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Demand for Design Services Predicted to Decrease

The architectural billings index rose 2.5 points to 49.4 last month. According to the American Institute of Architects, any reading below 50 indicates an overall decrease in demand for design services in the next 9 to 12 months. The AIA reported that while the 2.5 point increase was encouraging, they expect demand for design services to remain volatile in the coming months.

Confidentiality Agreements

from the desk of Judy Mendoza

Recently I’ve been asked to review several confidentiality agreements. Design professionals frequently receive confidential information necessary to perform their services. Sometimes, information of this nature may constitute a “trade secret.” In most states, the common law protects clients from the disclosure of designated “trade secrets,” “confidential information,” or “proprietary information.” In addition, clients will often require that an express confidentiality provision be included in the professional services contract or, alternatively, will request that the design professional sign a separate confidentiality agreement. Clients have many reasons for this desired confidentiality. Disclosure of the information could adversely affect the proposed acquisition or sale of property, place the client at a competitive disadvantage to its competitors, or subject the client to various statutory or common law liabilities for site cleanup or personal injury.
 
Design professionals, however, may be required by law or professional responsibility rules to disclose certain information to regulatory authorities. For example, while performing services, the design professional may learn that a soil sample indicates that a site contains hazardous waste. A licensed professional’s public health and safety obligation generally requires that this information be disclosed to protect innocent third parties from potential injury or to comply with federal and state statutory and regulatory reporting requirements.
 
Accordingly, confidentiality provisions in contracts should include exceptions for disclosure required by legal or ethical obligations. Here is an example of a provision that recognizes the client’s rights to confidentiality while acknowledging the design professional’s disclosure responsibilities:
 
Sample Provision:  Consultant shall maintain the confidentiality of the Project information including but not limited to the nature of the Project, the location of any sites under consideration or selected sites, together with any other information supplied to Consultant by Client and designated by Client to be confidential or proprietary, except (1) when such confidential information becomes generally known to the public through no fault of Consultant or (2) when disclosure is required pursuant to applicable governmental regulations or with an order of a court of competent jurisdiction.
 
If the client requests the execution of a separate confidentiality agreement, the above referenced exceptions for disclosure should be included. In addition, the design professional should take care to be sure that the separate confidentiality contract is coordinated with the terms of the professional services contract and does not include conflicting terms. In particular, the design professional should be certain that the separate confidentiality agreement does not include express warranties or guaranties or alter the ownership and use-of-documents provision or choice-of-laws provision contained in the professional services contract.

Back-up City for Tokyo

In the wake of the recent devastating earthquake in Japan, the Japanese government is exploring the idea of building a “back-up” city for Tokyo. The idea is that if disaster were ever to demolish Tokyo, the government could continue to function by moving to the back-up city. The back-up is named Integrated Resort, Tourism, Business and Backup City (IRTBBC). It will sit 300 miles west of Tokyo. In addition to being able to house the government, it will also include offices, resorts, casinos, and parks. IRTBBC would hold 50,000 residents and a workforce of 200,000. At this point the plan is still just a concept that will be further explored.

Do not define government rules and regulations as contract documents

from the desk of Nahom Gebre

Professional services agreements often incorporate terms from other documents by reference. In a recent client-drafted contract review we came across the following clause:

The Contract Documents consist of and include:
a) This ten (10) page Agreement.
b) All Exhibits referenced within or attached to this Agreement. c) All approved Change Orders.
d) All applicable governmental and agency ordinances, standards, policies, regulations, resolutions, conditional approvals, rules and permit conditions, whether or not specifically named as part of the Contract Documents.

The terms that are most often incorporated are the terms that matter the most.

Design professionals should be wary of any clause that seeks to make all government rules and regulations that are deemed applicable part of the contract documents. By definition, a professional services agreement is intended to describe the role and responsibilities of the parties to a contract; incorporating government rules and regulations into the contract documents provides no meaningful guide to either the client or the design professional and in our opinion such a clause should be deleted. It is difficult for the design professional to ascertain what the inclusion of the applicable government rules and regulations means. The prudent thing to do from a risk management perspective is to identify the specific government rules and regulations that pertain to the project, and then write the scope of services so that the impact of the applicable rules and regulations are accounted for. This approach reduces the contract terms between the client and the design professional to a limited universe of documents that explain the roles and responsibilities of the parties.

Vertical Gardens in Milan

beauty meets sustainability

Can you imagine being able to reach out the window of your 27th-story urban apartment building to touch a tree? A cutting-edge architect in Milan (Stefano Boeri Architetti) is making that possible with a new project called Bosco Verticale. Two buildings that are currently under-construction in Milan will feature a “vertical forest.” The project will integrate vertical gardens into the exterior of the new buildings. The trees and plants aren’t just for aesthetics; they will help control the building’s climate, provide shade, and help to filter the city air. The plants may also provide some sound-proofing against the urban noise of Milan. Bosco Verticale will support 900 trees as well as other types of plants. Each building will host the equivalent of 2.5 acres full of plant life.