Previously published in Construction Executive magazine.
The risk profile on federal construction projects has changed
significantly because of aggressive energy efficiency and
sustainable building practice mandates. These mandates extend the
expected lifespan of federal buildings, require new means and
methods of design and construction, and introduce new players into
the development process. Architects and engineers must conform
their services to these mandates, as well as manage the associated
risks in contract documents.
Following are federal sustainability mandates and goals in the
Energy Policy Act of 2005 and the Energy Independence and Security
Act of 2007.
- Achieve energy performance 30 percent beyond ASHRAE 90.1-2004.
- Reduce building energy intensity 3 percent annually through FY 2015, or have a 30 percent total reduction by FY 2015.
- Reduce fossil fuel-generated energy consumption by 55 percent in 2010; 65 percent in 2015; 80 percent in 2020; 90 percent in 2025 and 100 percent in 2030.
- Acquire 7.5 percent of total energy from renewable sources by 2013.
- Achieve a 26 percent reduction in potable water consumption and a 20 percent reduction in industrial, landscaping and agricultural water consumption by 2020.
- Meet 30 percent of hot water demand with solar hot water equipment, as long as its life cycle is cost-effective.
- Maintain or restore the pre-development hydrology associated with temperature, rate, volume and duration of flow for properties that exceed 5,000 square feet.
By virtue of Executive Orders 13423 (January 2007) and 13514
(October 2009), federal design and construction is now governed by
the "Guiding Principles in High Performance and Sustainable
Buildings." Similar in content to the LEED family of rating
systems, these guiding principles eschew the traditional
design-bid-build method of project delivery in favor of an
integrated and collaborative planning and design process. They also
include criteria to optimize energy performance, protect and
conserve water, enhance indoor environmental quality and reduce the
environmental impact of materials.
Although the rating level, size and cost triggers vary,
certification or compliance with LEED is currently required by the
Departments of Agriculture, Energy, Environmental Protection,
Health and Human Services, Interior and Veterans Affairs, as well
as by NASA, the Smithsonian, Forest Service, Air Force, Army and
Navy. In its solicitation for offer, the General Services
Administration requires projects exceeding 10,000 square feet to
target a LEED Silver rating and new construction to achieve (and
retain) an Energy Star score of 75 or above within 18 months of
reaching 80 percent occupancy. Under the solicitation for offer,
the government may deduct the cost of corrective action from its
rent.
Impact of Mandates
The government's sustainability mandates impact the risk
calculus on public green building projects in several ways. For
example, the timeline for a green building is much longer than for
a conventional building. After a certificate of occupancy is
issued, a green building is expected to:
- earn the required level of certification;
- reduce energy, water and other operational costs; and
- increase personnel productivity while reducing absenteeism.
Furthermore, integrated project delivery methods and building
information modeling blur the traditional lines of responsibility
among designers, contractors and subcontractors. No single party
controls all aspects of a green building project; everyone must
come together to achieve the sustainable building goal or the
desired/required certification.
This diffusion of responsibility may diminish an architect's or
engineer's exposure because contractors, subcontractors and
suppliers participate in the development and detailing of the
design. On the other hand, architects and engineers are at risk of
becoming answerable for:
- the performance (and availability) of products and systems for which experience or reliable performance data may be sparse or nonexistent;
- the contractor's means and methods of construction or its selection of products and systems where a performance standard is specified; and
- the owner's (and user's) operation and maintenance of the completed project.
Strategies for Managing Risk
Architects and engineers that work on federal projects should
consider adding the following strategies to their risk management
toolbox.
- Prepare a comprehensive program document that clearly describes the owner's objectives and defines the responsibility and services each project participant will provide. There are so many "shades of green" that achieving a particular LEED rating does not automatically translate into a building that meets an owner's expectations. The LEED checklist affords a good framework for identifying programmatic requirements for building design, construction, operations and maintenance, and for educating the owner on the project team members responsible for achieving them.
- Do not commit, warrant or guarantee matters beyond the firm's scope, control or responsibility, including obtaining third-party certification, achieving stated energy savings, reducing construction materials and waste, or creating a healthier interior environment. Design professionals cannot certify their design will be LEED compliant because a third party awards the LEED certification. More importantly, the elements for achieving LEED certification are not within the design professional's control. Review marketing materials for representations regarding the firm's qualifications and experience in sustainable design, as well as its ability to achieve sustainable objectives and standards. Keep in mind contractual commitments are not necessarily insurable if they do not represent a breach of the standard of care. If the firm is engaged as a consulting engineer, review the contract between the architect and owner and disclaim any commitments made by the architect to the owner that are contrary to these recommendations.
- Obtain informed consent for new or experimental products and systems. While design professionals must continue to review and research both tested and untested products, they should not be held responsible if these products do not perform as advertised, as long as they performed the due diligence required of a design professional by the standard of care. The "Client Waiver and Informed Consent to use Experimental Green Products" form from the American Institute of Architects is a good way to document an owner's informed consent.
- Recommend enhanced commissioning and expand the scope of commissioned systems. Increasing the commissioning authority's scope by targeting the Enhanced Commissioning credit and expanding the scope of commissioned systems as recommended by the U.S. Green Building Council should increase the probability a project will achieve its LEED goals on time and within budget, as well as maintain those performance benefits after construction. The Enhanced Commissioning credit also will spread some risk from the engineer to the commissioning authority.
- Recommend LEED's two-phase review process. The two-phase application process allows a project team to assess the likelihood of credit achievements, correct any deficiencies or modify the targeted credits before reaching a point in construction that could jeopardize achieving the desired rating or significantly increase costs.
- Recommend a qualification-based selection of contractors, subcontractors and suppliers with validated experience and skills in green construction. Successfully developing green buildings requires specialized knowledge among everyone involved in design and construction, as well as operations and maintenance. Ideally, a LEED Accredited Professional with prior green building experience should be a member of both the general contractor's and key subcontractors' teams.
- Consider securing or sharing with other design professionals the Section 179D tax deduction. For public property, the Energy Improvement and Extension Act of 2008 states the Section 179D deduction can be allocated to the "person primarily responsible for designing the property in lieu of the owner of such property." Many design professionals seek to take advantage of this tax deduction by requesting public owners assign the tax deduction to their firm.
Federal sustainability mandates could significantly increase a firm's exposure in the short and long term. Companies should avoid a "business as usual" approach and instead manage this increased risk operationally and in their contract documents.&
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
