Nothing frustrates owners more than paying for design errors and omissions. In my role of directing the design and construction efforts of a major research university, one of the most common challenges I face is coaching administration and internal clients on realistic expectations of our design consultants. The argument inevitably centers on accountability, with my client asking, "If the architects are not responsible for their mistakes, then who is?" The answer to this question is often, "As the owner, we are."
Owners are befuddled when they must pay for mistakes made by their contracted service provider. They assume, in the absence of any other information, that the services provided will be free of mistakes, and if mistakes are made, those making the mistakes will pay them for them. Owners often view architectural and engineering services no differently than lawn care services promising weed-free results. This is especially true in this age of consumer rights and protections, where "satisfaction guaranteed" rules the day.
However, before owners can understand what recovery from errors and omission is possible, they need to understand the nature of the relationship between an owner and designer, and the standard of care expected of licensed professionals practicing their craft.
Ordinary Skill and Ability
Architects/engineers (A/Es) advise owners to engage the services of a licensed professional designer who is well-versed in the type of project required. The relative brevity of an A/E agreement is indicative of a business relationship that will be based largely on trust. At this early stage in the project, the owner is not in a position to describe in great detail what they need their agent, the designer, to perform or produce. Instead, they look to the designer to provide professional guidance throughout the ensuing phases of the project, culminating in a product meeting their needs.
In most states, marketing architectural and engineering services requires a professional license. As such, practicing A/Es provide a professional service based on years of education and experience. By entering into a contract with an owner, the A/E implies he possesses the "ordinary skill and ability" necessary to serve the owner's needs.
Supporting this notion of ordinary skill and ability is the Supreme Court of Pennsylvania, which concluded in the 1960 case of Bloomsburg Mills v Sordoni Construction: "An architect is bound to perform with reasonable care the duties for which he contracts... His client has the right to regard him as skilled in the science of construction of buildings, and to expect that he will use reasonable and ordinary care and diligence in the application of his professional knowledge... [H]e does not guarantee a perfect plan or a satisfactory result..." 1
So there is no guarantee of a perfect plan or even satisfactory results. Instead, architects and engineers are expected to use "reasonable and ordinary care" in the practice of their profession. The courts know it, designers know it, and contractors know it. For some reason, this information is not always conveyed to owners. The challenge, then, is to educate owners and align their expectations.
A good starting point is for the A/E to draw comparisons to other professions that apply a "standard of care." For more than a century, the law has viewed architectural and engineering services as those provided by physicians and attorneys. In fact, in the 1896 landmark case Coombs v Beede, the Supreme Court of Maine held: "The responsibility resting on an architect is essentially the same as that which rests upon a lawyer to his client, or upon a physician to his patient..." 2
A surgeon cannot guarantee a perfect procedure or a complete recovery, nor can an attorney guarantee a favorable judgment. Instead, they are expected to apply their knowledge and experience in a competent manner that best serves the interest of their clients, regardless of the outcome. Like attorneys and physicians, A/Es cannot guarantee the results of their service.
A/Es' liability for errors and omissions is determined by whether they have performed their services with the standard of care consistent with that of other professional designers in their community. If they have complied with the prevailing standard of care, the courts will generally find the designers are not liable for any resulting errors and omissions. On the other hand, if they do not perform their work to generally accepted standards, they will be liable for their mistakes.
Understanding that the standard of care even exists is a good start; defining what that means is more difficult. In our society, we want to be able to measure things; to take a concept such as standard of care and slap it on a yardstick. Owners want a more definitive measurement system for identifying breaches in the standard of care.
Unfortunately, it is not that simple. The threshold is left to the courts and competing expert witnesses. This leaves owners frustrated, and more often than not, forces them to abandon the pursuit of compensation to which they may legally be entitled.
Viewing Errors and Omissions
Owners can make better decisions when pursuing reimbursement if they understand how industry and the courts view errors and omissions. Omissions usually add value to a project. Instead of being included at the time of contract award, the building improvement 'omitted' from the bid package is picked up by a change order. A/Es will normally argue the owner should pay for omissions because he would have paid in the form of a higher contract amount at the time of award anyway. Owners may counter that funds may not be available, as the omission was not in the project budget. They will also maintain a higher cost for the omitted item results from adding it by change order versus competitive bidding. Generally, recovering for the cost of omissions is an uphill battle, unless the number of omissions is excessive and the A/E failed to meet the standard of care.
Design errors, on the other hand, are mistakes made by the designer that when corrected do not add greater value to the project. While a design error may be recoverable, owners should be aware of the following truth, which is embraced by industry and accepted by the courts: there is no such thing as error-free design. Even a modest building design effort requires scores of individuals acting on hundreds of major decisions to coordinate the design of thousands of building components. A design effort is a unique, one-time creative endeavor that does not have the benefit of product testing. To expect a perfect design would be like believing software will function flawlessly without beta testing.
In addition, buildings are becoming increasingly complex, and owners want them designed on ever-shorter timelines. When owners seek to minimize change orders resulting from errors and omissions, they must recognize they are often contributing more to the problem than the solution. Owners demand A/Es lower their fees while at the same time fast-track their services. Obviously, this increases the risk of errors.
Communication throughout the project can help both owners and designers align their expectations. When both agree an error falls below the standard of care, many design professionals, governed by pride and reputation, will work with a client to reach an amicable settlement, so long as the owner has fair and reasonable expectations.
A well-informed owner is more apt to be fair. Unlike the medical and legal fields, where client expectations are aligned prior to performing services, design professionals often wait to discuss expectations after the owner reaches the breaking point with change orders. The owners are generally well-coached by designers about establishing a project budget contingency for changes, unknowns, and unforeseen conditions that will surely arise during the course of the project. Despite the best efforts of talented professionals, owners must be reminded many of the change orders will result from errors and omissions.
As an owner, I suggest A/Es take the time at the onset to explain to their clients errors and omissions are an inevitable part of any creative endeavor. This provides the opportunity to align A/E and owner expectations, and defines how the A/E can meet or exceed those expectations to have a successful project outcome and a satisfied customer.
Donald J. Guckert, P.E. is director of planning, design, and construction at the University of Missouri-Columbia (MU). During his 15 years at MU, he has been responsible for over $750 million in successfully completed projects, and currently overseeing a current workload of over $500 million. Guckert possesses a master's degree in engineering management, is an active member of several industry associations, and is an editorial advisory board member of the Construction Specifier. He can be reached via e-mail at email@example.com.
Reprinted with permission of The Construction Specifications Institute, 99 Canal Center Plaza, Suite 300, Alexandria, VA 22314, from the Construction Specifier.