Construction Engineering 380
Professional Design Services
Chapter 12
Appendix G
Professional Design Services
• Range of Service has expanded due to:
– Public control & oversight
– Greater participation in financial and
economic aspects of the project
– Greater demands by owners
– More litigation and disputes
– Risk-sharing and risk-shedding
– Move toward integrated project management
(no longer viewing construction in “phases”)
Professional Design Services
• Professional service contracts include services
under a “basic fee”
• Basic fee typically calculated at a percentage of
total project cost
• Fees for “additional services” are calculated on
an hourly or other time-based factor
• What is included in the Basic fee and what
constitutes additional service must be spelled
out in detail in the contract for services
Professional Design Services
• Professional liability insurance covers only
routine professional services (needs
analysis, design, site inspections, etc.)
• Professionals will frequently need a liability
rider to engage in non-routine services
(financial guarantees for municipal
bonding, market studies, etc.)
Professional Design Services
• Traditional role of design professional in
construction
– Project administration
– Supporting service
– Evaluation and planning
– Design
– Construction procurement (bidding)
– Contract administration
– Facility operations
Professional Design Services
• AIA form B141 is shown in Appendix “A”
– Specifically for construction
– Designed for use by architects
• Another standard agreement has been
prepared by a joint committee of American
Consulting Engineers Council (ACEC),
National Society of Professional Engineers
(NSPE), and American Society of Civil
Engineers (ASCE)
Professional Design Services
• Joint committee standard form is shown in
Appendix “G” (1996 edition)
– More generic- can be applied to a variety of
engineering projects outside of construction
– Not as much emphasis on design- more on
advising and cost opinions
• Can be used for environmental remediation service
• Can be used for power, energy, materials,
information system designs, etc.
Professional Design Services
• Review samples of joint committee forms in
Appendix “G”
• Cost predictions can be troublesome for design
professionals
– Clients often use consultants to verify designer cost
estimates
– Can get contractors involved early (pre-bid),
sometimes evolves into design-build project
– Many designers use rough estimate based on area or
volume
• Leads to bulk of cost-related litigation
Professional Design Services
• Designers can create a cost-condition by failing
to design a project within the cost estimate they
provided
• “Michigan rule” is the precedent that will likely be
followed by the majority of courts
• Forfeiture of design fee is permitted if cost
exceeds representation by design professional
• AIA is trying to include protective language in its
standard forms to prevent loss of fees in the
case of substantial cost over-runs
Professional Design Services
• Assistance in obtaining financing
– Frequently required
– Can create a risk/liability for designers
– May be best to structure as a separate activity
• Performing economic feasibility studies
– Not part of basic services
– Most architects/engineers not trained or experienced
in this area
– Can be very risky for designers to offer this service
Professional Design Services
• Government approvals (zoning, planning,
permits)
– Reasonable cooperation in getting
government approvals is expected under
basic services
– Anything outside cooperation (such as
attending a meeting, making a presentation,
or preparing a report) is considered additional
service
Professional Design Services
• Legal advice and representation
– The line between legal services and design
services can be difficult to establish (for
instance, if an owner asks if an existing floor
plan is ADA compliant)
– Design professionals use of standard contract
forms should be viewed as a “legal service”
with appropriate disclaimers and review by
counsel
Professional Design Services
• Legal services continued
– Design professionals need to be knowledgeable of
the law
– Important to know when you need legal advice and
what types of “legal services” should be turned over
to legal experts
– Practically impossible (and costly) for all “legal
practices” to be handled by lawyers (for instance,
writing a subcontract is technically “practicing law”
because it is a contract). Therefore all designers,
engineers, and other professionals should have some
basic legal knowledge
Professional Design Services
• Site services
– Observation versus supervision
– Acceptance of the work versus approval of
the work
– Inspection versus discovery
– In general, the architect/engineer cannot be
held as a guarantor of contractor’s work
– The trend is for issues of fact to determine
liability (go to trial) rather than summary
judgments based on contract deficiencies
Professional Design Services
• Review of submittals, shop drawings, and other
performance verification documents is related to
site inspection
• However, because this is a design review,
rather than a construction review, the design
professional is usually held to higher liability
• Courts use a “balance of expertise” (design
versus execution) standard to determine
responsibilities
Professional Design Services
• Other issues of contractual concern:
– Design delegation & use of consultants
– Ownership of drawings and designs
– Time to perform services
– Cessation of service clauses
– Judicial remedies for breach
• What happens if a design defect is uncovered