Design-Build Risk Shifting Is Key to Success or Failure
The game of risk-shifting on design-build projects is changing again. Where the shift once was from owner to the design-build contractor, designers and contractors now are shifting risks to subcontractors. But a growing body of case law suggests that all parties can better forecast the outcome of contract disputes in litigation than other forms of dispute resolution.
Michael C. Loulakis, president of the law firm Wickwire Gavin PC, Vienna, Va., told the Design-Build Institute of Americas annual conference in Las Vegas Nov. 8-10 that many owners seek to limit their liability by assigning single-source responsibility to a design-build contractor. But issues can arise with warranty claims, ambiguous contract language, scope and failed attempts to use commercial general liability insurance. To protect themselves, design-builders should budget higher fees than at-risk construction managers, he advised.