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Managing Design Contracts

by Donald Charrett

Dr Donald Charrett (2012) V15 No 10 Inhouse Counsel 317

Every construction project has a substantial element of design in it. The cost of design is generally a small proportion of the overall cost of a construction project, and a much smaller proportion of the life cycle cost of a project. However, as it is the design that determines not only the form and nature of the construction, but also the characteristics of the constructed facility that determine the ongoing operating and maintenance costs over its entire life, its importance is substantially greater than the proportion of its cost of the project. There are actions that an employer in a construction project can take to manage the design to ensure, to the greatest extent possible, that the final constructed facility will fulfill its expectations. (The term “employer” is used in this paper to refer to the entity that engages the designer, irrespective of whether the employer is an owner or a design and construct contractor.)

This paper looks at the design risks inherent in any project, and the actions an employer can take to minimize those risks. The thesis of this paper is that, because of the fundamental importance of design to the functionality and overall cost of a constructed facility, the quality of design is of overarching importance in construction contracts. The corollary of this is that the design contract should be implemented and managed to ensure that the required quality is achieved.

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