As schools across the country open, most people in the Delaware Valley are well aware of the School District of Philadelphia’s financial woes. As the School District considers measures to help close its massive budget deficit, it has recently begun to take legal action that is particularly interesting.
About one month ago, the School District sued more than twenty design professionals that it enlisted for various school improvements as part of the District’s Capital Improvement Program. The goal? To recoup approximately $2 million in damages related to alleged deficiencies in the drawings and specifications for the various school improvement projects.
At this stage in the litigation, there is very little information available, as only Writs of Summons were filed. But, it is believed that the School District’s claims may arise out of a number of change orders issued to prime contractors on the projects in question. In theory, if the change orders were issued because of errors and omissions and not scope changes, design professionals may be liable.
Given the severe budgetary woes, it is not difficult to fathom why people may draw a connection between the School District’s shortfall and its recent litigation activity. Motive aside, this series of lawsuits is likely to affect the manner in which future School District contracts are drafted and administered. Though the implications remain to be seen, for future projects, it would not be surprising to see more tightly and thoroughly drafted contract documents and a more stringent change order process. It will also be interesting to see whether the litigation has a chilling effect and dissuades professionals or contractors from working for the School District in the future.
We will continue to monitor these cases and the potential implications for construction work administered by the City of Philadelphia, its agencies, authorities and departments.
Lane F. Kelman is a Partner with the Firm and a member of the Construction Group. He represents developers, general contractors, construction managers and the different trades in complex matters ranging from bid protests, contract negotiations and claim prevention & management.
Daniel E. Fierstein is an Associate in the Construction Group of Cohen Seglias and focuses his practice on construction law.