The use of delegated design in construction, where a
project’s design professional of record (DPR) assigns
responsibility for a specific part of the design to the contractor,
is on the rise throughout the industry. This approach, historically
limited in practice to a narrow set of specialized elements like
steel stairs and fire sprinkler systems, is now being used for an
ever-growing scope of specialties, from intricate excavations and
sophisticated deep foundations to concrete systems, equipment,
finishes, IT infrastructure, and much more.
As delegated design becomes more commonly incorporated into
design and construction processes, disputes regarding
responsibility and liability are also bound to increase —
making it critical for all stakeholders to understand and mitigate
the inherent risks.
The Pros and Pitfalls of Delegated Design
Delegated design is growing in popularity for good reason. When
a portion of a project’s design is delegated to a contractor, a
specialized design professional is used to design the element
according to the performance criteria set forth by the DPR. This
highlights the core benefit of having specialized designers handle
specialized design tasks that are best suited for their
expertise.
“As delegated design becomes more commonly incorporated
into design and construction processes, disputes regarding
responsibility and liability are also bound to
increase…”
This is particularly valuable given that in today’s world,
it is neither realistic nor plausible for one architect or engineer
to be an expert in every element of construction. The building
industry is more complex than ever, and the rapid pace of
innovation driving new construction methods and materials is only
accelerating. Beyond leveraging the experience of carefully
selected partners, strategically delegating design elements
simultaneously enables the lead designer to concentrate on the
building design and more holistically address the challenges of
multi-faceted projects.
Delegated design can also offer merit from a dollars and cents
perspective. If a project budget will not allow sufficient time for
the DPR to do the deep research required to design a specialized
element, assigning the work to the contractor can be a more
efficient approach.
While delegated design can yield efficiencies, it can
potentially cause design gaps and project delays at certain stages
if it is not properly managed. Consider the example of a building
where the design of a metal wall panel system is delegated to the
contractor and the design of other cladding systems in the building
is handled separately. The metal wall panel system and the
additional cladding systems each meet their respective performance
requirements, but it is later discovered that neither scope of work
accounted for the necessary transitions between the systems,
leaving the design incomplete.
This is just one specific example of design gaps that can occur.
Other potential design gaps may include things like transitions
between delegated steel stairs and stair landings, the relationship
between the delegated steel structure design and the rest of a wall
or floor assembly’s components, or the interface between a
delegated IT infrastructure design and a building’s general
electrical systems.
If gaps are identified during the design process, they can be
addressed and rectified. However, depending on their nature, if
they are identified during installation, they could cause
unexpected delays. When these interfacing design gaps occur, work
usually has to be paused while the designers address them. In
addition to impacting the project’s progress, these delays
often result in claims and disputes.
Responsibilities & Liability: Designers vs.
Contractors
All this raises the question of who is responsible when there is
a delegated design dispute or claim related to issues like design
gaps, compliance, or performance. The lead designer? The
contractor? It depends.
As the professional tasked with design responsibility by the
authorities, the DPR typically assumes all responsibility and
professional liability for the project design given their role as
the lead designer. This can be a gray area when it comes to
delegated design. Does the contractor assume design responsibility
and liability for the work it has been delegated, which is
structured to meet the performance specifications documented by the
DPR? Or does the risk continue to live with the DPR, who is
responsible for detailing the performance criteria as well as
ensuring the contractor’s designs meet those requirements
within the context of the larger project?
Delegated Design Case Study
As a licensed architect serving as an expert witness on disputes
involving delegated design, I have seen outcomes fall both
ways.
“While delegated design can yield efficiencies, it can
potentially cause design gaps and project delays at certain stages
if it is not properly managed.”
One published case involved the appeal of Mercury Construction
Corporation v. the U.S. Government in 1980.1 Mercury was
contracted to build two barracks in Fort McClellan, Alabama. The
project included the delegated design and subsequent installation
of air ducts. Mercury designed and built the ducts using fiberglass
in areas above fire-resistant ceilings, but the Government
contended that the ducts were required to be sheet metal in order
to meet fire safety requirements.
The Government ordered Mercury to either replace the fiberglass
ducts with steel or install appropriate fire safety features. The
construction firm did the latter but later demanded nearly $150,000
for the additional work, stating that the Government had approved
fiberglass ducts as part of the system. The Government contended
that as part of the delegated design, it did require steel ducts at
these fire-rated assemblies, and thus, the approval did not alter
this requirement. Though the contract language may have been
complex, the judge determined that the requirement to use steel
ducts in this particular scenario was indeed documented in the
construction contract. As a result, the contractor was found
responsible for shouldering the extra cost of the remediation work.
This case and others like it represent how contractors can be held
liable, even if the delegator of the work approves the design.
The Importance of Contractual
Language
Agreements that clearly delineate each party’s
responsibilities and the standards they must meet are, without
question, essential for avoiding disputes related to delegated
design. As stated by the American Institute of Architects (AIA),
“Delegated Design responsibilities should be expressly stated
in an agreement.”2 Their guidance continues to
say:
An agreement that includes delegated design services should
include (1) the contractor’s overall scope of work; (2) a clear
statement regarding the delegated design responsibilities,
including responsibility for the adequacy of the performance
criteria and the design responsibilities for each project
participant; (3) how design information will be exchanged and
reviewed, including if, how, and when digital models will be used
and shared[;] (4) the contractor’s compensation[;] and (5)
requirements for professional liability insurance to be obtained by
the contractor.3
Further, AIA Document A201 – 2017, “General
Conditions of the Contract for Construction,” includes
language in Section 3.12.10.1 that offers more specific
recommendations for the delegated design portion of construction
contracts. Key points include:
- “If professional design services or certifications by a
design professional related to systems, materials, or equipment are
specifically required of the Contractors by the Contract Documents,
the Owner and the Architect will specify all performance and design
criteria that such services must satisfy.” - “The Contractor shall be entitled to rely upon the
adequacy and accuracy of the performance and design criteria
provided in the Contract Documents.” - “The Contractor shall cause such services or
certifications to be provided by an appropriately licensed design
professional, whose signature and seal shall appear on all
drawings, calculations, specifications, certifications, Shop
Drawings, and other submittals prepared by such
professional.” - “The Owner and Architect shall be entitled to rely upon
the adequacy and accuracy of the services, certifications, and
approvals performed or provided by such design professionals,
provided the Owner and Architect have specified to the Contractor
the performance and design criteria that such services must
satisfy.” - “The Architect will review and approve or take other
appropriate action on submittals only for the limited purpose of
checking for conformance with information given and the design
concept expressed in the Contract
Documents.”[3]
In short, AIA A201 – 2017 puts the onus on designers to
provide the exact specifications of the delegated design work,
holds the contractor responsible for meeting those performance
criteria, and puts the responsibility of reviewing and approving
those designs on the lead designer.
Best Practices for Risk Mitigation
As with every approach to design and construction, there are
risks to using delegated design. These risks can be minimized by
following leading practices derived from decades of industry
experience and expertise managing design disputes.
- Follow the AIA’s guidance to clearly define roles
and responsibilities in delegated design contracts.
Despite the AIA’s recommended contractual provisions in A201
– 2017 being widely recognized and readily available, they
are often not relied on heavily enough. As a result, the lines
between designers and contractors are needlessly blurred, leaving
each party and the overall project susceptible to potential risks.
The upfront effort to define strict contractual terms for all roles
and responsibilities pays dividends for everyone. - Ensure the lead architect has a thorough understanding
of the appropriate performance requirements for each delegated
design deliverable. This might seem counterintuitive given
that delegated design can be most valuable when the DPR does not
have the in-depth knowledge to design a specialized element
themselves. However, they need to have a solid enough understanding
of that specialized area given their responsibility to detail the
performance criteria that the delegate’s design must meet.
Inadequate performance criteria jeopardize the integrity of the
design and set up the project to incur extra costs and delays down
the line. - Take a collaborative approach, when possible, to
determine performance criteria. Building on the point
above, delegates bring valuable and unique expertise to the table.
Their perspective should be leveraged to help ensure the
performance criteria stipulated by the lead designer include
considerations and nuances that may not be on the radar of a
professional who does not specialize in that area. This type of
collaboration might be met with resistance in a delegated design
scenario as it could create liability repercussions for the
contractor. However, contractual terms can mitigate those concerns
while enabling both partners to do what is best for the project,
similar to how architects and delegated design professionals in the
steel fabrication space openly collaborate on required
specifications. - In addition to professional liability insurance,
explore protective indemnity insurance. Beyond
professional liability insurance that helps protect policyholders
from risks related to their own errors and omissions, it is wise
for designers and delegates to explore protective indemnity
coverage. Protective indemnity “covers protective claims for
amounts the insured is entitled to recover from downstream design
professionals arising out of their failures in rendering
professional services that exceed the downstream party’s own
liability insurance.”4 This provides added
protection for architects given their responsibility to review and
approve a delegate’s design, as well as for gray areas where
the delegated design work intersects with their scope of work. - Keep in mind there are some state-specific statutes
that govern delegated design. It is not common, but a
handful of states have statutes outlining the use and/or parameters
of delegated design in their jurisdiction. New York has the Board
of Regents Rule 29.3(b). Florida has a delegation framework for
engineering design. California has its own rules that pertain to
delegated design, as do Missouri, Ohio, Massachusetts, and
Texas.5 Be aware that these statutes, where applicable,
must be factored into plans and contracts.
Looking ahead, all signs point to the continued growth of
delegated design. Understanding the risks that accompany its
benefits, and working to proactively minimize these exposures, can
make all the difference between forging a productive, successful
partnership between designers and delegates and potentially facing
a costly and disruptive dispute.
Footnotes
1 Appeal of Mercury Constr. Corp., 80-2 B.C.A. (CCH)
P14,668; 1980 ASBCA LEXIS 121, affirmed by Mercury Constr. Corp. v.
United States, 230 Ct. Cl. 914, 1982 U.S. Ct. Cl. LEXIS 220
(1982)
2 https://zdassets.aiacontracts.org/ctrzdweb02/zdpdfs/design-collaboration-paper_aia-aisc_081320.pdf
3 https://learn.aiacontracts.com/articles/what-contractors-need-to-know-about-delegated-design/
4 https://www.lexology.com/library/detail.aspx?g=b0e18cb7-9cb3-4a9a-898c-1d22fdd6ae0e
5 https://www.agc.org/sites/default/files/pdf/Handout%20on%20Delegated%20Design.pdf
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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