Preparing for Future Tragedies Decades Before They Happen

The design-bid-build project delivery method has dominated the construction landscape for many years.    

Under this methodology, contractors commonly bid on fully completed designs drawn to code with cost estimates, specification guidelines, material recommendations and other pertinent details already included in the planning. The design documents are developed by the design team under a single contract with the project owner before the bidding begins. A separate contract is then held between the owner and construction firm or contractor, which may help reduce the contractor’s professional liability (except for the exposures to construction management errors) related to both design and construction issues.

Another benefit is the inclusion of carefully defined roles routinely outlined in contractual agreements. In most cases, everyone from survey engineers and architects to contractors have their own marching orders. Responsibilities seldom deviate significantly from those specified. Change orders and the resulting shop drawings follow a chain of command for reviews and approvals. And liability issues and exposures are almost always resolved through a systematic process that ranges from the identification of challenges to the research and payout of claims to even litigation.

However, much of this changed when computer-aided design and drafting (CADD) was introduced and design-build began to grow in popularity throughout the United States. In addition to expediting the entire construction process, it also complicated the project’s liability issues with a one-size-fits-all concept that embedded the responsibility for both design and construction into a sole contract with the owner.

As for risk management, numerous policy forms have existed for years to help defray or overcome the costly delays and exorbitant fixes that can accompany “errors and omissions” problems. However, nearly every program includes a statute of limitations or repose, which can vary from state to state or among the various carriers. In other words, the clock can run out on these coverages before the “fix is in” or, in some cases, before the problem even becomes apparent.

So, what do you do when problems occur years after the initial professional liability coverage has expired or the project’s original players aren’t even in business?

These were just a few of the many challenges that surrounded the tragic collapse of the Champlain Towers South condominium in Surfside, Florida.

A disaster in waiting, the entire project should serve as a warning and a template for avoiding future catastrophes. The funding and planning should be in place to cure the relatively minor problems that could become cataclysmic over time.

The Catastrophic Surfside Condominium Collapse

In the early morning of June 24, 2021, 98 people died and hundreds more were displaced when the central section and eastern wing of the Champlain Towers South condominium collapsed following the structural failure of the pool deck. This was after years of ignored warnings.

Lax inspections preceded the 2018 report of a structural engineering firm stating that more than $9 million would be needed to repair a concrete slab that had “major structural damage” as well as the “abundant cracking and spalling” of concrete columns, beams and walls in the parking garage. It also cited that the “waterproofing below the pool deck was beyond its useful life and needed to be completely removed and replaced” and the “failure to replace waterproofing” would cause the “concrete deterioration to expand exponentially.”  In an attempt to address the issues, condo owners received a two-page letter from the condo association in April 2021 stating that the repair costs had risen to $15 million and would likely begin in July.

However, “too little too late” applies to this case. The pattern of negligence, errors and omissions date back to 1981 when the building first opened. The Miami Herald called the building “flawed from day one.” Their report noted faults in the original plans, and major flaws remained in the building for 40 years. This included errors in the original plan that were prepared by a now defunct firm. According to a Curbed article, the report showed “structural columns that were too narrow to accommodate enough rebar, meaning that contractors had to choose between cramming extra steel into a too-small column — which can create air pockets that accelerate corrosion — or inadequately attaching floor slabs to their supports.”

In addition, researchers have since found a multitude of glaring structural deficiencies that likely led or substantially contributed to the building’s demise and the subsequent loss of life. These findings revealed the:

• Poor bonding of mass sections of steel and concrete due to corrosion.
• Perimeter beams under the middle tower were improperly connected to the shear wall, resulting in a fault line between the north and middle towers.
• Fire alarm sirens did not sound and consequently failed to warn the people inside the building of the impending collapse.
• Column sizes and the amount and positioning of the building’s rebar were insufficient for supporting the south tower’s pool and deck.
• Leaking planters and improper water drainage added to the ponding of water and added stress to the pool and deck.
• Latest computer modeling and sounding technologies could have found the fatal cracking issues in the decking slabs, which were continually paved over throughout the past 40 years.

Lessons Learned From Surfside: Maybe, Maybe Not

On March 10, 2022, a tentative settlement was reached in a punitive class action lawsuit with the victims of the Surfside building collapse. According to ABC News, under the $83 million Common Fund agreement to be paid to unit owners, “the victims would receive $50 million out of the first $100 million recovered from groups responsible for the building,” with “the remaining $33 million to be paid out from the money that’s first recovered after that $100 million.”

However, on March 11, 2022, negotiations between Florida lawmakers broke down. According to NBC News, lawmakers failed to “agree on a bill that would require inspections of aging condo buildings and mandate that associated condo boards conduct studies to determine how much they need to set aside for repairs.” Per NBC News, the passage of such reforms was especially difficult given that Floridian lawmakers only have 60 days each year to pass new laws, and lobbyists and trade groups actively “work with the condo industry to fight measures that owners see as too restrictive or expensive.”

Nevertheless, the Surfside condominium collapse awakened the entire world to the consequences of ignoring potentially fatal construction flaws — especially the ones built along the coastlines and constantly bombarded by the corrosive effects of saltwater air. Some of the suggestions and actions currently under consideration include the following:

• Shortening of inspection and certification guidelines. Current Florida laws in Broward County stipulate “Building Safety Inspections shall be required at 10-year intervals from the date of the 40th anniversary of existence of buildings or structures regardless of when the inspection report for same is finalized or filed.”
• Increased emphasis on the compressive strength testing of concrete core samples, structural analysis of post-tensioned sections, repair documentation, geotechnology assessments and structural engineer peer reviews.

Other recommendations surround the employ of the risk management strategies. In fact, there are numerous enhanced coverage forms ranging from contractors pollution liability (CPL) and architects & engineers professional liability (A&E) to contractors professional liability (CPrL) that are designed to help provide owners, developers, contractors and designers with the financial resources needed to overcome error and omissions exposures and potentially fatal design and structural flaws before they become catastrophic.

Most of these policies do have very specific start and end dates. That’s why building and facility owners should consider taking the long view to protect themselves and stakeholders from the problems that could appear years into the future. Regardless of the local or state laws and/or statues, this may include:

• Hiring a consulting structural engineer every 10 years to perform basic structural integrity inspections.
• Employing geotechnical engineers every 10 years to perform foundation inspections that include the review of construction plans for nearby, newer structures. This includes determining if dewatering or any other issues have negatively impacted the building’s foundation or infrastructure.
• Lobbying for the establishment of a “condo fund” that would allow homeowner associations (HOAs) to make major repairs with no-interest or low-interest loans that could be paid off over 10- to 15-year periods.
• Ensuring that architects and engineers employed by the HOA submit certificates of insurance. This includes proof that the programs are viable up to 15 years after the certificate of occupation is issued for a condo structure.

In most cases, owner’s protective professional indemnity insurance extends the coverage of design and construction issues to project owners and developers. This risk management program was specifically designed to provide insureds with broad excess above design professional insurance (protective indemnity), along with the funds to cover financial losses and the primary defense of third-party professional liability claims made against owners. Optional CPL and separate pollution legal liability (PLL) can even be included to help protect against additional covered construction and real estate-related pollution risks.

So, there is no reason to let the mistakes of the past tragically impact the future, especially when the lives of hundreds could be at stake. Let the multitude of errors surrounding the Surfside condominium collapse be a reminder that this should never happen again. Steps can be taken to prevent the preventable.