Tips for Drafting Performance Specifications

An owner’s traditional design (or prescriptive) specifications give the contractor specific, step-by-step details for construction. If the contractor builds a project according to design specifications, it has no liability for the design.

In contrast, true performance specifications focus upon the owner’s requirements for the finished project. Performance specifications afford significant discretion to the design builder for the design as long as the finished project meets the owner’s requirements.  It is this discretion that shifts the responsibility for design to the builder, who by operation becomes a design builder.

In practice, the distinction between design and performance specifications sometimes becomes muddled. The purpose of this article is to provide some guidance for drafting and recognizing performance specifications that will shift the risk for design to the design builder.         

One source of confusion is because most projects are constructed using design and performance specifications. Even in traditional, “design-bid-build” contracts, some design features (or “ancillary” design features) are left to the discretion of the general contractor or specialty subcontractors; and are finalized through submittals to the owner’s design professionals. Those providing such submittals should be aware the responsibility for such design elements will likely remain with the party that provided the submittal, regardless of the owner’s design professional’s limited “acceptance” or “approval” of the submittal.

Likewise, contract documents for design-build projects typically include design specifications for some portion of the project. But simply labeling a design specification as a “performance requirement” will not shift design liability to the design builder. Courts uniformly hold whether a specification is “design” or “performance” depends upon the amount of discretion for design left to the contractor.

Wherever performance specifications are intended, the contract documents should expressly state that the owner’s requirements are to be interpreted to permit the design builder significant latitude for design. Here is an example:

The specifications set forth herein are to be interpreted as “Performance Specifications” and are intended solely for the purpose of describing the criteria by which the work to be completed by the design builder shall necessarily comply. Unless otherwise specifically set forth herein, the design, methods and means of construction, materials utilized, equipment installed and any and all other aspects of the work are at the sole discretion and the sole responsibility of the design builder.

The goal for drafting performance specifications is to define the end product to be constructed and avoid unnecessary limitations as to how to design or perform the work. 

Consider using these phrases to reinforce this intent:

• • “[specified brand/model of equipment] or demonstrated equal.”
  • “as required.”
  • “shall comply, meet or exceed [recognized industry standard or testing requirement].”
  • “whenever or wherever required.”
  • “as required to complete the Work, whether or not specifically indicated by the illustrative drawings or specifications.”
  • “to comport with the general intent of the owner’s requirements.”

When drafting performance specifications, give specific details only when absolutely necessary. For example, if possible, state weight and physical envelope dimensions as maximums or minimums. Draft the requirements to meet specified industry standards instead of specifying design requirements. This makes the design builder responsible for compliance with the specified standard. Although the owner should try to refrain from specifying materials, processes or parts, it can prohibit the use of certain materials or processes it does not want utilized in the project.

Use specifications mandating environmental, maintenance, operational, capacity, or longevity requirements instead of specifying equipment or details concerning installation design. For example, require the installation of a “roofing membrane with a 20-year lifespan and that will withstand 60 mph gale force winds” instead of specifying a certain type and installation method for roofing materials. Likewise, specify only that the supplied HVAC system shall be able to maintain the owner’s stated temperature and humidity requirements throughout the year based upon the project location’s seasonal variations in temperature and humidity – instead of providing details for HVAC installations. Keep in mind, pumping systems should be specified by required total pumping capacity within a unit of time as opposed to specifying the model or number of pumps needed or other specific details. Of course, the ability of an owner to allow the design builder these types of design and installation flexibilities will vary depending upon the type of project and criticality of the building components.

The goal is to draft performance specifications to include objectively quantifiable criteria to determine whether they have been met. There are multiple methods to verify or, in some instances, warranty the desired result. For example, manufacturers can certify as “compliant” criteria for installed equipment such as pumps, generators, or HVAC units; these can be confirmed through established industry testing procedures. Inspectors can review and certify welding. State and federal regulatory agencies can (and often must) pass mandatory inspections for design and installation compliance. Issuing established manufacturers’ warranties can satisfy the longevity requirements for items such as roofing, siding, or boilers.

Please contact William J. Tinsley, Jr. or any member of the Phelps Construction/Design team if you have questions or need advice or guidance.