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CASH Facility Resource Center

22nd Annual Conference
Coalition for Adequate School Housing

Workshop #11
ERRORS & OMISSIONS:
When Should Your Architect Pay?
or...Should the Architect ever pay?

or...Why Should the Architect ever pay?

Doubletree Hotel
March 6, 2001
3:40 – 5:00 p.m.

Sherry Gongaware, Director, Facilities Development
Tracy Joint Unified School District

Gary L. Vinson, Attorney
Greve, Clifford, Wengel & Paras, LLP, Sacramento

Michael Rainforth, Architect (Workshop Mediator)
Michael Rainforth & Jeffrey Grau Architects, Sacramento

Errors & Omissions:
When Should Your Architect Pay?

School District Perspective
Tracy Unified School District
Sherry Gongaware

Are Architects Responsible for a Perfect Set of Plans?
If Yes

  • Then no questions from the contractor
  • No change orders
  • This workshop is not for you

Are Architects Responsible for a Perfect Set of Plans?
If No, when should they be held accountable?

  • Realistic design timeline
  • Clear understanding of District standards
  • Clear understanding of program

Considerations For Who Pays

  • Adequate time to program and design the facility
  • Necessary District input provided
  • Constructability review
  • Re-use of plans
  • Re-occurring circumstance

Final Considerations

  • Does the change add value to the contract?
  • Should the architect have known?
  • Is the item a safety default?
  • Should the contractor be paid by District, as added value, and architect fees be withheld?
  • Should architect pay contractor for change?

Case Examples

  1. Corrective Work

    • Paid for in contract but needs to be corrected
           K-2 campus, with catch basin 2' below grade, causing a 45 degree slope in sidewalk.
    • District paid for site survey
    • Architect civil engineer put grades on sidewalk and catch basin based on survey
    • District asked to pay 2 1/2 times value after corrective work, plus architect fees charged on change
    • Architect considers changes less than 10% is margin of error, dropped architect fees on change

  2. Phased Master Planned Project

    • Underground paid for in Phase 1, rerouted in Phase 3
           Underground signal system for entire master planned project installed in first phase. By Phase 3, underground signal system had to be re-routed, due to fine tuning of building locations and additions and inappropriate original design
    • Architect paid for 30% of relocation cost and no architect fees were assessed

  3. Lack of co-ordination of design between canopy footings and underground utilities

    • Second project with same architect, same situation.
    • Architect concern in aesthetics that must live with for life of school, so must change underground utilities that have already been placed. Only so may hours in day and all District's projects are time critical. Bid prior to DSA approval.
    • 1st project, shame on us. 2nd project, shame on architect. ($32,000)

  4. Unknown Conditions

    • Adding new grease interceptor for expanded kitchen.
    • Assumed point of connection in drawings.
    • In this case, would it have been cheaper for the district to pot hole the elevation for the point of connection prior to bid? Was the District even asked?
    • The actual point of connection was deeper so extra cost for greater effort and more materials. ($7,000 + $630 architectural fees)
    • District Standards

PRINCIPLE #1:
STANDARD OF PROFESSIONAL CARE

or... No Buddys Purfakt

Nobuddys Purfekt

Nobudys’ Perfekt

Nobody’s Perfect

or... "Hey...I’m human too!"

  • DESIGN PROFESSIONAL required to render services with an ordinary degree of skill and care that would be used by other reasonably competent practitioners under similar circumstances, taking into consideration the contemporary state of the art and geographic idiosyncrasies.
    • English Common Law
    • Reasonably careful and prudent manner as tested or established by action of peers under like circumstances.

  • "UNMET EXPECTATIONS" LEAD TO LIABILITY CLAIMS

    • Not technical errors
    • Most projects are prototypes
    • 97% = "A" grades in schools
    • Contracts cannot require "performance to the highest standard of practice."
    • Liability insurance will not cover

  • SOLUTIONS

    • Owner – Contractor – Consultant cooperation in identifying defects early enough to remedy at appropriate rather than exorbitant cost to Owner (contractor selection!)
    • Contingency Fund
    • Limitation of Liability Clause in Owner-Architect Agreement
      - Excessive exposures can bankrupt Architect
      - Excessive exposure strains the relationship of Architect with Owner and Contractor.

When should the Architect pay? ...NEVER! I say!

PRINCIPLE #2:
BETTERMENT OR UNJUST ENRICHMENT

  • PERSON DAMAGED by another’s mistake is not entitled to gain an advantage or profit because of the mistake.

    • Something unintentionally omitted from the plans, but nevertheless required or necessary, is not an obligation of the Architect
    • Contractor would have had it in his bid, if it had been shown, as needed
    • Owner would have paid then, so should pay now
    • Applies from missing door stops to omitted elevators

When should your architect pay? ...NEVER! I say.

PRINCIPLE #3:
PROPORTIONAL RISK & BENEFIT

  • Allocation of risk in some reasonable proportion to the profits and other benefits to be derived by each party.

    OWNER: $10,000,000 building
    x 10% return/year
    x 20-40 years
    BENEFIT $$$$$$$$$$ $$$$$$$$$$$$

    BENEFIT IS HUGE!

    Contractor: $10,000,000 building
    x 10% profit
    Benefit $1,000,000

    Architect: $10,000,000 building
    x 7% fee
    $700,000
    x 10% profit
    Benefit $70,000

    EXPOSURE IS HUGE!

  • REASONABLE CONTINGENCY SET ASIDE BY OWNER
When should any Architect pay? ...NEVER! I say!

Strict Liability
Strict liability, or liability without fault, is predicated on the theory that one who, realizing the hazard of his or her undertaking, nevertheless assumes the risk and may be held liable for any bodily injury or property damage notwithstanding the absence of negligence or even the use of the utmost care.

Breach of Warranty
A warranty is a promise that goods or services will be free of defects. If this theory were applicable to architectural plans, a warranty would be a guarantee that the plans were 100 percent accurate and complete.

What is "Negligence?"
Who Determines It?

Jury Instruction No. 6.37


In performing professional services for a client, an architect has the duty to have that degree if learning and skill ordinarily possessed by reputable architects, practicing in the same or a similar locality and under similar circumstances.

It is further duty to use the care and skill ordinarily used in like cases by reputable architects practicing in the same or a similar locality under similar circumstances, and to use reasonable diligence and best judgment in the exercise of professional skill and in the application of learning, in an effort to accomplish the purpose for which the professional was employed.

A failure to fulfill any such duty is negligence. (Emphasis added.)

Standard of Care
Determined by Expert
Testimony

Jury Instruction No. 6.37.4


You must determine the standard of professional learning, skill and care required of the defendant only from the opinions of the architects (including the defendant) who have testified as expert witnesses as to such standard.

Perfection is Not Required

Jury Instruction No. 6.37.2


An architect is not necessarily negligent because he or she errs in judgment or because his or her efforts prove unsuccessful. However, an architect is negligent if the error in judgment or lack of success is due to a failure to perform any of the duties as defined in these instructions.

There is a reason that architects as quasi-arbiters should be protected. If their decisions can thereafter be questioned in suits brought against them by either party, there is a real possibility that their decisions will be governed more by the fear of such suits than by their own unfettered judgment as to the merits of the matter they must decide. It is for that reason that architects, acting as quasi-arbiters, have been held immune from suit.