Stephen Wichern, P.E., Esq.
Partner, Beltzer Bangert
& Gunnell LLP
A trend in commercial construction is the concept of “design assist,” an approach under which the contractor collaborates with the owner during the design phase to help bring the owner’s ideas to life. The logic behind this approach is that an owner should take advantage of the contractor’s unique skills to identify potential gaps and refine the design with better constructability and more efficient scheduling, resulting in fewer design related change orders. While this approach has clear potential to benefit all parties, this early collaboration between the owner and contractor can lead to confusion about who is responsible – and, ultimately, liable – for design problems that reveal themselves during the construction phase.
The owner, having carefully selected the contractor based not only on construction skill and experience but also on reputation for managing design issues, may reasonably expect that there will not be discrepancies, errors or omissions in the drawings that will result in costly changes and redesigns during construction. After all, who else but the contractor, after careful study and review of the design while developing the contract price, is in a better position to say whether the drawings are in fact complete and accurate? Contractors, on the other hand, typically are not design professionals and do not view themselves as having been paid to ensure the accuracy of the design, notwithstanding their involvement in project planning. Instead, contractors will see their role as building what ultimately is depicted in the plans and specifications for the agreed upon contract price. Contractors may even believe that, by proposing value engineering and other changes during the design phase, they will be insulated from second-guessing by the owner when problems arise during construction. To the contrary, the contractor’s advanced input may inadvertently raise the owner’s expectation as to the contractor’s responsibility for the sufficiency of design, leading to disputes with the owner over who should bear the cost for design errors.
The reality is that even small renovation projects likely will present challenges in understanding, interpreting and applying the design documents. Even the most diligent, experienced and conscientious contractor will not be able to identify all potential conflicts or uncertainties, despite concerted efforts, when analyzing design drawings. As a general principle, the contractor usually is responsible for defects caused by a failure to conduct work according to design and specifications, not for the design and specifications themselves. For the last century, the construction industry has operated under the “Spearin doctrine,” based on the seminal case of United States v. Spearin, 248 U.S. 132 (1918), which generally holds that the contractor is entitled to rely on the plans and specifications and is not, in the end, liable for design defects when it follows owner-provided design. Under Spearin, the owner impliedly warrants the adequacy of the plans and specifications and bears the risk of errors or omissions in them.
Many construction contracts attempt to find a middle ground, recognizing the contractor’s need for relief from design errors and omissions while also imposing on the contactor an obligation to assist the owner in the review of the design drawings. For instance, under the AIA Document A201-2017 General Conditions of the Contract for Construction, contractors are obligated to promptly report any errors, inconsistencies or omissions they have discovered in the plans and specifications, but this requirement is tempered by the acknowledgement that the review is made in the capacity “as a contractor” and not that of a design professional:
§ 3.2.2 Because the Contract Documents are complementary, the Contractor shall, before starting each portion of the Work, carefully study and compare the various Contract Documents relative to that portion of the Work, as well as the information furnished by the Owner pursuant to Section 2.3.4, shall take field measurements of any existing conditions related to that portion of the Work, and shall observe any conditions at the site affecting it. These obligations are for the purpose of facilitating coordination and construction by the Contractor and are not for the purpose of discovering errors, omissions, or inconsistencies in the Contract Documents; however, the Contractor shall promptly report to the Architect any errors, inconsistencies or omissions discovered by or made known to the Contractor as a request for information in such form as the Architect may require. It is recognized that the Contractor’s review is made in the Contractor’s capacity as a contractor and not as a licensed design professional, unless otherwise specifically provided in the Contract Documents.
(Emphasis added.)
Under these terms, if issues arise during construction because of inconsistencies, discrepancies or omissions in the design documents that none of the parties identified during the preconstruction process, the contractor is not precluded from requesting relief, whether cost, time or both, according to the contract’s terms, for resulting adverse impacts. If the owner prefers that the contractor have more responsibility for the design drawings, the parties can adopt alternative approaches through different contract models, including the design-build approach where the contractor takes all of the design risk (but is compensated for it).
To avoid costly disputes over design issues, the owner and contractor should discuss their expectations regarding the contractor’s level of review of, and responsibility for, the design documents early so they can properly negotiate pricing terms to fairly reflect the risk allocation. If raised later in the process, particularly after the contractor has commenced construction, it may be too late for the contractor to accurately price in additional design risk. A frank discussion at the outset of the project to assess the owner’s expectation as to the contractor’s responsibility for the design, followed by a concerted effort to ensure that this expectation is accurately and clearly incorporated into the contract, will help avoid unnecessary disputes over design liability later on.
