Liability of Design-Builders for Design, Construction, and Acquisition Claims (2015)

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100 undertook the necessary geotechnical investigation and testing, which resulted in a geotechnical design report that quantified the actual scope of the emer- gency repair. During the design period, MoDOT con- ducted over-the-shoulder reviews of the design–build subcontractor’s design work, further expediting the approval of the soil nail wall design. This had the added benefit of permitting an information-rich com- munication environment, as MoDOT designers took over from the design–build subcontractor to com- plete the final redesign based on the technical con- straints imposed by the temporary slide repair work. The nested design–build subcontract allowed con- struction to proceed only 5 days after the design was submitted and the construction to be completed 120 days after the slide damage occurred. This is in con- trast to two previous emergency MoDOT projects, where construction could not proceed for 50 days after design submission and took an average of 205 days from slide to construction completion.461 These designs were completed by consultants and required the procurement period necessary to consummate a consultant design contract. The use of the soil nail wall permitted the construction to be completed without the need to close any lanes on I-270. IX. CONCLUSION Although design–build is a relatively new project delivery system in terms of case law, some impor- tant judicial principles relating to it have already been established. For example, although owners have tried to shield themselves from liability under the “single point of responsibility” doctrine, they have been generally unsuccessful in avoiding the implications of the Spearin doctrine. Courts have, to date, overlooked contract language and concluded that design–builders should not be held financially responsible for the consequences of defective owner- furnished information that they reasonably rely on during the bidding process. As is evident, however, from the cases reported on in this digest, the issues of design–build liability are far more complex than applying the Spearin doctrine. The design review process creates some major administrative challenges, as design–build- ers can be significantly impacted by late and disor- ganized owner actions upon submittals. Case law suggests that the design–builder will have a rem- edy against the owner if it can prove that it met the notice requirements in the contract and can dem- onstrate the cause-and-effect that the owner’s actions had on the design–builder’s overall sched- ule. Stated differently, owners need to understand concluded that the project faced the risk of land- slides. It was concerned that its conventional approach of dealing with landslides that occurred during construction would prolong the time that I-270 was closed to traffic. To mitigate this risk, MoDOT “nested” a design– build provision within the construction contract.459 The purpose of this was to have a geotechnical design–build subcontractor “on call” in the event of a landslide, which would shorten the time the road- way would be out of operation by allowing that sub- contractor to begin preliminary construction tasks while the design of the repair was underway. This also had the added benefit of encouraging the use of innovative means and methods to reduce the cost of the slope repair. Consistent with this approach, MoDOT used a qualifications-based selection process to procure the subcontractor. For bidding purposes, this work was treated like an allowance and all the bidders on the low-bid construction contract used the same number for that lump sum pay item. Prior to advertising the project, MoDOT completed a preliminary geotechni- cal risk analysis, which pointed to the use of a soil nail wall as the best technical option for restoring traffic after a slide. MoDOT’s in-house designers, however, lacked the technical expertise to design soil nail walls, which led them to develop the “nested design–build” lump sum pay item. The wall was “a key design element that allowed the slope to be safely excavated top down so that a rock slope could be rebuilt with rock…[and] the nested design–build allowed the design [of the soil nail wall] to be com- pleted quickly,”460 which is another reason that MoDOT decided to obtain that expertise by using the nested design–build subcontract. Ultimately, the competition for the design–build subcontract was based on the qualifications and past experience of offerors with designing and building soil nail walls. Once selected, however, the winning design–build subcontractor had the latitude to propose a different option if the technical requirements of the actual landslide demanded it. The project experienced a landslide that damaged a triple box culvert and threatened to close the road. This triggered the application of the subcontract, and the design–build subcontractor designed and constructed a temporary soil nail wall to protect the Interstate traffic and repair the culvert. As part of the design process, the design–build subcontractor 459 See generally Kevin W. McLain, Design-Build Pro- curement Process for Slope Repairs and Slope Stabilization Projects for Roadways on the Missouri State System 66 (2008) (Master’s Thesis, Iowa State University). 460 Id. 461 Id.

101 from the Cooper River Bridge arbitration. As for those design professionals who are working directly for an owner and creating RFP documents, the stan- dard of care for deficiencies in those documents is not well-developed, and there is no real case law to help the industry at this point in time. A final thought on the subject of liability. The axiom “with control comes responsibility” is a useful tool to remember in assessing how courts generally view liability on construction projects. When in doubt, participants in the design–build process should keep in mind that the more they exercise con- trol of a given situation, the more likely it is they will have some form of responsibility if things go wrong. this potential exposure and manage their design review processes efficiently. Although some areas are becoming settled, there are at least two major areas where there is insuffi- cient case law to predict ultimate liability—and they both involve design professionals. For those design professionals that are part of the design–build team as a subcontractor, it is clear that there is a potential for liability during the proposal process. This is dis- cussed in both Section VI.F.1 and in the Cooper River Bridge case study. Although the liability theo- ries are somewhat easy to articulate (e.g., implied warranty of sufficiency of bidding documents or breach of the standard of care), they are difficult to apply to specific situations. That is quite evident