What delegated design means for contractors and the costs involved.
Delegated design is a form of collaboration between design professionals and the contractor, wherein the contractor assumes part of the responsibility for a project’s design. There are several key features of delegated design, along with significant advantages and a few added risks. Here are some tips to help navigate and reduce said risks.
- Understand the Role of Performance Specifications: Delegated design is based on performance criteria put together by the design professional. This is all based on those specifications. The contractor is responsible for a portion of the design delegated to it. Typically, this is a discrete part of the project, such as the concrete walls or the fire protection system. The design team is responsible for the performance criteria. The portion of the design provided by the contractor has to conform to the performance criteria, applicable building code requirements, and the standard of care for all professionals involved.
- Your Construction Contract Should Address Delegated Design: Any agreement that includes delegated design needs to needs to define the services. Services are to include (1) the contractor’s overall scope of work (2) all performance criteria and design responsibilities for each project participant (3) how any and all information will be exchanged and/or reviewed, including if, how, and when digital modes will be used and/or shared (4) any compensation to the contractor (5) all requirements for professional liability insurance to be obtained by the contractor.
- Consider the Additional Risk of Design Liability: The contractor may incur liability for the portion of the design delegated to it and may also assume professional design responsibility and any liability for its design. Contractors should consider that they may need to procure liability insurance when providing delegated design services to a project.
- Know that Delegated Design has Limitations: There are certain limitations to delegated design. For instance, any design responsibility must remain with the design professional of the current project.
- Recognize the Impact of the Spearin Doctrine: The Spearin Doctrine is a landmark Supreme Court case wherein a utility contractor signed a federal contract to relocate a storm sewer and build a dry dock, was fired after damages due to faulty specifications supplied by the client, and sued for wrongful termination and profits on unperformed work; the court determined contractors are not liable for damages resulting solely from insufficiencies or defects in information, plans, and specifications.
When a contractor performs delegated design work on a project, it may intercede their ability to rely on the owner’s implied warranty of adequacy of the plans and specifications.