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Construction Health & Safety
Articles

Best Practices: Defining Responsibility and Authority in Construction Projects

February 23, 2023

In 1985, a federal court ruled that if a project owner agrees to “oversee” or “supervise” a contractor’s work performance, the owner may share responsibility for defective work performed by the contractor. The case US Home Corp v. George W. Kennedy Construction Co. shows that proper definitions of who has authority and who has responsibility are critical in any project delivery system. Having definitions is only part of the story, and for intricate and complex projects such as in construction, effective management can only be accomplished through a well-coordinated team effort.  

In this post, we discuss  

  • The key team members involved in a construction project who may – or not – have both authority and responsibility.
  • Resources for defining the roles of team members. 
  • The important distinction between “inspectors” and “supervisors”.  
  • The role consultants can play.  

Many Players, but Who’s in Charge?    

Who are the teams usually involved in a construction project? 

  1. The owner, who wishes to build a facility, a building, have his land developed, remodel his residence, etc.  
  1. Architects and Engineers (AE), who create what to build and provide construction documentation 
  1. The contractor, who performs the project work and provides construction project management  
  1. Suppliers and manufacturers, who provide products and materials; they may also be distributors and fabricators.  
  1. Facility Managers, who operate and maintain the structure and the facilities. 

With so many key players on these projects, it is imperative to define who-is-who and who-does-what. Authority and responsibility on construction projects is largely based upon the concept that several individuals act as the eyes and ears of the owner, architects and engineers, contractors, facility managers or even suppliers and manufacturers. With so many individuals involved and multiple schedules, procedures, and plans to be followed, it is easy to lose control of a construction project.  

Almost all construction projects involve organizations not individuals. These organizations have their own means of governance and those can be complex. Furthermore, these complexities require decisions and approvals that occur daily during a construction contract. These organizations must establish lines of authority by designating the individuals who are authorized to make necessary decisions, at the appropriate time. If done poorly, the project suffers huge risks of misunderstandings and disputes will ensue.  

Establishing Lines Authority & Responsibility: Specificity Matters  

Contractually speaking, for site visits, several entities have provided standardized models of agreements that present the conditions of the contract for the work to be performed, and these models have withstood the test of time. The most common of these are provided by the American Institute of Architects (AIA) and the Engineers Joint Contract Documents Committee – (EJCDC). Most notably, these standardized contracts are:  

  1. AIA Document A232TM – General Conditions of the Contract for Construction
  1. AIA Document A201TM – General Conditions of the Contract for Construction
  1. EJCDC C-700 – Standard of General Conditions of the Construction Contract

These contracts have several provisions that may serve as guidelines for defining authority. Participants and stakeholders in the project need to establish actual authority in the contract by naming a specific individual, i.e., a specific position or job title should not be assigned to a group of individuals. For example, larger projects have a Quality Control Team; on this team, the contractor may designate staff to assist the Quality Control Manager (QCM), but ultimately, there is only one QCM. With staff in mind, stakeholders should delegate apparent authority and establish administrative procedures consistent with contract requirements. For example, QCM staff may have a definitive set of procedures to perform inspections, but, if the staff is not properly certified, they may not sign off on certain types of inspections, such as those that need the oversight of a licensed Professional Engineer (PE). Nor do these representatives have the right to delegate their authority. This means that when granting limited authority, their scope of activities must have definitive outlines. Another example would be QC staff may perform slump tests, but they may not plan the amount, specifications, or codes followed without the involvement and approval of the lead AE and the QCM and in some cases, the owner of the project.  

Professional agreements between an owner and AEs are coordinated with their versions of general conditions of the construction contract; standardized agreements between owner and contractor are coordinated in their own general conditions as well. These agreements will vary per project delivery method (typical Design-Bid-Build projects are different from Design-Build projects). In practice, the agent for an AE firm is responsible for seeing that the work being inspected is constructed in accordance with the requirements of the plans and specifications. However, this does not deliberate the right to disrupt the activities and tasks of the contractor, whether unnecessarily or willfully. This distinction is crucial in any successful construction contract administration.  

Inspectors vs Supervisors: Labels Matter  

An inspector plays an essential role in the lifecycle of the contract. Fundamentally, there is a difference between observing and inspecting. The dictionary definition of observe is “to notice or perceive”, while the definition of inspect is “to assess their condition or to discover any shortcomings”. Out in a construction site, definitions may erroneously overlap, and simple witnesses to field tests and inspections are called, too, “inspectors”, when in truth they are not. This error may cost the project dearly at the end of its lifecycle, and it may even render liability to these poorly defined “inspectors”. All stakeholders involved may have their respective inspectors, e.g., contractors have their Quality Control Manager and staff, AE have their owners’ representative or Quality Assurance staff, and the owner may have his own representative apart from the AE firm. It is fundamental, though, that an inspector carries out the scope of work expected and as planned. Using the Quality Control example, the contractor can assign an inspector to assess soil conditions and sampling in a  construction site. This example can take a step further, since it is not enough to leave the assurance of quality entirely in the hands of the contractor, and its respective testing agency, so. The AE firm involved in the project can provide field administration and quality assurance agents or inspectors for both the owner and the contractor by also testing and sampling soil specimens. This symbiotic approach among three stakeholders – contractor, AE firm and owner reduces the risk of future disputes. The message here, though, is that definitions matter especially when the project is at closeout.  

It is important to note that, although the AE agent during construction does not guarantee the work of the contractor, nor does such agent relieve the contractor of its own responsibilities, the designated agent should guard the owner against defects and deficiencies. If such definitions are not established and understood by all involved during the furnishing of the contract documents, latent defects may not be discovered for years, and, by then, it may be too late and costly.  

Often, supervision has been used in connection with field inspection. Many job postings say “supervisory position,” and many professionals associate it with upper management only, but in fact, the word carries a binding meaning. It is a legally risky term, and, as such, its use has long been discouraged by all technical and professional societies of the construction industry. As mentioned before, in the case US Home Corp v. George W. Kennedy Construction Co., the ruling was that if a project owner agrees to “oversee” or “supervise” a contractor’s performance of the work, the owner may share responsibility for defective work performed by the contractor. With that in mind, it is important that stakeholders of construction projects use the standardized contracts mentioned to clarify and specify the correct language and its intended use.  

In the summary: if the owner simply “inspects” the work for compliance with the plans and specs, the owner does not assume responsibility for the sufficiency of the contractor’s work. If, however, the owner agrees to “supervise” the contractor’s means and methods of performance, it gives rise to the issue presented in the case.  

The Versatility of Consultants  

There is another role within construction projects for the provision of technical information, and this role can have crucial authority and responsibility on the project’s lifecycle. Based on their expertise, this professional is necessary to ensure that methods, materials, and products are incorporated into the project. Consultants can be incorporated in all teams: owners, AEs, contractors and facility management. These individuals provide valuable insight into products; advise owners, AE, contractors, and subcontractors; provide maintenance and warranty requirements, technical assistance and information during design, execution, commissioning, and closeout. These professionals can serve as supervisors or inspectors and represent any of the construction teams. The advantage of using consultants is that their versatility can benefit a project at any point in time, whether it be in its initial stages or when disputes reach litigation. Not only do these versatile professionals play a role paramount for the project’s lifecycle, but they are effective in understanding the importance of the value of time.

Whether it is flying to the moon, building a skyscraper, or planning a child’s first birthday party, teamwork is the best way to get it done. Construction projects are not different: success only comes through a well-coordinated team effort. It does not matter the role, all participants and stakeholders in the project have certain responsibilities and authority to turn ideas into concrete reality. 

For more information on best practices for defining roles for authority and responsibility, contact me at lfaria@vertexeng.com

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