Value Engineering: A Legal Perspective

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Value EngineeringA Legal Perspective

• David M. Governo
• Governo Law Firm LLC
• 260 Franklin St.
• Boston, MA
• 617.737.9045
• dgoverno_at_governo.com
• www.governo.com

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Value EngineeringLegal Goals

• Get Paid
• Avoid Claims

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Value EngineeringDefinition

• Structured Process
• Assess Design/Materials
• Assure Goals Met

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Get PaidYour Contract

• Conflict Recognition Avoidance
• Clear Communication
• Documented Agreement

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Get PaidAdditional Services

• Build Value Engineering into Contract
• Detail Your Scope of Services
• Clarify Payment Terms

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Engineering ContractsLiability Risks

• Lack of Detail
• Indemnification Provisions
• Warranty and Guarantee Clauses

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Value EngineeringLegal Protection?

• Facility should operate better
• But What Goals?
• Risk Management
• Claim Avoidance

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Value Cutting Liability

• Sound Goals
• Qualified Team
• Proper Documentation

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Sources of Engineers Liability

• Contract Failure to meet terms
• System/Facility Failure to perform

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System or Facilitys Failure to Perform

• Engineers Duty Standard of Care
• Specification of Less Durable Component
• Documentation of Value Engineering Process

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Record Keeping

• What to document?
• How to describe?
• Keep for how long?

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Case StudyValue Engineering

• HVAC in Office Building
• Fan and pump motors originally specified were
  engineered out to save initial cost
• Less expensive/less durable motors
• Occupants complained
• Motors failed

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Case StudyClaims

• Allegation Breach of Contract
• Failure to properly design
• Selection of materials that were non durable

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Case StudyDocumentation

• Owners other consultants requested change
• Reason for change and expected results described
• New operations and maintenance specified
• Owners acceptance documented
• No breach of contract
• No negligence

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Protect Yourself at all Times

• Understand
• Analyze
• Act!!!