Warranties

Archive of Older Topics Archive - Specifications Discussions #4
1

I am trying to identify the types of warranties that most of us specify. For instance what is the difference between manufacturers and installers warranties.

Can we get a workmanship warranty from any product manufacturer?

What are warranties if not insurance policies?

Why do we need them? For instance, why do we not require warranties for structural steel and we do for roof membranes? I would think that structural steel is more important for life and safety.

Once we specify them, are they easily enforceable by the owner I think of all the exclusion clauses found in roofing and waterproofing warranties – and what do they achieve? Also, even though we specify replacement of overburden for failed waterproofing systems, overburden replacement is always excluded from the warranty; so what we get is a bucket of material left at the curb.

Wouldnt it be in the owners interest in the end to have a full time clerk of the work, as in the old days, rather than spending money buying warranties?

2

Gerard, that is a great post. You seem to know what you are asking, but it is, nonetheless, provocative.

Warranties are designed to limit the liability of the manufacturer, hence the term “limited warranty”. In many cases, the Uniform Commercial Code imposes a “warranty of merchantability” that would be of more value to the owner than the warranty offered by the manufacturer.

For roofing and waterproofing, we used to have bonds that were held against possible claims of failure. That was a cost added to the project and served as insurance against a loss. Today, warranties for these products are typically shared between the installer and the manufacturer, with the installer having responsibility for issues that show up the first three years, then the manufacturer takes over from there. The assumption being that defects due to labor would show up during the earlier period and then the liability would go the the manufacturer. It probably is neither prudent nor necessary for the specifier to spell out this third-party relationship in the specifications.

Structural steel is specified by reference standard and the products are less a concern than the field connections. We have code-required special inspections for connections that exonerate the erector. The design engineer is the person left holding the bag for the structure.

We all know that knowledgeable, full-time, on-site representative would be invaluable to the owner’s interests, but we also know that owners rarely want to spend the money required to do it right.

3

Richard,

Thanks for the answer. Few specifiers are aware of the effect the UCC has on what we specify.

One question I meant to ask is: What is the correlation, if any, between warranty and durability? That is, do we ask for extended warranties for systems or materials that have a limited life and not for those that we know will not deteriorate to a point where they need to be repaired or replaced during the expected life of a building?

4

It may be true that few specifiers are aware “of the effect the UCC has on what we specify” because the truth is that there really isn’t that much impact on what we specify related to our service to the Owner in developing Contract Documents.

The Project Resource Manual devotes very little attention to the subject (unfortunately). I know from speaking with attorneys that Owner/Contractor agreements render the provisions in the UCC largely moot where Owner is looking to the UCC for remedy. And so, I do worry about it much. Why? Because a construction contract is really a services contract, and not a procurement contract strictly for goods. For a really good summary of this go to this link and scroll down to Mclaughlin and Jensen (December 1994):

http://cset.mnsu.edu/cm/students/aic-study-guide/level1lprojectadmin.pdf

Here is a really good article about the UCC and Contractor’s relationship with subs (but, again, not my problem - nothing to do with the specs):

http://www.smithcurrie.com/assets/attachments/32.pdf

The UCC does apply to FF&E agreements, because those are all about purchase of goods…

5

And here is more - from a recent article/summary on the topic written by a construction law attorney which includes this statement:

“The Uniform Commercial Code’s implied warranties of merchantability and fitness for purpose do not normally apply to construction contracts between owner and contractor, because those contracts are considered contracts for services rather than goods. Therefore, every contract for construction of any improvement or the installation of major equipment should contain the general basic warranty of quality. The elements of this warranty are: (i) materials and equipment will be new and of good quality; and (ii) the materials, equipment and labour furnished will be free from defects and conform with any design requirements.”

Link to full article here:

http://www.internationallawoffice.com/newsletters/detail.aspx?g=610fa8ca-21fb-4d26-b9fb-3aa7abf405a2

6

I for one very seldom specify (few exceptions) manufacturer’s product warranties for reasons Richard notes - most of them protect mfgr more than they do the Owner. See PRM or Practice Guide for a discussion of warranties. I used to quote some of the great limitations from actual mfgr limited warranties to CDT/CCS classes - the absurdity of some of them got the student’s attention. Of course the first thing that almost everyone of them states is that it deletes the UCC provisions as the UCC allows them to do.

If using AIA documents you have unlimited warranty (not under federal FAR) and one year correction period. I use extended or special warranties on selected work results including labor and workmanship - roofing and waterproofing being prime examples with extended period, defects, and corrections spelled out - they are in reality an extended correction period beyond 1 year.

Mfgr Waranty versus durability - Remember the long warranties provided by some of the new single ply roofing mfgrs in the early days - how good were they as those companies went out of business - don’t need to say any more than a mfgr’s warranty is only as good as the longevity of the company is. The rating of the mfgr is just as or more important than the warranty itself. Good companies of long standing will stand behind their products no matter what the warranty provisions are. Their reputation is at stake.

7

The industry tends to over emphasize the importance of warranties. I used to work for an architect who liked to say that a roof warranty never kept a building dry. When I have looked into the difference in requirements for a roof, the longer warranties often require a thicker membrane or a cover board, or an inspection by the manufacturer’s local rep; all generally things that would enhance performance or assure quality. However, I don’t think you can rely on a direct correlation between warranty term and product duration.

I think there is a lot of over-promising for a marketing advantage beyond what you can reasonable expect in actual performance. The more a manufacturer stresses his warranty rather than the product, the less inclined I am to want to see it on my project. NRCA has data on the life expectancy of various roofing types, but it is not detailed enough to demonstrate the value of a more robust installation.

The roof membranes used today compared to 40 years ago (gosh, I hate to admit to going back that far) are that they are mostly designed to be disposable, whereas the old BURs were intended to be around as long as the building itself. Building owners are no longer accustomed to regular preventive maintenance to prolong the roof, they just budget for replacement.

8

For many products, what is really needed is some sort of workmanship warranty from the installer. There are some products out there but there are mostly poor product selections (product works great in application A and B, ubt won’t work in X, but it would look so good in application X that the designer won’t be talked out of it) or bad workmanship. I have been saying for some time that I would rather see a mediocre product put down by a good installer than a really great product put down by a poor installer.

I like the mention of the UCC, but the fact is that UCC warranties pass from the manufacturer to the purchaser (which will either be the distributor or the installer) not to the end user unless there is some language that someone is using.

I also like the discussion of the limited warranties. I have increasingly been asking about warranties from manufacturer to the Owner. Most of them will provide replacement material or, in some cases, repair material. This does not necessarily include shipping to the project site and is almost always does not include installation. Now, picture a building with 40,000 sq. ft. of slab on grade and a bank of two or three elevators in the center. No manufacturer I know will issue a warrantee that will replacing failed waterproofing at the elevator pit. They will try to fix it from inside the building. No matter tightly you word the specification language on waterproofing warranties, it is unreasonable (to the poiint of insanity) to expect anything more.

At this point, good field observation and some sort of field quality control before backfilling may be much more important than any warranty one gets from the manufacturer.

9

Dr. Who notes two basic provisions of “quality warranties” which are contained in the AIA A 201, but stated a little better. Materials are supposed to be new, unless otherwise indicated (like reused or recycled materials in “sustainable projects”) and free from defects not inherent in the materials (like the knots in knotty pine paneling or the boat patches in many grades of plywood).

Be careful what you ask for especially when you really don’t want exactly what you asked for.

10

In response to the statement “Structural steel is specified by reference standard and the products are less a concern than the field connections. We have code-required special inspections for connections that exonerate the erector. The design engineer is the person left holding the bag for the structure.”

I see warrantees as more appropriate for products but not for materials such as steel. You might want a warranty if there was a significant concern that the product might not have the expected life span due to the actions of the manufacturer or installer. I have never seen warranties used for structural materials or products.

Disagree that the code required special inspections exonerate the erector. If the erector did not comply with the construction documents the general conditions make it clear that the contractor is still responsible.

Unless the structural engineer did something stupid like signing a warranty he is not responsible for the defects of the contractor rather he is responsible for his instruments of service. It is also important to note that with rare exceptions it is the Owner not the structural engineer that hires the special inspectors.

11

one in a while - not very often – we do hear about an actual material failure. Not the connections, or the joints, but the material itself. I saw one a few years ago, when the office I worked for was trying out an experimental concrete mix that allowed a lot of forming flexibility. It worked fine… and then after about five months, it spontaneously disintegrated into dust. And we were very happy it was the mockup that disintegrated, not the proposed building. But other than the new, weird stuff, we do rely on materials standards to ensure performance of basic materials. And the trade associations help with that effort. they want their materials used, which means that they want the performance to be reliable and predictable.

12

Anne - That’s a great argument for doing mock-ups!
We always did them at my firm back east - during design, and again prior to actual construction.

13

Anne

I would be interested in understanding what was unique about the experimental concrete mix you mentioned.

14

I agree strongly with J. Peter Jordan, " I would rather see a mediocre product put down by a good installer than a really great product put down by a poor installer."

However, a poor installer may also write a glowing warrantynot aware of his own incompetency.

For important work, I’d add or beef up the installer-qualifications requirement and require a submittal.

(Aside) I once rejected a “limited warranty” for paint because the manufacturer’s standard exclusions included any paint if the can had been opened!

15

One of the reason we did the mockup on that job was that the managing partner of the firm had some reservations about the claims for the material and he just wanted to watch it for a while.
regarding the concrete mix: it was a copyrighted, patented mix and additives, so even if I did know I couldn’t have said what it was. The concrete was extruded through a mold into board-like shapes (2" x 12") and it remained plastic for a couple of hours, allowing it to be draped over a form into curvy shapes. Then when it cured, the foam form was taken out, leaving the draped, woven concrete.

16

Although I agree with the problems and pitfalls mentioned above, I have always wondered about my liability when I delete a warranty. It may be not in the Owner’s interest, but when S_H_F occurs everyone is looking for a scapegoat.

17

Richard

Legaly you are not liable under the standard of care defense if you exercised the standard of care espected by other architects in your jurisdiction. Note this means you must use an appropriate level of care in selecting and specifying the work. This does not neam that you have to do it the way others do it.

When the shit hits the fan people will invent all sorts of rational about what you should have done. You cannot possibly have anticipated all of these expectations so why try. Just focus on doing a good job.

One strategy to limit your liability exposure is to let your client know where you are recommending waranties and obtain his input.

18

A reason to not rely heavily on installer warranties is that subcontractors seldom have the financial resources to underwrite their warranties, short of purchasing a project bond. Another reason is the tenuous existence of the subcontracting firm. For that reason, manufacturers often get into the act even when a manufacturer warranty is not required, by bonding their installer firms in order to sell their products.

A school district client is ferocious about requiring manufacturer extended warranties on about two dozen Arch/MEP items. They employed a staff person full time to manage their warranty program. I’ve often wondered if their annual collected claims totalled their administrative costs.

One positive reason to require manufacturer warranties for certain items is the extent of manufacturer engagement that comes with it. For some work, the manufacturers become cautious about the installer firms they will write those warranties for; they also want to be on the jobsite frequently to reduce their warranty risks; both results benefit the owner.

19

I apologize for the length of this post - but I did not want to leave anything out. There many problems with warranties that I’ve found most Owners (and many Specifiers) are not aware of wanted to try to cover as much as possible. You might just print it and save it for reference…heck, I don’t want to read it! :wink:

“When the shit hits the fan people will invent all sorts of rational about what you should have done. You cannot possibly have anticipated all of these expectations so why try. Just focus on doing a good job.”

Having been on the Specifier, contractor and manufacturer sides of the warranty issue I think that is an excellent summary.

Under the “standard of care” defense (based on my experience) I tend to reject almost all warranties, and if an owner or property manager demands one I mention that I will need to write a “non endorsement” letter stating the warranty was an owner decision made against my recommendation. That usually ends it, especially if I can explain “real life” to them:

Warranties appear for two reasons: 1) because the owner or A/E wants one, and/or 2) a manufacturer dangles one as a sales tool.

Gerard, extended warranties are a manufacturer’s invention. For example, 25 years ago we rarely saw warranties for deck coatings, elastomeric wall coatings (both part of my little niche) or roof coatings (roofing yes, but not coatings).

But someone…it’s long forgotten who…decided to offer a “10 year warranty” on professionally-applied systems only; then some manufacturers printed huge “!0 YEAR GUARANTEE!” on can labels, initiating implied warranties in the consumer market. Not to be outdone, a competitor went to “15 years” and the dominos started falling.

Heck, I’m seeing 50-year warranties tossed around. And I have actually seen one proposed 100-year warranty!

It’s a monstrous can of worms.

These “Extended warranties” (“container warranties” have different conditions, but are just as ridiculous) for the most part require inspections at specific intervals and subsequent maintenance of the installed product if necessary (this is universal, not limited to paint/waterproofing).

The maintenance - which will ALWAYS be required, since the “inspection” is performed by the manufacturer, is NOT free; it’s also not sent out to bid. It costs whatever the manufacturer and installer want it to cost! Where there’s a chance a product might not need maintenance the manufacturer will charge for the warranty up front - a specific fee tied to the $$ value of the order. In other words, you can pay now, or pay later…but you WILL pay!

And what you are paying for may not be necessary - because if you want your warranty to continue, you are at the mercy of the manufacturer.

The fine print - almost every warranty I’ve seen for construction products covers only one or two things:

  1. Replacement of failed product/parts, and only the specific failed “part” - NOT an entire assembly, layer of deck coating or whatever AND NOT THE INSTALLATION.
  2. Material/equipment as above plus the labor to install it; but NOT TO ACCESS IT, as I’ll describe below.

“Material warranties” cover only the first part - and the idiocy of the scenario is this - What good does it do for an owner to be given a quart of paint with which to repair 5-6 blisters 20 stories up, or a gallon to replace the coating on an anodized storefront?

Material-only warranties are inevitably useless to an owner.

But as a sales tool they work - I’ll admit to at least curiosity if someone mentions a 50-year warranty.

A labor and material warranty also includes the repair work. On the affected ares(s) ONLY (or to replace the steel screws with stainless, or whatever very specific item is covered and not one thing more).

BUT - there are universal disclaimers that require the owner to provide access to the area, surface, equipment etc. If a below-grade waterproof membrane has failed, that means the owner will have to demo enough of the nice new parking lot to gain access (and slope it to meet OSHA requirements) so the contractor can install one square foot of sheet membrane. Negative-side repairs might work fine and be less expensive - but they’re not covered; ONLY the original item or its replacement (if discontinued) is covered. So the $3,800.00 helicopter rental to lift a 2-ton HVAC unit to fix a busted conduit under it is on the owner’s dime - the warranty covers $12 in parts and $77 labor.

OR the owner might need to bear the cost of draining a 12-acre pond, demo of 1’ of concrete (and rebar), 6’ of excavation and then replacing all that stuff after a manufacturer paid $80 in gas and time to have a tech guy spend 10 minutes fixing a 1"opening in a seam.

These are not exaggerations - these are typical of conditions I’ve encountered in warranties.

The labor and material warranty, by the way, is issued by the manufacturer - the contractor/subcontractor is not a party to it. The labor is provided through a specific contract (or handshake) between manufacturer and contractor/subcontractor, not contractor and owner - so ALL claims run through the manufacturer, and all verification of claims runs through them as well!

Terms such as “unforeseen conditions”, “acts or omissions of the purchaser (usually a subcontractor) or any party(ies) other than the manufacturer…”, “…and if after inspection by the manufacturer’s representative (insert manufacturer’s name here) determines there is a product defect…” (the wolf guarding the henhouse…), “…but under no circumstance shall the replacement cost, including labor and reasonable calculation of inspection costs, exceed 3x the cost of material/equipment/widget(s) originally installed in/on the affected area/equipment” ad nauseum.

I used to be one of the “black hat” guys. I wrote warranties and performed inspections as an employee of well-knownn manufacturers.

The very simple fact is this - a warranty is created for the sole purpose of protecting the manufacturer. Period. The longer the warranty, the more loopholes and conditions are included. Report a problem as soon as you “discover” it? Disallowed - it had to be reported within 10 days of occurrence (and sorry, but the fine print requires monthly inspections…oh-oh…missed that, huh?).

Equipment didn’t operate quite right 10 days after substantial completion…but a couple of kicks and there were no more problems. Until it failed after 7 years, which is no big deal because you have a 20-year, no-limit warranty!

Except the first incident was noted in the manufacturer’s files - oops again - it had to reported within 10 (or 30, or whatever) days. Denied!

As a project manager for a contracting firm, I loved warranty jobs - unless the manufacturer didn’t know “the game”. As long as they did I had no worries. This did NOT mean I would allow poor workmanship - but I had peace of mind, as I knew I was protected from expensive claims.

From a Specifier’s viewpoint (and as a knowledgeable owner) a warranty is not worth the paper it’s printed on. I would MUCH prefer inspections at various stages of the job (no matter WHAT type of product is involved). Eyes, a camera and a written report are far more valuable than a piece of paper with more holes in it than Swiss cheese.

Last - if you forget or ignore everything else, remember this one point - 99% of the warranties that cover a time period over 10 years will NEVER be “actionable”.

Because somewhere in the 7-10 range…often earlier…the warranty will be lost, personnel will change and nobody will have a clue there ever WAS a warranty.

And with warranties that do not have a specific cost tied to them, over half (this is anecdotal but based on my dealings with many manufacturers and general contractors) are never part of the project closeout AT ALL - they’re completely forgotten.

20

Thank you all for your wisdom and for sharing your experience with those who participate in these discussions. My post (and reason for posting it) is that I love being an agent provocateur. It very often elicits answers on areas and subjects that I hadnt thought about, such as the explanation Richard Howard gave us on limited warranties. After much research and many phone calls, the following is what I discovered:

Q: I am trying to identify the types of warranties that most of us specify. For instance what is the difference between manufacturers and installers warranties?
A: The difference should be obvious, one is for materials and seldom workmanship, and the second is for workmanship but often covers materials; these warranties are usually for 2 years. There are exceptions to the above. Some manufacturers will provide extended warranties for labor and for materials.

Q: Can we get a workmanship warranty from any product manufacturer?
A: See above for answer.

Q: Why do we need them? For instance, why do we not require warranties for structural steel and we do for roof membranes? I would think that structural steel is more important for life and safety.
R: Mentioning structural steel was meant to illustrate how difficult it is to find a global answer to questions on warranties. However the corollary is still valid.

Q: Once we specify them (the warranty), are they easily enforceable by the owner I think of all the exclusion clauses found in roofing and waterproofing warranties – and what do they achieve? Also, even though we specify replacement of overburden for failed waterproofing systems, overburden replacement is always excluded from the warranty; so what we get is a bucket of material left at the curb.
R-1: To the first question Id like to get a facility or building manager or an owners to describe his or her experience in enforcing a warranty.
R-2: To the second question, I found that placing an overburden over 6 inches or mud set pavers, or a concrete slab over a WP membrane shortens the manufacturers warranty considerably. Pedestal-set pavers are acceptable for extended warranties.

Q: Wouldnt it be in the owners interest in the end to have a full time clerk of the work, as in the old days, rather than spending money buying warranties?
A: Yes and probably cheaper in the long run.

I also found that all the manufacturers warranty that Ive looked at are labeled Limited Warranty. If an owner were to accept such a warranty, hed have to forgo all other recourse he or she may have against the manufacturer whose product failed. Also, all the limited warranties I read restrict the manufacturers liability to furnishing new materials they do not include labor! So what good is it to the owner of a facility with a failed liquid-applied waterproof membrane to have pails of urethane coating delivered at the curb?

To recap, with few exceptions, a 2-year labor and material warranty from a reputable subcontractor may be the best deal for the money for a facility owner.