Before You Bid, Know the Digital Demands of a Project

Digital and data controls have moved to the forefront of today’s project risk management,
both before projects begin and after their completion. It is becoming more common for suppliers and trades to encounter contractual terms that address who, when and how electronic project data and plans are accessed, changed and stored. Addressing these items at the time of contracting is essential to define and understand a project’s requirements.

Data and digital rights must be considered regardless of a project’s size, but let’s start with the big jobs. The 2013 American Institute of Architects Digital Practice Documents are being widely endorsed as uniform standards by the makers of construction management and building information modeling software. There are four documents of particular importance:

Document C106 is a license agreement for the use of digital data. By signing, a company agrees that it can use, but does not own, someone else’s digital data. These licenses are
critical in the digital world, because the value of information exists in the right to control its distribution. There is some concern, however, due to an indemnity clause for claims arising out of, or relating to, modification or unlicensed use of data. This requirement could be read broadly, and therefore very expensively, against trades who run afoul.

Document E203 is an announcement of the intent to use digital data on a project. It tries to establish common grounds for the use and transmission of digital data and necessary preliminaries for BIM, if used on a project. It includes a similar license agreement to Document C106. One concern for E203 is the possibility of long-term obligations for archiving that stretch well beyond substantial completion.

Documents G201 and G202 are two documents that attach to E203’s master attachment. G201 and G202 are job-documents that can be modified during the course of construction. G201 addresses use of digital data and centralized storage, but does not include BIM. G202
addresses digital data and storage where BIM is used. Both have their own disclosure and usage controls that depend on the parties’ intent to use digital data.

Even in projects that do not require the AIA forms, contractual digital controls are being included more regularly. Owners and general contractors have their own contractual data controls that require indemnity and reimbursement for hardware costs. Often these nonstandard clauses require certain file types or applications that may necessitate
hardware or software expenditures by subcontractors. Compelled digital vendor requirements are also becoming more common. These require all trades to submit data to a third party for preparation and dissemination. Cost control for required vendors is generally not available to subcontractor tiers and these pass-through or direct-bill items can be excessive.

It is also important to remember that digital controls are not limited to an office. Mobile Device Management is becoming another digital control required of subcontractors. Specification of certain mobile apps or required job logging via mobile devices is becoming more common on large projects. It is becoming more common to see MDM inventory controls and site staging through QR Codes and RFI submittals through Skype as required conditions. The flexibility and utility of mobile devices make them invaluable tools, but also require contractual vigilance when terms impose what you must do via a mobile device.

The importance of data and mobile devices to job performance means that contracts often expect control over the digital and mobile data from trades and contractors. To manage these contractual demands, companies must first understand how they use digital and mobile data. Certainly not every company requires a detailed digital device plan or chief information officer. But, knowing what digital controls can and cannot be met is an essential risk management step; likely the first one.

Next, watch for digital control demands in owner demands, prime contracts and “assumed term” clauses, among others. Careful review can be necessary because digital controls are
often imbedded throughout an agreement. Additionally, certain digital obligations have initial costs for hardware, software or archiving. Digital needs must be a part of bidding cost and ongoing project management concerns.

Finally, if you regularly operate in a world of digital submittals and archiving, talk to your insurance broker. Confirm you have coverage if something does go wrong with data
storage, security and/or corruption. Each event can be very specific and may necessitate its own coverage.

The future of digital claims on construction projects may be expansive. We already see these claims in access to data, RFIs, change orders, as-builts and owner approvals. Careful digital contracting and internal device and data controls are necessary risk management realities in today’s market.