Recommended practices regarding warranties
The following recommendations are for design professionals relative to warranties:
- By the end of the design development or preliminary design phase, establish with the owner the Division 00 documents that will be used. Read and understand their provisions on the correction period and the contractor’s general warranty and guarantee.
- During the design phase, obtain from suppliers—especially those who may furnish key items of material and equipment—the language of their standard warranties and review and understand their limitations.
- Also during the design phase, obtain from suppliers information on optional special or extended warranties that are available, and request and obtain information on the costs associated therewith. If the owner’s preference for a certain special warranty requirement is unusual for the specified manufacturers, present the proposed special warranty requirements to them and find out if the special warranty could be made available and its associated cost.
- Communicate the suppliers’ warranty information and costs to the owner. Ensure warranty discussions with the owner include a mutual understanding of the protections the owner receives under the contractor’s correction period, and general warranty and guarantee. Obtain the owner’s instructions on the desired warranty requirements, and ensure the owner is aware of the costs associated with and limitations of special or extended warranties.
- Clearly specify the warranty requirements in the proposed construction contract documents. Obtain advice from the owner’s legal counsel when necessary. Ensure such requirements are properly coordinated with the correction period and general warranty and guarantee provisions of the General Conditions.
- During the construction phase, obtain, as submittals, the warranty language proposed by the supplier and enforce compliance with the contractual requirements regarding warranties.
- During reviews of construction phase submittals, carefully evaluate the proposed warranty language because suppliers may later take the position approved warranty language governs over the terms of the construction contract between the owner and contractor. Some suppliers may even interpret the warranty language governs over their own purchase order with the contractor.
- When equipment is placed into long-term storage between shipment from the factory and permanent installation into the construction, require and enforce on the contractor implementation of the supplier’s recommended actions for long-term storage, such as preventative maintenance (e.g. turning rotational equipment) and proper storage environment. Document such measures were properly performed, to reduce the potential for voiding the manufacturer’s warranty.
When a latent defect is discovered during the correction period, the owner should promptly notify the contractor in accordance with the notice provisions of the contract; frequently, these are in the General Conditions. The temptation to bypass the contractor by directly approaching the supplier should typically be resisted, so the contractor can determine how best to implement the correction. As the defect’s extent and complexity may be unknown at the time notice is given, a pre-determined, stipulated time-to-correct may be counterproductive.
The owner should understand the correction may take some time to implement. Conversely, the contractor should act promptly to implement the remedy. In most cases, the design professional’s scope of services will not include services during the correction period; therefore, serving such notice on the contractor is typically the owner’s responsibility.
Conclusions
This article has indicated there are several types of warranties in effect on a typical construction project, and there are costs and concerns associated with requiring unusual special or extended warranties. During the design stage, warranties should be discussed with the owner in consideration of the costs and benefits associated with the various warranty alternatives. Once the warranty requirements are established via mutual understanding between the owner and design professional, such requirements should be clearly specified at the proper locations in the construction documents, in a manner that allows the owner to properly and effectively enforce its rights under the contract.
The author gratefully acknowledges the advice and comments on drafts of this article from Gerard Cavaluzzi, Esq. (Kennedy/Jenks Consultants [Croton, New York]), Lee Orosco, FCSi, CCS, SSGB (Carollo Engineers [Phoenix, Arizona]), Jason Williams, PE, CCCA (Arcadis [Buffalo, New York]), and Chris Matthews, PE (Arcadis [Columbia, Maryland]).
Kevin O’Beirne, PE, CSI, CCS, CCCA, is a principal engineer and manager of standard construction documents at Arcadis in Buffalo, New York. He is a professional engineer licensed in New York State and Pennsylvania with 29 years of experience designing and constructing water and wastewater infrastructure. O’Beirne served as the FY2014−2015 chair of the Engineers Joint Contract Documents Committee (EJCDC) and is a member of CSI’s MasterFormat Maintenance Task Team. He can be reached at kevin.obeirne@arcadis.com.
