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Value Engineering: A Legal Perspective

Value Engineering: A Legal Perspective. David M. Governo Governo Law Firm LLC 260 Franklin St. Boston, MA 617.737.9045 dgoverno@governo.com www.governo.com. Value Engineering: Legal Goals. Get Paid Avoid Claims. Value Engineering: Definition. Structured Process Assess Design/Materials

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Value Engineering: A Legal Perspective

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  1. Value Engineering:A Legal Perspective David M. Governo Governo Law Firm LLC 260 Franklin St. Boston, MA 617.737.9045 dgoverno@governo.com www.governo.com

  2. Value Engineering:Legal Goals • Get Paid • Avoid Claims

  3. Value Engineering:Definition • Structured Process • Assess Design/Materials • Assure Goals Met

  4. Get Paid:Your Contract • Conflict Recognition & Avoidance • Clear Communication • Documented Agreement

  5. Get Paid:Additional Services • Build Value Engineering into Contract • Detail Your Scope of Services • Clarify Payment Terms

  6. Engineering Contract’sLiability Risks • Lack of Detail • Indemnification Provisions • Warranty and Guarantee Clauses

  7. Value Engineering:Legal Protection? • Facility should operate “better” • But: What Goals? • Risk Management • Claim Avoidance

  8. Value Cutting = Liability • Sound “Goals” • Qualified Team • Proper Documentation

  9. Sources of Engineer’s Liability • Contract: Failure to meet terms • System/Facility: Failure to perform

  10. System or Facility’s Failure to Perform • Engineer’s Duty: Standard of Care • Specification of Less Durable Component • Documentation of Value Engineering Process

  11. Record Keeping • What to document? • How to describe? • Keep for how long?

  12. Case Study:Value 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

  13. Case Study:Claims • Allegation: Breach of Contract • Failure to properly design • Selection of materials that were non durable

  14. Case Study:Documentation • Owners & other consultants requested change • Reason for change and expected results described • New operations and maintenance specified • Owner’s acceptance documented • No breach of contract • No negligence

  15. Protect Yourself at all Times • Understand • Analyze • Act!!!

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