Category Archives: Design Professionals

Public Contract Code Section 1104 Does Not Apply to Claims of Implied Breach of Warranty of Correctness of Plans and Specifications

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Garret Murai | California Construction Law Blog

It’s the classic tale of two cities. One city is occupied by architects and engineers. The other, by contractors. And while the cities typically co-exist relatively peacefully together, at times, they do not, such as when a defect arises that can either be a design or construction defect.

Sometimes, project owners are pulled into these fights as well. There is a common law rule that when contracting with a contractor the owner impliedly warrants to the contractor that the plans and specifications are sufficiently accurate and correct.

And, if you work on local public works projects, you may be familiar with Public Contract Code section 1104 which provides that, with the exception of design-build projects, local public entities cannot require a bidder to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications.

In Suffolk Construction Company, Inc. v. Los Angeles Unified School District, 90 Cal.App.5th 849 (2023), the Court of Appeal examined Public Contact Code section 1104 and found that, while Section 1104 prohibits local public entities from contractually requiring contractors to assume responsibility for the adequacy of plans (again, unless the contractor is a design-builder), Section 1104 does not prohibit public entities from contractually requiring contractors to determine the means and methods of achieving performance standards.

The Suffolk Case

Suffolk Construction Company, Inc. was the lowest responsible bidder on a school project of the Los Angeles Unified School District. The Project, known as the Central Region 9th Street Span K-8 Project (just rolls right of the tongue, doesn’t it?), consisted of the construction an elementary school building, a middle school building, a multi-purpose room and a parking structure. The contract price was over $39 million.

Suffolk subcontracted with R.J. Daum Construction Company to perform structural concrete work including the construction of concrete footings. After 1,450 cubic yards of concrete was poured for the the first of the concrete footings, subsidence of the footings and “checkerboard cracking patterns” were observed.

The project engineer KPFF Consulting Engineers directed that all work stop. Core samples were taken which revealed significant gaps between the rebar and the concrete. Then, as these things tend to happen, Suffolk pointed its finger at R.J. Daum and both Suffolk and R.J. Daum later pointed their fingers at KPFF. However, before we get there, it’s important to talk about the “mock” pourings.

The parties agreed to conduct a “mock” pouring, which eventually turned out to become four “mock” pourings to determine the cause of the subsidence and cracking:

Mock Pour 1: Baseline Pour – Mock Pour 1 was intended to simulate the footings as placed. As such, during the mock pour, the same concrete mix from the same concrete supplier was poured using the same means and methods as the original pours. The results were better than the original pours but cracking was still observed. In addition, revibration – where the concrete is re-vibated just before it sets – was used for a subset of the Mock Pour 1. The results, while again better than the original, still resulted in cracking.

Mock Pour 2: Different Supplier – Mock Pour 2 used the same concrete mix and used the same means and methods as the original pours, but used concrete from a different concrete supplier. Again, the results were better than the original but cracking was still observed.

Mock Pour 3: Different Concrete Mix – After Mock Pour 2, LAUSD retained concrete expert Geoffrey Hichborn of Building Forensics International who opined that the loss in concrete volume was due to water loss from the fresh concrete into the soil. Hichborn recommended the use of an accelerant admixture as well as a vapor barrier to prevent “moisture transport . . . between the concrete and soils.” However, for Mock Pour 3 a higher strength concrete mix was used instead. Mock Pour 3 resulted in results similar to Mock Pour 1 and Mock Pour 2, with cracking still observed.

Mock Pour 4: Eureka!: For Mock Pour 4, the parties agreed to use a rat slab with Visqueen sides to isolate the concrete from the adjacent soil. The results were successful! But then the finger pointing began.

Suffolk and R.J. Daum contended that Mock Pour 4 proved that the cracking was a design error because the rat slab and Visqueen sketches provided by KPFF for Mock Pour 4 constituted a design change that was necessary to “correct” a design error.

LAUSD, on the other hand, contended that the use of Visqueen was not a design error because the specifications permitted R.J. Daum to use Visqueen it if wished. Further, LAUSD contended that, while the rat slab and Visqueen corrected the cracking, it was not probative of the cause of the cracking which could have been caused by other factors including:

  • Inadequate or improper vibration techniques.
  • LAUSD also presented evidence that R.J. Daum’s concrete mix used more water than was necessary.
  • LAUSD also presented evidence that R.J. Daum could have mitigated the effects of the excess water by using admixtures to reduce the potential for excess water bleeding.
  • Finally, LAUSD presented evidence that R.J. Daum failed to use the required aggregate composition.

Note: This highlights one practical piece of advice: Follow the specifications, to a “T,” and if you have questions prepare a request for information. When it comes to concrete, you’re not baking cookies for the family, like I just did this weekend.

Ultimately, these issues went to trial. And LAUSD lost.

The trial court permitted Suffolk to include a special jury instruction on Public Contract Code section 1104 and in closing argument Suffolk’s counsel argued:

And essentially, now they’re saying the contractor should have designed the mix further to make up for the error that was left by KPFF. [¶] . . . [¶]

And there’s a jury instruction that’s right on point.

No local public entity shall require a bidder to assume responsibility for the completeness and accuracy of the engineering plans.

In other words, you the public agency cannot transfer this design responsibility to the contractor. Why? Because we want the smart people doing this. We want the people with the stamps doing this, not the contractors. These are public buildings used by the public and we don’t want the designers to shirk their responsibilities and hand this off to the contractors.

And this is a California statute, a code section, so the contract can’t override it. Any provision that the school district stands up this afternoon and says, well, this requires the contractor to adjust the mix to fix this problem is in violation of the statute.

Suffolk’s counsel emphasized Public Contract Code section 1104 again in rebuttal:

Clearly, we’ve seen there’s a Public Contract Code section that says the contract—the owner can’t shift it. And you know why that section exists? Why do we have any statute? It’s to prevent people from doing things like they’ve been doing.

The reason we have that statute is because owners have tried for years to shift that design responsibility to the contractor. And the state spoke and said you can’t do that. The design must stay with the designers, the people with the stamps.

I don’t know how design professionals = smart and contractors = not so smart came up, but ultimately, the jury sided with Suffolk finding that LAUSD breached the implied warranty of correctness of plans and specifications by providing specifications for the concrete footing design that were not correct.

LAUSD appealed.

The Appeal

On appeal before the 2nd District Court of Appeal, the Court of Appeal explained that instructional error (i.e., Suffolk’s special jury instruction) is subject to de novo review explaining that, “‘where it is contended that the trial judge gave an erroneous instruction’ we must ‘view the evidence in the light most favorable to the claim of instructional error.’”

Discussing Public Contract Code section 1104, the Court of Appeal explained:

Section 1104 was enacted to prohibit a public entity from transferring design responsibility to the contractor. The legislative history shows that the Legislature accepted the long-standing division of responsibilities on public construction projects set forth in United States v. Spearin (1918) 248 U.S. 132 (Spearin). However, the Legislature noted a “recent trend by local entities to utilize contract provisions to transfer design liability from architects to general contractors.” (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 1314 (1999-2000 Reg. Sess.) as amended Sept. 2, 1999, p. 3.) The Legislature noted that this trend ran “counter to the long-standing division of responsibilities on construction projects which was formally recognized by the U.S. Supreme Court in [Spearin].” (Ibid.) Due to this trend of contractual shifting of responsibilities, the Legislature enacted section 1104 to prohibit public entities from requiring bidders to assume such responsibilities. The purpose of section 1104 was thus to prevent public entities from attempting to contract around the Spearin doctrine.

Noting, however, that cases interpreting Public Contract Code section 1104 were “sparse,” the Court of Appeal noted that “the few available cases support the premises that Section 1104 is not relevant to a claim for breach of implied warranty of the correctness of plans and specifications” and that “[i]nstead, its purpose is to prevent public entities from attempting to contract around their obligation to provide correct plans and specifications” and “[i]t says nothing about the contractor’s burden to prove that the public entity breached the warranty of correctness.”

Hmm. Let’s chew on that for a moment, literally, as I’m eating one of my cookies as I type. Would Suffolk have been in the safe zone if it alleged that LAUSD had violation Public Contract Code section 1104 rather than alleging that LAUSD breached the implied warranty of correctness of plans and specifications? No, I think it’s more nuanced than that.

While it is true that Suffolk alleged that LAUSD had breached the implied warranty of correctness of plans and specifications as opposed to a violation of Public Contract Code section 1104, the rub, to me, seems to be between Public Contract Code section 1104 and the ability of local public entities to allow contractors to determine their means and methods.

LAUSD argued on appeal that Public Contract Code section 1104 was inapplicable because its specifications did not require Suffolk to assume responsibility for the correctness of its specifications. Rather, argued LAUSD, they “were proper objective performance standards, which allowed the contractor to select the promotions and ingredients in the concrete mix within the parameters of LAUSD’s design.” This, in turn, argued LAUSD, “allowed Suffolk, the entity with the most extensive expertise in performing concrete work, to select the appropriate concrete mix.”

I’m not sure if I buy that though. There was nothing in the appellate decision that indicated that the specifications included performance standards. Rather, the specifications, from what I can gather from the decision, gave the contractor options it could consider using such as the use of Visqueen.

Thus, to me, the issue is how complete do plans and specifications need to be? Certainly, providing a schematic drawing to a contractor and saying “build this for me” is on one end of the spectrum. But what if you told the contractor, use a concrete mix of your choosing, and here’s some options you might want to consider, just make sure  the building doesn’t crack or buckle? Is that enough?

Ultimately, I think it’s a sliding scale.

Conclusion

My opinions are, of course, just my opinions. Nevertheless, the Suffolk case is a clear win for local public agencies. As the Court of Appeal noted, however, cases under Public Contract Code section 1104 are “sparse.” I am curious to see what future cases hold under different factual scenarios.

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.

Construction Termination Issues Part 5: What if You are the One that Wants to Quit?

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Melissa Dewey Brumback | Construction Law in North Carolina

Architects and Engineers are sometimes pleasantly surprised to find out that they, also, can terminate those crazy, hard to deal with Owners—at least, if the Owners fail to make payments as required.

breaking heart

“It’s not you, it’s me!” (It’s you)

You can also terminate for Owner delays to the work, or where you think the contractor should be fired but the Owner disagrees.   Again, the standard 7 days written notice is required.  (See B101 §9.4).

Do you have to walk off the job if they are not paying you?  No—you could exercise the smaller remedy of suspending services (with 7 days written notice) until payments are caught up or the contract performance is corrected by the Owner.   (See B101 §9.1).   Suspension rather than outright termination is a softer approach when working with an owner you do not want to burn (too many) bridges with.

Can the Owner use your plans and specs?

The default AIA design professional contract provides that the drawings and specifications are the copyrighted work of the DP (B101 §7.2) and that the Owner is given the limited, nonexclusive license to use them only for the Project.  (B101 §7.3).  However, all bets are off if you quit because they are not paying you.  [Under ConsensusDocs, copyright issues are essentially the same].

 In a “rightful termination”, the owner’s license to use your work terminates.

So, you should remind the Owner– in writing, of course– that they are forbidden from using your plans.  Now, you can negotiate a release of the documents in exchange for a release of liability or indemnity agreement.  The AIA provides for a “licensing fee” under B101 §11.9.

The right to your designs is a critical one—protect it, and use it to protect yourself.  Consider both the licensing fee and an indemnity agreement to protect you in the case where you are leaving a project that is still being constructed.

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.

The Design Liability Hot Potato: The Spectrum Between Collaboration and Delegated Design

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Mark Stockman | Frantz Ward

The Benefits of Collaboration
In today’s construction industry, it is no secret that there is always increasing pressure to speed up schedules and to keep costs down. One key factor that can help achieve these goals is to increase the coordination between the various stakeholders in the project so that all parties –  owner, designer, contractor, and specialty subcontractors – can contribute their expertise and advice at appropriate times during the project. This collaboration can head off conflicts early, vet the best ideas on how to achieve a desired solution,  and helps aid in the sharing of ever evolving specialty knowledge that a single person, firm or industry may struggle to keep abreast of. When multiple parties work together in harmony to achieve a goal it can significantly improve the accuracy and completeness of a design, leading to a shorter schedule and lower costs.

The Risks of Collaboration
Unless the parties are paying close attention, however, this process can also blur the lines between who has ultimate responsibility if a design ends up failing and the owner is looking for someone to blame. A contractor may end up being wholly or partially liable for design defects rather than the architect if they have assumed that responsibility either expressly by contract, or impliedly by performance. And an architect may find that they are liable for design decisions made by another party if they have not successfully clarified the limits of where their professional services end and that of others begins.

The Normal Process During Design
Consider a scenario where an architectural and engineering professional services firm is designing a manufacturing facility where one of the Owner’s requirements is that the offensive smells generated by the manufacturing process are not detectable outside the building. The A/E firm may determine a highly specialized ventilation system is required. The A/E team may have discussions with the manufacturer and/or supplier of such specialized equipment, and may coordinate with the selected contractor or a  specialized subcontractor during the design process in an effort to better understand how to specify and design such a system. This scenario would be an example of routine informal involvement of the design, construction, and supply teams to each lend their advice regarding the design intent. But in the end, the design choices and ultimate design liability would rest with the AE team, who, while they consulted with experts, were the party charged with understanding the input provided by others and adequately incorporating their suggestions into an effective design.

The Spectrum of Consultation or Collaboration During Design
But what if the project was utilizing a Construction Manager who has been engaged by the Owner to provide pre-construction services, including review of the design as it progresses? What if the Owner is paying the CM to provide advice on the design of the ventilation system, and the CM has far more experience with installing such systems than the AE team has designing such systems? If the CM provides advice to the AE team during the design development stage, and such advice is supported by the Owner and incorporated by the AE into the design, is the AE off the hook if aspects of the design fail to meet requirements? Probably not. While the CM’s involvement here is a bit more formal, there is still no formal agreement between any of the parties where the AE firm’s ultimate professional liability for design compliance is shifted to the CM, or even lessened because the design team listened to, or even relied on, the CM’s input — even if everyone agrees the CM’s advice seemed entirely reasonable. Absent clear contract language agreed to by all parties, this “Design Assist” structure does not result in a shifting of responsibility, but only a more formal recognition of the potential benefits of advice from other experienced parties. The AE team still retains the professional responsibility to analyze and incorporate the input from others solely as they determine is correct.

Continuing on the Spectrum – Delegated Design
What if the AE team took all the CM and supplier input under advisement, and then prepared specifications setting forth the ventilation and odor reduction performance metrics the system had to meet, leaving the ultimate selection of exact equipment and potentially proprietary design elements to the CM and its suppliers and subcontractors? This scenario moves towards a “Delegated Design” structure and the AE should insist on clear contractual language where everyone agrees the AE team is determining “what” has to be built, but the CM team is determining exactly “how” those criteria are met. The AE may consider requiring that the ultimate system design be stamped by the actual professional engineers responsible for the detailed design, and that the specialized design team assume responsibility for system conformance. Conversely, the CM and its consultants must be vigilant that they are not inadvertently assuming design liability that they did not intend to, or that are not getting paid for, or worst, for which they are not insured.

Avoid Implied Liability – Document in Advance
All of the above scenarios are completely legitimate ways to structure the design of specialized equipment, and, when done correctly, the project can realize great benefits from getting early and specialized input as to how to solve a particular issue. This can have far better results than just hoping the AE team did their best with a new concept on their first try and then dealing with constructability, cost, or scheduling issues raised after the design is complete. But the above scenarios will only be successful if all involved parties are clearly discussing where the lines are drawn, who will be responsible for what, and then ensuring those agreements are captured in a clearly written contract with similar language in the contracts binding the various parties. Furthermore, the parties should ensure that if someone is undertaking design liability, that they are carrying adequate design professional liability insurance coverage.

Whether you are an owner, design professional, contractor, or specialty equipment manufacturer, you must always be aware that while there are benefits to having many experienced cooks in the kitchen all helping out, the parties will need written clarity as to who the hot potato of design liability rests with on each aspect of shared design.

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.

Delegated Design In A Design-Bid-Build Project Delivery Approach The Professional Liability Conundrum

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David A. Pogorilich and Eric Brodfuehrer | Ankura Consulting Group

The inclusion of “Delegated Design” scopes of work into the construction documents of a construction project blurs the roles of the design professional of record (DPR) and the constructor. The role of the DPR is to design and detail the project to define the expected configuration and quality of the completed project. The role of the constructor is to construct the project and be able to rely on the accuracy of the design developed by the DPR. Delegated design is the act of the DPR relinquishing design responsibility to the constructor for one or more specialty scopes of the work for the construction of a project. The conundrum that is created is the inability to allocate the design responsibility of the delegated design scope of work and the performance of the design. Case studies of projects where the delegated design scopes of work were found to be defective in their design have determined that the DPR is not responsible for that scope of work despite their primary role as the designer.

The Process

The Design-Bid-Build project delivery approach is the manner in which design and construction projects have been traditionally executed. The Design-Bid-Build project delivery approach is explicitly intended to advance a construction project in a sequential manner. The Design-Bid-Build project delivery approach is intended to fully complete one phase of the design and construction project before another is initiated. The DPR is traditionally an architect or engineer retained by the owner to lead the design and technical detailing phase of a project and they assume full responsibility for the health, safety, and welfare of the public who occupy the project. The sequence begins with the DPR developing the construction documents consisting of drawings and specifications that define the scope of the work required to construct the project. The construction documents are then issued to constructors to provide a price to build the project as described in the construction documents. The bids, as well as the qualifications of the constructors, are reviewed by the owner and a constructor is selected often with the assistance of the DPR.

Under the Design-Bid-Build project delivery approach, the DPR is wholly responsible for the suitability of the intended purpose and accuracy of the design work defined in the construction documents and for the overall coordination of all aspects of the project. However, the resolution of disputes regarding the ownership and liability for defective designs that have developed from a scope of work that was delegated has been inconsistent in determining professional liability.1

Why is Design Delegated?

There are several reasons a DPR may choose to delegate a scope of work to the constructor. The construction design environment has evolved into various highly scientific and specialized sub-components that include multiple variables. The DPR is designated to integrate all of the components into a single set of construction documents. As the diversity of programmatic functions required of a project grows and the innovative use of new materials has become more prevalent, it has become increasingly difficult for the DPR to be the traditional “master builder” of the past and assume general responsibility for the entirety of the project.

The manufacturers of construction materials continue developing new products that attempt to improve the ability to meet increased and evolving performance criteria. Construction assemblies have become increasingly complex and often include more material components than ever before. In turn, the number of transitions and interfaces between the materials included in the assembly has increased exponentially, requiring more knowledge and sophistication to execute the assembly properly. As construction projects and technical detailing of project components have become more complex and specialized the DPR, at times, includes delegated design directives for the constructor in the specification section of the construction documents. Delegating scopes of work effectively delays the completion of the design of that portion of the work until after the project has been bid and awarded. For portions of the work that the DPR delegates, the construction documents direct the constructor to retain its own licensed design professional for the design of that particular scope of work. Examples in which delegated design is often used are the design and construction of curtain wall systems, metal panel facades, fire sprinkler systems, steel stairs, and precast parking garage structures.

New energy performance standards also require the DPR, the constructor, and the material manufacturers to innovate and develop new approaches to address these standards. For example, curtainwall glazing, which is composed of metal mullions and insulated glass units, strives to maintain thermally broken exterior and internal surfaces all while managing pressure equalization, internal drainage, and air and weather tightness. ASHRAE 90.1 is the industry standard that determines the required thermal performance of all building components including walls, roofs, and windows, based on the climate zone of the project. This is one of many standards that have accelerated the performance requirements of buildings at an extremely quick pace. While the DPR may be aware of the new standards, they may have limited experience with how to address the specific requirements and integration of each of the material assemblies. Due to the DPR’s responsibility for all aspects of the project’s scope of work and their primary responsibility to protect the health, safety, and welfare of all occupants of the project, they will rely on the expertise of the constructor and/or the manufacturer to execute the design.

Another reason the DPR may include delegated design is the limitation of the DPR’s time and fee available to produce the construction documents. The DPR’s fee and design schedule typically limit its ability to explore design options. By delegating the design of portions of the scope of work to the constructor, the DPR is able to focus on the development of the project as a whole. The DPR, rather than fully designing the scope of work, will provide the constructor with performance requirements for the scope of the work that the constructor’s design must achieve. The DPR will then review them for conformance with the specifications, the design intent, and integration into the overall project, and may require the design to be altered.

The Constructor’s Dilemma

The constructor, in a Design-Bid-Build project, traditionally assumes the work in accordance with the well-established “Spearin Doctrine,” which states:

“… if the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications. This responsibility of the owner is not overcome by the usual clauses requiring builders to visit the site, to check the plans, and to inform themselves of the requirements of the work…”2

The constructor, as an agent of the owner, should be able to rely upon the accuracy or suitability of the intended purposes of the construction documents that the DPR has prepared for the owner. However, portions of the design that have been delegated or identified by the DPR as a performance specification3require the constructor to provide a design solution. This puts the constructor at risk for the designated scope of the work as the law attributes the authorship of such design to the constructor. The transfer of design responsibility is somewhat counter to the intent of the Spearin Doctrine and the Design-Bid-Build project delivery approach.

The intent of having the constructor develop a design solution is to leverage the specialized experience and knowledge the constructor has with that specific material or assembly. Complicating the constructors’ task is that many times multiple products (different versions/options/manufacturers of the same or similar product) must be specified to provide a competitive bidding environment to deliver the owner the most cost-effective and valuable solution. The products or manufacturers specified may be equal in terms of performance, but the installation of the products can be vastly different and require the design to be developed by a subcontractor or manufacturer under the constructor’s scope of work. While the constructor is providing the specific design, via the subcontractor, the DPR is still responsible to review the development of the shop drawings and coordination of the work, including affirming acceptable tolerances and interfaces of the delegated work with the entirety of the project. However, The DPR has no professional liability for the design of the material component or assembly provided by the constructor. When the constructor begins to design and submit drawings to the DPR for “approval” is when the question of liability is raised.

The constructor is commonly required to retain a licensed professional with the ability to sign and seal drawings in accordance with the requirements of the jurisdiction of the project. The seal applied to the drawings of the constructors’ professionals carries equal responsibility to protect the health, safety, and welfare of the public as the DPR. However, the conundrum arises when the DPR, upon review of the design, proposes changes. The constructor requires the DPR’s approval to fabricate the work, and although the DPR may have changed the design and approved it, the DPR is not liable for the performance of that scope of work because it is signed and sealed by the constructors’ professional. Therefore, the constructor is liable for the performance of the design of that scope of work.

Delegated design, as well as the design of work that was not intended to have been delegated, has opened the constructor to liability for the accuracy of the design. The debate within the construction industry, with regard to design liability associated with delegated design and constructor-proposed design modifications, can be traced directly to the landmark Kansas City Hyatt Regency Hotel catastrophe. In 1981, suspended walkways that connected the second and fourth floors across an open atrium, structural connections failed. The walkways fell to the lobby floor killing 114 people and injuring 216. The contractor responsible for manufacturing the walkways objected to the original design of structural connections developed by the DPR during the construction of the building due to constructability issues. Subsequently, the contractor proposed an alternate design that weakened the structural capacity of the walkway supports. The DPR, without performing a thorough review of the proposed design change, approved the revision. The design of the structural supports was not delegated and had been designed by the DPR. However, the design change developed by the constructor was not suitable to adequately support the structure and proved to be fatal.4The constructor was charged with faulty design, and the constructor filed a third-party claim against the DPR for deficient design. The court ultimately threw the 3rd party claim against the DPR out but did find the DPR professionally negligent for not thoroughly reviewing the proposed design in accordance with the standard expected of a licensed professional. The DPR ultimately lost the privilege to work as a licensed professional engineer. The constructor was held liable for the defective design solution and ultimately the fatalities that occurred, which carried far more egregious legal punishment.

Current Status of Delegated Design

In the time since the structural failure at the Kansas City Hyatt, the construction industry has not sought more regulation in the implementation of delegated design scopes of work in Design-Bid-Build projects. Design trade organizations have developed more aggressive contractual frameworks to protect DPRs from delegated design errors.5

Since 1997, the American Institute of Architects (AIA) has expressly acknowledged and approved the practice of delegated design. Section 3.12.10 of the 2007 edition of the AIA document A201 – “General Conditions Contract for Construction” states:

“§3.12.10 The Contractor shall not be required to provide professional services that constitute the practice of architecture or engineering unless such services are specifically required by the Contract Documents for a portion of the Work or unless the Contractor needs to provide such services in order to carry out the Contractor’s responsibilities for construction means, methods, techniques, sequences and procedures. If professional design services or certifications by a design professional related to systems, materials or equipment are specifically required of the Contractor by the Contract Documents, the Owner and the Architect will specify all performance and design criteria that such services must satisfy. The Contractor shall cause such services or certifications to be provided by a properly licensed design professional, whose signature and seal shall appear on all drawings, calculations, specifications, certifications, Shop Drawings and other submittals prepared by such professional. Shop Drawings and other submittals related to the Work designed or certified by such professional, if prepared by others, shall bear such professional’s written approval when submitted to the Architect. The Owner and the Architect shall be entitled to rely upon the adequacy, accuracy and completeness of the services, certifications and approvals performed or provided by such design professionals, provided such design professionals, provided the Owner and Architect have specified to the Contractor all performance and design criteria that such services must satisfy. Pursuant to Section 3.12.10, the Architect will review, approve or take other appropriate action on submittals only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Contractor shall not be responsible for the adequacy of the performance and design criteria specified in the Contract Documents.”

As mentioned above, delegated design requires the constructor to retain the services of a licensed professional. The licensed professional is contracted by the constructor and therefore the constructor bears the liability for the design. The AIA contractual language focuses on the responsibilities of the DPR as a reviewer and not as the designer.

Conclusion

Delegated design remains a subject of debate in the construction profession due to the traditional and expected duty of the DPR to design all aspects of the project and the duty of the constructor to build according to the design. Very few jurisdictions have a documented position that allocates liability for errors and omissions and the settlement of disputes that arise due to delegated design. As delegated design continues to be used in traditional Design-Bid-Build projects and new project delivery approaches evolve, professional liability for the design of a project continues to be a complex subject matter that is often at the center of conflicts as it confuses and redefines the traditional and expected relationship between the DPR and the constructor.

Footnotes

1. The examples are detailed in the essay “Delegation of Design to the Contractor: Should the Con-tractor “Plan” for Problems?; Section 4 – What defenses exist for GC where design delegation has occurred?” by Bob Burchette & W. James Johnson, 2015.

Examples where the constructor was found liable for delegated design damages: Waggoner v. W&W Steel Co., 1982 OK 141, 657 P.2d 147, 151 (Okl. 1982); D.C. McClain, Inc. v. Arlington County, 249 Va. 131, 452 S.E.2d 659 (1995); Appeal of Mercury Const. Corp., 80-2 B.C.A. (CCH) 14668, 1980 WL 2708 (Armed Serv. B.C.A. 1980); Johnson v. Salem Title Co., 246 Or. 409, 425 P.2d 519 (1967).

Examples where the DPR was found liable for delegated design damages: Toombs & Co., Inc. v. U.S., 4 Cl. Ct. 535, 31 Cont. Cas. Fed. (CCH) 72149 (1984) aff’d, 770 F.2d 183 (Fed. Cir. 1985); Henningson Durham & Richardson v. Swift Bros. Constr. Co., 739 F.2d 1341 (8th Cir. 1984).

2. Spearin v. U.S. (248 U.S. 132 (1918)), 135-136.

3. Specifications in Construction Documents are either Design Specifications that “prescribes the material and methods to be used for contract performance”; or Performance Specifications that provide “a description of the desired results of performance of a product, material, assembly, or piece of equipment with criteria for verifying compliance.” RS Means Illustrated Construction Dictionary. Hoboken, NJ: RS Means; 2012.

4. Whitbeck, Caroline (1998). Ethics in Engineering Practice and Research. New York: Cambridge University Press. p. 116.ISBN 0-521-47944-4

5. Carl J. Circo, “When Specialty Designs Cause Building Disasters: Responsibility for Shared Architectural and Engineering Services,” 84 Neb. L. Rev. 162, 216-226 (2005) p. 164.

Construction Termination Part 3: When the Contractor is Firing the Owner

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Melissa Dewey Brumback | Construction Law in North Carolina

Last week we discussed an Owner terminating a Contractor “for cause”.  Today, it’s time for a 180:  what is your role as the architect when the Contractor is quitting?

First, be aware that there are valid reasons for a contractor to quit within the contract itself. Most of these have to do with either (a) time delays/stand stills or (b) failure of the Owner to make payments as required.

Never thought being a designer required Referee skills, did you?

The Contractor can suspend or terminate a contract with the Owner for cause, provided a 7 day written notice is given to Owner and Architect.  See A201§14.1.3.  (This can be an email notice as all AIA notice clauses now allow).

If this happens, what do you do?  First, consult with the Owner to see if there is truth in the Contractor’s assertions.  See if payment can be caught up, or any disputed money put into an escrow, or other options that will keep the Contractor working.  Ultimately, if the project comes to a stand-still, money will be lost.  Where money is lost, parties are sued.  Keep the project moving to lower your own risks of being sued.

If there is no way to salvage the situation, make sure to fully document the  Project status at the time the contractor quits work.  Photographs, videos, a line in the file as to how much money had been earned and paid by the termination date.  All will be key evidence in the inevitable law suit.

While the contractor’s decision to quit is out of your hands (you don’t have to certify anything), documenting the state of the Project can only help all parties later on.

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.