Scope Creep, a Missing Survey, and a Certification Request
An interior design firm signed a fixed-fee agreement of $156,000 to design a 24,000-square-foot outpatient clinic fit-out, with the fee set at 6.5 percent of an estimated $2.4 million construction cost. The agreement lists basic services as programming, schematic design, design development, and construction documents, and states that the owner will furnish a boundary survey and existing-conditions drawings. At 60 percent construction documents the client adds three exam rooms, switches from a rooftop VAV system to a variable refrigerant flow system, requests a second furniture package, and asks the firm to compress the remaining schedule by four weeks. Separately, the owner's contractor has issued an RFI stating that the deck-to-deck height is 11 feet 2 inches rather than the 12 feet shown on the owner-supplied drawings, so the planned 9-foot-6-inch corridor ceiling will not clear the ductwork. The owner has refused to authorize a survey, saying the drawings should be good enough. The firm has also been sent a contractor payment certification and a lien waiver to sign.
1. Sort the four requests into basic and additional services, and explain how you would document and price each.
Read the worked answer
None of the four is basic services as the agreement defines them, and all four share one trait: they change program, system, or schedule after the fee basis was set.
- Three added exam rooms. Changes the program and the area the 6.5 percent was computed on. Additional: replanning, additional rooms, added medical equipment coordination.
- Rooftop VAV to VRF. A system substitution with ceiling, shaft, equipment-space, and structural consequences, plus new coordination with the mechanical engineer. Additional, and potentially a redesign of the ceiling plan.
- Second furniture package. New scope and a new procurement cycle. Additional.
- Four-week acceleration. Compressing the remaining schedule requires overtime, additional staffing, or both. Additional, and priced as a premium, not as a courtesy.
Process: issue one written amendment before performing any of it, describing each item, the estimated hours and hourly rates or a percentage multiplier, and the schedule effect. Do not begin the work under a verbal instruction and do not absorb it as professional goodwill. Log the request dates and keep the client's written requests. If the client will not sign an amendment, state in writing that the additional scope is not authorized and that the schedule and fee remain based on the original scope.
2. What is the correct response to the height conflict, and how does the standard of care apply to relying on owner-furnished information?
Read the worked answer
The standard of care permits reliance on owner-furnished information, but it does not permit silent reliance on information you know or should know is unreliable. Once the RFI surfaced the discrepancy, the firm is on notice.
Response:
- Send written notice to the owner that the owner-furnished drawings conflict with field conditions, that the discrepancy affects the corridor ceiling and duct routing, and that a survey and field verification are required.
- Do not redraw the corridor on an assumption. Request authorization for field measurement at minimum, and a survey in the full area if the discrepancy suggests broader error.
- If the owner still refuses, proceed only under a written assumption that the field condition controls, with the cost and schedule risk assigned to the owner, and confirm the direction in a signed directive. Do not proceed quietly.
- Evaluate options for the contractor: lower the corridor ceiling to 9 feet 2 inches and use a shallower duct or a locally furred soffit; reroute the duct; or reduce the corridor width. Each has a cost, and each is a change to the contract documents.
The professional exposure is not the wrong dimension; it is continuing to produce documents after learning the base information is wrong without telling the owner in writing.
3. Should the firm sign the contractor payment certification and the lien waiver? What are the alternatives?
Read the worked answer
No, not as presented. Both documents carry obligations the agreement never contemplated.
A payment certification is a representation that the work covered by the application is complete and in conformance with the contract documents. That is a site-observation statement with liability attached, and the designer's periodic visits do not support it. Signing also places the designer between the owner and the contractor in any payment dispute.
A lien waiver, if unconditional, could waive the firm's own right to collect fees for work already performed, and if the firm has not been paid, it gives up its leverage for nothing.
Alternatives:
- Offer a limited design professional's certification, expressly restricted to conformance of the work observed with the design intent, qualified by the frequency and purpose of site visits, and stating that it is not a guarantee of the contractor's performance.
- Alternatively decline, and suggest the owner's lender use a title company or construction manager for payment certification.
- For the waiver, sign only a conditional waiver limited to the amount actually received, effective on receipt of funds, and never before payment clears.
Check the agreement for any certification obligation the firm already accepted, and notify the professional liability carrier before signing anything. Confirm the position in writing to the owner with the reasoning, not just a refusal.