What Inquiring Minds Want to Know BATTLEFIELD STORIES LEED (LEADERSHIP IN ENERGY AND ENVIRONMENTAL DESIGN) Points earned across areas that address sustainability issues Based on a number of points achieved Project receives one of four LEED rating levels: Certified, Silver, Gold and Platinum
LEED, CONT. Problem occurs when contract with owner requires design professional to guarantee/ warrant/promise that building will meet LEED rating The certification is obtained through examination of the project by LEED certifiers over whom you have no control and use their subjective judgment. LEED, CONT.
Failure to achieve level required could be actionable, risks are substantial (lost revenue, loss in energy efficiency, etc.) and, due to warranty/ guarantee contractual mandates, probably not insurable. Even with LEED certification, promises must be couched in terms of complying with Standard of Care. WHAT CONSTITUTES MALPRACTICE/ NEGLIGENCE BY THE DESIGN PROFESSIONAL Absent a modification in the contract, a D/P is required to perform in accordance with the Standard of
Care. D/P is required to perform services consistent with professional skill and care ordinarily provided by D/Ps practicing in the same or similar locality under the same or similar circumstances. Unfortunately, claimants hire experts to opine on these issues. Their opinions, provided they can be
qualified as experts, will obviously favor the person or entity that has hired them. Managing expectations is the only practical manner in which to attempt to avoid claims. Design is not a product, it is a specialized, one time only, service. It will not, cannot be, perfect as it of
necessity must evolve through the design and construction process. Contingency/Budget is needed to cover this evolution. No such thing as perfect set of plans and specifications. MALPRACTICE/NEGLIGENCE AS COMPARED TO BREACH OF CONTRACT Malpractice/Negligence is a concept of tort law Duty, breach of duty, breach of duty is
proximate cause of damages, damage to claimant Breach of Contract is a concept of contract law It is a claim by one party to a contract that the other party has failed to perform a material term of the contract without a legitimate legal excuse Most claims against D/Ps have to be couched in negligence/malpractice, but if the D/P provides contract to perform a specific function and fails to do so, a
claim can be based upon breach of contract. Indemnity Clauses LIQUIDATED DAMAGES Liquidated Damages are damages established by parties in their contract which will be paid or forfeited by one party to the other as compensation related to a specific breach, typically late performance.
Typically formulated where it is difficult to prove the actual amount of damages that will be incurred. Such damages, however, cannot constitute a penalty. It is inherently unreasonable for a D/P to agree to a liquidated damages provision, either with an owner or even where the D/P is part of a design-build team. The D/P typically has little or no control over project scheduling or completion.
SIMPLE DESIGN-BUILD PROJECTS: THE BASICS Division of Tasks D/Ps design, may monitor construction Contractor builds Cannot assume responsibility for means and methods, LDs, safety, compliance with OSHA for contractor/subcontractor employees, schedule for performance of anything but providing
design deliverables, consequential damages. Indemnity Issues Still must be negligence based DESIGN DELEGATION/SHOP DRAWING REVIEW EJCDC C-700 6.21 Delegation of Professional Design Services A. Contractor will not be required to provide professional design services unless such services are specifically required by the Contract Documents for a portion of the Work or unless such services are required to carry out Contractors responsibilities for construction means, methods, techniques, sequences and procedures. Contractor shall not be required to provide professional services in violation of applicable law. B. If professional design services or certifications by a design professional related to systems, materials or equipment are specifically required of Contractor by the Contract Documents, Owner and Engineer will specify all performance and design criteria that such services must satisfy. Contractor shall cause such services or certifications to be provided by a properly licensed 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 professionals written approval when submitted to Engineer. C. Owner and Engineer shall be entitled to rely upon the adequacy, accuracy and completeness of the services, certifications or approvals performed by such design professionals, provided Owner and Engineer have specified to Contractor all performance and design criteria that such services must satisfy. D. Pursuant to this Paragraph 6.21, Engineers review and approval of design calculations and design drawings will be only for the limited purpose of checking for conformance with performance and design criteria given and the design concept expressed in the Contract Documents. Engineers review and approval of Shop Drawings and other submittals (except design calculations and design drawings) will be only for the purpose stated in Paragraph 6.17.D.1. E. Contractor shall not be responsible for the adequacy of the performance or design criteria required by the Contract Documents. 6.17.D Engineers Review: 1. Engineering will provide timely review of Shop Drawings and Samples in accordance with the Schedule of Submittals acceptable to Engineer. Engineers review and approval will be only to determine if the items covered by the submittals will, after installation or incorporation in the Work, conform to the information given in the Contract Documents and be compatible with the design concept of the completed Project as a functioning whole as indicated by the Contract Documents.
2. Engineers review and approval will not extend to means, methods, techniques, sequences, or procedures of construction (except where a particular means, method, technique, sequence, or procedure of construction is specifically and expressly called for by the Contract Documents) or to safety precautions or programs incident thereto. The review and approval of a separate item as such will not indicate approval of the assembly in which the item functions. 3. Engineers review and approval shall not relieve Contractor from responsibility for any variation from the requirements of the Contract Documents unless Contractor has complied with the requirements of Paragraph 6.17.C.3 and Engineer has given written approval of each such variation by specific written notation thereof incorporated in or accompanying the Shop Drawing or Sample. Engineers review and approval shall not relieve Contractor from responsibility for complying with the requirements of Paragraph 6.17.C.1. AIA A201-2007 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 Contractors responsibilities for construction means, methods, techniques, sequences and procedures. The Contractor shall not be required to provide professional services in violation of applicable law. 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 professionals 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 the Owner and Architect have specified to the Contractor all performance and design criteria that such services must satisfy. Pursuant to this 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. AIA A201-2007 4.2.7 The Architect will review and approve, or take other appropriate action upon, the Contractors submittals such as Shop Drawings, Product Data and Samples, but only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Architects action will be taken in accordance with the submittal schedule approved by the Architect or, in the absence of an approved submittal schedule, with reasonable promptness while allowing sufficient time in the Architects professional judgment to permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities, or for substantiating instructions for installation or performance of equipment or systems, all of which remain the responsibility of the Contractor as required by the Contract Documents. The Architects review of the Contractors submittals shall not
relieve the Contractor of the obligations under Sections 3.3, 3.5 and 3.12. The Architects review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Architect, of any construction means, methods, techniques, sequences or procedures. The Architects approval of a specific item shall not indicate approval of an assembly of which the item is a component. HIERARCHY OF CONTRACT DOCUMENTS Advisable to establish in General Conditions of Contract for Construction EJCDC C-700 3.03.B. Resolving Discrepancies: Except as may be otherwise specifically stated in the Contract Documents, the provisions of the Contract Documents shall take precedence in resolving any conflict, error, ambiguity, or
discrepancy between the provisions of the Contract Documents and: a. the provision of any standard, specification, manual, or code, or the instruction of any Supplier (whether or not specifically incorporated by reference in the Contract Documents); or b. the provision of any Laws or Regulations applicable to the performance of the Work (unless such an interpretation of the provisions of the Contract Documents would result in violation of such Law or Regulation). AIA A201 and A101 do not establish a hierarchy Establish a hierarchy in supplemental conditions for hierarchy of contract documents in Owner/Contractor Agreement
Change Orders Agreement Drawings Specifications Supplemental General Conditions General Conditions Contractors Proposal (if at all) APPLICABILITY OF GEO TECHNICAL INFORMATION EJCDC C-700 4.02.B.
Limited Reliance by Contractor on Technical Data Authorized: Contractor may rely upon the accuracy of the technical data contained in such reports and drawings, but such reports and drawings are not Contract Documents. Such technical data is identified in the Supplementary Conditions. Except for such reliance on such technical data, Contractor may not rely upon or make any claim against Owner or Engineer, or any of their officers, directors, members, partners, employees, agents, consultants, or subcontractors with respect to: 1. the completeness of such reports and drawings for Contractors purposes, including, but not limited to, any aspects of the means, methods, techniques, sequences, and procedures of construction to be employed by Contractor, and safety precautions and programs incident thereto; or 2. other data, interpretations, opinions and information contained in such reports or shown or indicated in such drawings; or 3. any Contractor interpretation of or conclusion drawn from any technical data or any such other data, interpretations, opinions or information. Best to modify. Something akin to
The technical data expressly identified in the Supplementary Conditions are provided for informational purposes only and are not Contract Documents. Contractor is to retain the services of a PE licensed in the State of Michigan to review and interpret any such technical data provided. The contractor acknowledges that the technical data may not be complete or accurate, or representative of
conditions that will be encountered throughout the project. The contractor may not rely upon or make any claim against owner or engineer, or any of their officers, directors, members, partners, employees, agents, consultants, sub-consultants or subcontractors in regard to any aspect of the means, methods, techniques, sequences and procedures of construction to be employed by contractor, and any safety precaution and programs incident thereto, but rather, are solely responsible for drawing its own conclusions from the information contained therein. ATTEMPT BY SUB-CONSULTANT TO LIMIT
RESPONSIBILITY Is typically forbidden by the terms of the prime consultants contract with owner, i.e., prime consultant must pass down its obligations to sub-consultants. Includes insurance and indemnity obligations. Explain to sub-consultant that limiting subconsultants obligations constitutes breach of contract with owner. If all else fails, get another sub-consultant.
DOCUMENT RETENTION POLICY: EMAILS Should be kept best practice at least ten (10) years from date of substantial completion Change of systems emails copied to disc or new system. Absolutely do not delete/destroy emails once a possible claim is known or threatened doing so causes at least a presumption that information contained is
contrary to position being asserted. ELECTRONIC DATA There are a number of issues that can arise Ownership Depends upon contract terms with owner. Typically, D/P wants to retain ownership, but many times owner wants the project to be oneof-a-kind and thus, wants ownership.
Have to impose limitations on owners use, i.e. for maintenance, but not re-use, not for facility operation. ELECTRONIC DATA, CONT. Transfer/use by contractors/subcontractors during construction which is in owner/contractor agreement. Need to establish reliability, interpretation, extent of use, indemnifications in separate transfer agreement. EJCDC 3.06. Electronic Data A. Unless otherwise stated in the Supplementary Conditions, the data furnished by Owner or Engineer to Contractor, or by Contractor to Owner or Engineer, that may be relied upon are limited to the printed copies (also known as hard copies). Files in electronic media format of text, data, graphics, or other types are furnished only for the convenience o the receiving party. Any conclusion or information obtained or
derived from such electronic files will be at the users sole risk. If there is a discrepancy between the electronic files and the hard copies, the hard copies govern. B. Because data stored in electronic media format can deteriorate or be modified inadvertently or otherwise without authorization of the datas creator, the party receiving electronic files agrees that it will perform acceptance tests or procedures within 60 days, after which the receiving party shall be deemed to have accepted the data thus transferred. Any errors detected within the 60-day acceptance period will be corrected by the transferring party. C. When transferring documents in electronic media format, the transferring party makes no representations as to long term compatibility, usability, or readability of documents resulting from the use of software application packages, operating systems, or computer hardware differing from those used by the datas creator. IMPLICATIONS OF DODD-FRANK TO ENGINEERS Are Engineers Municipal Advisors requiring registration with the Securities and Exchange Commission?
Engineers providing engineering advice are specifically excluded. Engineers can provide plans, specifications, cost projections, schedule projections, anticipated funding requirements, and life of service information which municipality can utilize to structure related issuance of municipal securities to fund the project. However, Engineers who go further by providing
advice on how to structure the issuance of securities, including length of the capitalized interest period and amount of capitalized interest to be financed, become municipal advisors. If the Engineer becomes a municipal advisor it not only has to register with the SEC, and make certain required filings, but it opens itself up to claims for breach of fiduciary obligations to the municipality should things not work out, claims not typically covered in professional errors and omissions policies. Safest way is to get written agreement
that municipality has engaged an independent, registered municipal advisor to provide assistance with financing options and details, will rely on the advice of this entity in regard to those subjects, and is not relying on the engineer. Of course, best practice is simply eliminate providing any advice regarding means and methods of project financing.
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