As design-build style projects continue to grow as a project delivery method of choice for project owners looking for a streamlined approach to designing and building their next project, there are certain risk factors associated with this type of project that should be taken into account.
Many architects and engineers will find themselves with an opportunity to provide professional services on a contractor-led design-build project. When that occurs, work closely with your lawyer and insurance agent or broker to ensure you take the necessary precautions to avoid the pitfalls you might face.
Consider the following:
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Ask to see a copy of the contract between the owner and the contractor design-builder. Have your lawyer and insurance advisor look for possible deal breakers (warranties, guarantees, etc.) as well as references to dispute resolution, ownership of documents, limitations of liability, and so forth. Make sure any professional liability protections garnered by the design-builder are passed through to you via your contract.
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Ask for proof that the contractor is authorized and properly licensed to provide design services in the project’s jurisdiction.
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Have your insurance broker conduct a thorough review of the adequacy of your policies, and seek certificates of insurance that demonstrate proper coverage for the design-builder.
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Look for signs of adequate funding for the project, including a contingency fund. Owners often look to design-build as a method of fixing a low project cost.
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Work with your lawyer to create an equitable and detailed contract with the design-builder. Both ACEC and CCDC provide good starting points for design-build contract language. Then customize that language to fit your situation. Clear and thorough scopes of services specifying the designer’s and the design-builder’s exact project roles and responsibilities are vital.
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Address ownership-of-document issues. If you are required to transfer ownership of your work to the design-builder or owner, set limits on what they can do with those documents. For example, limit their uses for operations and maintenance only and prohibit reuse of the design without your written consent (and adequate compensation).
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Work to add a contract clause that requires the designer-builder to pay the designer for services rendered, despite any ongoing disputed services.
Find out more:
Download our free guidebook “7 Tips for Managing Risks on Design-Build Projects” to learn more about how to better manage risks on design-build projects:
