Recent Changes to Design-Build Construction in New Jersey
and Jeffrey Valacer of Turner Construction
At the end of April 2021, the “Design-Build Construction Services Procurement Act” (the Act) became law in New Jersey. The Act brings important changes to how publicly-funded construction projects are awarded in the state by, most significantly, providing for the use of design-build contracting on publicly-bid projects.
Praised for their efficiencies and cost savings, design-build projects have skyrocketed in use across America. A recent Pennsylvania State University study found that design-build projects had a 6% reduction in change orders, were delivered 33% faster, and cost 6% less when compared to traditional design-bid-build projects. For more than 10 years, state agencies in New Jersey have had statutory authority to use the design-build model for procurement. The new act expands access to the design-build model to other state, county, and local contracting units.
Historically, public construction contracts in New Jersey were awarded through the design-bid-build system. Under that system, an owner separately retains an architect or engineer to design the project and then puts that design out for public bid. The project is then awarded to the responsible bidder with the lowest dollar value bid to build the project, as required by the Local Public Contracts Law (LPCL). The owner carries the highest level of risk for the project under this model because the owner is responsible to the contractor for the completeness and accuracy of the design.
By contrast, the design-build process allows an owner to contract with a single entity for both design and construction services. After a design-builder is chosen, that entity takes responsibility for both the design and construction of the project. Therefore, the owner assumes less risk. The design-build team, comprising a contractor and design professional, supplies a single point of contact for the owner, facilitating simplified project coordination and communication. The design-build approach also allows some construction activities to proceed while the design is still ongoing, through phased advancement of the work. For an owner, it is typically an uncomplicated, streamlined process.
Under the Act, if an owner can show why the design-build approach meets its needs better than the traditional design-bid-build approach, it is now public policy to permit the owner to enter into design-build contracts. In addition, and in contrast to the LPCL, the Act does not require owners to award a design-build contract to the lowest, responsible bidder. Instead, cost can be considered as only one factor in the design-build approach, along with other considerations such as experience, design, and time, to name a few.
However, public owners/agencies still need to be wary. The Act contains a litany of requirements and procedures that owners and design-builders must follow. For example, an owner must appoint a registered design professional to provide technical advice, construction review services, and professional expertise on the owner’s behalf. In addition, an owner must develop (with the assistance of a design professional) performance criteria and a scope of work statement that defines the project and provides prospective design-builders with adequate information regarding the owner’s requirements. Only after this point may an owner solicit proposals from design-builders. Importantly, an owner may only solicit proposals in accordance with the requirements of the applicable public procurement laws.
Furthermore, for evaluating bids, an owner must establish a “technical review committee,” which must consist of:
- A representative of the owner
- The owner’s project manager
- The owner’s authorized design professional
- The owner’s attorney
The technical review committee is responsible for evaluating bids based on rating and scoring proposals and evaluating design-builders based on their qualifications.
The Act also mandates specific factors an owner must use to evaluate design-builder proposals. These include:
- Specialized experience and technical competence
- Training certification of workforces
- Principal location of the company
- Capability to perform
- Safety modification rating
- Past performance of the individual members of the design-builder’s team in their respective capacities
- Other appropriate technical and qualification factors as determined by the owner
Each solicitation for proposals must establish the relative importance assigned to the evaluation factors and sub-factors to be considered. In addition, a solicitation for proposals must state the maximum number of design-builders that are to be chosen to submit proposals. The minimum number specified in the solicitation must be at least two and cannot exceed five. Based on the proposal, the technical review committee must select the most highly qualified number of design-builders specified in the solicitation and request the selected design-builders submit a second proposal and sealed bid.
Similar to the LPCL, the Act explicitly states what solicitations design-build contracts must include. In particular, solicitations must include, at least, the following information:
- The identity of the owner
- Procedures to be followed for submitting proposals
- Proposed terms and conditions for the design-build contract
- A description of the drawings, specifications, or other submittals to be submitted with the proposal
- A schedule for planned commencement and completion
- Budget limits, if any
- Affirmative action, disadvantaged business, or set-aside goals or requirements
- The required qualifications of the design-builder
- Bonding and insurance requirements for contractors
- A statement that all employees have graduated from a registered apprenticeship program
Clear requirements for design-build teams are also set forth in the Act. All design-build teams must include a licensed design professional, independent from the owner’s licensed architect or engineer. This professional must be identified in any proposal submitted to the owner. As with other public bidding laws, all design-build proposals must be sealed and cannot be opened until the end of the solicitation period. A proposal must list each person to whom the design-builder proposes to delegate responsibilities under the design-build contract. Importantly, design-build proposals must establish the cost of the design-build contract, which cannot be exceeded without a change order if the proposal is accepted. The maximum cost in the proposal may be converted to a fixed price by a negotiated agreement between the owner and the design-builder.
The post-submission and award process is also clearly outlined in the Act. No proposal can be considered until certification is issued by the design professional retained by the owner attesting that the proposal is consistent with the evaluation factors. No proposal for a design-build contract may be accepted until the owner determines that there was adequate competition for such a contract. An owner must accept the proposal that it considers most advantageous after a thorough review and scoring of both parts of a design-bid proposal by the technical review committee. Acceptance of a proposal must be made by written notice to the design-builder. At the same time the notice of acceptance is delivered, the owner must also inform, in writing, the other design-builders that their proposals were not accepted. The owner reserves the right to reject any and all proposals and must solicit any new proposals using the same evaluation factors, budget constraints, or qualifications. Interestingly, disappointed bidders are afforded an opportunity to gain clarity as to why their bid was rejected. Once a design-builder receives notification that its submitted proposal is not accepted, the design-builder may, within 30 days, request a written explanation of the selection process.
Although the expansion of the design-build process in public construction projects in New Jersey is an exciting development, parties to public design-build projects must be mindful of the numerous new statutory requirements as they adjust to the stark departure from traditional public procurement laws that have governed public bidding in the state for decades.
Jeff was formerally an associate at Cohen Seglias and is now corporate counsel for Turner Construction Company.
Q&A: Get to Know the Women of Cohen Seglias
By
Lori Wisniewski Azzara,
Jennifer R. Budd,
Kathleen Garrity,
Kate Emert Gleason,
Julie Grohovsky,
Tiffany R. Marini,
Kathleen M. Morley,
Whitney Patience O’Reilly,
Sydney Pierce,
Sydney Smith Forquer,
Cody M. Wolpert
In March 2022, Cohen Seglias celebrated Women’s History Month. In addition to our donation drive for Dress for Success, a global not-for-profit organization that empowers women to achieve economic independence, we sat down with the women of Cohen Seglias and discussed their experiences as a woman in the workplace, focusing on mentorship, health and well-being, and professional growth and challenges.
Who is one female mentor who has influenced you? How did she support you and encourage your personal and professional growth?
Sydney Smith Forquer: In law school, I spent my summer working as a legal assistant for a fantastic attorney and researcher, Beth Wiggins, at the Federal Judicial Center. She not only took an interest in the skills I could develop at the organization and the work product I could provide but personally included me in conversations with judges and other stakeholders in the federal courts. She elevated my voice and validated my abilities and opinions, letting me know that she valued both. Beth also took a personal interest in my law school classes and later my search for a post-graduation job. That summer turned into an entire year because I enjoyed learning under her mentorship so much.
Tiffany Marini: I don’t know that I have had one female mentor. But as I have moved along in my professional career, I notice that I have naturally surrounded myself with friends and colleagues that are passionate about what they do. I think the biggest influence this has had on me is that it has made me more confident to not only set big goals for myself but also be unapologetic in my commitment to go after them. When you have a strong female support system like that, it alleviates the constant imposter syndrome that I think many of women experience daily.
How can female professionals mentor others?
Lori Azzara: Being a mentor is about showing up and leading by example and sharing your successes as well as how you overcame adversities. Not everyone will walk the same path to success, but a mentor is there to support, guide, and encourage you every step of the way!
Lisa Wampler: By being an advocate for other women and promoting their accomplishments both within the organization and elsewhere. By being a sounding board and offering suggestions
What’s one hobby or habit you’ve adopted in the last few years to help navigate the pandemic?
Stasha Sosnowicz: I’ve tried to be more present in individual moments with my family and friends while also just being grateful for ordinary things that I took for granted before, including working with my colleagues.
Whitney Patience O’Reilly: I do yoga and meditation twice a week with an old colleague.
Kate Emert Gleason: During the pandemic, I decided to learn how to play the violin. I was eventually successful, but my dog and husband likely did not appreciate the learning period. Also, working from home gave me time to revisit some of my hobbies that I hadn’t had much time to enjoy. I love to knit, sew, paint and read.
Kathleen Garrity: The pandemic abruptly challenged many of us to rethink how and where we work. Home and work life tended to blend together, so it was hard to create the downtime we all needed to re-energize. With everything closed up at the beginning of the pandemic, long walks were the best way for me to get out of the house, get away from my home office and give myself a break. Sometimes we forget to be kind to ourselves, and that downtime is essential to doing good work. It gives us room to breathe and come back stronger.
How do you and your colleagues support one another?
Brionna Denby: Support each other. Let people know they are doing a great job or give some positive feedback about something they worked on. So many times, you wonder if you did a good job or how your work was received or perceived. That reassurance from your colleagues, which is equivalent to a high five in sports, is great encouragement to keep you motivated and provides assurance that you are doing the right thing.
Sydney Pierce: For me, supporting other women means talking up and crediting each other’s abilities, ideas, and successes and advocating for policies that promote the retention and advancement of women in the workplace.
What’s one piece of advice you’d give to other women about navigating a male-dominated field/industry?
Cody Wolpert: Imposter syndrome is entirely normal—don’t let it get to you. Knowing what you are good at and what you need to work on or ask for help with is a skill that not everybody has. I think that, especially in male-dominated fields, showing any uncertainty can feel like you are failing. Instead, learn when to be confident and when to ask for help. Surround yourself with friends and colleagues you can go to for honest advice and be yourself around. Accept that your career will and should always be a learning process.
Kathleen Morley: Be confident in your abilities and have your voice heard. Know that you have earned where you are in your career and deserve a seat at the table where decisions are made. Do not be afraid to voice different perspectives or ideas and understand that there are many different paths to success in any field.
Where would you like to see women continue to make strides?
Jen Budd: While women have been entering law school in equal (or greater) numbers than men for many years, women are still underrepresented in the leadership of law firms. It is very important for the legal industry to continue to adopt, encourage, and support women at all different stages of their careers. I have witnessed that a diversity of experiences and perspectives is good for organizations—it decreases blind spots and groupthink. Further, retaining women is best for our clients. When women leave private practice, there is a loss of perspective, knowledge, and talent.
Julie Grohovsky: More women are needed in corporate board rooms. Studies show that companies and organizations with women in the board room are stronger, more creative, and have a better return on investment.
Not Your Average Desktop Printer: How 3D Printing May Impact the Construction Industry
We are in the midst of what has been termed the “Fourth Industrial Revolution,” where manufacturing and other industries take advantage of modern advances in smart technology, automation, and cloud computing. 3D printing (also called “additive manufacturing”) is one such innovation starting to disrupt traditional business processes. The healthcare, aerospace, manufacturing, and automotive industries are being transformed by 3D printing methods. Other industries are taking notice including the construction industry, which uses the term “3D printing” to refer to the manufacturing process by which digitally-created designs and models are constructed in the field using robotic arms that pour building material layer by layer.
In its current form, 3D printing is primarily used to construct small residential homes on an individual basis or, more recently, in planned, multi-home developments. The first-ever 3D-printed, fully sustainable neighborhoods in the United States are being constructed in California by the Palari Group in partnership with construction technology company Mighty Buildings. The Palari Group’s goal is to develop net-zero energy communities, with new deliveries planned for spring 2022. Miami-based homebuilder Lennar is planning to build 100 3D-printed homes in the Austin area in 2022. Lennar will build their homes with the Vulcan construction system developed by another construction technology company, ICON. In southeast Mexico, 3D printers are currently constructing a housing community for low-income families, designed to withstand hurricanes, earthquakes, and other natural disasters. The goal is for these homes to have enough durability to be passed down from generation to generation.
As the technology advances and the construction industry becomes more receptive to 3D printing, its natural progression will be to construct larger and more complicated multi-story buildings, even skyscrapers. Presently, the world’s largest 3D-printed building is a two-story municipality building that spans 6,900 square feet in Dubai, where 3D printing technology has been embraced. The Dubai Future Foundation plans to construct 25% of its new buildings using 3D printing, with an ultimate goal of making Dubai the world’s 3D-printing hub by 2030.
Proponents of 3D-printed construction champion this market-disrupting building method as both an effective, time-saving, and cost-efficient way to address the current housing shortage and high demand. 3D printing has already shown an ability to decrease material and labor costs substantially, which can lead to more affordable housing for purchasers and increased profits for builders. Material waste is virtually non-existent in 3D printing as the printer discharges the exact amount of material required for the job, and projects typically do not require formwork for vertical wall installation. Labor inputs are also drastically decreased. In Shenzhen, China, for example, only eight workers were required on site to construct a portion of a museum using 3D printing, as compared to the estimated 160 workers that would have been required if traditional building methods were used. 3D printing is also touted as energy efficient. Traditional square-shaped buildings can be replaced by rounded walls, which have been found to minimize humidity and thus require less cooling. From an aesthetic point of view, architects are intrigued by the endless design possibilities using computerized blueprints and sketches.
Meanwhile, critics of 3D-printed construction are concerned with the associated learning curve, how other trades will be affected, as well as the impact on overall project coordination. From a labor perspective, specific skilled workers in the carpentry, masonry, and drywall trades are worried that 3D printing could lead to widespread job displacement as workers are replaced by 3D printers, and the need for onsite manpower is greatly reduced. Additionally, procuring a 3D printer is difficult due to limited supply and complex customization needs. It can also be cost-prohibitive, depending on whether the printer is purchased or leased, and whether the building components are printed offsite or onsite. If printed offsite, the developer must arrange for transportation and installation of the components similar to a modular construction project. If printed onsite, the printer, which is expensive and oversized, must be safely transported to and from the project site and protected while onsite. Printers often weigh several tons and can cost in excess of $500,000 for the equipment and sophisticated computer programs. Setup and dismantling costs are also significant, making multi-home projects more attractive for 3D printing developers.
A builder’s stance on 3D-printed construction notwithstanding, the truth is that buildings cannot be constructed in the field without the necessary building permits and without complying with all existing codes and regulations. Unlike traditional materials and methods with hundreds of years of collective knowledge as reflected in building codes, 3D printing is a new and evolving construction method that requires similarly innovative regulations to address this developing technology.
One organization, the International Code Council, introduced Appendix AW governing 3D-printed building construction, which was adopted in the 2021 International Residential Code (IRC). The appendix provides for the design, construction, and inspection of buildings, structures, and building elements fabricated by 3D-printed construction techniques. While the appendix shows progress toward a unified building code that recognizes 3D printing as an accepted building practice, state and local jurisdictions will need to formally adopt the new aspects of the 2021 IRC, including Appendix AW. The same is true for constructing non-residential buildings, as the International Building Code (IBC) has yet to incorporate a provision for 3D printing construction technology. Instead, an acceptance criteria for 3D concrete walls (AC509) has been developed under IBC Section 104.11, which allows for alternative materials, design, and construction methods provided that such alternatives meet the intent of the IBC. Regardless, local building codes will need to be modified to accommodate 3D printing, and local building and code compliance departments must become conversant in this new building method.
Once proper permitting is obtained, a builder’s natural next question would be how the 3D printing process could backfire, resulting in legal costs that eclipse any planned savings. Like any other construction contract, a project utilizing 3D printing technology should still contain provisions related to workmanship. While computers may reduce the risk of construction errors, computers may also malfunction like any other piece of equipment. Additionally, all designs require input from people and then execution in the field. This means that architects, engineers, general contractors, subcontractors, and suppliers still face many of the same risks associated with defective work, even if those risks now involve a computerized element.
Conceptually, one could foresee a reduction in litigation related to project delay, as 3D-printed construction is projected to dramatically reduce the time needed to construct a building. One could also foresee that lawsuits related to jobsite injuries might also be substantially reduced, as fewer workers are required onsite and printers are performing a portion of the more strenuous and dangerous tasks. On the other hand, 3D-printed construction could expose a whole new category of potentially liable parties, namely software engineers and manufacturers of 3D printers. While new building methods give rise to initial reservations and skepticism, developers and contractors alike should consider investigating this new frontier in order to stay ahead of the curve.
You can watch the 3D printed construction process in action by visiting: https://youtu.be/XHSYEH133HA.
What’s New?
In this issue, you’ll gain insight into the new trend of 3D-printed building and big changes to public design-build construction rules in New Jersey. We also highlight many new faces, promotions, and accolades, and, in honor of Women’s History Month, the women at Cohen Seglias and elsewhere whose contributions deserve celebrating!
Sydney Pierce, Co-Editor-in-Chief
Christopher W. Sexton, Co-Editor-in-Chief
New Faces
William R. Firth, III is a partner in our Delaware office. He advises individuals, officers/directors, investors and companies on legal issues arising in the course of doing business. Bill litigates disputes in all Delaware courts involving the interpretation and enforcement of contractual agreements, corporate governance documents, and financial wrongdoing. When clients encounter issues such as shareholder and partnership disputes, sale-related contract disputes, and various business tort claims, they turn to Bill to resolve such claims quickly and efficiently while protecting their business interests.
Stephen D. Tobin is senior counsel in our Government Contracting Group. Based in our Washington, DC office, Steve brings considerable government experience to the firm’s clients, having served as an associate counsel for litigation and senior trial attorney in the Department of the Navy’s Office of General Counsel. As a result of his work with the Navy, Steve helps clients strategize the best approaches for negotiation and litigation involving complex federal contracts. He also advises companies and individuals facing government investigations under the False Claims Act.
Nicholas F. Morello joined our Philadelphia office as an associate in the Business Transactions and Construction Contracts & Risk Management Groups. He drafts, analyzes, and revises agreements that are essential for business transactions, advising clients on potential risk and ensuring compliance with state and federal regulations. The initial stages of a project or deal formation can establish the tone for the transaction going forward; Nick helps lay the groundwork by conducting due diligence and advising on best practices for mitigating risks and liability.
Aislinn Sroczynski returned to Cohen Seglias as an associate in our Philadelphia office. As a member of the firm’s Commercial Litigation Group, Aislinn assists clients at every stage of commercial disputes, from drafting initial demand letters to filing appeals. She conducts legal research on coverage issues, liens, and potential damages, and drafts memos analyzing business and legal risks. Aislinn was a summer associate with Cohen Seglias in 2020.
Cody M. Wolpert joined our Philadelphia office as an associate in the Construction Group. She counsels owners, general contractors, subcontractors, and other construction parties throughout the course of a project and guides them through the resolution process when disputes arise. Cody conducts legal research, drafts motions and pleadings, and helps prepare clients and witnesses for depositions and trials.
Cohen Seglias Promotes Two Attorneys to Partner
We are pleased to announce the promotions of Casey McKinnon and Whitney O’Reilly to the firm’s partnership. Casey is located in the firm’s Washington, DC office and Whitney is based in the Philadelphia office. Brionna Denby and Evan Rassman, both of the Wilmington office, have also been promoted to senior counsel.
Casey J. McKinnon counsels government contractors on a broad range of federal contracting issues, including the filing of bid protests, interpretation of solicitation and contract provisions, resolution of disputes, and the preparation of contract claims and litigation of appeals. He is a trusted advisor on complex questions concerning the intricacies of the Federal Acquisition Regulation (FAR), domestic preference requirements, and day-to-day issues arising from contract performance on both domestic and international projects.
Whitney Patience O’Reilly joined Cohen Seglias in 2018 and is an integral member of the firm’s Wealth Preservation Group, collaborating with clients to find legal solutions that address their needs, preserve wealth for future generations, and minimize tax consequences. She regularly handles estate tax audits and has successfully administered hundreds of estates and trusts ranging in value from a few million dollars to more than 100 million dollars. Clients turn to Whitney for her guidance on estate and tax planning and administration and value her approach of understanding their business operations, priorities and goals to find innovative solutions.
Brionna L. Denby is a member of the firm’s White Collar Defense & Internal Investigations, Government Law & Regulatory Affairs, Research Misconduct, and Title IX Groups. She regularly assists clients that are faced with allegations of wrongdoing and helps them successfully navigate complex investigations and governmental inquiries resulting in legally defensible decisions.
Evan Rassman works with real estate developers, investors, banks, retail tenants, and other stakeholders on complex commercial real estate transactions, including complex commercial financings, joint ventures, acquisitions and sales, real estate lending, commercial leasing, workouts, and restructurings.
Congratulations to Anthony L. Byler and Christopher D. Carusone
Congratulations to Tony Byler and Chris Carusone, who were named shareholders and joined the firm’s board of directors! Both Tony and Chris have made significant contributions to Cohen Seglias’ success and growth over the years.
Brionna L. Denby Recognized Among Delaware Today’s Top Women in Business
We are proud to announce that Brionna Denby is among 2021’s “Top Women in Business,” the Delaware Today’s list of the 40 most empowering women doing business in Delaware. Honorees were selected based on their professional achievements and contributions to their community.
Brionna is recognized for her legal work in the white collar, internal investigations and Title IX arenas, a dedication to the local community, and her advocacy for diversity and inclusion. The profile highlights her notable leadership roles, which have included serving as president for the Delaware Barristers Association, as well as her varied professional background. In discussing the importance of diversity, inclusion and representation, Brionna says, “My message to youth is to consider aspirations and careers that may not be visible in your immediate network. Growing up in Wilmington, I didn’t know any black attorneys, but just because I didn’t see it, didn’t mean that I couldn’t do it. I just kept taking small steps toward my goals and was determined to finish what I started.”
Cohen Seglias Attorneys Named to 2022 Best Lawyers® List
We are pleased to announce that 11 Cohen Seglias attorneys are listed in the 2022 edition of The Best Lawyers in America©. Lawyers are recognized based on an exhaustive peer-review process. In addition, a number of attorneys are included in “Best Lawyers: Ones to Watch,” which recognizes extraordinary lawyers who have been in private practice for fewer than 10 years.
Attorneys Recognized as 2022 “Best Lawyers”
Lori Wisniewski Azzara, Litigation – Construction
Jonathan A. Cass, Insurance Law
Roy S. Cohen, Litigation – Construction
Jason A. Copley, Construction Law, Litigation – Construction
Shawn R. Farrell, Litigation – Construction
Marc Furman, Employment Law – Management, Labor Law – Management, Litigation – Labor and Employment
John A. Greenhall, Construction Law
Michael F. McKenna, Litigation – Construction
George E. Pallas, Construction Law, Litigation – Construction
Edward Seglias, Construction Law, Litigation – Construction
Lisa M. Wampler, Litigation – Construction
Steven M. Williams, Commercial Litigation
Attorneys Recognized as 2022 “Best Lawyers: Ones to Watch”
Kathleen M. Morley, Litigation – Construction
Jennifer R. Budd, Litigation – Construction
Marc B. Cytryn, Labor and Employment Law – Management
Kelsey E. Riehle, Litigation – Construction
Alexander F. Spilberg, Commercial Litigation (new this year)
Cohen Seglias Recognized by U.S. News – Best Lawyers® on the 2022 “Best Law Firms List”
We are pleased to announce that Cohen Seglias is named in the 2022 U.S. News – Best Lawyers® “Best Law Firms” list nationally for construction and regionally in Philadelphia, Pittsburgh, Harrisburg, and New Jersey for various practice areas. Firms included in the 2022 “Best Law Firms” list are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal acumen. The firm is listed in the following areas:
- Litigation – Construction: National Tier 1, Metropolitan Tier 1 Philadelphia and Pittsburgh, Metropolitan Tier 3 New Jersey
- Construction Law: National Tier 2, Metropolitan Tier 1 Philadelphia
- Commercial Litigation: Metropolitan Tier 1 Harrisburg
- Employment Law – Management: Metropolitan Tier 2 Philadelphia
- Labor Law – Management: Metropolitan Tier 2 Philadelphia
- Insurance Law: Metropolitan Tier 3 Philadelphia
2021 Philadelphia Heart Walk
For the sixth year in a row, the Cohen Seglias team, consisting of employees, family, friends, and pets, reunited at the annual Philadelphia Heart Walk to support of the American Heart Association’s mission of building healthier lives free of heart diseases and stroke. Leading up to the walk, the firm hosted fundraising events throughout October and September and raised over $2,500.