By Cynthia Turner

The U.S. Green Building Council (USGBC) presents an informative training workshop on the topic of sustainable design as part of their Leadership in Energy & Environment Design (LEED) program. The workshop focuses on “green” design and its associated certification process. The workshop not only identifies the criteria for achieving green design recognition for buildings, but also serves as a preparatory course for persons interested in pursuing a USGBC-accredited professional certification. As the number of professionals who retain this certification increases, so too does the need to recognize and address the associated risks.

What Are ‘Green' Buildings?
Green buildings or sustainable designs are buildings designed and constructed using energy-efficient, environmentally-friendly engineering methods and materials. The LEED program offers five categories in which a building can achieve credits. The number of credits earned and approved for a building corresponds to varying levels of LEED certification.

The Five Certification Categories
The USGBC has issued goals and intents for these five categories:

• Sustainable Sites: To reuse existing sites; protect natural and agricultural areas; and reduce the impact on the environment.
• Water Efficiency: To reduce the quantity of water needed for the building.
• Energy and Atmosphere: To establish energy efficiency and system performance; and encourage renewable and alternative energy sources.
• Materials and Resources: To reduce the amount of materials needed; use materials with less environmental impact; and reduce and manage waste (both during construction and building operation).
• Indoor Environmental Quality: To establish minimum indoor air quality performance, and to maintain the health and well-being of the occupants.

At a time when the world's renewable resources are being depleted, the overall intent of the program is to spearhead environmentally-responsible development. Firms are therefore looking to provide this service because it makes good sense and is addressing changing client needs. The USGBC has been instrumental in identifying the advantages of the proposed process. The construction costs associated with a green building may be slightly higher than a traditional design method, but cost analysis indicates that savings can be realized through reduced building expenses, particularly energy and water costs.

While beneficial to the environment, sustainable design can impose some additional risks. These risks, if properly identified, evaluated and controlled, need not be deterrents to pursuing sustainable design projects.

Risks and How To Manage Them
Expectations: Because of the certification process involved with sustainable design projects, expectations of duties and obligations need to be identified. Client requirements for a project are typically presented within either an RFP or a less formal request. Therefore, whether you are the designer, design/builder or the construction manager, you should ensure that the owner's requirements and expectations are fully developed during a programming phase.

On a sustainable design project, client requirements may consist of a LEED certified building, but their expectations may actually be for a higher Gold certification. Therefore, the need to identify if the owner understands the process and responsibilities in achieving such a certification is necessary. A LEED-accredited professional should educate the owner not only on the technical aspects, but also on the servicing that goes along with the process. Accordingly, identification of owner expectations, as well as your expectations and limitations are also necessary. Identifying expectations, in addition to being a prudent step in the sustainable design process, may also be considered a legal requirement. In one case, a Philadelphia County Court ruled in 1999 that the engineer's standard of care includes asking the right questions. This could be interpreted as a requirement to understand the client's expectations.

Therefore, careful consideration of the specific duties and responsibilities you are willing to assume and knowing what you are going to deliver is material. Your decisions will have significant risk implications. For example, if you are willing to take on the responsibility of delivering a certified building, have you provided a guarantee to provide such a building? Have you taken on the responsibility of ensuring that the systems within the building are constructed to achieve the needed capacity/efficiency for certification? By doing such, have you just created a non-traditional risk for your firm?

In considering the above questions, a LEED
professional should keep in mind that professional liability insurance does not typically cover contractual warranties or guarantees, or construction means or methods. Therefore, guaranteeing certification should be avoided; otherwise, the insurance limits imposed by the client may be voided. Additionally, by specifically not guaranteeing the actual certification, you are not assuming responsibility for the LEED certification board's interpretation of data, i.e., ultimate approval or rejection. With no control over the board's interpretations, why should you agree to contract provisions that make it your responsibility?

Clearly identifying these responsibilities and limitations will provide the framework for a successful project.

Fees: When identifying expectations and responsibilities, fees for such services must be discussed. The increased construction costs for such a building will typically be off-set by reduced operational expenses. However, there are other cost increases to consider in the delivery of such a project. Providing an economical, sustainable building for that client, at that location and with the resources available will require more man-hours than a non-green building. Evaluation of material durability, maintenance and operational requirements, and their interaction with other materials typically not used must be conducted. Although these costs may be minimized in future projects, designs must be evaluated on a per-project basis in order to achieve certification.

Secondly, additional project documentation will be required for submittal to the LEED board. The time associated with such a submittal will decrease with the number of projects completed. However, adequate compensation for this additional time is acceptable, as the client will directly benefit from these efforts.

Additionally, active involvement and communication during the contraction phase will determine the success of the project. Do project participants have experience building a green-designed building? Do they understand the consequences of field changes that could ultimately affect the certification of the building? Will their proposed changes decrease efficiency? Clearly, the delivery of this project requires a team approach. Active involvement of on-site operations is a must. The project participants must partner and attempt not to point fingers or file lawsuits when issues arise; otherwise, the end result will not be a successful project.

Comprehensive documentation is essential in order to deliver the appropriate and comprehensive documentation for certification. Testing, monitoring and/or evaluation of the various building components and/or systems may be necessary to ensure their intended efficiency. Partnering will not only provide efficient use of time, but also can facilitate early corrections.

Contract Documents: To ensure the completion of a successful project and the minimization of risk, the parties' understandings of their respective expectations, capabilities and limitations need to be clearly set forth in the contract. Just as design/bid/build and design/build use differing terms and conditions in their agreements due to varying responsibilities and obligations, a sustainable design project agreement should address these special risks and responsibilities inherent in the process and assumed by the parties.

The parties' contract should clearly define the scope of work during the project lifecycle. The contract terms should adequately reflect each party's role toward achieving certification, and responsibilities they will and will not assume in performing its services. The agreed upon fee and reimbursable schedule must also be included in the contract documents. Project teams should review each other's contracts to ensure that risks are equitably distributed and that all parties are aware of their roles. Levels of responsibility should be equalized to assist the project team in providing a successful, certifiable project.

As with any project, the bottom line is to take care when entering into projects. Terms and conditions must be reviewed carefully for any project. It is highly advisable to have project agreements reviewed and/or developed by legal counsel that is not only familiar with your firm's operations and the design/construction industry, but also with sustainable design issues.

Clearly, additional responsibility and risks are associated with sustainable design projects. These risks, however, are more than manageable for those who become knowledgeable not only in the technical requirements of the program, but also the additional risks that the firm faces on such a project. Through recognition and evaluation of associated risks, effective communication with the project team and commitment, these risks can be appropriately controlled and the profitability of the firm enhanced.

Cynthia Turner holds an M.Eng. degree in Engineering Sciences, with a concentration in Environmental Engineering and has been providing risk control services to the construction and environmental industry for over 12 years.

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Information accurate as of 05/2007

PROFESSIONAL LIABILITY BULLETIN

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