An Administrator's Guide to California Private School Law

Chapter 17 – Construction

2. I NCORPORATING G REEN B UILDING I NTO S ELECTION O F A RCHITECTS , C ONTRACTORS , A ND C ONTRACTS If a school decides to follow green building principles, it should select an architect, construction manager, or contractor who has sufficient experience in green building to work on the project. Schools should request a list of all prior experience relating to green certification of buildings from each proposed vendor to determine whether it qualified to design or construct a green building project. Schools can include LEED certification and green building contract requirements with the architect, construction manager, or contractor. However, contractually requiring achievement of LEED certification is a relatively new and untested area of law. For example, if the School does not achieve LEED certification, what are the damages? Arguably, a school may suffer provable damages, such as not being able to obtain certain tax credits or other incentives due to the failure to achieve green building certification. Other damages could include the loss of expected energy savings due to an architect’s failure to design a project properly, a contractor’s failure to properly construct a project, or a contractor’s delay in the project. Some damages, however, such as expected increase in productivity of staff and students and teaching students about the benefits of energy efficiencies and environmental protections, are difficult to quantify. To address these challenges, schools can clearly identify the green and sustainable objectives in the contract and include any expected green certification levels for the building. The contract should clarify which party is responsible to meet those objectives or levels, and which party accepts the risks of failing to meet those objectives or levels. Schools can also identify expected tax or other credits and expected energy cost savings in the contract, have both parties agree that these credits and savings are reasonable, and that the vendor will be liable to the school for these damages if the school does not timely achieve the green certification. The contract could also state that if the project does not reach a particular objective or level, the contractor or other party will take all actions needed to reach that objective or level at no additional cost to the school. Schools may not want to insert liquidated damages provisions in contracts related to achieving green certification because such provisions may actually limit the amount of damages a school may suffer if the building fails to obtain the appropriate certification. Courts have not addressed enforcing green construction requirements in construction contracts. The American Institute of Architects (“AIA”) issued a proposed “Sustainable Projects Exhibit” to address green construction requirements. Schools should have legal counsel review this AIA exhibit if provided by an architect or contractor to ensure they are protected and that they do not waive claims related to an architect’s or contractor’s failure to achieve a sustainable objective.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 554