A £55 million power station was to be built in the Falkland Islands. During the tender period, the contractor engaged the consultant to provide design consultancy services, for which they received a modest payment, with a view to the consultant carrying out full design services if the bid was successful. Those services included design and the preparation and implementation of building information modelling (BIM).
BIM is a technology-enabled process where information and data is comprised in 3D models allowing it be shared amongst relevant parties. It assists with the design, preparation and integration of different aspects of a project. BIM can be a useful tool for planning and management of the design and construction process and beyond. Project software called ProjectWise was to be used to enable the design teams to manage, share and distribute design data on a single platform.
The bid was successful. However, the contractor and the consultant fell out about the scope of the work and the consultant’s entitlement to payment. This resulted in a dispute about what exactly had been agreed: was there no contract; was there a simple contract without detailed terms and conditions; or was there a contract in the standard terms submitted (which included a cap on liability of £1 million)? A large payment had been paid to account but other invoices remained unpaid.
The consultant issued a notice saying it would suspend performance unless payment was made by 2 June. Payment was not made. On 2 June the consultant denied the contractor access to the servers hosting the design data in ProjectWise by revoking the contractor’s password.
The impact to the contractor was considerable – delay and losses well over the cap of £1 million (if it were applicable). On the other hand, if the consultant was compelled to hand over the password, then it would suffer the loss of a very good bargaining position.
The judge decided, on the balance of convenience, to grant the interim order for access to be restored.
- As technology advances, access to electronic information and how that is governed will become more and more important. This will particularly be the case with BIM-enabled projects (which the Government are strongly behind) and a single platform approach. Where passwords allow access, care should be taken to ensure control of those passwords lies in the correct hands.
- Consider whether it is appropriate to have positive BIM and copyright obligations in consultant appointments which survive termination and suspension.
- Beware of clauses in appointment terms that are subject to payment of outstanding fees (this is often the case with copyright provisions).
- Be clear on the terms which govern any appointment at the outset. The passwords dispute grew out of a disagreement about what the original contract terms were.
Source: Scottish Construction Now!
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