FEATURE: Who Pays for Defective Design?

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Owners' liability to contractors Design/build contracting provides an owner with a single point of responsibility for both design and construction. The general rule is that whether the problem is defective design or faulty construction, the contractor is liable. But a design/build contract does not guarantee an owner complete immunity from liability to the contractor for defective design. The information the owner gives to the contractor itself create liability for the owner if that information is in error and causes the contractor to produce a defective design. This liability can be a costly surprise to the owner, who have assumed naively that the design/build contractor took care of everything. Two recent cases illustrate how information provided to a design/build contractor can render the owner liable for defective design. The case of Pitt-Des Moines, Inc. involved a contract with the U.S. Navy (the owner) to design, construct and install a large acoustical tank and perform major structural modifications to the building in which the tank was to be housed. Although it was design/build, the contract included a number of critical remedial clauses typically found in traditional construction contracts, including a changes clause, a differing sites conditions clause and a site investigation clause. The request for proposal (RFP) included some as-built drawings of the building and offered more information at the site, but warned that the drawings may not be accurate and shall be field-checked. While preparing the technical proposal, the contractor reviewed the drawings, inspected the site and attended a preproposal conference with the owner. Though the RFP drawings included some wall dimensions, they lacked detail and their legibility was poor. The contractor asked the owner for additional drawings. The owner informed the contractor that no other drawings were available and that the drawings would have to serve as the basis for the proposal design. Because the building was occupied during preparation of the proposal and through the contract award period, no in-depth site investigation or survey was possible. Based on the information available, the contractor's technical proposal made certain basic design assumptions, including the type of piling system that would be required. It turned out O NEVERY