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Covid or Supply-Chain Costs and Delays

Most of us will be aware of the problems builders are having in getting materials onto sites at reasonable times and costs.  This will have a consequential risk for design practices:  your Risk Management should be looking beyond the short term and thinking about the effect that these problems will have in the future.

If you had any doubt about the seriousness of these issues, take a look here:  https://www.eboss.co.nz/supply-chain-report-2021/background

https://www.corelogic.co.nz/news/construction-costs-rise-22-three-months-june-fastest-quarterly-growth-record#.YTASCo4vNPZ

These issues will impact on client/designer/builder/funder relationships.  The material cost changes of 5% to 25% in the past year or so are the harbinger of more upward movement.  Labour costs are being driven up by tight labour resources and contractors well booked into the future.  The supply chain problems are disrupting site progress, leading to project delays and pressure on contractors’ margins.  

The problems are not ours alone:  America and Europe are also troubled by shortages of materials and labour, slow and expensive shipping and varying lockdown measures.  Covid is driving up inflation generally, and the size of our economy (and construction industry) means we have ineffective leverage on material supplies.

Clients with projects at design stage may be unable to accommodate these costs and delays within their budgets.  Others will continue but with resentment adding stress to the project.  Still others will be looking to continue but with cost cuts which may compromise the design and add to design costs.  Procurement strategies may favour early contractor design involvement, movement away from lump sum contracts to an arrangement which redistributes the risk of delays and cost increases, staged consenting and contracting, and design-stage identification and ordering of items requiring long lead times.

Projects under construction will come under stress if builders cannot complete within the time and cost parameters understood when the project was priced.  If increased costs cannot be recovered, performance on site is at risk or perhaps may be abandoned.  Where costs can be recovered, they will not be welcomed by clients.  Arguments from delays beyond those directly related to Covid lockdowns will be unpleasant.  All of those circumstances represent increased risk to you:  both additional (and perhaps unrecoverable) attendances, and the potential for dispute and negligence claims. In order to manage those risks, please take the time to assess how these issues will affect all the projects you have underway, in particular where reliance has been placed on pre-Covid cost/time estimates, and to communicate appropriately with each client.

A Grim Tale About Piggies and Wolves

Once upon a time there were three designer pigs:
The first designer pig designed a house of straw, but along came a shower of rain and because the walls weren’t protected by eaves, and the window details were appalling, and the waterproofing system comprised only paint over dodgy plasterwork, the walls rotted and the house fell down. Along came a wolf, and the design pig was roasted.
The second designer pig designed a house of timber, which was all very well and good, but the pig did not stick around to see if the house got built properly, and the piggies who lived in the house closed all the windows to stay warm in winter, and didn’t venture outside to clean out the gutters or even stop the weeds growing up very close to the walls. The insulation and building wrap ensured that the walls were always wet inside and before very long the house was a great place for growing mushrooms, many of which were not found until the wall linings were removed. Along came a wolf who was keen to see that the piggies who lived in the house grew big and fat instead of being weak and sick from the dampness. He made sure that the design pig paid the costs of making the piggies and the house better again.
The third designer pig was much smarter and more stylish. Of course, a brick chimney was out of the question because of the earthquake risk, and possibly because a wolf could fall down it. Instead, one of those very stylish metal fireplaces was put in to keep the piggies who lived in the house healthy and happy. And everyone was. Well, for a couple of years, anyway. Because what happened then was that the house suddenly burst into flames. The wolf was not at all happy that the piggies were overcooked and he asked a wise old owl what could have possibly happened. The owl yawned and said (in a doleful way) “pyrophilia” which the wolf looked up on Google (with some surprise!) and found should have been “pyrophoric carbonization”.
And the moral of this story?

  1. Whenever an aspect of design or construction is critical to the performance of the completed building, both design and installation are critical activities. In these cases, proper detailing and specification, observation during construction, and review of manufacturer’s installation requirements may have saved the designer pigs’ bacon.
  2. Any hot surface in proximity to timberwork has the long-term potential dry out the timber to the point that spontaneous ignition may occur at temperatures less than would happen by the application of a direct flame.
  3. If reliant on intumescent products for fire protection, do not ignore the need to provide specific fixing details, clearances for expansion, and installation conditions applicable to that product.
  4. If the ongoing satisfactory performance of an element of a building – or its continued warranty cover – is reliant on maintenance, then it is in the interests all concerned that the need for that maintenance is made clear.
  5. Wolves can be scary and hungry

Does the 10 year longstop still apply?

Not so long ago, in our Communique article “How long to keep records”  we said

“The warm fuzzies induced by the 10 year longstop on liability under the Building Act have been under threat from cases brought to Court.  So far, so good.  But it would be unwise to biff out everything related to a project as soon as the longstop is reached” 

Alas, in May 2021 the decision on the October 2020 hearing of BNZ Branch Properties Limited v Wellington City Council [2021] NZHC 1058  has made good on that threat.  There may be the possibility of an Appeal, but currently, the position is that if (for example) the owner makes a claim on the contractor at 9 years and 364 days, that contractor would have another two years to seek a contribution from you as a “third party”.

The case arises out of the BNZ building on the waterfront in Wellington, which was damaged in the 2016 Kaikoura earthquake and later demolished. 

In August 2019, BNZ sued the Wellington City Council for negligence in respect of granting the building consent, inspecting during construction, and issuing a CCC.  A month later, Council sued the engineers, Beca, as a negligent third party, seeking a contribution in accordance with s17 of the Law Reform Act.  Beca argued that it had provided its engineering services in March 2008, more than 10 years before Council filed its claim, and thus the claim was time-barred by s393(2) of the Building Act. 

The issue before the court was not whether or not Beca was negligent, but whether – in consideration of the limitation issues – they were liable.

The Building Act s393(2) states

“….no relief may be granted in respect of civil proceedings relating to building work if those proceedings are brought against a person after 10 years or more from the date of the act or omission on which the proceedings are based.”

In simplistic terms, the understanding has been that you are not liable for your actions (as a building designer) beyond 10 years from the date on which your actions may have given rise to the alleged problems. 

NZ case law has confirmed that in respect of primary claims between plaintiffs and defendants;  but the position has not been so clear in relation to third party claims.  This was a test case for that issue, with about $100 million at stake.

Beca argued that the use of the words “civil proceeding” in s393(2) of the Building Act was intended to include “every form of civil proceeding regardless of its source or makeup”.

The High Court, after a detailed consideration of the relationship between s393 of the Building Act, s17 of the Law Reform Act, and s34 of the Limitation Act 2010, held that the term “civil proceeding” in s393 of the Building Act refers only to a primary claim between a plaintiff and defendant, and does not include a claim for contribution.

Third party claims – such as the Council’s claim against Beca – must be initiated within a two-year period provided for in the Limitation Act 2010.  This judgement establishes that so long as a claim is made on a party within the Building Act 10 year longstop, that party would then have two years in which to make a claim against third parties.

NZACS has previously suggested that the WHRS timelines justify keeping your documents 12 years, not just 10:  such things may (almost) be in the past, but this new case reinstates that recommendation.  Those “warm fuzzies” are now facing the reality of winter.

Balustrades and Barriers

For some reason, balustrade failures – especially glazed ones – have been prominent over the past year or so.
• there seems to be plenty of room for a difference of opinion about the type of glass, fixings, rails and supports.
• the long-term durability of elements has been an issue in respect of paint finishes and metal treatment;
• support fixings into the structure have been the source of leaks;
• cost-issues have driven design solutions which are incompatible with the potential risk;
• minimum balustrade heights have not accounted for the deck falls and finishes;
• inconsistencies between a “generic” design, or the designer’s details and those of a specialist trade design/install contractor.
• poor workmanship or inadequate quality control has led to sudden or potential failures
• spontaneous failure of toughened glass as a result of: poor edge finishing or hole formation, damage in delivery or installation, uneven shading, localised fixing or shape issues, imperfections and inclusions in the glass at the time of manufacture, and unknown or a combination of all of these, perhaps beyond the control of the designer or contractor.
At the heart of the matter is the functional purpose of a barrier: irrespective of compliance minima, if the human consequences of barrier failure are significant, then that is the first priority for design, installation, and site observation.

Guides to the design of balustrades and barriers:
• The Building Code (primarily sections B1, B2, F2 and F4) and relevant determinations
• New Zealand Standards (e.g. NZS 4223 Glazing in Buildings Part 3)
• Determinations
• MBIE Guidance Documents
• Specific Design (usually by the sub-contractor)
• Rules for barriers around swimming pools.

The Building Code:
Section B1 (Structure), clause 22.4.3 amends what is set out in NZS 4223, and so it’s worth familiarising yourself with this if you are designing structural glass barriers. Also watch out for any change of use that might impact on the loads that your structural engineer uses. The MBIE Guidance on Barrier Design is a useful document to accompany B1, and Figure 3.1 in the Guidance document sets out a useful design flowchart.
Section B2 (Durability) accepts a 15-year durability for a barrier infill but there is a 50-year requirement for the handrail and its supporting structure. We can sometimes think of barriers as part of a cladding system but this makes it clear that the structural aspects need to match the life of the building.
Section F2 (Hazardous Materials) references NZS 4223: Part 3. A word of warning here is that if you apply some decorative film – say for graphics or privacy purposes – to toughened glass, you may be inadvertently turning the glass into something more hazardous than if it were able to break into many small pieces.
Section F4 Safety from Falling is obviously the most relevant part of the code and it’s worth re-reading this to make sure you don’t miss something. A few aspects to note include the following.
Table 1 sets out minimum barrier heights, however it would be a good idea to dimension your documents with extra height to take care of falls, finishes, construction tolerances, unexpected build-ups etc. There is no obvious provision in the code for inspectors to allow for “tolerances” when they check measure on site. Preferably dimension the height as a minimum in relation to the finished floor/deck level. (It’s not unknown for owners to change deck finishes without informing the designer!)
A commentary in F4 notes that there are more relaxed requirements where a building won’t be frequented by children under 6. But you cannot control who uses the building and how: we recommend caution before relying on this exemption, and drawing the issue – and inherent responsibility – to the client’s attention.
Figure 3 shows that any projecting lip of greater than 15mm in a barrier design is considered a foothold, and therefore the barrier height needs to be measured from this projection. It’s easy with a parapet flashing build up to get caught out by this rule and have to measure the barrier height from an upstand rather than a terrace level.
Figure 4 shows the requirements for stair barriers. Don’t be caught out by the 150mm diameter rule – it’s tested in 3 dimensions by a 150mm diameter sphere: if the handrail is set out from the stairs it may need a smaller opening than a 150mm elevational diameter.
Figure 5 is a reminder of the importance of preventing a barrier from being able to be used as a seat. This requirement does not apply to housing but in all other cases something like a top edge wider than 100mm could be considered a seat and so would not be code compliant, as well as being hazardous.
There are a number of requirements in situations where there is a toilet pan or any other fixed feature (e.g. seating) within 500mm of a window. It would be easy to forget about including a restrictor or barrier in these situations.
Landscaped areas may require a barrier. MBIE Determination 99/012 notes that “Barriers are required above retaining walls exceeding 1 metre in height, where people, particularly those unfamiliar with the area, would frequently be expected to be close to the top of the wall in the course of their normal activities.”
Some detailing issues:
• Try to avoid barriers going across backgrounds with different light reflectance that may create temperature differentials that cause stresses in the glass, leading to breakages. (East elevations can produce rapid temperature rises).
• Detailing and dimensions should allow for generous construction tolerances. Glass fixings where there is little to no gap are more prone to breakage.
• Conservatively detail the base plates of stanchions bearing in mind the potential risks from corrosion and surface water: consider the B2 50-year durability requirement.
• Make your compliance pathway clear in your building consent documentation, so that an inspector on site interprets things the same as the consent processing officer.

NZRAB Disciplinary costs

NZRAB’s recent newsletter sets out their revised approach to the allocation of the costs of complaints.  They indicate that if a complaint goes to review by the Investigating Panel, the costs recoverable from the architect are likely to be in the order of $5000, and if it proceeds to a Disciplinary Hearing, $60,000.  NZACS’s insurance brokers Aon advise that the current PI policy wording is limited to the costs of defending the complaint, and does not extend to costs awards against the member.  NZACS Statutory liability insurance includes prosecution costs as part of the penalties cover, however there are limitations around the type of NZRAB complaint covered by this policy.

That means that a client suggestion of lodging an NZRAB complaint carries the threat of a substantial uninsured loss. 

NZACS’s view – made known to both NZRAB and the LBP Board – is that disciplinary proceedings should not be put in hand until the civil claims are resolved.  Despite the obvious logic of proving the case in a civil or contractual forum, both NZRAB and the LBP Board appear to be bound to pursue a complaint after only preliminary review.

The terms of engagement provide for dispute resolution, and the path to negotiated settlements on sensible business terms is well-trodden.  The outcome will indicate whether the architect should or should not face disciplinary action.  But unfortunately, upset (or unscrupulous) clients consider that lodging a complaint carries minimal cost and no downside to them, whilst exerting leverage on the architect to settle on unfavourable terms.  The architect who successfully defends faces the costs of the process and the client only loses face.  The architect who unsuccessfully defends faces not only substantial uninsured costs but also the prospect that the outcome will establish precedent for a potential civil claim.  There is room – and pressure – for the architect to admit to some of the claim in order to avoid uninsured costs:  in this situation the client’s case remains untested beyond a preliminary overview.  NZACS is aware of such a case where the outcomes were driven by the client’s untested allegations which were later found to be untruthful.

The only good news in this matter is that the statistics indicate that the vast majority of complaints to the NZRAB are about architects who are not members of NZACS.  This suggests that our members are aware of and manage their risks by attending to (at least) 3 key factors:

  1. Communications:  Being alert to client attitudes and concerns, maintaining open communications with project stakeholders and keeping clients informed at all times.  Taking the opportunity to see things from their point of view, and remaining humble enough to compromise when necessary.
  2. Obligations:  Maintaining professional and technical competence, and seeking external advice when appropriate.  Connecting with NZIA resources and fellow professionals including the NZACS Claims Committee members if required.  Reviewing and confirming actions and obligations against the contract requirements.
  3. Records:  Retaining good records in a way that can be easily referenced.  Filing everything for later referral if necessary, digitising the hard-copies of documents when practicable, keeping regular file back-ups as well as on and off-site records.

List of All Articles

List of All Articles

Articles will be listed as they are published in Communique, or as Seminar papers. The list is not hyperlinked to the articles. Many articles appear under multiple categories, only the primary category is shown here. Category = “All” will pick up all articles.

Date loadedArticle TitleCategories
17/02/2100 Current List of All Articles by Category then by TitleAll
1/08/18Consultant Selection Best PracticeConsultants; 
1/08/18Employees, freelancers, contractorsConsultants; 
1/08/18Estimates and budgetsCost Control
1/08/18Project BudgetsCost Control
15/02/21Project Cost Management – Not Snakes and LaddersCost Control
1/08/18Who is responsible for the budgetCost Control
15/02/21A Flaming Row:  signing off on specialist design inputDesign Management; 
17/02/21ACP PanelsDesign Management; 
1/08/18Alteration projectsDesign Management; 
1/08/18Asbestos Cement Materials (ACM)Design Management; 
1/08/18But can they be TrustedDesign Management; 
17/02/21CAD file transfersDesign Management; 
1/08/18Claims involving ConsultantsDesign Management; 
1/02/20Cross-leases covenants and planning controlsDesign Management; 
1/08/18Design of WHRS remediation works.Design Management; 
1/08/18Documentation failuresDesign Management; 
1/08/18Drone risks and requirementsDesign Management; 
1/08/18Fire Code changesDesign Management; 
17/02/21Fit for Purpose StatementsDesign Management; 
1/09/19Land Covenants, Unit Title restrictions and Cross Lease restrictionsDesign Management; 
1/08/18Land Ownership RightsDesign Management; 
1/08/18NZBC E3Design Management; 
17/02/21NZS 3604, Lintels and importance levelsDesign Management; 
17/02/21Passive Fire Design  – Intumescent paint systemsDesign Management; 
15/02/21Passive Fire Design – Problems, Risks, ReferencesDesign Management; 
1/08/18Peer reviewsDesign Management; 
17/02/21Proprietary SystemsDesign Management; 
1/08/18Risk Management and Environmental IssuesDesign Management; 
1/08/18Site dimensioning problemsDesign Management; 
1/08/18Skillion roofsDesign Management; 
1/08/18Stainless SteelDesign Management; 
1/08/18Understanding design obligations – The Contractor’s DutiesDesign Management; 
1/08/18Arbitration & Adjudication – Consumer protection provisionsDispute Management; 
1/08/18Building Act – Responsibilities of the partiesDispute Management; 
1/08/18Can a contractor (or subcontractor) make a claim against an architect?Dispute Management; 
1/08/18Complaints to NZRAB or BPBDispute Management; 
1/08/18Confidentiality in settlementsDispute Management; 
1/08/18Construction Contracts ActDispute Management; 
1/08/18Construction Contracts Act Amendment: incorporation of designersDispute Management; 
1/08/18Consumer Guarantees ActDispute Management; 
1/11/19Expert WitnessesDispute Management; 
15/02/21How long to keep recordsDispute Management; 
1/08/18Joint and several liabilityDispute Management; 
1/08/18Liability for Company DirectorsDispute Management; 
1/08/18Preparing for disputesDispute Management; 
1/08/18The Role of the Expert WitnessDispute Management; 
15/02/21What does it say – What does it meanDispute Management; 
1/08/18Changes to the Scope of ServicesEngagement, Clients & Fees; 
17/02/21Communication and the client experienceEngagement, Clients & Fees; 
17/02/21Communications – Put it in writingEngagement, Clients & Fees; 
1/08/18Completion CertificatesEngagement, Clients & Fees; 
1/08/18Conditions of Engagement:  are they Mandatory?Engagement, Clients & Fees; 
17/02/21Copyright in ArchitectureEngagement, Clients & Fees; 
17/02/21Engagement Terms – sign before designEngagement, Clients & Fees; 
15/02/21Get your fees and scope agreement agreed and signedEngagement, Clients & Fees; 
1/08/18Hold Harmless ClausesEngagement, Clients & Fees; 
1/08/18Limited Services – Minimizing the riskEngagement, Clients & Fees; 
17/02/21Non-standard terms of engagement (1)Engagement, Clients & Fees; 
17/02/21Non-standard terms of engagement (2)Engagement, Clients & Fees; 
1/08/18NZACS Guide to Better Agreements for ServicesEngagement, Clients & Fees; 
1/08/18On selling the project and selling out on the architectEngagement, Clients & Fees; 
1/08/18Partial servicesEngagement, Clients & Fees; 
1/08/18Recent NZRAB Ethics changesEngagement, Clients & Fees; 
1/09/19The Continuing Saga of Client-Imposed Agreements for Services Engagement, Clients & Fees; 
1/08/18When an Owner Wants a WarrantEngagement, Clients & Fees; 
17/02/21When contract terms shift the risks and responsibilitiesEngagement, Clients & Fees; 
1/08/18A Background to Insurance Insurance concepts & scope; 
1/08/18Budgeting for ExcessInsurance concepts & scope; 
1/08/18Common Insurance and Contractual TermsInsurance concepts & scope; 
1/08/18Cyber LiabilityInsurance concepts & scope; 
15/02/21Cyber Liability & Cyber RisksInsurance concepts & scope; 
1/08/18Design/Build SituationsInsurance concepts & scope; 
1/08/18Do I need Public Liability CoverInsurance concepts & scope; 
1/08/18Home replacement insurance valuationsInsurance concepts & scope; 
1/08/18Levels of PI CoverInsurance concepts & scope; 
1/08/18No Claim for No Claims BonusInsurance concepts & scope; 
1/08/18NZACS discretionary benefitInsurance concepts & scope; 
1/08/18Runoff cover – requires updatingInsurance concepts & scope; 
15/02/21Selecting Professional Indemnity CoverInsurance concepts & scope; 
1/08/18Steigrad – the caseInsurance concepts & scope; 
1/08/18Which PI Policy should I take outInsurance concepts & scope; 
1/08/18Who is the InsuredInsurance concepts & scope; 
1/08/18NZACS: Who Made it Happen – What Does it Stand For?NZACS History & Purpose
1/11/19Liaison with Government & Consultant GroupsNZACS History & Purpose
1/08/18Practice structures and family trustsPractice Administration; 
15/02/21Practice SurvivalPractice Administration; 
15/02/21Private JobsPractice Administration; 
15/02/21Slowing down?  An action list for Smaller FirmsPractice Administration; 
1/08/18Builders deposit before starting workProcurement & Contracts; 
17/02/21Completion StatementsProcurement & Contracts; 
15/02/21Covid19: project impactsProcurement & Contracts; 
1/08/18GuaranteesProcurement & Contracts; 
1/08/18Practical Completion CertificatesProcurement & Contracts; 
1/08/18Responding to Payment ClaimsProcurement & Contracts; 
1/08/18(Un)Proportional LiabilityRisk & Liability; 
1/08/18Claim StatisticsRisk & Liability; 
1/08/18Claims are StressfulRisk & Liability; 
1/08/18Disputes and duties in Contract and in Tort arising out of Contract Administration.Risk & Liability; 
17/02/21Free adviceRisk & Liability; 
1/08/18LBPs and RBWRisk & Liability; 
1/08/18Leaky Buildings a retrospectiveRisk & Liability; 
1/08/18Limitation (time) versus LiabilityRisk & Liability; 
1/08/18Managing Risk 1- The Basics of Risk ManagementRisk & Liability; 
1/08/18Managing Risk 2 -Identifying Risk within the FirmRisk & Liability; 
1/08/18Managing Risk 3 – Identifying Risk External to the FirmRisk & Liability; 
1/08/18Managing Risk 4 – Assessing and Quantifying RiskRisk & Liability; 
1/08/18Managing Risk 5 – Allocating, Transferring and Mitigating RiskRisk & Liability; 
1/08/18Managing Risk 6 – Interactive ChecklistRisk & Liability; 
1/08/18Multiple Housing UnitsRisk & Liability; 
1/08/18Notifiable situationsRisk & Liability; 
1/08/18Problem clientsRisk & Liability; 
1/08/18Project Initiation – a Good Kick-offRisk & Liability; 
15/02/21Reliance on, and co-ordination of trade and consultant adviceRisk & Liability; 
1/08/18The Cost of InnocenceRisk & Liability; 
1/08/18The Uninsured Cost of Professional Negligence AllegationsRisk & Liability; 
1/08/18Why Claims Happen 1Risk & Liability; 
1/08/18Why Claims Happen 2Risk & Liability; 
1/08/18Why Claims Happen 3Risk & Liability; 
1/08/18Why Claims Happen 4Risk & Liability; 
1/08/18Will a fee claim dispute lead to a negligence claimRisk & Liability; 
15/02/21A Sad Tale about FeesTales of Woe
1/08/18Tales of woe – Budgets and EstimatesTales of Woe
1/08/18Tales of woe – colours and selectionsTales of Woe

Passive Fire Design – Intumescent paint systems

Passive Fire Design – Intumescent paint systems

In October 2020, a “Code of Practice for the Specification and Application of Intumescent Coatings for the Fire Protection of Structural Steel” was published by the Fire Protection Association of New Zealand.

It includes a requirement to keep all structure clear of the steel by a distance of 50x the dry film thickness of the coating. It is no longer acceptable to fix timber directly to coated structural steel to accommodate the protective foaming of the intumescent paint during a fire or for the fixing of linings. It will also be a requirement to have access to the steel to inspect the state of the coating when ‘life to first maintenance’ inspection is required.

Proprietary Systems

Proprietary Systems

Your design includes a proprietary system.  For example a glazed wall or curtain wall system, cladding or a façade cladding system, roof or sandwich panel, a membrane waterproofing system, flashing system – take your pick.  You are reliant on the provider’s information for design documentation (including details specifications and QA systems), on a licensed applicator/installer for the work on site, and on a producer certificate and/or warranty for completion.

When it goes wrong, are you in the cross-hairs?

Apart from being a natural target as the designer holding PI cover, it will depend!

In selecting the product or system for your design, you are entitled to rely on representations by the supplier, but as a professional person it is expected that you at least attempt to divide the facts from the “alternative facts”.  When the blow-torch is applied in the courtroom (several years later), you need to be able to verify that you carried out sufficient enquiry to establish that you made a prudent selection.  And that your selection was made on the basis of the particular circumstances of the project as they were known at the time.

When incorporating the supplier’s information into your design, you still have a duty to assess and make sensible use of their standard detailing to suit the project.  Wind loadings, seismic movement, future maintenance, installation complexity and many other issues will be relevant.  The question is not so much “will it be good enough” but “where, why and how will it potentially fail, and what are the consequences of that?”

The supplier’s information is not usually provided in the form necessary to deal with all the junctions and interfaces with other work;  QA/ fixing details/ lap details/ weathering details may be at odds with your expectations.  Your site-specific design needs to deal with that.  If you “tweak” a standard detail, it becomes your detail, not theirs.  The same if you use a standard detail in a non-standard way.

During the installation, what are your obligations to observe?  You may think that your responsibility is replaced or reduced by using a licensed installer under the supplier’s QA system.  But sooner or later, someone is going to suggest that despite that, you still had a duty to observe and comment on the work.  A licensed installer does not provide certainty of performance;  a supplier’s QA system in turn needs to be assessed and monitored.  At the very least you will have to verify that you reviewed the work to the extent required to be satisfied that the performance requirements and the QA measures were being carried out.

On completion, are you now completely reliant upon documentation by the supplier?  If so, what is in place to make sure you get it when you need it?  Can it be trusted:  it is not unknown for suppliers to sign off on defective work in the hope that it never comes back to bite them.  If the contract requires a warranty, make sure you get it.  But a warranty from a worthless company is worthless!  How hard is it going to be to “collect” on the warranty when required?

And now we are at the point – years later – when the proprietary system and/or building elements in association with it have failed.  Maybe the main contractor, supplier and installer have also “evaporated”.  Worse, close examination reveals that the system was used in a non-standard way, and with substitution of some elements of it, despite the producer statements and warranties.  The performance expectations and technical detailing has become more sophisticated over the years. 

Only now, dear member, do you realise that the fees you earned were inadequate to allow for the careful attention required by the circumstances of this project;  or for the potential future risk that under joint and several liability you (and your insurers) would carry the can for failures by others.

(See also “Reliance on, and co-ordination of trade and consultant advice”)

NZS 3604: Lintels, and Importance Levels

NZS 3604:  Lintels, and Importance Levels

Practical experience suggests that where sliding doors are concerned, the lintel deflections under NZS3604 sizings are problematic.  Just as NZS3604 floor joist sizings are perhaps going to give unwelcome “bounce”, we suggest that where there is a prospect that a sagging lintel may lead to a jammed slider, you would do well to consider a steel lintel or flitch beam and perhaps with a pre-camber.  If shims were provided at installation to take up expected deflection, make sure they are removed to allow for that later deflection to happen!

All public buildings – including simple single storied buildings such as classrooms, libraries and public halls – are designated under NZS 1170.5 as having a BUILDING IMPORTANCE LEVEL (BIL).  Most public buildings have an BIL of 3 or greater, and NZS 3604:2014 does not apply to buildings which have an BIL of 3 or greater:  so all timber framing will need to be specified by a Structural Engineer as a Specific Engineered Design (SED).

Non-Standard Terms Of Engagement (2).

Non-Standard Terms Of Engagement (2).

Use NZIA/AAS or CCCS terms

The short point is:  the NZIA or CCCS terms are “neutral” and built up from many years of experience in projects of all types and sizes, so you should be VERY AFRAID of attempts by others to reinvent the wheel, with the prospect of unexpected and potentially unwelcome outcomes.

The frequency with which clients dream up new terms of engagement is wearying, and often unnecessary.  The NZIA suite of AAS, and the CCCS, are well-accepted engagement terms for architects which apply to all but a few projects.  They are the product of wide and knowledgeable input, written in the mutual interests of architect and client, based on verified legal interpretation and case law, insurable, and flexible enough to deal with most issues. 

Some clients or projects will have special requirements, but these should be accommodated by specific terms, rather than specific contracts.  Wherever possible, you should object to clients attempting to impose their own creations which may later create uncertainty as to meaning and insurability.  Both NZIA and NZACS (with input from Aon) are able to provide general non-legal advice, and an appraisal of insurability;  but non-standard terms of engagement are a commercial and legal matter, and you should take legal advice accordingly. The separate article “Non-Standard Terms of Agreements (1)” provides some guidance on the words and terms which may be problematic.

For several years – and ongoing – government departments and larger local authorities have developed agreed terms with professional bodies including NZIA, NZACS, IPENZ, ACENZ and others.  There is a strong move within government to achieve consensus and coherence, and support for the use of CCCS, even acknowledging some particular (government or local body) needs which are not present in the commercial world.  NZIA is keen that the AAS scope schedules are also adopted.  We expect this effort to prevail, but meanwhile some clients just don’t “get it”.

2020 Government Model contracts

MBIE’s website states (Feb 2021):  These contract templates are not intended for construction, ICT or social services related contracts because they are generally not low risk or lower value.

The GMC is intended for products and supply rather than professional services contracts, which have different needs and requirements. We understand that when MBIE refers to construction, they include architectural and engineering design.

Engagement as a subcontractor, or under NZS3910

DO NOT sign up for a project on the basis of being a party to a construction contract or a supply contract or a purchase order. 

BEWARE of being trapped into the situation of being a subcontractor (or sub-consultant) to a design-build contractor.  They are known for spreading risk across their subbies:  this may come in the form of a grandfather clause which overtakes the usual and acceptable terms of a professional services contract.

NZS3910 (or a variant of it) is NOT an appropriate contract for professional services, and exposes an architect to the risk of PI cover not responding in the event of a claim.

Housing NZ

A recent enquiry to Aon from a member was in relation to a Housing NZ project, where HNZ was seeking a statement that “  …. XXXX Architects:

(1) warrants to HNZ that all work will be carried out in a good, professional and workmanlike manner (and in accordance with the provisions of the Contract) ; 

(2) will be required to repair all defects in their works; make good and indemnify HNZ for all direct losses to the works arising from any defect in their works; 

(3) will carry out any repair work for which they are liable under the warranty.

(4) if they do not do so within 14 days after receiving notice by HNZ, then HNZ may undertake the work and recover all costs;  

(5) indemnifies and holds HNZ harmless for any costs, claims, liabilities etc for which HNZ may become liable arising from failure by the architect.”

This wording was all in relation to a Subcontractor Deed of Warranty sought from the Architect.  It is not appropriate to a professional services contract;  it is likely to impose terms and conditions beyond those covered by the PI policy.