Should You Guaranty Performance on a Green Project? (Law note)

guarantee sealBy now, I hope you know me well enough to know that I’d never, ever say you should make a guaranty of performance, period, let alone guaranty the green performance for a new building.  However, sometimes caution has to be thrown to the wind to get the job– at least in the case of a recent GSA design-build project in Seattle.

There, the design-build team agreed that the GSA could withhold 0.5% of the original contract amount, or $330,000, pending the achievement of energy goals.  As writer Suzanne H. Harness, J.D., AIA, noted recently:

The GSA’s approach is diametrically opposed to the recommendations of the American Institute of Architects, which advises both architects and contractors not to guarantee or warrant the achievement of a sustainability goal.  The AIA’s 2011 Sustainability Guide explains the obvious:  contractors and architects can design and construct a building, but the owner operates it, and the owner’s actions are beyond the control of the design and construction team. If the owner operates the building differently from the assumptions used during design, performance goals will likely not be met, even if the building is perfectly constructed. [Emphasis added].

Ms. Harness also correctly noted that professional liability insurance would not cover such a guarantee of performance.  So beware to the design team who takes such a project on: they can be held contractually liable, but there will not be insurance to cushion the fall out from any lawsuit.

Just DON’T do it!

 

 

Understanding & Modifying Key Construction Contract Terms

As I mentioned, I  was one of three amigos who spoke on a Construction Contract webinar last week.  We had a good turn out and lots of very astute questions during the Q&A portion.  While you will miss all of my witty insightful helpful commentary, you can check out the slides for my portion, on understanding and modifying key terms, here:

Drafting Construction Contracts

My comrades’ presentations can be found by visiting Chris’s blog (for payment provision issues) and Craig’s blog (for damages and dispute resolution issues).  Happy viewing!

Dear Abby Advice for Engineers– too good not to share!

A recent column in the ENR shares a plethora of good advice for structural engineers–and any design professional–who wants to avoid a lengthy, ugly construction claim lawsuit.  Among the good gems in the article:
  • “E-mails can haunt. ‘Any e-mail you write can be used against you. Be careful—don’t write anything you don’t want to show up on the front page of your local newspaper.’” [I always say: imagine having to explain what you wrote to your elderly grandmother.].
  • “A tip: Mediate, mediate, mediate: This is the chance to control the outcome. In arbitration or in front of a jury, others control the outcome.” [This is very true. Early mediation can sometimes be productive, but other times some discovery is necessary first. Each case is different, so discuss when to mediate with your lawyer.]
  • “Be careful what you say. Example: If you call the contractor ‘an asshole,’ you are not covered by your insurance; if, as the observer of the process, you call the contractor incompetent, you are.”  [While I’m not nuanced in the acceptable derogatory language that may or may not be covered by your insurance policy, in general err on the side of caution. Think of your grandmother again when you decide what language you will use.]
  • “It’s not the size of the claims that hurts, it’s the time it takes to fight it—and the cost…Get your insurer’s assistance during the project to try to resolves issues as they arise.” [Very good advice.  Often, free claims prevention/loss prevention services are covered under your errors & omissions insurance policy.] 
haunted house

Have you been haunted by the ghosts of emails you’ve written?

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 Questions?  Thoughts? Comments?  Share below.

Photo (c) Moon Stars Paper blog. 

 

Got a Job Offer? Now What? Engineers and Architects: Think Before You Sign ! (guest post)

Today, we have a guest post by Hayley Spencer, a freelance writer and attorney, on behalf of Martindale.com. She enjoys writing articles on contract law, law careers, and employment agreements.

Got a Job Offer? Now What?  Engineers and Architects: Think Before You Sign!

Architects & Engineers are not immune from employment agreements.  Those who go to work for a larger companies, especially, may be required to sign a contract of employment.  This form may be standard and identical for each employee, or each employee may have a contract with the employer that applies solely to him or her. Alternatively, there may simply be an oral contract about the type of work the employee will perform, benefits to be provided, and bonuses which are applicable.  If there is no oral or written form of agreement, the behavior of the professional parties involved can be identified as an implied employment contract. Some relationships may be that of a traditional employer and employee, while others may be set up as some type of an independent contract. Regardless of the specific details, it is always wise to have a qualified attorney review all such agreements before you sign them.

shaking hands on employment agreement
Why Do Engineers and Architects Need Employment Agreements?
Barring terms and policies that are actually illegal, anything and everything can be integrated into these types of agreement. Nonetheless, for engineers and architects, the law provides several safeguards regarding what can and cannot be negotiated upon as terms of employment. Furthermore, due to the gradual decrease in unemployment rates, employers have had to propose contracts for transitory workers loaded with language to safeguard them as much as possible. The sheer volume of potential variation, therefore, makes written contracts wise.

What Should You Consider Before Signing an Employment Agreement?
There are several particularly important regulations and policies of which you should be aware before signing any type of employment agreement.

First, is there a probationary period? Professionals do not just utilize probationary periods to analyze their new recruit’s fit. Setting a probationary time frame enables them to dismiss for purposes that would otherwise be inconsistent or inadequate.

Second, are oral offerings included in the contract? As with any relationship, optimistic forecasts of the future are common at the beginning of a work relationship. Nonetheless, your attorney can guide you through a list of solutions for engineers, architects and other specialists if employers’ pre-employment expressions were created negligently or if promises did not materialize.

What Common Aspects of an Employment Agreement are Generally Acceptable?
A professional confidentiality agreement is a part of a contract wherein the engineer or architect promises never to share any data regarding the details of how the employer’s enterprise is carried out, or of the employer’s confidential procedures, plans, solutions, information or equipment.

Similarly, a non-competition clause generally states that for a specified amount of time following the date the engineer or architect stops working as a part of the company, that person will not become employed by a competing firm or a firm focusing on an identical form of business.

An ownership of inventions clause applies to specialists who create or invent something as part of their work. By agreeing to this type of clause, the worker agrees that anything he or she creates while employed, or during a specified period of time following the contract termination, is treated as the creation or invention of the company and not that of the engineer or architect.

A no extra compensation clause specifies that if the worker becomes some type of executive or manager for the firm, he or she will not be subjected to extra compensation for accomplishing these duties.

Conclusion

 Of course, this brief guide will be insufficient to help you navigate all the potential issues involved with these types of employment contracts. Their details can vary widely, so seek out a professional for assistance.

Thank you, Hayley, for your post.   North Carolina employees should be aware that unless there is a specific employment contract, you are generally an “at will” employee.  That means that you can be fired for any reason or no reason whatsoever, so long as it is not due to your being a member of a protected class (race, religion, sex, etc.).  Also, covenants not to compete must be deemed reasonable to be enforceable.

 Any questions for Hayley?  Please post, below.  And, if you haven’t already, please sign up to get email delivery of all posts directly to your mailbox, by going to the sign up form.  At the same time, you’ll get the download link to my free white paper on the 7 Critical Mistakes that Design Professionals Make during Contract Negotiation and Execution that Sabotage their Projects & Invite Litigation.

Photo: (c) Aidan Jones via Creative Commons license.

New Safety Standards Issued by ASSE and ANSI (News Note)

 

standards

The American National Standards Institute (ANSI) and the American Society of Safety Engineers (ASSE)  have recently announced their approval of two new safety standards to enhance construction site safety.

The two new standards, which are set to take effect during June 2012, are the ANSI/ASSE A10.1-2011 Pre-Project and Pre-Task Safety and Health Planning for Construction and Demolition Operations, and the ANSI/ASSE A10.26-2011 Emergency Procedures for Construction and Demolition Sites.

The new A10.1-2011 standard was designed to assist construction owners, contractors, and designers by ensuring that safety and health planning were standard parts of their pre-construction planning. It is also intended to help owners of construction sites to establish a process for evaluating constructor candidates with regard to their safety and health performance planning.

The A10.26 standard applies to emergency situations, including fires, collapses, and hazardous spills. The standard deals with emergency rescue, evacuation, and transportation of injured workers, and also plans for coordinating with emergency medical facilities ahead of potential disasters.

In addition, the ANSI/ASSE A10.33-2011 standard, Safety and Health Program Requirements for Multi-Employer Projects, received an update, which will become effective May 7, 2012. The standard delivers minimum requirements for programs where multiple employers are engaged in a common undertaking, and is intended to address cost-efficient and coordinated safety on the construction site.

These new standards are part of a larger rollout designed by the A10 Accredited Standards Committee on Safety Requirements for Construction and Demolition operations.

Comments or questions? Drop me a line in the comments section, below.

Pic Credit: Alpha Stock Images – http://alphastockimages.com/