Construction and the Law in Texas

Green construction is a hot topic in vertical construction. The U.S. Green Building Council and LEED (Leadership in Energy and Environmental Design) certification are well known and many project managers and facilities owners strive to attain desired levels of certification for their projects. The risks associated with green construction initiatives in vertical construction differ, to some degree, from the risks associated with traditional construction methods.

In the world of horizontal construction, green is also a hot topic and sustainable construction practices are gaining a foothold in this arena. Like vertical construction, there are additional risks that contractors must consider when agreeing to contract provisions and practices that incorporate sustainable methods into a project. Additionally, contractors that become involved in projects that incorporate vertical structures – such as administrative offices, concessions, toll plazas, or other buildings associated with but incidental to the larger civil project – need to consider those particular risks because obligations relating to sustainable construction practices in vertical construction differ from those commonly associated with horizontal construction.

For many transportation projects, the practice of material recycling is implemented to save both costs and virgin resources. Salvaging materials reduces waste destined for landfills and minimizes construction debris. Crushed concrete used for base and concrete aggregate are beneficial uses for materials that, in the past, would have gone to a disposal facility. Recycling asphalt is also becoming more common. Because these practices have been successfully implemented on projects, owners are likely to seek more innovative sustainable practices to further the efforts toward green construction.

Like the vertical world, the use and incorporation of new and innovative materials for transportation projects is one means for achieving a higher level of sustainability. New concrete and asphalt mixes that provide more porous surfaces assist in storm water infiltration and help reduce the environmental impact of transportation and other civil construction. At times, contractors might be asked to use materials that they have not used in the past. The use of new materials can provide a challenge to the contractor. For example, warranties are becoming an issue in horizontal construction. Some owners are now looking to the contractor to warrant its work for extended periods of time. When this warranty is accepted on projects incorporating new materials, the risk of product failures may be borne by the contractor. If a new product does not perform as intended, the contractor could face significant costs associated with repair or replacement of the failed material.

Aside from potential issues for warranty, recent court decisions demonstrate that Texas courts have been moving toward a doctrine of strict compliance with contractual language. If a contractor on civil projects accepts risks associated with performance, then courts seem willing to place that risk firmly on the contractor even if the owner required the use of a material that ultimately fails. Let’s assume for the sake of an example that a contractor on a civil pipeline project is required to use a base material that has certain environmental advantages and incorporates recycled materials. Let’s also assume that this material is new or somehow unique in its composition compared to more traditional base fill that might typically be used.

If the materials fail and the line sags, Texas courts are more likely now than in the past to assign liability to the contractor to repair that work. In the past, if the failure was caused by material ordered to be used by an owner, courts were more willing to look past the language in the contract and assign liability to the party that was responsible for the use of the failed material. Because of the manner in which courts are viewing construction contracts, use of untested or new materials for the sake of sustainability can open contractors up to more risks. These risks should be considered when bidding and negotiating contracts.

Additionally, the employment of sustainable construction practices and methods can introduce new risks into a project. For example, on a project in Arizona, the contractor agreed to implement a conveyance system for an onsite batch plant rather than use an offsite batch plant that required concrete mixers to deliver the materials. This change was made to reduce the environmental impact of additional trips and consumption of fuel. Ultimately this cost more to implement than the use of an offsite plant. These types of measures can increase costs and risks on a project. Contractors need to be aware of these measures at the outset of a job and plan accordingly.

In general, the transportation sector of the construction industry is seeing benefits from sustainable business practices. Recycling and reuse of construction and demolition debris decreases the waste sent to landfills and can reduce both transportation costs and emissions. The use of concrete aggregate for base course and recycled asphalt for new mixes has proven effective. Soil modification also can be a beneficial use for materials that would otherwise be waste. However, the use of these new mixes may expose contractors to additional risks of product failures or performance issues. These risks can result in increased costs associated with testing, repair and other related expenses. While many of these practices and new materials save money and benefit the environment, there are risks that come along with implementing them into projects.

– As seen in the February 2013 Issue of Texas Contractor.