Common mistakes in... the design development process

Design development, the process by which a specification or high-level design for an asset is translated into the detailed design that allows construction to proceed, is a key feature of major construction projects. For projects procured on a design-and-build basis, clients will require assurance that the design being developed by the design-and-build contractor satisfies their requirements. For this reason, construction contracts for major projects will typically include a detailed design development procedure.

A clear and considered procedure that aligns with the commercial drivers underlying the contract will protect both parties. It may also be a requirement of funders, particularly in the case of PFI projects. On the other hand, an unclear procedure may blur contractual responsibilities and lead to confusion.

Here are some dos and don’ts in the context of a design development process.

Don’t confuse design development with design approval Under the design development process, the design will be submitted to the client according to a programme, with the client required to respond within a specified period. The procedure is intended to give the client visibility of the design as it progresses. It is not an “approval” process and should not alter the allocation of design risk which, under a design-and-build contract, will sit with the contractor.

Do be clear if any “comment” is to operate as approval In certain projects it may be necessary for the design development procedure to include a limited approval mechanism. A good example is in building a hospital - the contractor will require confirmation that the design meets basic functional requirements (for example, the location of operating theatres). As the client is best-placed to confirm such matters (referred to as “adjacencies”), it is appropriate for it to sign off on them.

A later change to the approved element will be treated as a variation and the contractor will be entitled to claim additional time and costs.

Design development is conceptually and practically distinct from the contractual variation mechanism. A failure to understand this may lead to the process being misused

Do be clear on grounds for commenting on/rejecting design For the process to work effectively, the grounds for the client to comment on (or reject) designs submitted to it must be specific and sufficiently objective. Permissible grounds for comment or rejection typically include:

• The design does not comply with the contract specification
• The design does not comply with statutory requirements
• The contractor has not provided sufficient supporting information to enable the client to review the design.

Don’t confuse design development with variations Design development is conceptually and practically distinct from the contractual variation mechanism. A failure to understand this may lead to the process being misused. If a client seeks to comment on or reject a design for reasons not set out in the contract, the contractor will be entitled to challenge the client’s comments and, where legitimate, to claim a variation if the client insists on them being implemented.

There are other issues around the interface with variations. What if a legitimate comment leads to another aspect of the design having to be modified? Some contracts expressly state whether any such modification will or will not qualify as a variation.

Don’t fail to respond Clients should always respond to designs submitted within the specified period. In order to avoid delay to the project, the contract will often provide that if the client fails to respond it will be deemed to have no comments. If the client later wants to modify or reject the design, it may be left with no choice but to instruct a variation, with the time and cost consequences this may entail.

Do provide for a suitable dispute resolution procedure If a dispute arises in relation to a matter of design development, it should be resolved quickly and, preferably, conclusively. For this reason, expert determination may be the most appropriate forum. However, remember that most construction contracts in the UK will be subject to the Construction Act, so either party will be entitled to refer a dispute to adjudication at any time.

Iain Suttie is an associate at Berwin Leighton Paisner