[youtube http://www.youtube.com/watch?v=Hdpf-MQM9vY&w=560&h=315]

In this video, you can watch the construction of a 30-story apartment building in less than 3 minutes. That’s the beauty of time-lapse technology. But the reality is also super fast. The apartment building, comprised of 30 floors built in sections, “each measuring 15.6 by 3.9 meters, with a depth of 45 centimeters,” was built from the ground up in just 15 days.

“Zhang Yue, founder and chairman of Broad Sustainable Building, is not a particularly humble man,” writes Lauren Hilgers in her recent piece for Wired magazine. “A humble man would not have erected, on his firm’s corporate campus in the Chinese province of Hunan, a classical palace and a 130-foot replica of an Egyptian pyramid. A humble man, for that matter, would not have redirected Broad from its core business—manufacturing industrial air-conditioning units—to invent a new method of building skyscrapers. And a humble man certainly wouldn’t be putting up those skyscrapers at a pace never achieved in history.”

The efficiency made possible by this copy-paste style of construction could change the way whole cities are designed in China, the country with the highest population in the world. But what impact will it have elsewhere? And what are the risks of such speedy construction?

In October 2012, Evan Osnos wrote Boss Rail, an article for the New Yorker magazine which revealed the flaws in China’s recent high-speed rail boom.

“In 2003, China’s Minister of Railways, Liu Zhijun, took charge of plans to build seventy-five hundred miles of high-speed railway—more than could be found in the rest of the world combined… With a total investment of more than two hundred and fifty billion dollars, the undertaking was to be the world’s most expensive public-works project since President Eisenhower’s Interstate Highway System, in the nineteen-fifties. To complete the first route by 2008, Minister Liu, whose ambition and flamboyance earned him the nickname Great Leap Liu, drove his crews and engineers to work in shifts around the clock, laying track, revising blueprints, and boring tunnels… When the first high-speed line débuted with a test run in June, 2008, it was seventy-five per cent over budget and relied heavily on German designs.”

On July 23, 2011, lightning struck a signal box outside the city of Wenzhou, and gave one of the high-speed trains a green light rather than a red on. The resulting crash killed 40 people and injured 192. It was this tragedy that forced China to take a closer look at what turned out to be a highly pressurized process, hobbled by the corruption of government officials, as well as the illegal practices of wealthy citizens.

Sacrificing oversight and transparency for speed is a concern, especially since China is already in the architecture world’s line of fire these days due to frequent accusations of copyright infringement (Creative China, Cutting and Pasting?). In a recent example, the New York Daily News wrote, “Already famed for fake designer bags and pirated DVDs, imitation in China may have reached new heights with a set of towers that strongly resemble ones designed by renowned architect Zaha Hadid.”

But Hadid might be the first to remind her counterparts that the existence of China’s specific market, even taking into account the political structure and shaded history, is beneficial. She has worked extensively in China, crediting the country as a major influence on her evolution and success as an artist. In a November 2012 piece published by Newsweek, author Melinda Liu quotes Hadid as saying, “Every country has its local requirements. In China, the requirement is to be big. Where else can you get this scale? That’s its Chineseness.”

Whether this latest exercise in speed and efficiency will be primarily positive for the world of architects, engineers, and builders remains to be seen.

october_pronetwork_newsThe following is an excerpt of Part 2 in this two-part series. In Part 1, author Eric Singer covered Veni (I went to the site) and Vidi (I observed for general conformance with design intent).

Lis Pendens – I got sued anyway

Sometimes observable deficiencies get missed, or the timing, relative solvency or insured status of the parties and plain old bad luck conspire to force you to defend your compliance with the standard of care. In tort claims (injuries, property damage or other calamities), most states have procedural mechanisms to apportion fault among the parties or to add parties potentially at fault. Contract lawsuits are different and an owner could choose to pursue the A/E and leave the contractor alone or to settle and join forces with the contractor. In contract cases, many jurisdictions make it difficult for an architect to pursue claims against a contractor without a direct contract. You can defend by blaming the contractor’s “empty chair” or try a more aggressive approach. The general conditions may provide you with some ammunition.

General Conditions frequently contain a warranty in favor of both the owner and the architect. The AIA A201 (2007), for example, provides “The Contractor warrants to the Owner and Architect that materials and equipment furnished under the Contract will be of good quality and new unless the Contract Documents require or permit otherwise. The Contractor further warrants that the Work will conform to the requirements of the Contract Documents and will be free from defects, except for those inherent in the quality of the Work the Contract Documents require or permit.” (A201 – 2007, §3.5). Interpretation of this provision and rights of the architect in these circumstances varies greatly state to state. If viable in your state, a warranty claim against the contractor may prevent the owner and contractor from settling cheap or joining forces against the design team.

To read about Vici, I conquered, visit our website where you may download the full PDF version of this October 2012 issue (and all previous issues) of our ProNetwork Newsletters.

About the Author: Eric Singer is a partner at Ice Miller, LLP. He concentrates his practice in construction law, with emphasis on the representation of architects, engineers, contractors, owners, and lenders as well as other professionals, in litigation and alternative dispute resolution of design and construction issues. Mr. Singer, who was awarded his J.D by the University of Chicago Law School, is a former Professional Affiliate Director of the American Institute of Architects of Chicago and is a member of multiple bar associations and design professional groups. Recently ranked as AV Preeminent by Martindale-Hubbell and listed in The Best Lawyers of America, Construction Law, by those peer-review organizations, Eric is an active speaker and prolific author on the subject of construction litigation and the liability of the design professional. Contact Eric Singer at: eric.singer@icemiller.com

Don’t forget to contact your local a/e ProNet broker if you have any questions!

In 2013, Professional Liability insurance provider Victor O. Schinnerer will host independent subject-matter experts for four webinars, all geared toward Architects, Engineers, and other Design Professionals:

Computer-aj_aj_ashton_01.svgEmployment Liability Issues in a Recovering Economy

February 13, 2013, 1:00 – 2:00 pm eastern

Thomas L. McCally, Esq., Carr Maloney, P.C., Washington, DC

Design firms face various types of employment liability issues during the normal course of business. However, the downturn and subsequent recovery of the economy have brought these issues to the forefront of concerns for design firms. An attorney expert in litigating design firm employment practices claims will discuss the issues firms need to recognize as the economy improves and firms prepare to staff-up for the recovery.

Business Models and Financial Opportunities in a Recovering Economy

April 10, 2013, 1:00 – 2:00 pm eastern

Michael O’Brien, ASA, Rusk, O’Brien, Gido + Partners, Washington, DC

From funding sources to procurement procedures, the financial environment for professional services has significantly changed since the pre-recession economy. Both in the public and private sectors, the rules, risks, and routes to financial success are different. Professional services firms need to adjust their business plans to remain viable and to benefit from the opportunities in a recovering economy. Specializing in solving the business management and ownership challenges of consulting firms, our expert will share thoughts on the needs and responses of firms in the new service environment.

Technology Risks for Design Professionals

September 11, 2013, 1:00 – 2:00 pm eastern

David J. Shannon, Esq., Marshall, Dennehey, Warner, Coleman, Goggin, Philadelphia, PA

Technology risks associated with the business operations and professional services of design professionals is not new. However, the increased use of building information technologies and collaborative delivery methods, such as integrated project delivery, may increase the exposure of firms to traditional technology risks, as well as introduce new risks. Join our discussion with an attorney expert in technology risks to learn what exposures design firms need to be aware of and how to manage those exposures.

Insurance and Legal Questions for the Collaborative Design Team

October 9, 2013, 1:00 – 2:00 pm eastern

Rebecca H. Farnum, Esq., Thompson & Bowie, LLP, Portland, ME

Building information modeling and integrated project delivery provide a platform through which all members of the design and construction team collaborate. As with all new technologies and delivery methods, there are important questions the collaborating team should ask to identify and respond to legal and insurance issues in the open transfer of information in a contractual arrangement of shared risk and reward. Our expert will discuss what types of questions the team should ask before formally entering a collaborative agreement.

Visit our website to download the full PDF version of the 2013 Victor O. Schinnerer webinar schedule.

Excerpted from the September 2012 issue of ProNetwork News, part one of a two-part series:

pronetworknews_sept2012What if Caesar had written “I came to the project site, I observed for general conformance with the Contract Documents but not for means or methods or work covered since my last visit” and then wrote a three word report? Caesar was a master of understatement and understatement leads to misunderstandings and, well, understatement. Architects have always faced liability for undiscovered construction defects but current economic times have forced many contractors out of business. With the typical lack of contractor insurance for defective work, A/E’s are the only solvent or insured pocket, leaving design professionals more vulnerable to construction defect claims than in the past.

Veni – I went to the site

Those preaching risk reduction used to urge that architects and engineers leave construction administration to construction managers and contractors. This approach allowed or even encouraged contractors, CMs, program managers and owner’s representatives to take market share for services formerly performed by A/E’s. It also missed the point. Design professionals do not seek to eliminate liability, but to manage the reasonable risks of design practice. Reasonable risks are those placed with the party able to control them.

If an owner wants an A/E to ensure perfect construction, the project is doomed to fail for two reasons. First, there hasn’t been perfect construction since the Pyramids (and they had different labor and insurance agreements in those days). Second, the A/E does not control all of the variables that go into a construction project. There are elements of construction installed and concealed by the time the A/E arrives for a weekly or monthly meeting and site tour and even the most gifted A/E is powerless to see through walls. Continue reading “Veni, Vidi, Vici, Lis Pendens: I came, I saw, I got sued – Part 1 of 2”

It’s true. The insurance industry has a reputation for bringing doom and gloom to an otherwise cheery outlook. Forgive us. Our business relies on our being able to spot negative trends in advance so that we can assist our clients in preparing for the worst. That doesn’t mean we don’t also hope for the best! Economic recovery is still ongoing, and we are thrilled that this means our architect and engineer clients are working and growing again.

That’s why, in our May 2012 post, To Hire or Not to Hire?, we mentioned some of the considerations and concerns facing design firms as they take on work that “could require additional hands,” including the need for accurate Professional Liability limits on their insurance policies… just a little worth-thinking-about-in-advance gloom.

Then this week, leading Professional Liability insurance provider, Victor O. Schinnerer, released its most recent Risk Management Guidelines, including an item on the Expanding Employment Liability Risks of recovering architecture and engineering firms.

“As firms downsized to face an economic downturn and restructured due to changing technology and new project delivery systems that required altered business models, employment practices claims rose. Add to that the challenges presented by the new generation of employees—many of whom consider their lives and the operations of their employers as public information, and a number of whom find the workplace to be a forum for their opinions—who are flooding the market during difficult economic times, and by returning military who must be accommodated in their former civilian positions or given preferential treatment, and firms are faced with a demanding and confusing employment perspective as they begin to staff up.”

Continue reading “Expanding Employment Liability Risks for Design Firms”

This week, 46 a/e ProNet members from 27 member agencies are expected to attend our annual meeting in Chicago, Illinois. Over the course of two and half days, twelve top-tier Professional Liability insurance companies will present to our membership. Each company will take this opportunity to announce policy form changes, new endorsements, and pricing expectations for the coming year; as well, they will alert us to industry trends surrounding claims and risk management.

Because a/e ProNet brokers are independent, that-is, not tied to any single insurance company, the insurance companies sending representatives to this event know that they are in competition for our business. It is in their best interest to make their programs as comprehensive and beneficial  to our clients as possible. The companies attending this event include: RLITravelersVictor O. SchinnererLibertyBeazleyCatlinHCCHanover, Navigators, Insight, All Risks, and AXIS.

Our Thursday night reception for members and insurance company representatives will be held at a new venue this year: The Grand Army of the Republic (GAR) Rotunda at the Chicago Cultural Center.

Our clients are architects and engineers, and we appreciate what they do today, as well as what they have created in the past. We chose the Chicago Cultural Center, opened in 1897, because it is “one of the city’s most popular attractions and is considered one of the most comprehensive arts showcases in the United States.” In other words, it’s beautiful! A Chicago landmark, located in the Loop, across Michigan Avenue from Millennium Park, the GAR Memorial consists of a large hall and rotunda in the north wing of the building. The hall is “faced with deep green Vermont marble, broken by a series of arches for windows and mahogany doors. The rotunda features 30-foot walls of Knoxville pink marble, mosaic floor, and a fine, stained-glass dome in Renaissance pattern by the firm of Healy and Millet.”

If you have questions about this meeting, or a question about a/e ProNet, don’t hesitate to contact us. You can also find your local a/e ProNet broker through our website.

Blog Love: Schinnerer’s RM Blog

Time to return some Blog Love!

We are big fans of Victor O. Schinnerer’s Risk Management Blog. Several times a month, this long-standing professional liability insurance provider posts brief, timely, helpful articles that are relevant to the design industry. The emphasis is on risk management for design firms, and posts often include links back to pertinent studies and claims scenarios.

A few recent posts:

Building Reuse Provides Environmental Value — 27 August

“Earlier this year the National Trust for Historic Preservation released a report by its Preservation Green Lab that provides the most comprehensive analysis yet of the potential environmental benefits of retrofitting the existing building stock. The study, The Greenest Building: Quantifying the Environmental Value of Building Reuse is available from the organization’s PreservationNation.org/Sustainability website.

“The report concludes that when comparing buildings of equivalent size and function, building reuse almost always offers environmental savings over demotion and new construction. The report states that it can take between 10 and 80 years for a new energy-efficient building to overcome, through efficient operations, the climate change impacts created by its constriction. For the majority of building types in different climates, the study points to 20 to 30 years of use to offset the initial carbon impacts from construction. The study recognizes that the environmental benefits of reuse are maximized when a minimum of new materials are used; renovation projects that require many new materials can reduce or even negate the benefits of reuse.” Continue reading… Continue reading “Blog Love: Schinnerer’s RM Blog”

Construction observation is a powerful weapon for architects and engineers (A/E) in their risk management arsenal. Certain clients understand the benefits when A/E firms offer construction phase services. However, driven by slow economic conditions, many clients are asking firms to do more, with less, including reducing or eliminating construction phase services. Other clients decide they will administer the construction contract themselves or decide to use a third party instead of the A/E firm.

Clients have also held the A/E to a higher standard of care when providing construction observation services. How do these actions affect A/E firms? It significantly increases the A/E’s risk and liability exposures.

Construction Phase Risks

Details in design documents cannot anticipate every contingency that may occur during the construction phase. If the A/E firm of record is not retained to provide clarification of the plans and specifications the risk of misinterpretation of the contract documents increases.  Bad decisions can lead to project confusion, delays, increased costs, disputes and claims between the owner and the A/E.

The exposure of the A/E is increased due to certain owners and contractors asserting that the designer has a similar responsibility of the contractor for discovering all defects on the project. Based on this distortion and unrealistic expectation of construction observation services, owners and contractors have stated the A/E should be a guarantor of the contractor’s work. These expectations dramatically increase the A/E’s standard of care and risks associated with construction phase services. Court decisions have ruled in Owners’ favor holding that the A/E has a duty to guard the owner against all non-conforming work on the project, although much of that work was completed when the firm was not present on-site. Members of the plaintiff’s bar continue efforts to hold the A/E accountable for this higher standard of care for construction phase services. Continue reading “Construction Observation: Important Risk Management Service”

The Perspective of the Fire Protection Engineer 

Integrated Project Delivery (IPD) is a collaborative alliance of people, systems, business structures and practices into a process that harnesses the talents and insights of all participants. Its aim is to optimize project results, increase value to the owner, reduce waste and maximize efficiency through all phases of design, fabrication, and construction. The most popular method of IPD is Design-Build, one of the most significant trends in design and construction in the U.S. today.

The Design-Build Team works under a single contract with the project owner to provide design and construction services: one entity, one contract, one unified flow of work from initial concept through completion. It consists of many players, including the General Contractor, Architect, Engineering Consultants, and a variety of sub contractors. Collectively, the team has the knowledge and expertise to complete a project from start to finish and each team member is equally important in the outcome of the project.

The role of the specialty sub-consultant is no different. For example, the Fire Protection Engineer (FPE) is a critical member of the Design-Build Team, and provides comprehensive input and guidance on all aspects of fire and life safety for the project. This includes, but is not limited to, building code analysis, water supply, smoke control, fire department access, exiting, and an analysis of the active and passive fire protection systems.

From an FPE’s perspective, the design-build process can be broken down into four separate and distinct phases: the teaming phase, the pre-proposal phase, post-award phase, and the construction phase.

Teaming Phase

The client should understand the value of the FPE in the teaming phase and that communicating with the key individuals responsible for selecting the team is a priority. Generally, the people responsible for selecting team members are the general contractor’s project manager, project estimator or the project architect. They may or may not be familiar with the value that the FPE provides so it is important to reaffirm the FPE’s role. Other disciplines can contribute to fire protection and life safety, but none of them take the total fire protection and life safety perspective that an FPE does. Continue reading “The Impact of Sub Consultants in the Design Build Process”