what. Inevitably, leaving these conversations to the last-minute results in disagreements, scope gaps, plenty of frustration, endless delays and additional costs. It’s common to find that designers, who have generally been on the project for several years by now and focussed solely on stages 4-5, are unaware of the detail surrounding their obligations for handover. Sub-contractors, who often all have entirely different contracts and scopes, will typically not have considered anything other than what they are physically building. And, at the top of the tree, the main contractor sits on a wave of assumption that “we must have bought everything from someone” – this is something that I hear all too often. It’s a mess, one that costs a lot of time and money to resolve.
This continues to be an issue on all projects that I have worked on, both with design consultants and as a main contractor, and I have no doubt that it spreads right across our industry. Its seemingly difficult to pinpoint a specific source or lay blame onto a single party; it appears to be a universal lack of contractual knowledge and ability, as opposed to the mistake of an individual at the time of signing contracts. I can, however, summarise a few key areas:
1. Scopes of work
The emergence of BIM seemed to confuse the entire industry and, as a result, scopes of work have continued to resemble leaky sieves – they’re simply full of holes. BIM aside, the fundamentals of the scope really shouldn’t have changed that much. Detail exactly what each supplier has to do, what they must deliver and when they must deliver it. BIM requirements are critically important too, but all too often it seems to be the basic requirements that are slipping through the net. An example is employing an MEP consultant, but missing a specific system from the scope – did somebody say additional fees? Nobody is going above and beyond their scope for free, so gaps are not acceptable.
2. BIM Requirements
Hurdle number 2 is the BIM requirements; we all know that this is a mess. Clients not knowing exactly what they want, people not knowing what they’re signing up to and the blind citing of standards without any specific reference or requirements – to name but a few. We are generally a long way behind where we should be with BIM, that’s not a new topic in the Smith Journey. We simple have to get better at defining our BIM requirements.
3. The unknowns
Contracts and scopes are written and signed at the start of a project – obviously. At this stage, many ‘unknowns’ remain, and that’s a problem. How do you ensure somebody is contracted to do something that you do not yet know that you need? If, during excavation works, you suddenly discover an unknown aquifer running right where the foundations are due to be built, how could this have been predicted? At the earliest stages of a project there are many things that are either unknown or unpredictable, this is almost impossible to avoid. You can’t simply add contractual clauses to include ‘and anything else that we find’, because nobody in their right mind would ever sign it. All we can do is ensure that the ‘knowns’ are covered well and that due diligence reduces the ‘unknown’ list as much as is practically possible.
4. ‘Get out of Jail Free’ clauses
I like this phrase, and i’ve seen quite a few examples. These are usually small sentences or clauses slipped into contract documents that undermine entire sections or processes, usually written with a lack of understanding. It’s the equivalent of writing a strict, 2-page process that’s critically important to the project, and then finishing it off with ‘but only if you want to do it’ – instant ‘get out of jail free’ for anybody that doesn’t feel like it. It’s a daft example, but it happens. We must all ensure that documents do not contradict themselves and that small errors of judgement do not throw entire processes into jeopardy. Simply stating that the wrong entity is responsible for something can be an incredibly costly mistake.
5. Document inconsistency
Another fine example of regular human error – inconsistency. In fact, at this point in my career I have never seen a suite of project documents that didn’t contradict themselves at least once. The moment that happens, everything is thrown into question. When document A says do this and document B says do something else, we’re lost. These always become areas of contention between parties as each will always refer to the clause that suits their own needs best. Consistency is everything, whether the contract is made up of 10 documents or 100, they must all read as 1.
6. Ambiguity
Anything that lacks clarity or leaves room for alternate interpretation is a problem, and it happens a lot. A classic example for me is the undefined use of the word ‘handover’ which, on a previous project, was interpreted by the main contractor as being ‘at every weekly issue of the model’ and by the consultant as ‘only at final project handover’. These are very different things. With no definition or clarity in the contract documents it was a circular argument, one that cost an incredible amount of time and money. Leave absolutely nothing to assumption, define everything to the most granular level possible to avoid misinterpretation.
7. Document everything
If its not written down, it simply doesn’t count. It’s a common occurance, especially on longer duration projects, that there is some level of staff turnover. In fact, it’s not uncommon for a project to finish without a single person left from the contract signing stage. Discussions and verbal agreements are entirely worthless and quite often, these lead to assumptions. Two people verbally agreeing something means nothing 3 years later to two different people squabbling over the contract documents. Document it, agree it and sign it – this is the only way that it means anything.
Absolutely nothing about the above is easy, I wouldn’t dream of claiming that it was. Contracts are long, difficult documents with a tonne of references, many appendices and above all else, many cooks (refer to post #21). So many individuals are involved that it is difficult to return a set of documents that are 100% aligned and consistent. Unfortunately, to the best of my knowledge, there is no alternative. This is something that we absolutely have to get right, because it’s costing us all.
There is no magic-wand solution to our contractual headache, but it’s clear to all of us that something needs to be done. Particularly in the scope-of-works area, there needs to be more guidance, something universal yet detailed, to bring all of our documents in line. Perhaps a new standard? Or a robust template that everyone could follow? I’d love to get some feedback on this because it is genuinely something that drags our industry down like a 10-tonne anchor. The comment box below is active (scroll down), or drop me an email for a non-public response.
I’ll finish there with a pet-hate, because why not. I refer to this as the ‘fake favour’:
Fake favours [phrase]; defined as an obvious, non-negotiable, clearly documented contractual requirement that is falsely presented as something optional that is only being delivered from the kindness of one’s heart. This is typically something that is clearly defined as a deliverable, but when asked to produce it the response, after some level of disagreement and with an arm twisted behind the back, is “okay, but we’re only doing this as a gesture of goodwill”.
THIS IS NOT GOOD WILL. THIS IS WHAT YOU HAVE BEEN PAID TO DO. THERE ARE NO FAVOURS IN CONTRACTS.
You all know what I mean.
Until next time…
Mr. Smith
smith@dbe.careers
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