Trends in Design Assist and Design Delegation

• Date: 01 April 2024
• Author: Richard W. Foltz Jr., Meghan H. Harrison, Jennifer Flynn, Robert C. McCue P.E., and Joy Spillis Lundeen

Forum on Construction Law The Construction Lawyer Volume 43, Number 2 Trends in Design Assist and Design Delegation By Richard W. Foltz Jr., Meghan H. Harrison, Jennifer Flynn, Robert C. McCue P.E., and Joy Spillis Lundeen Richard W. Foltz Jr. is a partner and Meghan H. Harrison is an associate at Troutman Pepper Hamilton Sanders, LLP, in Philadelphia. Jennifer Flynn is chief technology officer for Raytheon Technologies in Boston. Robert C. McCue P.E. is principal at MDC Systems in Paoli, Pennsylvania. Joy Spillis Lundeen is a trial attorney at Bilzin Sumberg LLP in Miami. Patrick Zancolli, an associate with Troutman Pepper, also contributed to this article. This article is adapted from a presentation made at the 2023 Annual Meeting of the Forum on Construction Law held in Vancouver, British Columbia, in April 2023. Evolving, expanding, and enduring—the field of construction is consistently changing to meet demanding challenges. One of the ways these challenges are being met is the development of concepts of design assist and delegated design to more efficiently include the latest and most sophisticated building technology. This article strives to understand how construction has changed with respect to design and its delegation, to examine the present state of the industry and its limitations, and to propose recommendations for the future. Master builders were the keystone of building projects during the Middle Ages and Renaissance. 1 They were overall designers with expertise in aesthetic and structural issues. 2 For them, “the structural form, strength and stability, and architectural expression were inseparable and complemented each other.” 3 With wide-ranging skills and a broad knowledge base, “their combined understanding of the technical and aesthetic issues involved in the production of structural form . . . have few equals today.” 4 Present-day designers are highly specialized. Teams of professionals work on complex structures because one architect or engineer generally does not have the full range of expertise to be the sole project designer. 5 Communication between the architects, engineers, contractors, suppliers, and manufacturers is key. “An architect may have an ingenious design concept, but unless it is developed into a technically viable scheme, the results could be disastrous.” 6 From the beginning stages of the design process, it is important for the architect, engineer, and specialty vendors to explore design options and work together. 7 The architect, who is unconcerned with technical issues, has a right, perhaps even a duty to innovate, experiment and challenge convention. The engineer on the other hand, with responsibility for the adequacy of the structure, must build on certain foundations. If the engineer wishes to develop and extend structural concepts beyond what is known to be possible, it is vital that he or she understands at a fundamental level why similar structural forms in the past did or did not work, and ensures that enough careful thought has gone into the consequences of proposing something different. 8 Construction projects, from power plants to office spaces to sports arenas, continue to become more intricate due to new materials, processes, and evolving regulations and codes. Concurrent with the increasing complexity of construction projects over the past several decades, design and risk allocation methods like Delegated Design and design assist have been employed to utilize unique expertise more efficiently. Delegated design is “a form of collaboration between a design professional and contractor Published in The Construction Lawyer Volume 43, Number 2, ©2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. Forum on Construction Law The Construction Lawyer Volume 43, Number 2 where the contractor assumes responsibility for an element or portion of the design.” 9 Design assist is “a form of collaboration where a contractor provides information to assist a design professional’s design, typically before pricing for the work has been agreed upon or before the work has been awarded.” 10 This article examines the past, present, and future of benefit and risk allocation in construction arising from delegated design and design assist. Part I surveys legal scholarship on design assist and delegated design. Part II surveys industry publications and forms that developed to allocate benefits and risk. Part III reviews recent design assist and delegated design cases. Part IV anticipates and discusses future trends and recommendations. I. Legal Survey of Design Assist and Delegated Design Project Delivery Methods To handle complex construction projects, different project delivery methods have been developed to allocate the roles and responsibilities of project parties. Design-bid-build, design-build, and engineer, procure, construct (EPC) are delivery methods that meet specific needs of owners, contractors, and designers. Design-bid-build is a traditional method where the owner retains an architect and contractor separately. 11 During the early 1900s, design-bid-build became the dominant project delivery method in the United States. 12 While there are different variations of design-bid-build, a contractor is typically hired through a bidding process. 13 Advantages to this project delivery method include established precedent, clarity of the parties’ roles, potentially lower overall cost resulting from competitive bidding, more owner control of the end product, and checks and balances on designers and contractors because their respective contracts are separated. 14 However, there are also disadvantages. The “owner bears the risk of deficiencies in the design documents—whether those deficiencies are errors, omissions of necessary features or information, or lack of clarity.” 15 Additionally, the project may take longer to complete, lack input into the constructability of the design, and create an adversarial atmosphere between the parties instead of a collaborative one. 16 In contrast, design-build and EPC are project delivery methods where the owner enters into a contract with one entity that is responsible for designing and building the project. 17 Ideally, owners relinquish control over the details of the design and are able to take advantage of a design builder’s innovations in the design and logistics of carrying out the overall project. 18 When this occurs, the liability for design deficiencies shifts from the owner to the design builder. 19 In practice, owners are reluctant to give up control. 20 “[E]ven though a contract document specifies that it is ‘design-build,’ to what degree the responsibility and liability for design deficiencies is actually shifted from the owner to the design-builder depends on the specifics of the transaction.” 21 Advantages of design-build include improved coordination and communication between the parties, cost savings through fast tracking projects, expert knowledge on elements of the project, and more opportunities for connecting construction and design expertise during the design phase. 22 Progressive Design-Build One application of design-build is progressive design-build, the application of which has increased in response to costly litigation stemming from traditional design-build. 23 Progressive design-build differs from traditional design-build in the stepped, or progressive, process that it employs during procurement. 24 It uses a “qualifications-based” or “best value” selection followed by a progressive process whereby the project owner moves toward a design and contract price with the design team. 25 The qualifications-based selection permits a bidder to abstain from submitting a project bid until a certain completion threshold is reached on the project design. 26 This arrangement permits a project owner to transfer risk that would Published in The Construction Lawyer Volume 43, Number 2, ©2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. 22 Forum on Construction Law The Construction Lawyer Volume 43, Number 2 traditionally be allocated to them onto the designer, making progressive design-build potentially more attractive to owners. 27 Regulation of the Design Process by States The design process is heavily regulated in most states and/or localities. For example, New York City requires that certain public projects have different design contracts for general construction, plumbing, electrical work, and heating and ventilation. 28 Many regulations were the result of catastrophic disasters. In Florida, strict building codes were put in place after a disastrous hurricane. California has issued specific guidance for development projects due to the increase in major wildfires over the past decade. Because of these complex challenges facing project designers, licensing is required. State authorities have greater trust in licensed professionals’ efficacy because of the substantial training such professionals have undergone. This is one of the reasons an architect or engineer’s stamp is required on shop drawings. The AIA defines shop drawings as “drawings, diagrams, schedules, and other data specifically prepared for the Work by the Contractor or a Subcontractor, Sub-subcontractor, manufacturer, supplier, or distributor to illustrate some portion of the Work.” 29 These documents undergo an intensive review process and indicate how work should be performed. 30 Shop drawings are usually prepared by a subcontractor or a fabricator...