Public Owners Held to Warrant Accuracy of Plans to Construction Managers

Saul Ewing Arnstein & Lehr LLP

A recent Massachusetts Supreme Judicial Court decision clarified that public owners on construction management projects impliedly warrant the accuracy of plans and specifications to construction managers.  The case, Coghlin Electrical Contractors, Inc. v. Gilbane Building Co., et al, greatly benefits construction managers on Massachusetts public projects.

It has been well established for years that, on traditional design-bid-build projects, a party furnishing plans and specifications warrants the sufficiency of the plans and specifications to a contractor who relies on them in good faith.  Unlike design-bid-build projects, construction management projects often involve the construction manager, at least to some extent, in the design phase of the project.  The construction manager may consult on and influence the project’s final plans and specifications.

Coghlin addressed whether, given the construction manager’s involvement in design, the implied warranty extends to construction management projects.

The court acknowledged the design role of a construction manager in its September 2, 2015 decision, but determined that “the owner, through the designer, ultimately controls the design and is the final arbiter of it.”  While the construction manager provides consultation and advice on the project design, the owner is under no obligation to accept that advice.  Simply put, the fact that a construction manager may advise on a project design is not enough to pass the risk of defective design onto the construction manager.

The increased design role does, however, subject a construction manager to a higher standard in asserting a claim under the implied warranty.  While a contractor on a design-bid-build project need only show good faith reliance on the plans and specifications, a construction manager must demonstrate that its reliance on the plans and specifications was both in good faith and reasonable.  Even with the slightly higher standard, Coghlin is a clear “win” for construction managers of public projects. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Saul Ewing Arnstein & Lehr LLP

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