Liability Factors and Conceptual Framework for Contracts to Manage Design for Digital Fabrication in Construction Projects

Digital design involves a data-rich design process that includes 3D design modeling, virtual design collaboration, and digital design documentation (Barlish and Sullivan 2012). State-of-the-art digital design technology is building information modeling (BIM). BIM facilitates design collaboration in a common virtual environment to cocreate data-rich 3D models. It enables simulation, monitoring, and digital twinning of construction processes as well as data management through digital systems (Wu and Hsieh 2012; Tsai et al. 2019; Ravi et al. 2021). Digital fabrication falls under the category of construction automation. It involves a digitally controlled fabrication process directly based on digital design information such as 3D geometry and coordination (Bock and Linner 2015). Digital fabrication entails a rethinking of management for the design process (Ng et al. 2020). It requires process, organization, and information integration between upstream design and downstream construction value chain (Ng et al. 2021). Recent scholarship explores lean and integrated design approaches, e.g., design for manufacture and assembly (DfMA), to manage design for digital fabrication in construction to different extents. The literature includes Bridgewater’s (1993) design for automation (DfA), Bock and Linner’s (2015) robot-oriented design (ROD), and Ng et al.’s (2021) design for digital fabrication (DfDFAB). However, the legal aspect has not yet been thoroughly studied to the authors’ knowledge.

Past scholarship has studied liability-related factors in the field of construction management. For example, Gad et al. (2011) explored various dispute methods for risk factors such as cost overruns. Mahfouz and Kandil (2009) studied factors such as project owner’s changes on clauses and the litigation outcomes of differing site conditions disputes. In this work, a liability factor is defined as a way, a mechanism, or a medium that can be responsible for impacting humans or nonhuman competency or incompetency that can contribute to improvements or failures in project performance (Celoza et al. 2021b). Through understanding the liability factors, project contracts can be designed to consider them in the early design phase so as to avoid evitable claims and potential disputes as well as to design to achieve project target values (Caine and Thomas 2013; Hyun Lee et al. 2020).

Recent literature studied factors related to liabilities for digitalization, in particular BIM adoption, in the AEC industry. This work studies liability factors under eight categories. The categorization is not limited to the approach presented in this paper. The literature and the examples of the factors are summarized in Table 1 and explained as follows. Hamdi and Leite (2014) identified the liability factors for conflicts of BIM implementation. These include cost control and return of investment as values, model ownership as condition, as well as accuracy and level of detailing in BIM for facility management as attribute and artifact. Alwash et al. (2017) presented the risk of dissipation of shared information as resource, limited liability of parties in collaborative virtual space as condition, negligence from professionals as condition and actors, as well as the admissibility of digital documents for courts as attribute as the liability factors of legal uncertainties in BIM adoption. Celoza et al. (2021a) identified risk allocation in contracts as condition, data transition as process, information preservation as artifact, standard of care as resources, responsible control as condition, and data misuse as risk as the liability factors for information management. Celoza et al. (2021b) found three necessary conditions for the project with cost success. They include the contractor and subcontractor (actors) being contractually required to use BIM, as well as the inclusion of the BIM execution plan in contracts. Despite the emerging adoption of digital fabrication in AEC, no research has studied liability factors in the process from digital design to digital fabrication.

The current practice commonly uses four project delivery models, namely, Design-Bid-Build (DBB), Construction Management (CM), Design-Build (DB), and Integrated Project Delivery (IPD). Fig. 1 summarizes the key elements that are relevant to this work.

DBB is well known as the conventional project delivery model. It is also commonly called the traditional procurement route in the UK. DBB usually involves two fragmented procurement steps and two solicitations. First, the design teams are appointed to complete design documents for a tender process. Second, the construction teams are selected, usually by providing the bid with the lowest price (Sullivan et al. 2017). The design process usually involves high design flexibility and low cost burden because DBB in general involves no early contractor involvement. However, DBB projects could suffer from change orders and claims due to negligence of construction know-how in the early design phase. Also, project owners usually control the assets and operations including project teams and schedules and thus they are financially liable for costs of any errors and omissions (E&O) in construction (Touran et al. 2011). Hence, DBB can “improperly presume a high degree of clairvoyance when allocating risk” (O’Connor 2009), but there are also cases when contractors “tend to be claim-oriented” (El-adaway et al. 2017).

In a CM project, the project owner usually manages all contracts separately with all parties, including hiring a construction manager as an agent with a separate contract to advise the owner and the design teams regarding construction methods and costs in the early design phase. The construction managers are usually selected based on qualifications (Ahmed and El-Sayegh 2021). In most cases, the construction manager is the general contractor for the construction (Sullivan et al. 2017). The early contractor involvement in CM can lead to relatively fewer change orders and more controllable costs and schedules while maintaining relatively high flexibility in design. The most commonly adopted derivation of CM is construction management at risk (CMR), where the general contractor (as the construction manager) provides a guaranteed maximum price contract to deliver the design during the construction phase. Hence, the owner is not financially liable for the cost above the set price (Touran et al. 2011).

DB has become more and more popular for the private sector and public projects since early 1996 when the US Congress passed the Clinger-Cohen Act, which provides DB guidelines (Hale et al. 2009). In a DB project, the project owner can issue one single contract to the DB party (also known as the general contractor) to complete the design and construction. They are selected based on qualification and/or, most often, the lowest fixed price bidding during the request for qualifications (RFQ) and request for proposal procedures. A DB party is liable for costs and also controls the assets and operations in design and construction (Touran et al. 2011). The early contractor involvement in DB allows for shorter project duration, fixed cost, and nonadversarial relationships throughout the process. Also, it is possible that some parts of the construction can be started while the design activities are still ongoing to save cost and time (Ahmed and El-Sayegh 2021). However, DB can lead to restricted design flexibility because the typical design professional liability insurance policy, commonly known as an E&O policy in the US, might not cover dissatisfaction of design (Hyun Lee et al. 2020).

The recent development of IPD intends to break with the tradition of fragmentation and low-cost competition in the AEC industry by integrating the supply chain through multiparty relational contracting. This involves architects, general contractors, and key trade contractors who are usually selected based on qualifications (Fischer et al. 2017). Instead of costing based on detailed design, IPD projects use the lean-based target value design for designing based on detailed costing (AIA 2007). The early contractor involvement and risk-and-reward sharing mechanism foster systemic innovation across disciplines and adoption of digital fabrication with cost control (Ng and Hall 2021). IPD also involves the BIM protocol to facilitate the BIM-based design and construction process. Moreover, innovative construction methods such as prefabrication and modular construction are usually specified in IPD contracts such as the Integrated Form of Agreement (IFOA). IPD projects can suffer from disputes due to the mismanagement of collaborative resources. For example, in the Sutter Health Fairfield Medical Office Building project, the architects found it unfair that their hours of work saved were added to the incentive pool, and thus they received a smaller portion than if they had not saved the hours (AIA 2012). Recent scholarship suggests relational management theories to manage collaborative resources as the commons in an IPD project, for example, Hall and Bonanomi (2021) explored Ostrom’s (2015) common pool resource governance to enable an agile, decentralized, and transparent governance structure, liability waivers, early contractor involvement and joint decision-making among multiple parties in IPD projects. However, how they can manage the integrated process of digital design and digital fabrication in an IPD project has not yet been examined.

For each of the four project delivery models, there is little to no research that investigates how they need to change in response to digital fabrication adoption. More broadly, there have been calls from scholars to investigate how new digital technologies impact project delivery models (Whyte 2019; Ahmed and El-Sayegh 2021).

To summarize the reviewed literature, there is a research gap in liability factors and contracting for design for digital fabrication projects in current practice. This can lead to conflicts and large claims and disputes among project parties. To assist the increasing number of project stakeholders in designing for digital fabrication, there is an urgent need to understand the liability factors in the process of digital design and digital fabrication and the corresponding contract design for digital fabrication for the main types of project delivery models. This work fills the gaps by addressing three research questions as follows:

To address the first research question, the first author conducted case study research on Case R in Project Q in Taiwan from March to September 2021. Primary data collection occurred through a review of project documents and schedules, and so forth, as well as 21 semistructured interviews with the project stakeholders. The first author then mapped the design-fabrication process of Case R in a swimlane diagram to illustrate the tasks and information flow from design to construction completion with validations by the project stakeholders (Ng et al. 2021).

This work employs an extended deep dive into a single case study using a case study approach and Delphi surveys of experts, who interpreted identical questions in identical ways to confront the reliability problem and achieve a consistent set of criteria for the data selection. The standardized interviews thus homogenized all experience by keeping the external conditions fixed to transfer their situational experience to situational knowledge to generate grounded theory with decontextualized generalizations from the systematic analysis of data (Burawoy 1998).

The Delphi method is a systematic multistage research approach to acquire detailed feedback on a specific topic from a preselected group of experts. It consists of anonymity, controlled feedback, and statistical group response (Dalkey 1969). The Delphi method involves an iterative process with various rounds, three in this work, of structured surveys (Hallowell and Gambatese 2010). The steps were defined based on Dalkey (1969) and Okoli and Pawlowski (2004). The Delphi method was chosen because it would identify liability factors from both the case study and expert experience and prioritize these factors based on expert experience. This iterative process allows the interviewees to first propose the factors based on their first impressions, then review feedback from others and revise their responses to gain consensus. Also, this method allows surveys to be conducted asynchronously and digitally (Celoza et al. 2021a), which suits the constraints during the pandemic period, when the research in this work was conducted. Furthermore, this method helps researchers develop frameworks based on the resultant data set. The Delphi method has already been adopted in much construction engineering and management research. For example, Giel and Issa (2016) and Celoza et al. (2021a) adopted the Delphi method to identify BIM-related competencies for developing a framework for evaluation and legal factors impacting information management, respectively; Ruhlandt et al. (2020) identified the drivers of data and analytics utilization within smart cities to develop a conceptual model; and Gunduz and Elsherbeny (2020) identified key operational factors to develop a contract administration performance framework.

Based on the study of Case R, 14 stakeholders from Project Q were selected through snowball sampling as the experts for the Delphi surveys in Stage 2. They were selected because they had strong responsibility and influence during the process of adopting the digital fabrication technology for Case R. Also, the affiliations of the selected experts were diverse to ensure the neutrality of the findings. This helps to generalize the findings of the proposed liability factors. Their qualifications can be found in Table S1. Although Experts 2 and 11 have no experience in contracts and working abroad, they had been extensively involved in the technical work for preparing the implementation of digital fabrication. Their work influenced digital fabrication’s liability on Project Q. Hence, the liability factors during the digital design and digital fabrication processes proposed by these two experts are valid for the Delphi study. Moreover, the factors proposed by them in Round 1 were further validated by other experts in Round 2.

The first author of this work conducted the three-round Delphi survey from May 2021 to January 2022. The survey design follows Okoli and Pawlowski (2004), Ruhlandt et al. (2020), and Celoza et al. (2021a). Even though many survey participants had prior relationships from working together on the project, during and after the Delphi surveys the experts’ identities and their responses remained anonymous to limit the effect of dominance bias (Dalkey 1969; Hallowell and Gambatese 2010). The experts were asked to identify the liability factors in the process from digital design to digital fabrication and rate the importance of liabilities for future digital fabrication adoption in projects based on their experience in Project Q. Round 1 involved interviews with open questions. Each expert was asked individually to propose important liability factors and rate their importance between 1 (marginally important) and 5 (highly important). Based on the literature, all proposed liability factors were categorized into eight categories: actor, resource, condition, attribute, process, artifact, value, and risk. The responses from each expert were documented digitally and sent back to the individual for their consent. After Round 1, the authors received in total 163 liability factors, which were sorted into eight categories, proposed by all 14 experts severally. In Round 2, each expert received a unique online questionnaire with all the factors that were not proposed by that expert. They were asked to rate each given factor with the importance in liability between 0 (not important) and 5 (highly important). They could answer “do not know/decline to answer,” which would be excluded from the calculation of the mean values. The responses from each expert were documented digitally and sent back to the individual for consent. Round 3 involved a common set of an online questionnaire with all the ratings of the liability factors collected in the first two rounds. Each expert was asked to rerate individually if they disagreed with any of the ratings. The final responses from all experts were documented and sent back to each for their consent.

Thirteen types were proposed as the important liability factors to different extents in the process from digital design and digital fabrication. They are named after their roles or professions. For example, the actor named digital fabrication (DFAB) engineer refers to a person or a group of people who work on the engineering of digital fabrication technology. General contractor was rated as the most important actor in liabilities. One reason stated by one of the surveyed experts is that in a typical project, “the general contractor is responsible for the overall construction process including planning and managing digital fabrication.” The importance of general contractor is followed by the DFAB trade contractor and the executive architect. The former is defined as an actor who is “legally responsible for the success/failure of the digital fabrication adoption in the construction process,” as quoted by one expert in this work. Moreover, one expert surveyed in this work stated that executive architects are “important, in particular, for large-scale public or public–private partnership projects.” Also, two experts specified that BIM specialist ought to be “in-house either as a member of the general contractor or as a member of the architect team(s).”

Eighteen types were proposed by the experts. The most important resource is management capability, which is defined as the capacity within multiparty project stakeholders to manage design for digital fabrication. This includes “managing and planning skillset to integrate 3D design models for adopting digital fabrication,” as stated by one of the surveyed experts. BIM expertise for design and construction and BIM modeling coordination platform rank second and third, respectively, regarding the importance in liabilities. They usually “come along with one another during the process from digital design to digital fabrication,” as stated by one expert in this work. They are followed by platform’s 3D interface capability and platform for performance analysis, ranking fourth and fifth regarding importance in liabilities. It can be concluded that BIM-based digital systems are in general important in liabilities.

Twenty-three types were proposed as the liability factors under this category. On-site constructability was rated as the most important condition. One reason stated by one expert in this work is that “a system fabricated digitally off-site should be integrable with other building parts during on-site assembly.” This is followed by digital fabrication information involved early as the second and common virtual environment, design-construction integration, and early contractor involvement as the third. The condition of early contractor involvement is relevant to “design for constructability,” as stated by one surveyed expert. This factor was initially proposed by 8 out of 14 experts in Round 1 of the Delphi survey.

Twenty types were identified through the Delphi surveys. Customizable ranks first in terms of importance in liabilities. One reason stated by an expert in this work is that “a customizable digital fabrication process can increase design complexity to achieve the project requirements.” Mutual trust and sharing among team and optimizable rank second and third. The former attribute was considered important because “trust is important to bring the digital design to digital fabrication with information integration from different parties,” as stated by one expert. Regarding the attribute risk sharing/agile management, one expert stated that “the more complex the project, the more important it is in liabilities.”

Twenty-two types were proposed as important liability factors. Architectural design optimization ranks the first. It includes optimizing “the geometry of the building system to achieve both the design intents and constructability,” as quoted by one surveyed expert in this work. This is followed by integration within packages. Some packages can be fabricated digitally, some can be constructed manually. “Their system interfaces should be well integrated through collaborative work,” as stated by one expert in this study. Digital fabrication process optimization, which specifically refers to the process of adopting digital fabrication, and engineering design optimization rank third; while construction process optimization, which refers to the overall construction process, ranks fourth. It can be concluded that processes of optimization are in general important in liabilities.

Fourteen types were proposed by the experts. Precise 3D BIM construction model ranks first. This artifact is in particular important for DBB projects because it is usually the model that provides “construction information and pricing,” including the “bill of materials and quantity takeoff,” as quoted by one expert. This is followed by integrated construction data from “not only general contractors but also the subcontractors involved,” as stated by one expert in this work. The third is physical mock-up of the digital fabrication process. Surprisingly, virtual mock-up of the digital fabrication process ranks 12th under this category. Also, although Case R in Project Q has demonstrated the effectiveness of using point-cloud technology to assist digital fabrication adoption, the artifact point-cloud files ranks last in terms of importance in liabilities.

Twenty-five types were proposed as the liability factors under this category. Reduce errors in the digital fabrication process was rated as the most important value. This has been well demonstrated in Project Q, where Case R had one of the lowest errors among all other cases. This is followed by improve quality/performance and improve design communication, respectively. Surprisingly, various types of cost reduction were proposed by the experts. However, values regarding costs were not rated highly in terms of importance in liabilities.

Twenty-eight types were identified through the Delphi surveys. The ratings of each factor under this category are in general not high compared to other categories. However, this category has the most types of liability factors. Design/BIM and on-site misalignment ranks first. One reason as shared by an expert is that “digital design [in BIM] and off-site digital fabrication could be fragmented with the situation on-site.” This is followed by DFAB constructability uncertainty. Digital fabrication is still in its early phase of adoption despite its technological advancement. One expert stated that “many stakeholders in the AEC industry are still skeptical about its performance in particular regarding constructability.” Some experts raised concerns over cyber security, building codes not suitable for digital fabrication, as well as limited market competition/monopoly. To the authors’ knowledge, these aspects of digital fabrication adoption have been rarely studied.

Further to the case study, the identification of liability factors through the Delphi survey, and the development of the contractual framework for contract design, the authors further examined how the existing project delivery models in current practice can consider the proposed contractual provisions based on the findings in this work. Based on the knowledge of the process from digital design to digital fabrication from the case study and the studies of the four existing project delivery models in current practice from the literature (e.g., Sullivan et al. 2017; O’Connor 2009; Fischer et al. 2017), the authors further proposed three ways to consider the 22 important liability factors in Contract Provision A in contracts as shown in Fig. 5:

Three examples are presented as follows:

Based on Fig. 5, the authors evaluated that, among the other three project delivery models, IPD requires fewer supplementary considerations when designing the contract for design for digital fabrication. IPD could require more considerations, in particular, in the BIM protocol and with design-to-target value practice to manage projects commons (Ostrom 2015) in the integrated process from digital design to digital fabrication. The considerations can include distributed ledger technology such as blockchain on BIM-based platforms to govern collaborative resources for multiparty relational contracting.

This work presents the knowledge in digital fabrication adoption through an in-depth single case study of an existing project that had successfully adopted digital fabrication in practice. The work illustrates the process mapping that can provide a good reference for researchers and industry stakeholders to design for digital fabrication. Also, this work identifies important liability factors in the process from digital design to digital fabrication. Based on the findings, this work presents the contractual framework for contract design that comprises four contractual provisions to consider the important liability factors. This contributes to the body of knowledge in the legal aspect of construction management by establishing a foundation that explores the corresponding mitigation, dispute resolution mechanisms, and litigation for future digital fabrication projects. Moreover, this work elaborates on the contractual considerations of the important liability factors with supplementary agreements, clauses, and practices for existing project delivery models in current practice to foster a successful adoption of digital fabrication in the early design phase. The proposed framework provides insights for industry practitioners to design the contracts immediately.