1. Duties and Liabilities of Design Professionals Arising out of Contract Administration Services Donovan Hatem LLP

2. POP QUIZ

3. 1.Every design firm should have its own on- site checklist for all job site visits.  True or  False

4.  True

5. 2.No matter how many problems a job site visit uncovers, do not stop the work.  True or  False

6.  True

7. 3.If during a job site visit you see a specific construction defect in work that has yet to be completed, you can have that specific work stopped until the defect is corrected.  True or  False

8.  False

9. 4.Most shop drawing related claims occur from poor management of the review process, therefore reducing this exposure is in your control.  True or  False

10.  True

11. 5.Since documenting on-site visits and communicating them to the owner can save a lot of money and time, most design firms tend to do a good job in this area.  True or  False

12.  False

13. 6.You should never review shop drawings without them first being stamped by the general contractor.  True or  False

14.  True

15. Overview of Topics Design Professional’s Contract Administration Services Job Site Safety Issues

16. Contract Administration Services Observation of Construction / Site Visits Issuance of Clarifications and Interpretations of Contract Documents Disapproval or Rejection of Defective Work Shop Drawings and Other Submittals Review of Applications for Payment Role as Quasi-Arbitrator

17. Contract Administration Services: Observation of Construction / Site Visits Affirmative Duties –Periodic visits at appropriate stages of construction. –Determine in general whether Work proceeding “in a manner indicating that the Work, when fully completed, will be in accordance with the Contract Documents.”

18. Contract Administration Services: Observation of Construction / Site Visits Affirmative Duties (cont.) –Representative of the Owner Keep the Owner informed of progress and quality of the portion of the Work completed. Endeavor to guard the Owner against defects and deficiencies.

19. Contract Administration Services: Observation of Construction / Site Visits Limitations on Duties –Not required to make exhaustive or continuous inspections. –Not responsible for construction means and methods or for safety precautions and programs. –Not responsible for Contractor’s failure to carry out the Work in accordance with the Contract Documents.

20. Contract Administration Services: Observation of Construction / Site Visits Recommendations –Abide strictly by the language in Contract Documents defining and limiting the Design Professional’s duties. –Make an effort to inform/educate the Owner regarding the scope and limitations of your duties.

21. Contract Administration Services: Observation of Construction / Site Visits Recommendations (cont.) –Pre-construction meetings. –Record keeping. –Communicate with the Owner and Contractor regarding your observations. –Avoid Assumption of Non- Contractual Duties.

22. Contract Administration Services: Issuance of Clarifications and Interpretations of Contract Documents Requests and Responses in writing – Timeliness of issuances Within agreed-upon time or limits or, if none, with reasonable promptness. If no agreed-upon time limit, delay not recognized unless interpretation is not provided within 15 days of request.

23. Contract Administration Services: Issuance of Clarifications and Interpretations of Contract Documents Standards of Interpretation / Clarification –Must “be consistent with the intent of and reasonably inferable from the Construction Documents.” –Comply with agreed-upon time limits and/or standards. –Beware of potential for delay claims – pay particular attention to critical path items.

24. Contract Administration Services: Disapproval or Rejection of Defective Work Authority to reject nonconforming Work Authority to require testing/inspection of Work No authority to stop the Work No authority to terminate the Contractor No duty to Contractor Communication with the Owner

25. Contract Administration Services: Shop Drawings and Other Submittals Limitations –Limited purpose of checking for conformance with information given and the design concept expressed in the Construction Documents. –Not conducted for purpose of determining accuracy of details, e.g. dimensions, quantities, installation, performance.

26. Contract Administration Services: Shop Drawings and Other Submittals Limitations (cont.) –Does not relieve contractor’s obligations, i.e. means and methods and warranties. –Does not constitute approval of safety precautions or means and methods.

27. Contract Administration Services: Shop Drawings and Other Submittals Timeliness –“Reasonable promptness” –Submittal schedule

28. Contract Administration Services: Shop Drawings and Other Submittals Recommendations –Impress upon contractors their responsibilities. –Do not accept shop drawings that have not been approved by contractor. –Written record. –Qualifications on stamp.

29. Contract Administration Services: Shop Drawings and Other Submittals Recommendations (cont.) –Review only for conformance with design intent. –Consistency; potential liability if reject earlier approved materials. –Avoid unreasonable delay; prioritize; communicate.

30. Contract Administration Services: Review of Applications for Payment Limit to those to whom you are contractually obligated to issue certifications Appropriate qualifications Satisfy yourself that work has been done Timeliness Resist Owner pressure

31. Contract Administration Services: Role as Quasi-Arbitrator Impartiality, fairness, good faith Conflict of interest issues Limitations on jurisdiction Timeliness – 10 days

32. Job Site Safety Issues Contractual Duties Assumption of Duties OSHA Requirements

33. Job Site Safety Issues: Contractual Duties Scope of services Means and methods; safety Authority to stop work Review of submittals Purpose and role of site presence

34. Job Site Safety Issues: Assumption of Duties Extra-contractual Actual involvement vs. contractual requirements

35. Job Site Safety Issues: OSHA Requirements Must perform actual construction work or exercise substantial supervision over actual construction Review Commission will look at: –Extent to which the party was involved in the multitude of different sorts of activities that are necessary for completion of the project, and –The degree to which the party is empowered to direct or control the actions of the trade contractors.

36. OSHA Case 1 Review commission held that an engineering firm performing construction management services on a subsurface project was subject to OSHA regulations The project involved the collection and conveyance of storm drainage and sewerage to two wastewater treatment plants

37. OSHA Case 1 Engineer had no contractual responsibility for construction means and methods or safety and no authority to stop work Investigation of one of the tunnels resulted in the discovery of methane, constituting a differing site condition

38. OSHA Case 1 Engineer proposed four contract modifications: –Increased ventilation in the tunnel. –Elimination of sources of ignition on machinery. –Additional methane monitoring. –Availability of personal safety equipment.

39. OSHA Case 1 Subsequently, an explosion in the tunnel killed three employees of the General Contractor

40. OSHA Case 1 Review Commission noted that: –Engineer had broad and comprehensive responsibility in many aspects of the project, including scheduling, coordination of contraction activities, preparation and interpretation of the Contract Documents, claims processing and dispute resolution. –Engineer had authority to direct work activities and reject nonconforming work.

41. OSHA Case 1 Review Commission noted that: –Rejected Engineer’s argument that it lacked contractual authority to direct means and methods or how the contractors perform the work. –Acknowledged that Contract Documents placed safety responsibility on Contractor BUT found that the contract modifications relating to the discovery of methane was specifically directed toward the elimination of a substantial safety hazard at the site

42. OSHA Case 1 Review Commission concluded that Engineer was effectively the “nerve center through which means were developed and implemented for allowing work to be conducted in light of a major safety hazard for a tunneling operation.”

43. OSHA Case 2 No GC, Owner directly retained subcontractors Architect contracted to provide assistance and recommendations regarding conformance with design, scheduling, budget, availability of labor and award of subcontracts

44. OSHA Case 2 Provided recommendations regarding requirements and assignment of responsibilities for safety programs and verified inclusion in the Contract Documents No contractual authority to direct contractors regarding safety precautions

45. OSHA Case 2 Occasional site visits on a monthly or as- needed basis Reviewed safety programs of contractors. Reported to Owner if it believed a dangerous condition existed. If saw something “blatantly dangerous” would tell Contractor Cited for OSHA violations for having unguarded wall openings in second and third floors

46. OSHA Case 2 Review Commission found: –Owner depended on Architect to maintain safe working conditions –Architect considered itself “eyes and ears” of Owner –Contractors abided by Architect’s requests related to safety hazards

47. OSHA Case 3 Review Commission held that Architect was subject to OSHA Architect and CM on project for State University of New York Cited for lack of stairway guardrails and light bulb guards

48. OSHA Case 3 Responsible for design, administration of contracts and inspection of worksite for conformance of work to the design Contracts stated no responsibility for means/methods, safety Provided Field Inspection and Resident Engineer

49. OSHA Case 3 Had authority to stop work “…empowered by the Fund to act on its behalf with respect to proper execution of work and to give instructions when necessary to require such corrective measures…to protect the Fund’s interests.”

50. OSHA Case 3 Review Commission found that Architect was subject to OSHA Compared Architect to a GC: –Possessed “sufficient control over the entire worksite to give rise to a duty under OSHA to either fully comply with the standards or to take necessary steps to assure compliance.”

51. Contact Donovan Hatem LLP Two Seaport Lane Boston, Massachusetts 02210 617-406-4500 617-406-4501 (Fax)