Two of the largest agencies that contract for federal buildings, the Defense Department and the General Services Administration, are failing to document adequately errors and omissions in plans prepared by architects and engineers, the General Accounting Office has found.
Without an adequate record, the GAO report noted, the government has been unable to pin responsibility for mistakes and thus has been precluded from recovering costs from architects and engineers in cases involving negligence.
"As a result, millions in change order costs are being paid by the agencies without determining who is responsible," the report concluded.
GAO examined 54 contracts in the General Services Administration and the Department of Defense. It found the agencies seldom take legal or out-of-court action against architects ands engineers for deficiencies found during construction.
Regulations require government agencies to follow through on change orders to determine who is responsible, but the GAO reports says this is rarely done because
Agency officials are primarily concerned with avoiding construction delays and do not want to get embroiled in lengthy liability disputes.
Negligence is difficult to establish and prove.
The government suffers no damage for design omissions, though, the report notes, this is only true in instances in which the omission is detected early.
Administrative costs to pursue every deficiency in most cases may exceed the recoverable amount.
Responding to these claims, the report argues that since little action is taken in seeking legal redress, the difficult in proving negligence has not been established. Further, failure to review each deficiency prohibits identification of those for which cost recovery is beneficial.
The practice of having clients pay for design/deficiencies also exists in private industry, but here, the study says, the private sector is taking more action than the federal government by filing more claims against architects and engineers.
"Present architect/engineer professional liability insurance programs cover errors and omissions," the report says. "Most claims involved in construction occur when architect/engineers are alleged to be responsible for design defects and therefore liable for correcting them.
"These claims have been increasing with the general trend of enforcing standards of legal responsibility on all professionals. The leading professional insurance company's analysis of such claims revealed that from 1960 to 1974, the frequency nearly doubled from 12.5 to 24.3 per 100 firms insured in the program."
Steps can be taken, the GAO concludes, to reduce government change order costs - steps which involve little more than enforcing already existing procedures.
"We believes," says the report, "the added costs of taking legal action against architects and engineers for negligence will be offset, at least in part, by savings achieved from the government not paying change order costs."
GAO also recommends the Office of Federal Procurement Policy establish an interagency task group consisting of representatives from General Services, Defense and other agencies that employ architects and engineers to:
Develop uniform performance evaluation criteria for all agencies.
Exchange ideas on other methods to reduce change order costs, perhaps similar to those used by private industry.