Dealing with errors and omissions

by Jennifer Wilson | April 4, 2016 10:07 am

Paul Potts portraitLAW
Paul Potts
The words ‘errors and omissions’ (E & O) are practically taboo in architectural circles and are rarely spoken—even in private conversations between architects, engineers, and their professional employees. However, errors and omissions in construction documents occur on every project. The unique nature and complexity of the building world is the common explanation for these mistakes. People make mistakes, and generally the more complex the undertaking, the more likely it is that errors will occur. However, the uniqueness and complexity of the undertaking is not the only cause of design mistakes.

A design error is an instruction (or lack of instruction) in the plans and specifications that, if followed by the contractor, will require replacement or correction at a cost (or result in a construction failure). The owner has already paid for the work once at bid time and now must pay for the replacement or correction.

For example, in the remodeling of an auditorium, the mechanical engineer showed new heating/cooling air terminal units above the lobby ceiling. The manufacturer, model number, and design criteria were on the drawings. The contractor purchased the equipment in advance so the project would not be delayed. When it came time to install the equipment, it was discovered the terminals would not fit above the new ceiling and the ceiling could not be lowered any further. Unfortunately, the manufacturer had no interest in taking back the original units.

Responsibility for this error fell to the mechanical engineer. The auditorium lobby ceiling existed before the mechanical units were designed—the engineer could have measured the space above the ceiling during a survey of the building. The owner also provided record drawings of the building. The contractor could have measured the ceiling height, but there was going to be a new ceiling at a lower height than the original, and the contractor assumed the HVAC equipment would fit above it.

In another example, an architect specified non fire-rated doors between classrooms and corridors of a school remodeling project. However, when the fire marshal came to inspect, she rejected the doors and required them to be fire-rated because the corridor above-ceiling space was a return air penum. The first doors were already painted and machined for hardware and could not be returned for credit. In principle, these are classic design errors, but variations on the facts are interminable.

An omission occurs when something required to complete the building or comply with the building codes is not shown on the plans and or in the specifications. For example, a sidewalk between two buildings is required for pedestrian traffic, but this is not shown on the plans. The contractor is entitled to a change order.

Costs for omissions are tempered by reasoning the owner has not paid for the sidewalk twice, as was the case with the heating equipment. For this reason, it can be referred to as a ‘value-added change order.’ However, it is not entirely accurate to say it does not cost extra, because contractors routinely overprice labor on change orders as much as 25 percent or more.

Origins of design mistakes
Most mistakes are caused by the complexity of the design coupled with human limitations. During the programming stage, the first step in the design process, owners discuss their vision and needs for the building with the architects. This stage is mostly conceptual and mathematical, and is managed by a few parties, allowing fewer mistakes. However, programming is followed by design development, and this involves more experts from a wide variety of professional disciplines.

The challenges of design development on large projects are enormous and prove the mettle and talent of skilled and experienced architects, engineers, and designers who perform this work on a daily basis. The task of exchanging hundreds of bits of verbal and written communications between many participants from different professional disciplines often results in mistakes caused by misinterpreted, dropped, or forgotten communications.

There are judgements and calculations made by the hundreds of people about:

Each verbal and written communication and each application of professional knowledge is subject to revision as the project develops.

This is not a manufacturing process that improves with every new model year, but rather involves a new design for each building. Hundreds of specialists, unique in their own knowledge, come together to provide these construction drawings to builders. Not only must the professionals have knowledge of the design requirements, but they must also understand the skills and talents of the trades building the project.

It is absurd to think putting this complex aggregation of information into equally complex construction processes can be done without mistakes, and not just a few. Failures arrive in the form of

This fits with the ‘unique complexity’ argument.

Unique complexity is not the only reason for errors and omissions. Professional miscalculation must also be added to the equation. Contributor’s mistakes in the documents include poor judgement in:

Some of these causes obviously result from false economies.

Defensive strategies for reducing the cost of errors and omissions
If architects and their insurance companies believe any dialogue between the architect’s representative and the contractors will invariably lead to a perception that the design is open-to-interpretation (a risk they are unwilling to take), they will simply have to forgo perhaps the most powerful tool for minimizing the cost of errors and omissions—the contractor, who is the last party in a position to call out an error before it gets built into the project.

Having a second architect, engineer, or designer review an intern’s work is mostly a waste of time and money. The supervisor has likely not been present at all the meetings where decisions were made and just does not have enough time to do all the calculations a second time or to go over the whole process again.

There are a few good defensive strategies for minimizing the costs of errors and omissions. Of course, carefully examining a contractor’s quote for corrective work is among them. However, the best method is to encourage contractor’s superintendents to question aspects they suspect are in error, instead of building them into the project without question. Trade contractors have likely built many similar projects and are quite knowledgeable about what is questionable.

American Institute of Architects (AIA) General Conditions require contractors who become aware of errors or omissions to bring them to the attention of the architect/engineer (A/E). Most contractors consider it common courtesy to ask about suspected particulars. However, if the time frame for getting answers begins to slow their schedule or if they have to fight for compensation when it is due, they will not ask in the future.

The first opportunity to establish a working policy with contractors to encourage them to ask about suspected errors or omissions is during the pre-bid and post-bid interviews. Contractors’ knowledge of errors and omissions at this stage is limited, because the estimator and project manager who attend these meetings have only studied the drawings for bidding purposes. However, even at this stage, the contractor usually comes to the pre-contract meetings with several questions. It is important to respond quickly and set a pace for a constructive dialogue in the future.

It is typically in the morning, when the jobsite foreman is studying the drawings and assigning work for the day, when they come across suspected mistakes in the plans. Unfortunately, there is usually a crisis mentality at this moment, when he or she is ready to start work for the day. This is the last real opportunity to getting out ahead of errors and omissions. The architect should accommodate the foreman with a quick, written answer.

Architects unwilling to pursue this method for minimizing costs for errors and omissions is not doing their duty as the owner’s representatives.

Preparing the client
The best way to prepare the client for errors and omissions is to discuss the issue during contract negotiations. It should be approached in a businesslike manner as just another term of the agreement in the spirit of mutual benefits. At this point, the owner has made a decision, usually after careful deliberation, to hire the A/E and is unlikely to back out at the mere mention of errors and omissions.

There is a huge benefit to having this discussion when the decision-makers are still at the table, rather than later when lower level bureaucrats are asked to sign the first change order. Presidents, CEOs, and board members are comfortable with making difficult decisions, while lower level bureaucrats typically do not like making decisions. The CEO will look at the issue with the confidence of knowing he or she will not lose a job for creating policy; lower-level bureaucrats do not make policy, and confrontation could arise if they are pushed into that role.

When should the A/E pay for mistakes?
There is no hard and fast answer to this question. A mistake of a few thousand dollars on a small budget project can wreck the owner’s finances, whereas on a $50-million project, it is barely a hiccup. For this reason, using percentages as a threshold has limited usefulness without being specific about the scale of the project.

This author worked for an architect who made a point of discussing errors and omissions during contract negotiations. To one client who wanted a rule to control when the A/E would be asked to share in the costs of errors and omissions, the professional gave him a clause in the agreement: errors were not to exceed two percent of the budget ($50 million project) and errors and omissions combined were not to exceed three percent or a combined $1.5 million. The architect was comfortable with these numbers because they were familiar with the type and scale of the project and had completed several similar designs in the past. The project was a complete success, partly because the architect and client had an understanding going into the project that there would be a reasonable cost associated with the errors and omissions, and it never became an issue.

Paul Potts is a technical writer and construction administrator. He has worked in the construction industry as an independent contractor and administrator for architects, engineers, and owners in Michigan. Potts can be contacted via e-mail at paulpotts1@comcast.net[1].

 

Endnotes:
  1. paulpotts1@comcast.net: mailto:paulpotts1@comcast.net

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