Risk Management for Architects and Engineers Part 5: Specifications

Risk Management for Architects and Engineers Part 5: Specifications

Specifications and risk management go hand-in-hand for design professionals. I briefly touched on this subject in my July 28, 2015 risk management presentation to the Alabama Section of the American Society of Civil Engineers in Orange Beach, AL.

Unbeknownst to many design professionals, different types of specifications can expose the design professional to varied levels of risk, particularly with respect to who is responsible for a faulty end-product. Prescriptive (a.k.a. “design specifications”) and performance specifications are two widely used, but vastly different, types of specifications. “Design specifications ‘describe in precise detail the materials to be employed and the manner in which the work is to be performed.’ ” Dillingham Const., N.A., Inc. v. U.S., 33 Fed. Cl. 495, 500 (Fed. Cl. 1995) aff'd, 91 F.3d 167 (Fed. Cir. 1996) (quoting Blake Constr. Co. v. United States, 987 F.2d 743, 745 (Fed.Cir.1993)). “They afford no discretion to the contractor, which is required to follow them as one would a road map.” Id. Another court has described design specifications like this: “Every line was drawn, every grade was fixed, and every detail was provided for by the city.” Filbert v. City of Philadelphia, 37 A. 545, 546-47 (Pa. 1897).

Performance specifications, on the other hand, “set forth an objective or standard to be achieved, and the successful bidder is expected to exercise his ingenuity in achieving that objective or standard of performance, selecting the means and assuming a corresponding responsibility for that selection.” Dillingham at 501. Thus, performance specifications require the design professional to relinquish control of each and every minuscule detail, and afford more discretion to the contractor.

From a design professional’s risk management perspective, the critical distinction between the two types of specifications usually arises with the end-product. For instance, a contractor that strictly adheres to prescriptive specification is generally not responsible for a non-conforming result. Rather, the design professional is generally responsible. If, on the other hand, a performance specification is used, and the performance mandates aren’t achieved by the contractor, the contractor is responsible. In sum, prescriptive specifications may be better suited for those tried and true methods, whereas performance specifications may be better suited for those situations where there are more unknowns, and you wish to rely more on the contractor’s ingenuity.

Alabama attorney and professional engineer Jacob W. Hill practices construction law, representing general contractors, subcontractors, material suppliers, developers, architects, engineers, and other parties to construction and development projects. Contact Jacob Hill for more information or a consultation regarding your project.

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