A. We have gone through a period where designing and building green has entered the public consciousness and impacted the development process. But until recently that interest has been mostly based on a “good of society” concept. Now, through government programs to promote reduced energy use and increased sustainability, various incentives have been created that intensify commercial interest in environmentally-responsive design and construction. There are now mandatory requirements for green construction of public buildings in at least 18 states. And other government programs raise the stakes. There are tax credits available for the construction or renovation of buildings that satisfy certain green standards. In some areas, there is accelerated permitting of green projects that can have a significant financial impact. Zoning benefits such as increased height or floor space allowances have been awarded to projects that are designed to meet third-party certification requirements. These programs increasingly are tied to final, measurable results rather than simulations. Thus, all parties in the design and construction process are at risk if success, as measured by some third-party program, is not attained.
Additionally, green building presents a platform for the use of new and untested designs and building systems, which in turn generates greater potential for building defects to arise down the line. That means all the stakeholders in the building process—the client, the design team, and those in construction—must understand their roles and operate under a defined procedure, including how that relates to the extensive documentation requirements that lead to third-party certification or some other measure of success. The addendum is the first industry standard document that clearly defines objectives, methods, and procedures and parses out the responsibilities so that the stakeholders know their roles.
Q. Aren’t there standard design and construction contract forms that incorporate requirements for sustainable projects?
A. No existing contract standard adequately guides the performance and addresses the allocation of risk on projects where third-party certification is desired or high performance of the project is required by the project owner or government regulations. Although there are some guides available that are specific to certain certification programs, such as LEED, until the addendum, no document focused on the procedures that can be implemented during the planning, design, and construction of a project. And without the addendum there is often nothing in place to facilitate the preparation of necessary information during construction, at substantial completion, and before the certification process begins. The documentation is essential to support the achievement of accreditation by LEED or other third-party certification programs.
Q. How does the addendum do this?
A. In creating the document, we focused on the basic risks related to obtaining third-party certification and the potential for the participants in the project to be dealing with concepts that may not be in their respective skill set or comfort range. Most importantly, we sought to bring clarity to the objectives of green building, how those objectives will be determined, the process to be followed by the project participants, and the roles and responsibilities of all involved. In short, who does what, when, where, how, and for what purpose is laid out for the project.
Steven M. Charney is the co-managing partner of the law firm Peckar & Abramson, P.C., in its New York office. The firm is a national leader and represents leading contractors, construction managers, and developers. Charney’s background includes a degree in accounting from Syracuse University, a Masters degree from the School of Civil Engineering at the New Jersey Institute of Technology’s construction management program, and a law degree from Seton Hall University.