Tag: Engineering

Integrated Project Delivery: Changing the Insurance Landscape

By Lynda

With more project owners demanding the use of Building Information Modeling (BIM), project delivery is necessarily carried out through greater contributions of design input by the general contractor and the major trade subcontractors. The design professionals are no longer the sole authors of the project design. This collaborative project delivery method has been called integrated project delivery (IPD). The contribution of design input from each of the various project players using IPD is a significant break from the traditional division of responsibility recognized in the standard design-bid-build project delivery method. Players who never participated in the project design now face potential risk of professional liability. Additionally, the new, cutting-edge technologies being used for BIM expand the types of risks born by the design professional if there are errors and omissions within the computer modeling system or the improper management of the computerized data.

What is BIM?

BIM involves computerized design software tools that help create a model that reflects all of the building components’ geometric and functional qualities. The general contractor and trade subcontractors provide product-specific information for building components and that data is inputted into the model, including performance specifications, connection details and cost data. However, the model is more than a mere representation of the design in a three-dimensional computer graphic. Embedded within the design programs are rules that define each of the components’ relation to the other components. Continue reading “Integrated Project Delivery: Changing the Insurance Landscape”

Sheep, Voldemort, Paul McCartney & Civil Engineers: London’s Opening Ceremonies

By Lynda

Pretty cool that the hardhat-wearing men and women who designed and built the infrastructure of the thirtieth Olympic games received a shout-out last night during the opening ceremonies. They deserved some applause! Just ask ICE president Richard Coackley:

Olympic Stadium - London 2012 Olympics: Who will light the torch at the Opening Ceremony?

Photo: AFP

“Our day-to-day lives depend on the infrastructure around us that is designed, built and maintained by civil engineers – from roads, railways and bridges to energy, water and waste networks. It forms the backbone of society and the economy. But unfortunately it is often only when things go wrong that the work of civil engineers is thrust into the media spotlight.

“The London 2012 Games have changed this – showcasing and celebrating the work of these often ‘unsung heroes’ while at the same time helping the public understand more about what civil engineers do and what a diverse and exciting career it is.

“If anything could excite and inspire young people to pursue civil engineering as a career it’s the Olympic and Paralympic Games – a true feat of engineering in every sense.”

— ICE president Richard Coackley —

Read the rest of London Olympics 2012: Opening ceremony to ‘reinvigorate careers in engineering’ in The Telegraph.

Construction Observation: Important Risk Management Service

By Lynda

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”

Responding to an RFP: Risk Management Tools to Guide the Bidding Process

By Lynda

Competition among design professionals can be fierce, so it is critical to be as prepared as possible when trying to win new projects, especially those that are put out for bid.  Just as you have project quality control procedures to review a design, you also should have a similar process for responding to an RFP (Request for Proposal) to assess the appropriateness of the project for your firm, to minimize risk and to insure profitability.

When first considering whether to bid on a project, ask these questions:

  • Does our firm have experience with the project type?
  • Is our staff capable of handling a project of this size and scope?
  • Do we have confidence in our design team, including sub-consultants?
  • Can we turn in a successful project and make a profit?

Once you decide to respond to the RFP, you will take many steps to ensure your firm has a good chance at being awarded the project. You will choose a project manager and team that have the most experience with the project type. You’ll take great care in selecting your sub-consultants. You’ll follow your customary quality control procedures and review every aspect of the design phase; the costs of construction, the construction schedule and most importantly, your fees.

So, what could possibly go wrong when responding to an RFP? The answer may lie within the RFP itself.

Project Owners and Project Expectations

When you assemble your project team, you need to call upon the staff members who are best suited to understand the project and the terms spelled out in the RFP.  Your team should be asking the following questions.  Who is the project owner? Is it a government entity? A school district? Is the project publicly funded? Is the project owner a developer? If it is an LLC, who are the parties that comprise it?  Understanding who the project owner is as well as the expectations set forth in the RFP is as important as delivering the winning bid. Continue reading “Responding to an RFP: Risk Management Tools to Guide the Bidding Process”

Some Civil Engineering Optimism in Napa, CA

By Lynda

ProNet Client Project Profile

Who else is sick of hearing about the world’s crippling recession? The last couple of years have been especially tough on the construction industry, as well as on the various industries surrounding it. But design professionals are eager to see the light at the end of this thoroughly designed, planned, surveyed, engineered, and constructed tunnel.

So here’s some light! a/e ProNet client Chaudhary & Associates, a California civil engineering firm that’s determined to grow through and out of this tough time, received a glowing mention in the North Bay Business Journal last week. The following is an excerpt from the NBBJ article:

Napa-based civil engineering, surveying and construction inspection services firm Chaudhary & Associates (www.chaudhary.com) is bouncing back from the huge slowdown in private construction projects in the past few years, thanks to big public works projects rolling forward, according to President Arvin Chaudhary.

The firm currently employs 25, up from about 15 a year and a half ago and 49 at the peak of construction activity. In May, the firm moved to 211 Gateway Dr. W., in a same-sized office — 7,200 square feet — for about half the rent.

Targets for more business are a contract in Merced County that could call for four or five more employees and pieces of the $1.5 billion first and followup contracts for the planned California high-speed train project. Design-bid contractor proposals are due this fall for work next year. The company has been involved in major public works projects such as the Bay Bridge retrofit.

Yet with the state government fiscal crisis, Department of Transportation contracts for construction inspection and other services increasingly are less fruitful than anticipated, Mr. Chaudhary said. Overstaffing at Caltrans is resulting in retraining efforts and less of a need for consultants to fill roles on projects, as staff designers have been moving into field inspections, a role firms such as Chaudhary would handle.

The worry in civil engineering is that this move of Caltrans designers into the field will lead to a dearth of projects moving to construction in a few years, Mr. Chaudhary said. Continue reading “Some Civil Engineering Optimism in Napa, CA”

The Impact of Sub Consultants in the Design Build Process

By Lynda

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”

Is there such a thing as a Standard Contract?

By Lynda

The most common refrain I hear when talking to clients about Contract Review and Administration is: “I only sign a standard contract.”

Most clients feel there is no reason for contracts to be reviewed prior to signing, because they only sign a standard contract. Unfortunately, the only standard contract I ever see is one in which an owner or client uses and wants their consultants and contractors to sign. Ironically, one of the few things that makes any contract a “standard contract”…is the omni-present and onerous broad hold harmless/indemnity and defense clause.

Contract Review and Administration is probably one of the most important aspects of a prudent risk management and loss prevention program. A contract that any Contractor or Consultant signs should identify their rights and responsibilities to the owner and third parties. All of this should be determined at the “request-for-proposal” stage. If done here…it allows the Contractor or Consultant to identify, evaluate and treat the risks in the Owner or Client standard contract. Please remember that no one is putting a gun to the Contractor’s or Consultant’s head when he or she signs the contract; so it’s absolutely essential that the Contractor or Consultant knows what he is signing and what his rights and responsibilities are when negotiating for future work.

The prudent Contractor or Consultant should discuss all contracts with their counsel and agent before signing. Some general practice tips to consider when reviewing contracts are:

  • Scope of services: Think about whether the contract is exactly what you thought is was going to be in terms of encompassing more or less services, added responsibilities or services outside your area of expertise. It is also wise to describe things you are not doing to reduce the potential for misunderstandings.
  • Change orders: Find out if the Owner is allowed to change the scope of work once under way, and, if so, under what conditions. For instance, look at what input or options you have and what time frame you have to consider this.
  • Warranties and Guarantees and Performance Standards: First, you have to know if there are any. Try not to assume any and don’t agree to unreasonable ones…if you must assume any! Don’t forget that all professional liability policies exclude the assumption of liability policies which turns out to be a warranty or guarantee or performance guarantees.
  • Compliance with all laws, regulations, etc.: These responsibilities can be difficult to live up to since no one knows what all the laws, regulations, ordinances, rules, etc. are, much less how to comply with all of them. Continue reading “Is there such a thing as a Standard Contract?”

A Reasonable Contract

By Lynda

Risk Allocation is an important part of the contract negotiation process for Architects, Engineers, and other Design Consultants.

“In allocating risks by contract terms and conditions, the goal is to allocate the specific risks to the party with the best ability to manage them. Although a contract can assign ownership of risks to any party, there can be serious adverse consequences if a party assumes risks it can’t manage. A design firm, for example, isn’t in a position to manage site safety responsibilities that most appropriately belong to the construction contractor. Despite the practicalities, however, of who is actually in the best position to manage site safety, if the design firm agrees to such responsibility by contract, the designer may be found liable for site safety by courts and possibly the Department of Labor.

“To be reasonable, a contract must be reasonable for all parties involved. If a contract attempts to shift all the risks to one party or the other, it will create problems on the project. A one-sided contract is likely to cause hard feelings during contract administration. It may also increase the likelihood of claims turning into litigation. As a practical matter, this means parties are better served by negotiators who don’t try to negotiate a contract that unreasonably shifts risk to someone who can’t logically manage it or accept legal responsibility for it. Such risk transfer will cause problems in the long run, and may even create uninsurable losses and claims.

“In evaluating who the various risks should be assigned to, parties can develop a table or list of responsibilities and risks to more easily see which risks most logically belong to each party. For example, site safety typically falls to the construction contractor. Easements and rights-of-way, as well as site data, including geotechnical information, may logically be allocated to the project owner. Responsibility for exercising due care in the planning and designing of a project generally falls to the design professional performing those services.

“Problems begin when any of these risks are allocated to the party that is not technically responsible for the related services. Unless you are in a position to manage a particular risk, it is not appropriate for you to accept contractual liability for that risk.”

This is an excerpt from a/e ProNet’s Risk Management & Contract Review Guide for Design Professionals (© Copyright 2006; a/e ProNet & J. Kent Holland, Jr.), one of the many resources ProNet Member Broker’s provide to their clients. A digital version of the full guide is available for purchase ($19.99). Contact a/e ProNet today to get in touch with your local ProNet broker.

About the Author: J. Kent Holland is a construction lawyer located in Tysons Corner, Virginia,  (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC. He is also the author of Contract Concerns, a series of articles available on our website here.

Just a Rabbit? Small Projects Can Bite

By Lynda

Who doesn’t love a good Monty Python reference? With our latest ProNetwork Newsletter, Just a Rabbit? Small Projects Can Bite, we’ve proven that the classic moments in Monty Python and the Holy Grail can be made analogous to anything, even insurance. Or, more accurately in this case, to potential professional liability claims:

“King Arthur and his knights approach a cave known to be guarded by a ferocious beast.  Upon seeing that the beast is but a wee rabbit, they let down their guards, proceed forward and are savagely attacked.  Was the mistake having approached the cave at all or having done so without anticipation of the risk and use of appropriate protection?  I sometimes ask the same question of design professionals who undertake small fee projects and unhappily receive large claims. But it has always been true that little projects can generate big claims, particularly where we let informality replace careful practice and appropriate documentation.  In a troubled economy, a/e’s want to take the work and no responsible lawyer should tell you to minimize your risk by eliminating your work. Take the work but don’t skimp on process, procedures and gut feelings in contract negotiations and documentation, even if done less formally.

Just a Rabbit

“Like King Arthur’s knights, I have frequently heard that the project was just a rabbit, or just a slab on grade, or just a retaining wall, or just a room addition, or just a (fill in the blank).  Insurance statistics prove that smaller firms do not necessarily get smaller claims, nor do smaller projects necessarily generate only small claims.   A modest structural engineering engagement for balcony maintenance on a condominium building can bring in modest fees.  When one of the balconies collapses or defects become apparent in 350 identical units with 350 separate plaintiffs, the defense and repair costs can be astronomical.  The same can be true for a small church addition, with the church school remaining open during construction.

Just a Contract

“Aside from legalities, written contracts serve two important practical purposes.  First, before work begins, the contract serves as a discussion outline with which a client can be educated about what you do for a living, what they have to give you in order for you to do the work, what work you have in mind and, equally important, what work is not included. All of these topics are much more easily and less emotionally discussed before anyone has started working and before a problem has arisen.

“I frequently receive calls about contracts just as the a/e is finishing Construction Documents and realizes either that nothing has been paid to date or that a risky project is about to go out for bid. This is not ideal, but very common, and still better than having the discussion after CDs are out or a problem has arisen.  I also frequently receive calls after the contract is signed, work is proceeding and could I just take a quick look at the contract, because it is “just a room addition” or similar small project?  Once signed, there is little I can do but warn the a/e of the teeth on that rabbit.

“Contracts serve a second important purpose as well – to tell a third party (judge, jury, arbitrator, Grand Inquisitor) what the parties thought about the scope of services, risks, rewards and the deal before they got to court.  If you show up to court with a contract calling you “contractor,” saying that you will perform your services to the “highest, best” standards of care and that you intended to “ensure” a successful project, you will be hard pressed to proclaim otherwise, even if Mrs. Justaroomaddition was a little flaky and Mr. Justaroomaddition employed his brother-in-law to do some of the work.   You will also create insurance coverage problems for the claim, perhaps ending up with two lawyers and two lawsuits instead of one of each.  Use the same scrutiny of contract language for your small projects that you use for your large projects, because the same words can cause problems regardless of size of the work.”

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ProNetwork News is the latest value-added resource produced by a/e ProNet. Each monthly edition includes an informative, timely article relevant to the design industry and authored by an industry expert. Contact your a/e ProNet broker for early access to these excellent 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. Eric is an active speaker and prolific author on the subject of construction litigation and the liability of the design professional.