Podcast
Questions and Answers
What is the importance of having QA and QC processes for architects?
What is the importance of having QA and QC processes for architects?
What is the potential consequence of awarding a contract to anyone other than the lowest bona fide bidder?
What is the potential consequence of awarding a contract to anyone other than the lowest bona fide bidder?
Which document should architects familiarize themselves with to mitigate bidding process risks?
Which document should architects familiarize themselves with to mitigate bidding process risks?
What must architects ensure when entering a contract for a method of project delivery they are unfamiliar with?
What must architects ensure when entering a contract for a method of project delivery they are unfamiliar with?
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What is the role of clear and concise criteria in the bidding process?
What is the role of clear and concise criteria in the bidding process?
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In a client-prepared agreement for a project, under what condition can personnel be replaced?
In a client-prepared agreement for a project, under what condition can personnel be replaced?
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During which phase of project delivery are architects most exposed to potential claims?
During which phase of project delivery are architects most exposed to potential claims?
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What are P3 projects primarily used for?
What are P3 projects primarily used for?
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Why is proper due diligence important for architects in design-build projects?
Why is proper due diligence important for architects in design-build projects?
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What type of contractual risks should architects be particularly cautious of in project delivery?
What type of contractual risks should architects be particularly cautious of in project delivery?
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What must be arranged before accepting a commission in a foreign currency?
What must be arranged before accepting a commission in a foreign currency?
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Which of the following is NOT a consideration when making payments in foreign jurisdictions?
Which of the following is NOT a consideration when making payments in foreign jurisdictions?
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What could be a potential requirement in some foreign jurisdictions regarding fee arrangements?
What could be a potential requirement in some foreign jurisdictions regarding fee arrangements?
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What is a common challenge faced due to different time zones in international dealings?
What is a common challenge faced due to different time zones in international dealings?
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For effective collaboration with foreign clients, what might architects need to consider?
For effective collaboration with foreign clients, what might architects need to consider?
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What aspect is essential for an architect's risk management strategy regarding disputes?
What aspect is essential for an architect's risk management strategy regarding disputes?
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Regarding the handling of claims, what behavior must architects avoid?
Regarding the handling of claims, what behavior must architects avoid?
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What must an architect be mindful of concerning their insurance policy in disputes?
What must an architect be mindful of concerning their insurance policy in disputes?
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What could increased communication costs in international projects lead to?
What could increased communication costs in international projects lead to?
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What could disputes in a construction project arise from?
What could disputes in a construction project arise from?
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Study Notes
Personnel Relationships
- Project personnel relationships are important, including internal relationships within the firm, relationships with the client, and relationships with contractors and trades.
- Client-prepared agreements may allow for the replacement of personnel at the client's discretion.
- Language should be added to require that any decision regarding replacements should be made by the client, acting reasonably.
Project Delivery Methods
- Different project delivery methods have different risks for the architect.
- Architects should consult with their lawyer and professional liability insurers regarding the scope of services for each project delivery method and ensure that the correct contract is used.
- P3 projects (Public-Private Partnerships) transfer project and financial risks to the private sector.
- Contracts for P3 projects should always be reviewed by lawyers and professional liability insurers to avoid potential uninsured risk.
- Design-build projects require proper due diligence in client selection as well as in contract terms.
- Problematic clauses in design-build contracts often include client requirements for warranties and guarantees, and transferring responsibility for liquidated damages for delays to the design professional.
Bidding And Contract Award
- Canadian tendering law includes the concept of Contract A (the bidding contract) and Contract B (the construction contract).
- To avoid litigation by unsuccessful bidders, clear and concise criteria should be used for contractor selection, and these criteria should be strictly adhered to.
- Standard bid documents should be used, specifically CCDC 23 – A Guide to Calling Bids and Awarding Construction Contracts.
- "Privilege clauses" in bid documents, like “The lowest or any bid may not necessarily be accepted," should be reviewed and written in accordance with the Principles of the Law of Competitive Bidding in CCDC 23.
- Awarding the contract to anyone other than the lowest bona fide bidder can potentially cause legal action.
- The architect should advise the client to obtain legal advice before awarding a contract to anyone other than the lowest bidder.
Contract Administration
- The contract administration phase is critical and prone to many risks.
- Pay close attention to payment terms, including currency exchange rate fluctuations, arrangements for the transfer of funds, and possible holdbacks or guarantees required by foreign jurisdictions.
- Time zone differences, increased communication costs, and client preferences for local presence present challenges for international projects.
Disputes and Dispute Resolution
- Disputes are common in construction projects due to the complex interplay of various entities with different interests.
- Architects should have an internal plan for reporting and sharing issues within the firm, and an external plan for contract documents and procedures to report disputes to their professional liability insurer.
- It is critical to not admit liability and not to volunteer any payments to claimants without notifying the insurer and obtaining their consent.
- The architect may be involved in alternative dispute resolution (ADR), such as mediation or arbitration.
- ADR is a strategy to avoid the costly and lengthy process of litigation and is usually proposed when amicable negotiations fail.
- Architects should always discuss ADR proposals with a lawyer and their professional liability insurer before agreeing to participate.
- Contract agreements should include a dispute resolution provision section.
Partnering
- Partnering aims to solve problems as they arise by achieving agreed-upon collective goals.
- Partnering teams are comprised of owners, design professionals, and contractors.
- Architects are required to perform their services to a "professional standard of care," and failure to meet this standard can result in negligence and potential professional misconduct.
- Architects should avoid accepting an elevated standard of care imposed by a client in an agreement.
- Professional liability insurance provides protection from claims arising from negligent acts, errors, or omissions.
- However, insurance policies have exclusions, limitations, and conditions that may void or restrict coverage for certain activities or contractual commitments.
Professional Liability Insurance
- Common exclusions under a typical professional liability insurance policy include fraudulent and dishonest acts, contractual liability, products liability, construction activities, and express warranties and guarantees.
- Policies have monetary limits per claim and in the aggregate for each policy period.
- Limits may also exist for designated projects.
- Architects should review their insurance policy and be aware of any exclusions or endorsements.
- Firm members should be aware of the coverages and restrictions, especially those who enter contracts on behalf of the firm.
- Insurance premiums are typically based on the volume and type of work in the practice, as well as the firm's claims experience.
- Architects may need to purchase excess coverage beyond the basic level of protection required by regulatory bodies.
- Client agreements may require specific levels of insurance that exceed the firm's existing coverage.
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