Panel provides advice for tightening contracts.
BY DONALD R. BOYKEN, FCCC
The design process and the resulting deliverables prepared by the design team on a construction project can be likened to a small set of hard deliverables, covering a fuzzy set of responsibilities, hiding an enormous amount of barely visible day-to-day work.” Too often, we have found to be lacking the completeness of specific deliverables at various stages of the design process, despite the fact that the design is the basis for project- impacting decisions. Contracts are developed to set forth the reasonable expectations of the parties. One of the basic tenants of a good design contract is that it should be specific as to contractual performance and end product so that those expectations are not left to debate. Yet, common design contract provisions, which should define those deliverables, are so fuzzy that they leave the results to each party’s (often differing) interpretation.
Considering the needs and expectations of the multiple users who look to the design team to define and specify a construction project, establishing specific guidelines governing the completeness and content of the design deliverables will help bring about a successful project and avoid disputes among the parties.
We have reviewed several forms of contract to determine if one contract provided a better definition of deliverables than another one. We found they all were equally weak in defining what the owners need to make informed decisions. The Engineering Contract language, however, is a little more specific than the AIA documents.
Following is a comparison of the two contracts as they relate to the Preliminary Design Document requirements: Engineers Joint Documents Committee Design and Construction Related Documents Instructions and License Agreement (2002 Edition) – The engineering agreement defines the services and duties of the engineer, including his obligations as to deliverables. The responsibilities of the Designer include the preparation of deliverables during the various stages of the design phase of the contract. The contract specifically outlines the preliminary design phase as follows: A.1.02(A) requires the engineer to prepare and produce the following deliverables to the Owner:
Preliminary Design Phase documents consisting of design criteria, preliminary drawings, outline specifications, and written descriptions of the Project.
Necessary field surveys and topographic and utility mapping for design purposes.
A revised opinion of probable Construction Cost (unique to the engineering contract).
Any additional Preliminary Design Phase tasks or deliverables the parties agree upon.” AIA Contract – The AIA Contract is the document used by most of the industry.
The entire section that specifies the preliminary design deliverables is quoted from the AIA-defined document B141- 1997. The document reads as follows: Article 2.4 Design Services 2.4.1. The Architect’s design services shall include normal structural, mechanical and electrical engineering services.
2.4.2. Schematic Design Documents 126.96.36.199 The Architect shall provide Schematic Design Documents based on the mutually agreed-upon program, schedule, and budget for the Cost of the Work.
The documents shall establish the conceptual design of the Project illustrating the scale and relationship of the Project components. The Schematic Design Documents shall include a conceptual site plan, if appropriate, and preliminary building plans, sections and elevations. At the Architect’s option (emphasis added), the Schematic Design Documents may include study models, perspective sketches, electronic modeling or combinations of these media. Preliminary selections of major building systems and construction materials shall be noted on the drawings or described in writing.” Why is it important? Success in delivering a construction project can be expressed in terms of meeting the owner’s requirements in three areas of concern – scope, schedule, and budget.
Fundamentally, these concerns are interdependent, as they form the overall plan for delivering the project that the owner expects within the owner’s time and budget constraints. Communication among the design team, the owner, the user groups, and special consultants requires a specific level of documentation for each to perform their respective services and to meet the expectations of all parties.
Engineering interface – At each level of design, the consulting engineers require documentation from the designer that gives clear direction to complete their portions of the work. Specifically, the interchange of information includes drawing backgrounds, program requirements, equipment information, system definition and quality, and level of finishes. The engineers should provide their concept and design-development information to the designer and owner at a sufficiently specific level of detail to clearly explain the intended design.
Owner interface – The owner’s evaluation is conducted by its engineering staff (if available) or the user groups, who often may not have specific knowledge of the design and construction process. A clear understanding of the building and the intended system design saves time and redesign costs if the work product at each level of design is definitive enough for the owner and user groups to evaluate whether the design presented meets each aspect of their essential needs – scope, schedule, and budget.
Contractor and cost consultants – One of the owner’s key considerations during the design process is the expected budget. It is axiomatic that the accuracy of a cost projection is driven by the accuracy and completeness of the project definition.
The design deliverables are the means by which the designer defines the project.
Whether the project cost projection is to be prepared internally by the owner, by the designer, by the contractor, or by an independent cost consultant, specific data is required for the estimating staff to develop accurate cost projections.
Special consultants – Detailed information is necessary for follow-on consultants, who may need to start their work prior to completion of a full set of construction documents to maintain the project schedule. Large, complex projects involve many firms that require coordination. For example, the design of an airport includes follow-on design firms for concessionaires, baggage systems, security, airline spaces, special airline communications, transportation, and loading bridges, just to name a few. Large resort hotels, hospitals, universities, municipal infrastructure systems, power plants, and other programs each have their own list of follow-on consultants that must rely on data provided by the building design team to be at a sufficient level of completeness for them to plan their systems or work properly.
Findings Our review of standard contracts and some additional owner-drafted contracts found the level of specificity to be consistently vague. We contend that at the schematic design stage, the owner’s vision, as set forth in the program of requirements and the designer’s or engineer’s general concept, sets the framework for the Schematic Design Phase. During this phase, the concept is developed from a functional diagram and conceptual section into a plan as the first step toward bringing the concept to reality. The scheme at this point is developed on the basis of the facility program and adjusted to respond to the owner’s and designer’s value judgments that are necessary in developing the concept.
The project is refined continually, and its positive attributes strengthened while trying to eliminate any negative components that are discovered.
With the overall design framework in place, the team now begins to focus on each of the design functions. To flesh out the program, additional meetings need to be held with the user to uncover additional, specific design requirements. These requirements are incorporated into the design, and the revised design is reflected in the next phase.
Simultaneously, the project’s systems begin to take shape. Structurally, the team develops an overall framing grid that efficiently and effectively meets the needs of the design solution. Concepts for supporting the major design features are explored and refined. After determining the type, size, and general location of the major mechanical and electrical systems components, specific locations for these components are identified and incorporated. With these elements set, development of potential system runs can begin.
The schematic design represents the latest refinements of each of the elements as well as the latest refinements of the overall project plan. As the design process moves into the design-development phase, the schematic design will continue to be refined and updated.
Decisions relating to scope and engineering systems made during the schematic-design phase have direct consequences on the owner’s financial and schedule goals. Therefore, it is important for the designer to communicate his or her plan in sufficient detail to allow the owner to consider and adjust its cost and schedule expectations accordingly.
Our research concludes that a better level of specificity should be identified in the contract. The amount of specificity is related directly to the size, complexity, and type of project under consideration, which will influence how detailed the designer’s deliverables should be. It is likely that the vagueness evident in the standard forms of contracts stems in large part from the desire to leave the details to the parties on a project- specific basis.
The designer’s role has undergone widespread changes in the recent past.
Design/Build, Construction Management, Fast Track, and Construction Management at Risk methods of delivery bring a unique bundle of risks, responsibilities, and expectations to the mix. All or some of these delivery methods require some review and changes to the underlying contracts, and need to be reviewed project-by-project.
Our initial recommendation is that the owner and the designer must not abrogate their responsibility to set forth their expectations in the contract by simply defaulting to the general boilerplate language common to the standard forms.
An approach to consider The American Society for Testing and Materials (ASTM) has conducted extensive research regarding building systems, products, and requirements for the construction industry. Standard Practice E1804-02 Performing and Reporting Cost Analysis During the Design Phase of a Project was written to establish a structured method to support design decisions” and to increase the level of communication between the design professional, owner, and cost professional.” Thus, this standard practice defines the necessary process for a contractor or cost consultant to provide accurate cost information to the owner during the design phase.
The standard includes a list of data required by the estimator to achieve a reliable estimate. We (the panel) agree that while all of the data is available from the design team (including simplified finish information), the design team may not need to go to this level on all projects.
The full criteria noted in the ASTM document for the Schematic Design listing is below for comparison with other contract requirements.
8.2 Schematic Design Phase Estimate – The cost professional requires the following documents: 8.2.1 Site Development: 188.8.131.52 Paving and parking requirements, 184.108.40.206 Finish building grades, 220.127.116.11 Original site drawings, 18.104.22.168 Storm drainage solution, 22.214.171.124 Existing utility location, 126.96.36.199 Site retaining walls, and 188.8.131.52 Site lighting requirements.
8.2.2 Building Work: 184.108.40.206 Principal floor plans, 220.127.116.11 Specification outline, 18.104.22.168 Exterior wall sections, 22.214.171.124 Mechanical/electrical/plumbing systems outline (suggested equipment requirements), 126.96.36.199 Finish schedule by room types, 188.8.131.52 Structural foundation system, 184.108.40.206 Typical structural framing system, and 220.127.116.11 Roof system selections.
8.2.3 Specialty Structures: 18.104.22.168 Structure type (bridge, gazebo, etc.) and 22.214.171.124 Height and floor plan dimensions.
The general consensus is that the specific list of deliverables most likely rests between the AIA requirements and the ASTM requirements.
It often is easier to remove definitive items from a specific list than to add definitions to a vague scope of work. The ASTM document, Section 8, is suggested as the starting place for owners and their design team to reach an agreeable definitive list of deliverables that meets their contract requirements.
Donald R. Boyken, FCCC, is chairman and CEO of Boyken International, an Atlanta-based, international consulting firm that provides program management and consulting services to building owners, developers, and other construction industry clients. He can be contacted at 770-992-3210, or via email at firstname.lastname@example.org.