By Joe DiPompeo, PE
Any engineering firm that takes on a new type of project, or even a familiar type of project with unfamiliar parameters is assuming elevated risk. An experienced engineer will understand and apply relevant codes and standards and any additional design criteria that are provided. But from a risk management standpoint the engineer must look beyond the givens and consider the unknowns. What isn’t known about the new project? What critical information hasn’t been provided?
My company has been in business for over 20 years and risk management has always been a priority; because of this we managed to go 20 years without paying a claim. But due to a failure to consider the unknowns on a recent project our streak ended.
In this case our firm designed a warehouse in a floodplain which required an elevated floor, in accordance with the building code and criteria provided by the client and architect. Although warehouse floor load criteria is provided in ASCE 7/IBC, the demands of the equipment that would be used to handle the warehoused material was never relayed to the design team. In fact, the Owner had asked us to check the already designed floor for a specific loading, which we did, and never indicated any use of equipment on the floor. Eventually, the performance of the floor resulting from the use of material handling equipment proved to be an issue as the concrete slab cracked and crumbled in the heavily trafficked areas. The design team’s insurance carriers wanted to settle for the cost of the new floor (to be shared among design professionals), rather than risk larger business interruption costs. It all moved very quickly and just like that we had paid our first claim on a floor that everyone involved agreed met IBC and ASCE 7 live loading requirements.
In discussing the specifics with the CASE Contracts Committee for this article, the issue was referred to as a “soft error” because there was no design error, and the design was code compliant. While our standard contract that we entered with our architect client limited liability and consequential damages, the architect’s contract with the Owner had the potential to expose us to additional risks. This was another lesson learned and could be its own article someday. That got me thinking about other incidents through the years that had involved insurers and attorneys. In general, most of these were soft error claims—meaning there was no failure or error in design. The most significant involved a building that was open and operating with no signs of issues or distress. An owner-tenant disagreement involving square footage and rent spiraled out of control and all the design professionals were brought into the dispute.
There are many ways to get in trouble without making a design error. As engineers we strive to stay alert to these soft errors and mitigate them. To borrow Donald Rumsfeld’s famous line, we can often find the foreseeable “known unknowns” through a pre-project review process. But what about the “unknown unknowns”—things that are unforeseeable or are a unique combination of factors unfamiliar to your company. For example, you may have designed several different components of projects many times but never in combination or usage on a given job. Is there anything you do not realize when taking things that you’ve done before but combining them in a new way?
My firm has designed countless numbers of warehouse floors and raised framed floors, so this project did not seem outside our realm of experience. The owner gave no specific criteria for the floors performance, flatness, etc. and the specific criteria they gave us for loading did not include the equipment. The slabs on grade in the other sections of the warehouse were not in good condition and had similar cracking and damage yet were in no risk of collapse since they were on grade. However, in almost every prior project the warehouse floor was slab-on-grade (thus making dynamic forklift loads much less likely to be an issue). On this project the unique factor was that the floor was to be raised several feet above grade. Who is responsible for the omission in project criteria? The client could have provided better usage information, the architect could have asked more questions, and so could have the engineer. But nobody did. My firm has experience designing warehouse floor slabs-on-grade, as well as raised framed floors; we know there are special design provisions required for a raised floor supporting large, concentrated loads. What was missed was putting it all together. This is one example of a “known,” but at the time the combination of circumstances resulted in an unknown. How do we minimize our liability for other instances of unknown unknowns?
Here are other examples of “unknown unknowns”: Could your project influence not just the adjacent structure, but a structure two properties away? Can local news about a proposed rule change put your firm on the hook for performance requirements not yet provided in building codes? Is there a “backstory” to the project, site, owner, or anyone else involved in the project that may unfavorably affect the end result? Being held responsible for these unlikely scenarios may seem unfair, but the litigation process may not make your limits of responsibility appear as clear-cut as they seemed in the design phase.
Effective risk management requires consideration of potential liabilities resulting from soft errors and unknown unknowns. How can we come to know more, and reduce the risk from what we don’t know?
- Knowing more starts with screening and vetting clients and projects. Firms should develop a process for this and involve as many people within the firm as appropriate. The combined experience of a company is valuable in thinking through things that one or two individuals may miss.
- When generating a proposal for a project, more time needs to be spent thinking through issues. Having a process and involving many people helps.
- A well-written contract or project information sheet filled out by the client that clearly establishes or references design criteria can help, but as our firm found out, this might not be enough to prevent a judge, jury, or arbitrator from concluding you should have done more.
- Gathering information about the project, client, and the project’s end use is obviously critical and should be a more thorough process than just accepting the information given. Discussions with the architect and owner, both formal and informal, can help reveal intents not provided in a request for quotation. These discussions can lead to value added to a project, resulting in a happier client and less risk exposure for the engineer.
Identifying the thing that you don’t know is not an impossible task, but requires client communication, attentiveness, and relying on available expertise to expose potential pitfalls. Careful thought and some additional time upfront can make the “unknown unknowns” better known. ■