Claims Retrospective: Construction Observation versus Construction Inspection—More Than Just Semantics
Depending on the type of project, an engineer may be involved in construction administration services. These services may include observing the ongoing construction at certain intervals to become generally familiar with the progress on the site.
Observation services also determine if the work is being performed in a manner indicating, when fully complete, it will be in accordance with the design, or the contract documents. The engineer’s services may also include certifying the contractor’s pay applications, or invoices, are based on and align with said observations.
The purpose of construction observation services may be generally understood in the industry not to involve any exhaustive, ongoing inspections. Nevertheless, it is not uncommon for an engineer’s client to attempt to argue the performance of these services constitutes some sort of guarantee of the contractor’s performance. The engineer, therefore, may be exposed to liability any time there is a defect in the contractor’s work.
All too often, engineers fail to execute a written contract detailing the scope and purpose of their construction administration services, or construction observation services. Engineers will often agree verbally, in an email, or in a proposal letter to simply do “inspections” without further defining what said “inspections” entail. The engineer is more often than not referring to the above described construction observation services. Afterall, it is a very rare occasion when an engineer agrees to supervise a contractor’s work every day on the site. And an even rarer occasion when the client agrees to pay for such exhaustive, supervisory services.
Unfortunately, an engineer’s nonchalant agreement to do “inspections” often leads to significant liability exposure when construction defects are discovered on a project. Without a clear definition of what the engineer’s “inspections” entailed, the client is free to argue the engineer agreed to ensure the contractor’s work complied with the design documents. Therefore, the engineer is liable to the client when the contractor’s work deviates from the design documents. Further, other parties may also argue the engineer was inspecting the site for worker or other safety precautions during construction where the scope of the engineer’s services are not defined. Site safety is almost never the purpose of the engineer’s construction observation services.
Accordingly, it is imperative for an engineer taking on construction administration or observation services to clearly define the scope of the services in a written contract. It is always best to define the services as those involving construction observation as opposed to construction inspection when possible. Apart from generally defining the observation services in line with what the industry generally understands them to be as described above, the engineer should include limiting language.
Specifically, the engineer should affirmatively state by conducting said services they are not required to make exhaustive or continuous on-site inspections to check the quality or the quantity of the work and are not guaranteeing the contractor’s performance. Similarly, the engineer should include language to the effect they shall not be responsible for construction means, methods, techniques, sequences, or procedures, or for safety precautions and programs, shall have no authority to stop work, shall have no supervision or control as to the work or persons doing the work, shall not have charge of the work, and shall not be responsible for safety in, on, or about the job site.
If an engineer intends to regularly engage in construction administration services, it is best if he or she not only narrowly defines the scope of the services in a written contract, but also seeks guidance from their local attorney regarding the contract language utilized.
