Dear YouDig?,
We are a design builder. We hired a design team to do the preliminary design for our bid on a large DB project. We won the bid. Of course we warranted to the project owner that we would build the project, as designed, in a workmanlike manner.
Well, guess what? The design was a little too preliminary and has turned out to be trouble. The designer miscalculated several items (to the bad) and misinterpreted some of the owner’s objectives. The owner believes these missteps are unreasonable. Now, the dominoes are falling. The owner is sticking us with the cost overruns and delays. The designer’s misses caused us to underbid the project. The designer claims that they exercised reasonable care. Do we have to take the hit?
-Ohhhh Domino
Dear Domino,
I prefer backgammon but ohhhh can the dominos fall when someone cuts corners or performs poorly on a construction project. The theory behind the design build method is that the construction process is more efficient than other traditional methods and thus helps minimize or prevent those nasty dominoes from falling. Under the design-bid-build method the designer represents the owner and owes the owner a duty to exercise the care, skill and diligence reasonably expected of designers under similar circumstances (“reasonable care”). In design-build, the design team has a contract with the builder (sometimes the design team is in house) and owes the duty of reasonable care to the builder. The owner relies on the builder for the design.
As usual, the key is in your contracts. The owner contract should permit change orders when the design changes and delays occur because the information in the RFP was incomplete or inaccurate. Likewise, your subcontract should be written so that when the designer miscalculates or misinterprets clear information in the RFP, the impact of the corresponding change should be borne by the designer. Watch out though, designers know the domino game and often try to limit their liability by including a waiver of consequential damages or a limit on damages at the contract price or some other lower number, YouDig?