Minimize the Risks of Performance Measurements

Matt Johnson
August 5, 2014
COMMERCIAL

Smart job bidding and contracting requires knowing the measurements. Every project involves measures of physical dimensions, but often more important are measures of performance. Increasing sophistication in the ability to predict and measure performance before and after completion has complicated the risk management of final project delivery. Code and contract requirements often depend on a combination of factors involving a system’s origin, performance modeling, and cradle-to-grave lifecycle. Each of these is a measurable item that could be a source of liability if project delivery does not meet these represented measures. What once were targets of “substantial compliance” are being turned into express “pass-fail” criteria, where the penalties for failure—contractual or legal—can prove steep.

As one example of these kinds of measures, consider the predictions of the Component Modeling Approach of the National Fenestration Rating Council. For the still-uninitiated, the CMA is a simulation that takes into account glazing, frame and spacer performance to derive an overall performance expectation for a system, as a completed assembly. Once particular combinations of components are selected, the assembly can then obtain a CMA Label Certificate for validation purposes with owners or controlling entities. The NFRC says the CMA program was developed to help purchasers compare the energy performance of assembled systems and assist code officials to determine compliance. Both of these are positive goals and will likely assist the glazing community for years to come.

The CMA has a positive intent at simulating performance, but jobsite and component tolerances can affect a completed system in ways that impact its ability to meet those predicted performance targets. This is not a slight of the CMA program, or NFRC and the work it is doing. But if CMA predictions are used to establish contractual measures, the thresholds set could prove difficult to meet on the site. Complicating things further is today’s legal reality that those who manufacture, supply or assemble building components are facing increasing claims tied to a building’s ability to meet technically exacting predictions of performance; predictions that can be measured with increasing sophistication. So what can be done?

Start simply. Acknowledge that any measurement should have acceptable tolerances and incorporate those tolerances as key contractual protections. Anything supplied to a job, no matter the size, can have inherent variance in size, color or performance that, when magnified across an entire jobsite, disrupts an entire project. Controls in manufacturing and assembly help limit the impact of individual variances, but defining the scope of permissible variances at the time of contracting can help defuse situations where an owner’s expectations do not align with a glazing company’s ability to control items supplied to a jobsite. And contract downstream with suppliers and manufacturers who can deliver within the principal contract’s tolerances.

Contractual tolerances are helpful when dealing with project measurements, but so too are the actual work and jobsite documents. Companies are often faced with “acceptance of work” clauses that try to impose approval of previously performed work. These clauses can be dangerous, because one trade’s contractually acceptable tolerance might not match the next. Watch for these kinds of clauses and acknowledge that glazing can only control so much. Consider instituting job checks and documentation procedures where these clauses must be accepted. Further, document and complain about those conditions that are not acceptable when on the job. It might be difficult to be the “squeaky-wheel,” but it is better to raise an issue during construction than litigate responsibility for the work years later.

Both of the above are ways to disclose what you can and cannot control, but keep an eye out for other disclosure points as well. Consider the adage “your mileage may vary.” Why does this disclaimer find its way into advertising by automakers? More than simply legal-wordsmithing a required governmental disclosure, this statement is a recognition by the automakers that they cannot control how people drive or the gas they use. When variables outside of a company’s control can have an impact on the contracting and purchasing expectations of others, disclosing a lack of control can prove a valuable tool if a dispute arises later. And where contract and compliance are measured by specific modeling of performance or lifecycling, recognizing what contractors and manufacturers can and cannot control is important to address both risk management and risk avoidance.

The author is a member of The Gary Law Group, a Portland-based firm specializing in legal and risk issues facing manufacturers of glazing products. Write him at matt@prgarylaw.com.