Materials: Managing Risks in a Changing Market from Sourcing to Installation

By Jessyca Henderson, Esq., Owner, The Law Office of Jessyca L. Henderson LLC

March 31, 2022

Materials are fundamental to sustainable construction practices, from sourcing to installation to deconstruction and reuse or recycling. In 2016, the AIA released its report, Materials transparency & risk for architects: An introduction to advancing professional ethics while managing professional liability risks, to guide architects in understanding the need for materials transparency and associated legal risk considerations. Contractors have an equally significant stake in materials. They must manage project requirements in a volatile market, where the financial and environmental risks associated with materials have only become more apparent due to the global pandemic. Presented below are a few points for construction professionals to consider in the changing marketplace.

Plan ahead: rising costs and supply chain disruptions

Construction material prices increased more than twenty percent between January 2021 and January 2022, according to an analysis by the Associated General Contractors of America of government data released on February 15, 2022. Combined with extraordinary supply chain disruptions, the current market challenges design professionals and contractors alike. Contractors are particularly under pressure to tighten up margins in all materials’ acquisition, storage, and installation. Sourcing local products and materials is an obvious strategy to mitigate the risk of supply chain disruption and is a sustainable solution already required on many projects. Where that’s not possible, contingency planning is a must. Adding second and even third material options pre-approved by the owner and architect may help mitigate delays.

Minimizing damage for cost savings and better performance

Tradition and standard business-as-usual practices are confronted today with a need for extra caution in projects intended to meet high-performance standards. What may seem like minor damage can cause severe issues with meeting air tightness, air quality, and thermal performance metrics.

For example, building scientist Joe Lstiburek estimates in Builder’s Guide to Cold Climates that about a third of a quart of water can pass directly through gypsum board by diffusion without a vapor retarder and that thirty quarts of water can pass through the same gypsum wall through a one-inch square hole in that same period over the course of one heating season in a cold climate due to air leakage through the hole.

Simply put, high-performance assemblies depend on dry, undamaged materials. In highly customized, complex work, even with traditional best practices in place, it’s essential to check and carefully oversee the methods and means planned for the project and look for ways to ensure that materials remain serviceable through installation and beyond.

Education may reduce risks associated with materials damage and improper installation

Construction materials acquisition and management will typically include planning for all the materials for a project in advance, procurement of the materials at a reasonable cost, and managing the schedule and needs of the job site so that materials are available when needed during construction.

As the project progresses and trades begin to overlap, and the longer materials are on site, the higher the risk that they may be misplaced, stolen, damaged, or misused. This increases the likelihood of material defects and claims. As above, for projects required to meet challenging performance metrics, the risk compounds: what was once perhaps a little cosmetic damage on an otherwise usable material may not be reasonable to install. For this reason, protecting materials to avoid waste, save time and cost is essential. With the price of construction materials soaring, contractors can reduce performance and financial risk by taking special care to educate their labor force.

Reducing the risk of damage is not just about a suitable materials plan; it’s about education. Everyone that touches the material should understand the ultimate effect of any damage or misuse. In addition to installation guides, many manufacturers produce valuable beyond-the-basics information and education for industry professionals and installers. It may not be enough for an installer to understand what type of damage should be avoided — but why it should be avoided. Investing in or contracting for training and education of subcontractors handling individual materials, and those overseeing the construction of assemblies, could pay dividends in the avoidance of defects.

Integrate materials planning with (legal) tools of the trade

Finally, you can reduce the risks associated with materials by ensuring that all players have a stake. Project teams should define and assign all responsibilities, sourcing, storage, installation, deconstruction, and recycling of materials in a well-coordinated set of construction documents. Using the AIA form A201 General Conditions in tandem with one of several other Owner-Contractor agreements, and combined with the AIA E204-2017 Sustainable Projects Exhibit, will enable the team to include critical clauses related to all phases in the life of materials to reduce financial, performance, and environmental risks, especially when coordinated with a well-organized and implemented materials acquisition and management plan.

Jessyca Henderson is an attorney and architect based in Maryland, providing legal services and consulting to design professionals, corporations and government related to sustainable design, building science, and environment.

AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.