Compensation Events for a change to British Standards?
BLUF: We have been working to one standard, the standard has been superseded, and now we’re being asked to work to the new standard… Without a compensation event.
Question: The following 3 paragraphs have been ripped from a TMR I’m currently writing (so excuse the lack of colour) but led me to wonder if anyone else had come across similar instances. For example when BS 7671 (requirements for electrical installations) moved from 17th to 18th edition in 2019, would you expect to be given a PMI and CE to compensate the possible increase to the cost of your works?
The Issue:
To understand CSJV’s BIM strategy, the author sought to identify the specific BIM related clauses in their contract with the Client. However, in an interview with Matthew, CSJV’s BIM Manager (2020), it was explained that a BIM level was not specified in the contract, in fact only the requirement to work to PAS 1192-2:2013 (British Standards Institute, 2013) was specified. PAS 1192-2:2013 focuses on the construction phase and specifies the requirements for Level 2 maturity; sets out the framework, roles and responsibilities and expands the scope of the Common Data Environment (CDE). When questioned on the lack of specifics in the contract, Matthew quoted guidance issued by the UK BIM Alliance, the UK’s largest community lead institution for BIM.
The UK BIM Alliance, and specifically its legal community, recommend that BIM levels are not specified in contracts. This is because, according to Matthew, that it would require the contractor to take too much risk. The perceived risk reflects the idea that it would be impossible for the Client to effectively define the BIM requirements of level 2 as they are too many in number, and simultaneously too complex and too vague. It is also relevant to mention that whilst more recent revisions to the PAS have reduced ambiguity, at the inception of HS2 Ltd. the standards were in their infancy.
The standards of BIM expected to be met by CSJV have become more ambiguous since the Client has recently been requesting elements of the BEP (BIM Execution Plan) to be delivered to ISO19650, a new standard superseding PAS 1992-2. CSJV claim that this would require a Project Manager’s Instruction (PMI) and an expensive Compensation Event (CE) as it is a change to the scope and would require a change to internal process. The Client claims that by requiring the latest standard at the time of contract signing, there was an implication that the latest standard would always be required – this has not yet been resolved but Matthew explained that without a PMI and CE they continue to work to the older PAS 1192-2.
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Hi Jordan,
I experienced a similar issue with changing standards on the design project I worked on during my consultant attachment. I’ll explain what happened there.
The project design contract for the Westgate Tunnel Project were signed around 2010 (exact date escape me). The contract stated AS5100-2004 (bridge design code, 2004 edition) and AS3600-2009 (reinforced concrete design dated 2009). Fast forward to today and a search on the equivalent to IHS returns AS5100-2017 and AS3600-2018 as the current versions so which do we apply to the project?
As the project was signed before the standards were updated, the old editions are still used on the project. This makes sense otherwise the designer would have to re-design their previous work everytime a standard is updated and the contractor could potentially have to rework completed works that didn’t meet the new design standard. In short nothing would ever get built.
I believe in the PCM lectures Gregg highlighted that most contracts have clauses that ‘freeze’ the standards at the time of signing eg if signed in 2010 the current standards applicable in 2010 are applied. Of course every bespoke contract is different and standard contrats may include different optional clauses so check the fine print.
If I were in your contractor’s position and the old standard was stated in the contract I would expect any change to the standards (or BIM requirements) to be a PMI and have an associated compensation event due to the increased scope/software requirements/cost. It sounds like the client may be chancing it by willfully interpreting the stated standard to mean the ‘latest standard’. From the Client’s perspective I can definitely see the benefit of having the BIM information to the latest standard the question is do they want it that badly they are willing to pay for it?