The following material is provided for informational purposes only. Before taking any action that could have legal or other important consequences, speak with a qualified professional who can provide guidance that considers your own unique circumstances.
Design professionals can provide added value to their clients by recommending and specifying materials and systems that enhance a project's utility and performance. It's up to design firms to remain current with their knowledge of the latest project materials and components so that they can make informed decisions regarding their specifications and achieve client objectives.
Today, it seems that building materials and mechanical systems are front and center when it comes to critical paths for getting projects completed on time and within budget. First, there is the issue of supply chain delays and failures. Accurate scheduling has become nearly impossible for receiving some materials, equipment and supplies. Delays in the delivery of critical components are commonplace. It now routinely takes months, and sometimes a year or more, to get materials, equipment and systems delivered to the jobsite, especially those coming from China and other Far East nations.
Then there is the issue of material costs. Inflation has raised its ugly head and is pushing the estimated cost of projects sky high. Moody's reports that year-to-date construction material costs have jumped nearly 27% and labor 5.5% over the first four months of 2022. Clients may have started the planning of their projects with a set of assumed costs that are suddenly twice what was expected.
Add to this mix new materials and systems that present a number of unknowns when it comes to performance and long-term costs. A prime example is a sudden rise in the use of "heavy lumber," aka, "mass timber."
Heavy lumber is essentially large engineered wood beams, trusses and timbers composed of glued veneers, cross-laminated timber, flakes, and other types of wood. Once glued, and dried, heavy lumber is extraordinarily strong and can be used as the primary load-bearing timbers, trusses and beams to frame tall structures. For some projects, it is now being used in place of steel construction.
Of course, as with any new or unconventional construction method, there have been inevitable hidden costs and liabilities associated with the use of heavy lumber. Virtually any wood product is susceptible to fire, water damage, mold, and warping, leading to losses associated with physical damage to the structure and business interruption for the occupants. Through innovative design and construction techniques, some of these liabilities can be lessened, but they cannot be eliminated.
Another added owner expense associated with heavy lumber is the cost of insuring the building. Many insurance companies are not yet comfortable with the idea of combustible wood frames for tall multi-story structures. They see potential losses associated with damage to the structure, nonperformance of its systems or, worse, danger to occupants in the event of a fire, flood, earthquake or other disasters. These fears will likely lead to high insurance premiums for property and builders' risk coverage until heavy lumber buildings prove themselves as insurable risks.
Caution: Innovation Ahead
Design firms should be leery of specifying innovative and newly emerging materials and systems, such as heavy lumber, with which they are unfamiliar. Even commonly specified, tried-and-true building materials and systems present some risks and liabilities for the design firms who specify them. But steps can be taken to minimize these risks for design professionals.
When deciding whether to specify a particular material or system, ask yourself:
How familiar am I with this material or system?
Has it presented any performance issues or other problems for me when using it in the past?
Are my peers who work on the same types of projects in the same locales commonly specifying it?
How comfortable would I be if I had to justify my specifications during a deposition or before a mediator, judge or jury?
Remember: You don't have to be perfect with your specifications. You only need to be able to demonstrate that you met the prevailing standard of care applicable to all design professionals. That is, whether you specify a new material or a tried-and-true one, you only need to show that you acted as any other reasonable design firm would act under similar circumstances. You must simply demonstrate that you made a reasonable, professional judgment to confirm that a specified material or system is suitable for the intended purpose at a given locale.
There is much you can and should do to demonstrate that your specification of a material or system is a reasonable one based on available information. For instance, read up on the material or system being specified. Gather and file away the manufacturer's marketing and technical brochures, specification sheets, test results, and warranties/guarantees. Browse the manufacturer's Website and other social media platforms. Read instructions for use and any warning labels.
Document any conversations you have had with the manufacturer regarding the applicable uses of the product in your specific circumstances. Ask the manufacturer to put in writing any verbal claims they make that are not substantiated in the written materials.
Be sure to look well beyond the manufacturer's information. Search for test results from independent laboratories. Talk with peer design firms as well as contractors, subconsultants and installers who have used the product or system in similar circumstances.
Working With Your Client
Once you have collected sufficient information regarding your specified materials or systems, present a package of your findings to your client. Make a solid case as to why your specifications are justified. If possible, draft a written agreement with your client that your specifications of materials and systems seem prudent based on your investigation and the claims of the manufacturer.
In your contract with the client, you and your attorney should strive to get language included that limits your liability for the failure or inadequate performance of any specified materials and systems that were reviewed and approved by the client. Try to get contract language stating that your client agrees to waive all claims and indemnify you from:
1) The specification and use of materials that are permissible under current building codes but that may, in the future, be discovered to be defective or harmful. (Some of you old-timers may remember when asbestos was a commonly specified material).
2) The use of any materials specified by the client. If a client insists on you using a particular material or system against your objections, it should be willing to accept all of the liability for its use and installation. Document such assurances.
Does "Or Equal" Make Sense?
There has long been controversy as to whether a designer should add the phrase "or equal" when specifying a material or system. For instance, a specification might read: "A Johnson Hi-Power 1229 generator or equal." Essentially this practice specifies a particular manufacturer, brand and model that the design professional prefers and approves, but recognizes that the contractor or client may choose a similar material or system that they feel has an equal performance profile and possibly offers other advantages such as a lower price.
Those designers who don't like the "or equal" qualifier may argue that it encourages the client or contractor to ask for a substitute, possibly one that the designer is unfamiliar with or may not feel is comparable to the specified material. This typically adds cost and time to investigate the substitute.
Today, however, with the severe supply chain problems coupled with inflationary pressures, having an "or equal" substitute may provide an option to avoid a lengthy delivery delay or a substantial price hike. If a contractor can show that a shortage or delay of the specified material will result in higher costs or added time to a project, a design consultant would be compelled to consider a readily available substitute.
Setting Your Substitution Guidelines
Establish the criteria you will use to review the acceptability of substitutions. Make it clear that the burden is on the owner or contractor to convince you that the substitute's performance is equal to or better than the material or system you specified.
In your contract with your client spell out the procedures that the client or contractor must follow to request a substitution. Set timeframes as to when substitutions can be submitted. In some cases, design firms may require that substitutions are submitted only after the contractor is selected and the contract is in force. However, it may make sense to allow substitutions to be requested during the bidding process, particularly if supply chain problems are anticipated and contractors can be relied upon to suggest substitution options.
Retain the right to be compensated for the time you spend reviewing a substitution request. Also, make sure you will get paid for any additional design services you must provide to accommodate a client's or contractor's substitution.
Require contractors to submit a "substitution request form" for each proposed substitution. Standard forms are available from the Construction Specifications Institute (www.cisresources.org). Your professional liability insurer may also offer similar substitution request forms. Information to be submitted include the reason for the substitution request, the proposed substitution, the manufacturer and installer of the substitution, features, performance scores or ratings, test data, a list of differences between the proposed substitution and the original specification, any deviations from specified requirements, and the projected impact of the substitution on project costs and construction schedule.
Commit to being responsive to substitution requests in a timely manner. Acknowledge receipt of the substitution request and set a reasonable deadline by which you will reply to the request.
When responding to a substitution request for an emerging material or system with which you are unfamiliar, document all of the steps you took to investigate the request. Establish that you made a reasonable effort to verify the suitability of the substitute material or system. You are not required to run extensive tests or take any extraordinary measures to validate the suitability of a substitution.
Consider contacting the manufacturer to gain written confirmation that the substitute is indeed suitable for its intended application. When warranted, ask that a manufacturer's representative be onsite for installation.
There will be instances when you simply are not comfortable accepting a substitution request. When you reject a proposed substitution, spell out your reasons why in sufficient detail.
Finally, it is your responsibility to remain current on the emerging materials and systems being used in the industry. Even though you might not be ready to take on designing a tall building using heavy lumber, you do have a responsibility to study this building method and learn how it works. Otherwise, you get left behind the leading-edge firms in the design profession, unable to apply emerging materials and systems that could soon become standard operating procedures and tomorrow's prevailing standard of care.
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