AIA|WA Bill on Contract Fairness Receives Hearing in House

On the first day of the 2012 Legislative Session, the AIA|WA was already pushing its agenda forward. The legislature opened with a hearing in the House Judiciary Committee on EHB 1559; a bill drafted and supported by the AIA|WA and its allies in the design professions.

This bill unanimously passed the House of Representatives in 2011, but ran into a wall of opposition from public agencies in the Senate.

Peter Rasmussen, FAIA, AIA|WA Immediate Past-President testified in support of EHB 1559 along with Stan Beck, an attorney with Lane Powell in Seattle, and other representatives of the design professions.  

EHB 1559, puts a new provision in law that prohibits agencies from requiring that architects indemnify and pay for the agencies’ defense costs for actions not resulting from the architect’s negligence. This is a growing problem as agencies look to shift any costs they can to someone else. As the lead design professional on projects, the risk is highest for architects.

Agencies claim that shifting risk and costs to the architects is fair. They claim they don’t pressure anyone to sign these contracts; they are willing to take them out if asked. But, we know different. We know that agencies present these onerous provisions with an ultimatum: sign the contract or lose the job.

The AIA|WA is fighting to ensure that architects are only responsible for their insurable risks resulting from acts of negligence or errors and omissions. We know that without insurance to protect architects, their businesses and even their homes could be put at risk by a single lawsuit. The public agencies’ lawyers and lobbyists do not care. But, we want a law that is fair and equitable to all parties.

After meeting with many state and local agencies since the last legislative session, the AIA|WA drafted technical changes to address the concerns that they raised. We are hopeful that they bill will move forward this year. Even so, it will be a difficult road as some local government agencies remain steadfastly opposed to giving architects and engineers equitable rights in contracts.

You can watch a recording of the hearing on www.TVW.org. Enter 1559 in the search engine and select today’s House Judiciary Committee hearing.

Cities and Counties Launch Late Attack on AIA|WA Contract Fairness Bill

Yesterday, with only a few hours warning, a consortium of city and county governments launched a last minute attack AIA’s bill to bring fairness to public contract provisions, EHB 1559.

EHB 1559 seeks to prevent unfair contract language from being forced on architects and other design professionals by government agencies. Many public agencies are putting a clause in their design contracts that require the prime design consultant to indemnify and pay for the defense of any lawsuit arising from the project, regardless of negligence.

These clauses are an abuse of the contract to unfairly shift risk and costs to the consultant that properly reside with the client agency or other contractors on the project. Even more problematic is these requirements are not covered by the design consultant’s insurance. Thus, the architecture firm is directly liable to cover any resultant legal fees and even the individual architect may find their personal assets entangled in the legal battles

AIA worked with our colleagues in the engineering, land surveying and landscape architectural community to develop legislation to prohibit these unfair clauses. EHB 1559 would limit the design consultant’s liability to actions arising out of their own negligence and forestall liability resulting from the actions of those not under the control of the design consultant.

Representatives for design professionals and their insurance providers testified before the Senate Judiciary Committee to the need for this bill. They cited examples of contract abuses and explained how EHB 1559 would restore parity of risk in public agency design consultant contracts.

City and county agencies testified against the bill. They stated, “We don’t make anyone sign these contracts; they can always walk away.” Their defense of current provisions rests on the premise that they want someone else to pay for their legal costs, regardless of fault or negligence.

AIA|WA will continue to push hard to get the bill passed by the Senate Judiciary Committee.

You can view the full hearing at TVW’s Website.

To see only the AIA|WA’s testimony, watch this segment:

Here is the video for the full hearing:

Senate Passes Government Contracting Changes

Second Substitute House Bill 1506 reauthorizes the state’s alternative public works law that authorizes government entities to use design-build, general contractor/construction manager (GC/CM) and job order contracting procurement procedures. The AIA/WA was heavily involved in the drafting of the bill through the Capital Projects Advisory Review Board. The bill expands the number of public agencies who may be authorized to use design-build and GC/CM. It also requires all public agencies to go through a new review process under the Project Review Committee (PRC). The PRC will review public owners and the projects to ensure they are appropriately using alternative procurement procedures. This bill will have to go back to the House for concurrence with the minor changes made in the Senate.

The Senate also passed Substitute House Bill 2010 to establish new bidder responsibility criteria for construction contractors. State law provides that a construction contract should be awarded to the lowest, responsible, responsive bidder. Up to now state law has not defined “responsible,” instead leaving it to each government entity to set its own rules. Absent clear direction from the state, agencies have not been willing to set criteria. The bill sets basic responsibility criteria, such as being properly registered with the state and be current with tax and other responsibilities. In addition, local governments may set additional project-specific criteria in the bid documents. The criteria will also apply to subcontractors. This bill now goes to the Governor.