Progressive Design-Build Takes Another Step Forward in California

Mary Salamone | Procopio, Cory, Hargreaves & Savitch

Legislators have gradually expanded local agencies’ authority to procure construction projects over the last couple of decades by using various alternatives to the design-bid-build delivery method, which requires that contracts are awarded to the lowest responsible bidder. Recently, California took another step forward in this regard.

On September 2, 2022, Governor Newsom signed into law SB 991, which expands the use of progressive design-build (PDB) project delivery in the public sector for certain water projects. This process has proven to be well-regarded by the construction industry for its balanced risk allocation, while simultaneously providing municipalities more flexibility in addressing challenges such as droughts.

Existing law, until January 1, 2025, authorizes local agencies to use the traditional design-build procurement process for specified public works with prescribed cost thresholds. This new legislation, until January 1, 2029, authorizes local agencies to use the PDB process for up to 15 public works projects in excess of $5 million for each project, similar to the PDB process authorized for use by the Department of General Services.

The term “local agency” is defined in the bill as any city, county, city and county, or special district authorized by law to provide for the production, storage, supply, treatment or distribution of any water from any source. The bill requires a local agency that uses the PDB process to submit, no later than January 1, 2028, to the appropriate policy and fiscal committees of the Legislature, a report on the use of the PDB process containing specified information, including a description of the projects awarded using the PDB process.

PDB emerged as a project delivery model in Canada in 2020 and quickly gained traction in the U.S. The PDB process has grown in popularity in recent years as a valuable form of collaborative project development that can help the project stakeholders minimize some of the customary risks inherent in traditional design-build, specifically by helping to avoid unforeseen conditions and design changes through a more achievable schedule and cost structure.

Essentially, the PDB model generally includes two phases. In the first phase, the awarding authority uses a “best value” process primarily focused on qualifications and experience to select a design-build entity. Notably, the fee to be paid to the design-build entity for both phases of the project is agreed upon at selection; however, the overall project cost and schedule are not established at the time of the selection. This mitigates the issue of a design-build entity bidding on a project with incomplete plans and specifications.

In phase one, the design-build entity completes preliminary plans and preconstruction services necessary to provide a cost estimate and final design proposal. During this phase, the design-build entity collaborates with the awarding authority and with its own consultants to develop the project’s overall design and clearly define the programming and priorities. Generally speaking, most owners, consultants, and contractors would choose a collaborative work environment as opposed to the adversarial approach inherent in many traditional forms of contracting.

The project then progresses to the second phase where the awarding authority and design-build entity agree to a final design, cost, and schedule, creating full transparency with an open-book approach. At an agreed upon time, typically when the design is between 50 and 75 percent complete, the design-builder will present the awarding authority with a commercial proposal to deliver the project in phase two, which is for the final design, construction, and commissioning.

The design-build entity would present a specific schedule along with a guaranteed maximum price (not to exceed) cost basis. If the parties cannot agree on a fair value cost, then there is a contractual “off ramp” that the awarding authority can exercise in its discretion if it elects not to proceed. Even if the “off ramp” is used, the awarding authority still benefits from having the first phase work complete since it may then solicit competitive proposals to complete the project from other entities. This differs from traditional design-build project where the awarding authority contracts with a single entity to design and construction a project at a set price before design work begins in earnest and without a similar “off ramp.”

Thus far, the PDB delivery method has been well-received in the construction industry since it appropriately and reasonably allocates the risk for each party involved in a project, which has been a frequent criticism of the traditional design-build approach. It also allows an awarding authority high level of input and control while allowing the design-builder the best possible environment to foster the innovation much needed for complex water projects. California is in another cycle of drought, and SB 991 could provide an opportunity to assist local agencies in addressing the state’s critical need for additional water.


When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.

Beware of Design Pitfalls In Unfamiliar Territory

Brad Shefrin | ENR Mountain States

$250,000. $1.5 million. $12 million. These are the litigation damage estimates that plaintiffs sought to recover against design professionals who failed to familiarize themselves with local site conditions.

For firms designing projects for clients with a regional, national or even international footprint, associating with local professionals is an often overlooked but necessary protection against embarrassing and costly design problems. The following are real-life case studies.

An East Coast-based engineering firm did not take expansive clay soils into consideration when it designed an under-slab sewer system. Detailing installation of PVC pipes into shallow, below-slab trenches had been the norm for the client’s warehouses throughout North America, so much so that boilerplate details were often passed from project to project without any serious scrutiny from the engineer who stamped the plans. While the firm had engineers licensed throughout the country, those engineers seldom had experience designing in every state where licenses were held.

Within a year of project completion, surface drainage found its way under the slab, wetting the subsurface soils. The resulting expansion of the clay split and shattered the PVC pipes. It was a multimillion-dollar design error.

In another example, a West Coast designer specified the make and model of a natural gas-burning fireplace to be installed in Colorado without realizing that the specified firebox was not rated for installation at altitudes above 3,500 ft and that the property had no access to a municipal gas service line. An above-ground propane tank was installed.

Gaseous propane is heavier than air, whereas natural gas is lighter. Natural gas burns slightly cooler than propane, so the orifice size on natural gas burning devices is larger compared with appliances that burn propane. The pressure of natural gas flowing through a service line is less than the pressure of gas in a propane tank. Within a week of completing the new home, the owner was delighted with 2-ft-tall flames in her fireplace. She recalled seeing a red glow at the top of the firebox that lasted for several minutes after she turned off the unit. Unfortunately, using the wrong orifice size and wrong fuel ignited the framing and insulation surrounding the firebox. The fire spread to the attic, setting off the sprinklers, which irreparably damaged several expensive works of art.

A final example involves an MEP designer that specified a natural gas heater and blower system for a homebuilder who was beginning to construct communities in states well above sea level. The designer failed to consider that as elevation rises, air density decreases, and with decreased density, heating and cooling efficiency ratings also decrease. A furnace rated at 80% efficiency is only 60% efficient at higher altitudes.Among the chief complaints from the new homeowners were cold spots that could not be attributed to insufficient insulation, leaving the homeowners with heating bills well above that predicted by the product literature and labels.

Even though most states have open reciprocity allowing a licensed engineer or architect to pay a fee to stamp plans in that jurisdiction, the licensing application process rarely, if ever, educates the design professional on nuanced design considerations for that jurisdiction. Make certain your team is prepared and protected by contacting the local building authority to learn about important conditions.


When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.

Architect, Engineer, and Design Professional Liens in California: A Different Animal than the Mechanics’ Lien

William L. Porter | Porter Law Group

Most in the construction industry are familiar with the rules governing California mechanics’ liens.  They know that the Preliminary Notice of Civil Code Section 8034 and 8200-8216 is an important foundational prerequisite document and that the deadline to record a mechanics’ lien is generally triggered by events occurring at the end of construction, including completion of the work of improvement and/or the recording of the notice of completion or notice of cessation.  Most of these rules are found in California Civil Code sections 8160-8494.

While architects, engineers and other design professionals are certainly entitled to pursue a mechanics’ lien at the end of a construction project when they are unpaid for their work, unless they also consider the remedy available to them under the California “design professional lien,” they are missing a powerful opportunity to preserve the right to payment only available to architects, engineers, and design professionals.

The California design professional lien is generally available to any certified architect, registered professional engineer or licensed land surveyor who furnishes services under a written contract with a landowner for the design, engineering or planning of a work of improvement, other than a single-family, owner-occupied residence with construction costs of less than $100,000 in value.  These rules are generally found in California Civil Code sections 8300-8319.

Where a building permit or other governmental approval for the work of improvement has been obtained, the recorded design professional lien will encumber the property where the work is to be preformed from the date of recording of the design professional lien notwithstanding the fact that the actual construction work on the project has not yet commenced (Civil Code sec. 8304).  This differs from the California Mechanics’ lien which is generally pursued long after work has commenced and in most cases been completed.

Under the design professional lien process, after the landowner defaults in the payments required by the written contract with the design professional, the design professional must mail a written demand to the owner specifying that a default in payment has occurred and the amount of the default.  The letter must be sent by registered or certified mail, express mail, or overnight delivery by an express service carrier. Only after properly sending such a notice and waiting 10 days may the design professional record the design professional lien at the office of the County Recorder (Civil Code sec. 8304).

The deadline for the recording of the design professional lien is important. The design professional lien must be recorded no later than 90 days after the design professional knows or has reason to know that the landowner is not commencing the work of improvement (Civil Code sec. 8312).  In addition, the design professional lien automatically expires and becomes null, void and of no further force or effect on the occurrence of either of the following:

  1. The commencement of the work of improvement for which the design professional furnished services at the request of the landowner; or
  2. The expiration of 90 days after recording the notice of lien, unless the design professional files a lawsuit to enforce the lien within 90 days of recordation (Civil Code sec. 8306).

The impact of these rules is that in order to ensure preservation of the right to a design professional lien, the design professional should draft the contract with the landowner so that to the greatest extent commercially feasible it is not possible for the landowner to commence construction of the work of improvement for which the design was created until payment from the landowner has been received.  One way to do this is to contractually authorize withholding of the delivery of design documents until satisfactory payment has in fact been received.  If the design documents are delivered without payment and actual construction work on the project commences, the right to an enforceable design professional lien will be lost.

Please note that the fact that the design professional has the unique right to a design professional lien does not mean that the design professional may not also later claim the California mechanics’ lien remedy available to contractors, subcontractors, suppliers and others under the rules of California Civil Code sections 8400-8494.

While this short article cannot fully describe all the advantages or the limitations of the design professional lien, it is important for certified architect, registered professional engineer or licensed land surveyors to realize that they have these rights and to draft their contracts and adjust their procedures to protect these rights to the extent possible.  For further detail on the design professional lien please consult California Civil Code sections 8300-8319.  This Civil Code section and all California Codes are currently available for reference on-line at www.leginfo.ca.gov.


When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.


Beware The Duty To Defend Language In Contracts With Architects And Engineers

Andrew O. Gay | Gentry Locke

It is the job of the Virginia legislature to make and change the laws of our Commonwealth. Sometimes, these new or changed laws are plastered all over the news. More often than not, new and changed laws are put into effect with little to no publicity. Nevertheless, there they are, ready to be used as a tool, or weapon, when the time presents itself.

Despite the world’s reaction to COVID-19, the Virginia legislature was hard at work in 2020. Part of its work included amending an existing law concerning indemnification provisions in contracts with design professionals. Historically, indemnification provisions included a duty to defend. In 2020, the Virginia legislature changed this rule, following a popular trend among other state legislatures, by adding the following paragraph to Va. Code § 11-4.4:

Any provision contained in any contract relating to the planning or design of a building, structure, or appurtenance thereto, including moving, demolition, or excavation connected therewith, or any provision contained in any contract relating to the planning or design of construction projects by which any party purports to impose a duty to defend on any other party to the contract, is against public policy and is void and unenforceable.

This amendment is important, but it has gone largely unnoticed by owners, contractors, and design professionals. As a result, for all qualifying contracts after 2020, the inclusion of a “duty to defend” obligation will render the entire provision void and unenforceable. Keep in mind that this new paragraph in Va. Code § 11-4.4 concerns any provision, not just indemnification provisions. Thus, owners, contractors, and design professionals must all be on the lookout for “duty to defend” provisions going forward, or else risk having numerous provisions of their contracts stricken.

As Benjamin Franklin once said, “an ounce of prevention is worth a pound of cure.” When dealing with design professional contracts, that ounce of prevention is taking the time to properly prepare, review, and negotiate your contracts before signing them.


When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.

Substitute Materials — What are Your Duties? What are Your Risks? (Law Note)

Melissa Dewey Brumback | Construction Law in North Carolina

many hard hats

In managing a project as the design professional, you are called upon to wear many hats.  One of those hats is that of material specifier and, at times, substitute material approver.  What are your duties in looking at substitute materials?

As always, the legal answer is “it depends”.  In part, it will depend on your role on the project and what, specifically, the contract says.  However, at its most basic, you can be sued for accepting an out of spec substitute material.  This is so even if you believed the spec met requirements based on information that the contractor gave you.  So, tread carefully in this area.

Do not assume any information that the contractor presents to you– take the time to research for yourself, call the manufacturer, and otherwise ensure that the product will work.

If the substitute is okay but will mean the Owner will get something a little different, make sure the Owner knows that and has approved the change.  Needless to say, get this consent in writing, as it could be evidence one day.

While you may not ultimately be held responsible for approving a substitute that is inferior, you don’t need the headache of finding that out from a Court.  Save your time, and your stomach lining, and make sure it’s correct and documented on the front end.


When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.