Episode 20: Managing Design Contingencies

Dan talks to Sue Yoakum, from Yoakum Law LLC, about the importance of establishing design contingencies. A design contingency helps establish expectations that architects and engineers’ drawings and specifications will not be perfect. Whenever there is a claim against a design professional on a project, there is often the question if there has been a breach of the design professional’s standard of care. When do you cross from non-negligent errors and omissions (not a breach of standard of care) to errors and omission that arise to a breach of the standard of care? Sue discusses this and how a design contingency can mitigate claims and the benefits to the project owner of having their project come in on budget and schedule – by setting aside funds for issues that can and should be expected on a custom design project. Sue also shares some suggested contract wording and reviews some important considerations when it comes to negotiating a reasonable percentage of the Cost of the Work to be used as a design contingency.