Responsibility in the Construction Industry

In 2001, the ASCE Board of Directors issued a policy statement "Construction Site Safety." The Board found that: "Numerous accidents have been attributed to the lack of clear responsibilities for final approval of shop drawings, such as L'Ambiance Plaza and the Kansas City Hyatt walkway. There is no clear consensus on an industry standard as to who (the designer, the engineer, the erector, the supplier, the manufacturer/fabricator or the detailer) should have ultimate responsibility for the approval of shop drawings that cover such critical items as connection details and temporary construction or formwork."1

The ASCE Board's concern over a clear consensus on industry standards regarding responsibility was not new. A 1978 National Academy of Sciences Report called for "a concerted effort to develop action programs (such that) responsibility, liability, and accountability will be properly and equitably assigned and accepted in a responsible manner."2

Responsibility carries with it the duty to decide and act. But team members must know their responsibilities in order to fulfill them. My premise is that no member of the owner/design professional/constructor team knows all responsibilities or levels of risk assumed when entering into a design or construction contract. Court decisions on responsibility differ widely and often do not reflect industry guidelines.

In this article, I hope to convince the reader that we need more than responsibility standards-we also need back-up systems of responsibility. Further, I provide recommendations to promote teamwork in design and construction of major projects.

DEFINING RESPONSIBILITIES

The three most used project delivery systems are Design, Bid, Build; Construction Manager; and DesignBuild-comprising 60, 25, and 15% of projects in the U.S., respectively. This article focuses on responsibilities under the traditional Design, Bid, Build system. A typical general list of responsibilities is included in the American Institute of Architects Document 201, "General Conditions of the Contract for Construction."3 Some mandatory responsibilities are buried in building codes and regulations.

Although they may be "guided" by others, team members are generally responsible for their own performance. Further, each team member is affected by the actions and lapses of other team members.

CHARACTERIZATION OF THE INDUSTRY

We take great pride in the many breathtaking achievements of our industry. In the context of responsibility, however, the construction industry can be characterized as dangerous, prone to design and construction errors, and litigious.

Dangerous

While employing only about 5% of the U.S.'s total work force, the construction industry inflicts about 20% of all industrial fatalities. Workplace fatalities in the construction industry averaged 820 between 1985 and 1989, increasing to over 1100 annually between 1994 and 1999. There were 1121 workplace fatalities in 2002.4 OSHA statistics show that most construction fatalities occur when workers fall, are struck by backing vehicles, crushed, or electrocuted, although fatalities from failures and collapses draw the most attention.

Constructors are generally assigned overall responsibility for site safety by contract, custom, and OSHA. When there are accidents and deaths on the construction site, the constructor's liability is generally limited to workers' compensation, builder's risk, and liability insurances. Workers' compensation pay-out allowances are generally low, however, so when workers are killed or injured, the plaintiff often includes the design professional in the suit. When courts decide responsibility for site safety, design professionals are often assigned some responsibility, even if they had no contractual responsibility.

Prone to design and construction errors

A generally accepted design professional responsibility is to prepare drawings and specifications that are complete and coordinated. In 2000, Engineering News-Record (ENR) published an article lamenting the poor quality of construction documents.5 In the article, building contractors complained about uncoordinated drawings that had ductwork passing through beams, ceiling plenums filled to overcapacity, drawings without dimensions, and so on.

The Council of American Structural Engineers (CASE) responded to the ENR article by developing "A Guideline Addressing Coordination and Completeness of Structural Construction Documents."6 It states that the key for achieving the desired quality is for each structural engineering firm to focus on and develop its own specific quality plan and to implement that plan on each project. The goal is not only to comply with applicable codes but also to meet the owner's concept of a functional project on time and within budget. Further, the goal is to provide documents that are accurate, complete, and containing sufficient detail to permit competitive bidding as well as be usable for construction. CASE should be commended for its forthright recognition of and approach to the problem.

The problems arising from incomplete and uncoordinated design and construction have often been worse than those described in the ENR articles. The previously cited ASCE Board policy statement listed two collapses. In fact, the 1970s and 1980s were decades of spectacular structural collapses, including those listed in Table 1.7-12

In two of these failures, the design structural engineers ignored explicit warnings raised by other team members. Two failures were attributed to culpable ignorance that concrete gains strength slowly in cold weather. Another failure was the result of divided and disorganized design and construction processes; in another, a roof collapsed probably due to ponding during a severe thunderstorm; and another was due to construction deficiencies compounded by an incompetent design professional. The references detail the horror stories behind these failures.

Why review these failures? Not to reopen old wounds, but to show how vulnerable we are, and to show how a single lapse by a team member could lead to catastrophe. Moreover, recent events, such as the Atlantic City, NJ, parking structure collapse during construction that killed four workers, indicate that we have not progressed to better quality or safer construction.13

Litigious

Most public agencies require the use of the traditional Design, Bid, Build approach, with the construction contract awarded to the lowest responsible bidder. There are often questions about what should have been included in the bid. Drawings and specifications often need clarification, but almost every request for information (RFI) is greeted as a precursor to a change order request. Almost any discussion in the field between the owner's and constructor's representatives may trigger a constructive change order claim.

Questions as to who is responsible for what arise daily. A legalistic interpretation of the contract documents prevails. As a result, adversarial relationships often develop among the owner, the owner's representatives, and the contractor.

Rather than promoting cooperation, these attitudes lead inevitably to conflicts and attempts to eschew responsibility. Design professionals sometimes try reducing potential liability by "observing" rather than "inspecting" at the job site, using disclaimer clauses when reviewing submittals, and inserting exculpatory clauses into the contract.

RESPONSIBILITY ASSIGNMENTS BY THE COURTS

Alternate dispute resolution methods (negotiation, mediation, arbitration, and dispute review boards) have been used successfully. Too many unresolved disputes, however, progress into the courts, which assign responsibilities on a case-by-case basis. Decisions may be made by judges who are not familiar with design and construction procedures or who have other concerns.14-22

Few of these decisions therefore represent the industry's view of its responsibilities. While recognizing that "circumstances alter cases," the inconsistency among these decisions demonstrates the need for industry supported consensus standards to help guide the courts. Even if individual team members would not agree with a particular consensus standard, at least they would know the rules by which performance is judged and have the opportunity to make changes.

CONSENSUS GUIDELINES

Two documents published by industry organizations represent significant progress toward development of consensus responsibility guidelines: 1) ASCE's Manual, "Quality in the Constructed Project, A Guide for Owners, Designers, and Constructors,"23 and 2) ACI's "Guidelines for Authorities and Responsibilities in Concrete Design and Construction."24

Quality in the constructed project

The ASCE Guide was the first important national effort to define and assign roles and responsibilities in the construction industry. The second edition was issued in Fall 2000. Originally proposed as a standard, it is now presented as an "aspirational" document, partly because many design professionals believed they could not meet its standards consistently. The abstract to the Second Edition states that it "...provides information and recommendations on principles and procedures that are effective in enhancing the quality of constructed projects..." The document:

* Defines the roles, responsibilities, requirements, and limits of authority of participants in the design and construction process, highlighting concepts and practices that are valuable in achieving project goals and objectives;

* Presents key themes, including the need for clear contractual provisions, strategies for good communication, the owner's selection process for other team members, the potential benefits associated with various project delivery systems, and procedures for managing design and construction;

* Provides tables of responsibilities that assign "Primary Responsibility," "Assist or Advise," or "Review" to the owner, design professional, or constructor; and

* Describes and discusses implementation of many management tools, including peer review, constructibility review, risk management, partnering, and dispute review boards.

Comments on ASCE guidelines

When the ASCE Guide was first introduced, some objected to the "imposition" of a set of "prescriptive rules" on each professional assignment undertaken by the design professional. Nothing in the Guide recommends substitution of the Guide for the design professional's education, skill, and experience. The owner may choose to take steps, however, to ensure that project design and construction meet the common law standards of care.

Based on my experience as a structural engineer and construction manager, I am confident that peer and constructibility reviews would have identified the design and construction problems that led to the collapses cited previously. Although the design professional is often reluctant to question the constructor's means and methods for fear of assuming responsibility, the owner's peer and constructibility reviewers can conduct such inquiries with impunity. Although independent peer and constructibility reviewers do not have the authority to implement their recommendations, owners have the authority to require that design professionals and constructors address the issues appropriately.

Guidelines for authorities and responsibilities in concrete design and construction

ACI's Committee on Responsibility in Concrete Construction was established in 1987. Its mission was to: "Make recommendations regarding the responsibilities of and the interactions among the principal parties involved with concrete design and construction." The Committee worked to stay within the general framework developed by the ASCE Guide while extending it with regard to concrete construction:

* The ACI Guidelines offer specific guidance on roles and responsibilities for cast-in-place reinforced concrete, cast-in-place post-tensioned concrete, precast concrete, formwork, and shotcrete and masonry construction.

* Three overriding principles in ACI's Guidelines are: 1) responsibility and authority go hand in hand; 2) every entity should be responsible for its own work; and 3) specialty engineers, licensed in the state where the project is to be constructed, can be given authority and responsibility for the engineering design of special aspects of the project.

(See p. 33 for the revised ACI committee document.)

RECOMMENDATIONS

I believe that the following recommendations will help foster a better organized, more cooperative work environment through well-defined authorities and responsibilities with an emphasis on teamwork.

Assignment of responsibilities

The owner's greatest power to affect the performance of other team members is in structuring the contractual obligations of each party. Duties and responsibilities of each party must be clearly defined; if the rules are not clear, disputes are certain. Those responsibilities not assigned by contract remain the owner's responsibilities

Both ASCE's "Quality in the Constructed Project, A Guide for Owners, Designers, and Constructors," and ACI's "Proposed Guidelines for Authorities and Responsibilities in Concrete Design and Construction" offer suggestions for organizing the work and for resolving responsibility problems that may develop. The ASCE Guide is general, dealing with a broad range of management and technical problems. The ACI Guidelines were specifically developed for concrete design and construction.

Neither document, however, is written in mandatory language and is therefore not appropriate for adoption by reference into contract documents. Specific items found to be desirable by the owner as a part of the contract need to be restated in mandatory language for incorporation.

On major projects, the owner should also require peer and constructibility reviews.

Revise the low bid contractor selection system

Many contractors perform well even under the low bid system. As a general rule, however, the low bid contractor selection procedure is a major stumbling block to development of consensus standards for responsibility as well as a major contributor to the industry's problems.

The low bid system does not directly recognize the best performing contractors who might deliver the best quality project. There is no direct consideration of a contractor's experience with similar projects, including completion on schedule, compliance with workmanship and material requirements, safety record, submittal performance, project management, and claims experience. These areas become more important as public agencies, faced with staff and budget constraints, are not able to provide the oversight needed to compensate for the contractor's lack of experience.

Several tools offer improved contractor selection while meeting the law and spirit of the traditional low-bid system:

Prequalify bidders-Prequalification ensures that only qualified firms are invited to bid. Contractors and suppliers could be reviewed and rated annually according to performance of service including quality, timeliness, and contract execution. Each area should be weighted to arrive at a uniform rating system for all successful bidders.

Use best value selection-Add quality issues to the bid evaluation process. The low bid is therefore weighted with other elements to determine a best value that reflects quality as well as cost issues. The Corps of Engineers and the Department of Veterans Affairs have used the best value concept to award construction contracts. The principal issues to be resolved in the best value approach are:25

1. Define best value from the points of view of the owner and contractors-factors to consider include best process for immediate term of construction and future use of the completed facility, price, shortest delivery time, quality of construction, and qualified constructor qualifications.

2. Develop a fair, equitable, and objective selection process-factors to consider include unbiased appointment of selectors, clear scope and criteria, process open to everyone, lack of political pressure, detailed selection criteria, public evaluation and scoring, and defining "responsible" bidders.

Consider safety-The owner should consider bidder's safety record as part of the bid evaluation process. Selecting contractors with low workers' compensation insurance program experience modification rates would be a major step toward improving site safety. Courts often assign responsibility for site safety to design professionals; however, design professional insurance may not cover this exposure. ASFE: Professional Firms Practicing in the Geosciences has recommended that construction contracts identify the owner and design professional as additional insured under the constructor's general liability insurance policy.26

Use a partnering agreement-Including a partnering agreement in the contract will help to foster the good working environment necessary for a successful project. Partnering has proved effective on many projects in promoting cooperation, but owners must live up to their partnering commitments. Augment the partnering agreement with provisions for a dispute review board. Dispute review boards usually comprise a panel of three experts agreed to by the affected parties and hold hearings as issues arise.