Case History 99
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[00:00:00] 

Liz: Welcome to the GBA case history series brought to you by the GBA podcast. My name is Elizabeth Brown and I'm Principal Geotechical engineer at JLT Consultants.

Tim: And I'm Tim Rodriguez, Chief Operating Officer at BSK Associates. Today's case is a fascinating one. It's about a small design build company tackling its very first office building project, and let's just say the lessons here are worth their weight in concrete.

Liz: Ooh. I like the way you put that. So this story has a little bit of everything. There's a tricky hillside site. There's a CEO that perhaps has some more confidence than experience. There's engineers that are trying to do the right thing, and ultimately a million dollars of lost money.

Tim: Yeah, there's a lot to cover. So let's buckle up. We're gonna walk through the whole saga step by step, and then break down the 12 lessons that we have to learn from this.

Liz: All right, so let's [00:01:00] start with the basics and set the scene for the story. So there is a CEO of a small design build firm, and he calls up a geotechnical engineering company who is a GBA member firm, and he asks for a proposal.

Tim: Right. And the project he's looking for to build is a two story office building, which sounds simple enough, right? But the site itself was anything but simple.

Liz: Oh yeah, this one was a doozy. The overall development had been rough, graded more than a decade earlier. So I mean, we're talking about cut ridges and valleys were filled with 40 to 50 feet of fill and all of this is perched on a hillside that's, you know, about 60 feet above a freeway.

So the development infrastructure, so think like the roads, utility, storm drains and stuff. It was already completed. And about 70% of the building pads in this development were already built out.[00:02:00] 

Tim: Wow. I mean, initially that just like makes me wonder what stopped this thing previously. Right. But, but the kicker at this point of the discussion is that the, this was the CEO's first office building project and despite the, he probably looked, I can imagine like, oh, this is all, you know, got a headstart on the project.

That may or may not have actually been a good thing in the end. So he thought proximity to the engineering firm's office would make things super efficient. So, you know, here's a big spoiler alert for everybody out there. Selecting your geoprofessionals. Proximity doesn't always equal competence.

Liz: Oh abs. Absolutely. So the GBA member firm, they prepared a two step agreement. So they kind of, they kind of broke things out. So first step was gonna be, hey. We're gonna do some preliminary services, right? We're gonna review the previous work done on the site. We're gonna do a site reconnaissance and you know, we'll advance some limited boring.

So we really just wanna see, hey, what are we dealing with here? And then their plan for the second [00:03:00] step was, okay, we're gonna go in and we're gonna conduct a more thorough design level geotechnical engineering study. And at that point in time, we will develop some confirmation dependent foundation design recommendations.

So the CEO, he signed the member firm's contract and they got to work and during the first step they found, you know, some decent compaction of that film material that was placed. But there were also some warning signs.

Tim: Yeah, like six areas of minor settlement in the streets nearby, and even more importantly, a longitudinal crack in the building pad soils, which ran parallel to the slope, of the hillside, which was about 30 to 60 feet from the top of the slope.

Liz: And Oh goodness, I see that as a geo professional and I'm, it screams, right? It's like red flag. You need to pay attention. There's something going on here.

Tim: For sure. And so the project manager proposed some additional field work to [00:04:00] explore the situation further. And what ended up happening was they recommended some over excavation at the project, some recomp compaction, and then reinforcing, the site with some geogrid, along with some drilled pier foundation.

So overall, you know, you might think it's pretty solid advice.

Liz: But you know, this is where that CEO, with a lack of experience steps in. And he was like, Hey, hold up. Like your recommendations are excessive. Oh, and they're too expensive.

Tim: Get on with the value engineering right?

Liz: yeah, you know it so you know, you know, project manager, trying to keep, keep people happy and whatnot. So he agreed to go ahead and drop the geogrid, but he did warn orally about the risks. However, you know, big, big issue here, there was no written documentation about what had transpired, right?

So, as we've said, if it's not [00:05:00] documented, did it really happen? So that was an issue here.

Tim: Yeah, I mean, for sure. And we talk endlessly about the value of documentation in GBA and, you know, uh, just if you're, if you wanna hear more about the importance of it, go check out any of the case histories really, but just for sure case history 89. It's a great story that speaks specifically to the importance of documentation.

But in this case, the CEO followed up and said he'd, you know, lower the pad elevation, move the building back from the slope. And then based on that, change, the engineers revised their design to become shallow foundations and eliminate the piers.

Liz: Well, here's the twist, right? The CEO never actually moved the building back, and he kept it. He had it right at that slope's edge.

Tim: Yeah, critical, communication error there, because what ended up happening was the project manager missed that there wasn't a change that was made. And when he reviewed the grading plans, because he [00:06:00] rushed through the process.

Liz: Right, and I mean, it's one of those things, Tim, and I'm sure that you've been in this situation, right? Like sometimes it's like, oh, another plan review. You know, you're checking a few boxes, you know, high level looking it over, right? Like is the geotech being met? And you know, it kind of seems like a small and inconsequential task sometimes, but really, like in reality it's so important because it gives us, as the geoprofessional another chance to really look through everything and make sure that, that everything is according to plan.

And. You know, really cover yourselves. Um, because I mean, there's been plenty of times doing plan review where I've seen things where I'm like, Hey, you know, this isn't quite matching the geotech report. Let's get together, let's discuss it. You know, sometimes it's just an oversight on the plans or sometimes, you know, they specifically changed it and, you know, you gotta work through that process.

But in this case, it was [00:07:00] missed. And unfortunately, like things just spiral, like started to spiral. So the CEO continued to cut costs by reducing, onsite observation during construction and those testing services. He's like, no, no, no, not full-time. That costs too much money. We're only gonna go part-time.

Tim: Yeah, that's just it. It can frequently be something really shortsighted on the part of, uh, developers. Or owners, and you know it because it's really kind of like saying, Hey, we're only gonna check our parachute every other jump. We don't really need to worry that much about something going wrong.

And, and it's funny because I've, I know I've had this conversation with various clients where, you know, a lot of what we do during construction is their reasonably priced form of insurance. I mean, you don't have any other way to find out what happened or whether some material made some specification, unless you actually have some testing and observation services on site, for whatever those, you know, elements that need to be observed are.

So [00:08:00] anyway.

Liz: Right. Well, and I think it goes back to making sure that the owners and those involved like that, that we as geo professionals kind of sell ourselves better and sell the value that we're providing to them, like you said. Right. We're, we're kind of like insurance making sure that things are getting done properly Right.

And making sure that we're. We're pushing. No, I mean, not hard pushing right, but like pushing the fact that, hey, you know, what we do brings value to the project.

Tim: Absolutely. And it's not even, you know, this is, we're speaking on the, from the perspective of the owner or developer in this case, who of course is, is cost conscious or at least, you know, aware of what they've got budget for. But you know what, what we're doing out there is the kind of that last line of defense.

Not just for our own professional services and maybe our, in this case, a geotech. It could be an environmental function, but, it also is for the other design professionals on the project and the eng, the architect, the design team as a whole. And so, you [00:09:00] know, if everybody's working together and understands the, to your point, the value that is added from these services, I think it would be hard pressed to argue the fact that it's not warranted.

Liz: Agreed. Absolutely. So in this case, soon after construction, I mean problems, problems started popping up, right? So one of the things is that. A retaining wall started to move down slope. Some pavement started ravelling and even the roof was leaking.

Tim: And the wall issue with the wall moving down slopes, was traced to missing drains. And so the CEO tried to blame the engineers about this, but they pushed back pointing out that the drains were clearly specified and that, you know, reduced observation was the CEO's choice.

Liz: Right. Again, bring, you know, the value that that's brought there.

Tim: Mm-hmm.

Liz: Over the next two years, the building owner brought in other geotechnical firms and one recommended a tieback slope [00:10:00] reinforcement system that cost over $1.5 million.

Tim: Wow. And then came the lawsuit. Which I guess it sounds like it maybe was inevitable with everything that's been described here. So the owners sued the original engineering firm, and they alleged that they were negligent in their performance.

Liz: Which was interesting because the slope stability wasn't really the issue here. The fact that the building sat right at the slope's edge made the engineers look negligent, even though, if you remember from earlier in the story. The CEO had agreed to move that building away from the edge of the slope, like the geoprofessional had wanted.

Tim: Yeah. Undocumented, communication there. So what ended up happening was the firm settled during the trial and they ended up paying $2.6 million plus legal expenses. So in total, the damages that [00:11:00] they, observed and, and had to pay for were over three and a quarter million dollars. That's a, that's a.

Sizable amount of money and man, it's just something that you hope nobody has to entertain.

Liz: Right. I mean, that's a big hit. You, you know what I mean? That's a lot of money. All over something that, you know. A little bit better communication perhaps could have helped there. So really, Tim, I think maybe at this time we should really talk about what are some of the things that we can learn from this story.

Tim: Right. So I, there's actually 12 lessons that we can touch on here. And so let's walk through them slowly 'cause each one's worth unpacking a little bit. First let's talk about the, the value, uh, and of a go no go analysis. And that one should always be conducted.

Liz: Oh, absolutely. A go, no go analysis. There's been times where. In my career where there's been projects that like, they're just enticing. You know what I mean? It's like all that, like that would be such a cool project. Like I really want to work on it. But then when you [00:12:00] really, you kind of like put that aside and really, you know, kind of put on that business hat and take a step back and do that go no go analysis. Like sometimes you realize, you know what, like maybe the risks aren't really worth it. And in this case, the firm never asked whether this project was worth the risk or not.

Tim: Yeah. And even beyond the firm, remember the CEO had no experience with office buildings, any in his prior construction experience. So that alone should have been a red flag. And, you know, even if, if it doesn't turn you away from, pursuing it with that client in the first place because of their lack of experience, it should at least have, you know, created some perspective on how you do move forward, right?

Like, what are the things you might add in as your behaviors or your proposal or contract to sort of make sure you're able to have some cushion to, if things go wrong, which they did.

Liz: Right. Yeah. And really kind of raise level of, Hey, what? What's going, what's [00:13:00] going on? Right? Like you're paying a little closer of attention. Or like for the project manager, right? It should have maybe been a little more at the top of his head of, oh, hey, you know, these guys haven't ever done a building like this before.

I should really make sure I do a thorough plan review.

Tim: Mm-hmm. Right. So the next one is to learn about your client and, and, you know, what's the, what do you know about them and, and is there anything there that, that we need to unpack, that would influence your decision on whether you work with them?

Liz: Exactly, which goes back to, you know, how we, we've talked that, hey, you know, the, the CEO hadn't ever done this kind of a project before, which, okay. We should take that into consideration. But another thing in this case is that the CEO was a close friend of the building owner. So I mean that relationship matters.

I mean, how many times have we seen, oh, you know, close friends or maybe even family members or something doing something together, and it just turns bad.

Tim: Right. And the member firm, if they had [00:14:00] asked the, why the owner chose an inexperienced firm to do the construction or build, develop the site, you know, they could, maybe they would've seen trouble coming instead of just relying on it being a relationship driven decision.

Liz: Right, exactly. And I think that goes back to also learning about the client and the fact that sometimes. You don't always know who the, you know, the contractor is gonna be, or you don't know if they're inexperienced or not. So doing it, a little bit of that due diligence upfront can really help save in the long run.

Tim: Yeah. Ask some questions. So third, make sure your project managers are qualified. Uh, for the type of work and the project that you're gonna be engaging in.

Liz: Yeah, and I think in this one, you know, some inexperience was a big issue here, right? I mean, the project manager, perhaps if he had some more experience, wouldn't have been so quick to get rid of the geogrid or, you know, would've known to pay a little bit more [00:15:00] attention in the plan review or some of the other issues and things that came up.

You know, some more experience or maybe even guidance from more senior level could have helped.

Tim: Right, and firms should make sure that they're assigning the right type of projects to managers. So high risk projects definitely shouldn't go to managers who aren't ready. It might be a good time to reiterate the GBA statement that, project risk is inversely proportionate to the project size.

So, you know, even small projects, really are, should be considered, potentially high risk by firms as well.

Liz: Oh, absolutely. Yeah.

Tim: So the fourth one is to understand and explain the standard of care for your professional services.

Liz: Yeah. And in this case, right, I mean, those initial recommendations were solid. And if they would've been properly implemented, likely, wouldn't have had the issues that happened. But, you know, dropping that jail grid was definitely a mistake combined with some of the other things that happened along the way.

Tim: Right. And [00:16:00] then failing to document the warnings that came by having your recommendations, rejected or a different approach taken to them. Not getting those in writing made the whole situation worse.

Liz: Agreed.

Tim: So, uh, you also need to respond to red flags whenever they pop up.

Liz: Right, and responding to red flags is one of those things of. Oh, I'll deal with that later. Like if something pops up, you know, and it piques your interest of, oh, this could be a problem. It's one of those things of you, you deal with it and you deal with it then, because the longer you let it set, the worse, perhaps the situation can end up being.

Tim: Absolutely. I frequently, uh, you know, I, I know people don't like dealing with tough situations or even necessarily always hitting problems, but, uh, head on. But you need to do that. These things don't resolve themselves. They don't miraculously disappear, and you need to, take care of them because it'll only get worse.

Liz: Agreed. Yeah.

Tim: So, six is to be [00:17:00] aggressive about solving problems. So maybe we touched on that with that last comment, but, really that's a key factor here.

Liz: Yeah, tackle, tackle 'em head on. Absolutely

Tim: Yeah. Waiting will only make molehill into mountains, which we're all trying to avoid. So, seven. Do not relax your client project acceptance procedures.

Liz: Right. So I mean, how many times, right? You have a slow economy or maybe it's a familiar client or, you know, whatever the case may be, right? A new, new business, right? And you just wanna make sure that you have work coming in the door. You gotta make sure and remember, hey, you know what, there are standards that should just never be lowered.

And, you know, knowing what those are and recognizing them and really holding a firm line of, I'm not gonna cross that line. This is the standard and I, I'm not gonna cross that line.

Tim: Yeah, you kind of gotta find yourself in a place where you're okay with. You know, if, if a, if a client or somebody wants to create that situation that you can see a problem occurring out of. You kind of gotta be okay [00:18:00] to walk away or let them hand it off to maybe a competitor that if it's gonna be something that doesn't, work out, let them deal with that, not you.

'Cause cutting corners is always gonna come back to bite you.

Liz: Right.

Tim: So eight, quality always wins. So I guess this is just adding on to what we kind of just said. To be honest.

Liz: Oh, absolutely. Remembering that every part of the process is important and making sure that you gotta have quality built into your culture, right? That, hey, it is important. We expect quality. Like don't, don't rush things through. It's important what we do, and we gotta make sure that our quality is there.

Tim: Right. And in this case, you know, we had a situation where the project manager rushed through reviews, and so some things got missed, and recognized in general that, you know, any of this quality related stuff, it, it's detail oriented, right? It takes time. It may cost a little bit of money.

So first and foremost, you know, as a, as a professional, you, that's time that should be charged to the client. They're the ones that are benefiting, [00:19:00] by your efforts. So certainly, you know, things like reviews and, and those type of items are part of the project, value and what you add to it. So make sure that you build that into your contracts and agreements because the result of not, while it may cost a little bit of money upfront, the result of not doing it as expressed in this case history is that it can cost millions of dollars either for the owner of the project or for you, or both.

Liz: Right, exactly.

Tim: All right, so nine, part-time construction materials testing and inspection services leads to part-time quality.

Liz: Oh, absolutely. It's one of those things of, you know, observation services aren't optional, right? Like it needs to be done. It's there for a reason. It wouldn't be required if there wasn't a purpose for it. And making sure that that, that, that testing and observation is done.

Tim: Right, and, and really just kind of to adding onto what I said a few seconds ago. This is [00:20:00] insurance. It's their benefit. The owner's benefit to have it done. And so part-time oversight equals full-time risk. And so if you have a client that wants to reduce what's, you know, required by code or a standard of practice or anything like that, make sure you document that. This is their decision.

And somebody other than you should be taking that risk on whatever exposure is created.

Liz: Oh, absolutely.

Tim: So, beware of complacency.

Liz: Oh, don't we all kind of fall into complacency at some point in time? It's just, I think, human

Tim: Unfortunately. Yeah.

Liz: right? But making sure that, we're aware of that and we're not falling into the complacency, right? We're not of, oh, we'll just keep an eye on it, or, oh, it will be okay. Or, oh, I've done this before, of really making sure that we're being thorough in what we do.

Tim: Right. Then 11, if it isn't in writing, it didn't happen. And hopefully we're we're driving this one home once again.

Liz: All right. Or oral warnings don't hold up in court. Right? Like you [00:21:00] gotta write it down.

Tim: Exactly. And then 12, demonstrate your financial fortitude.

Liz: Right? So firms that stay involved even at their own expense, they often control the narrative and most of the time, things turn out better for them when they stay involved and make sure that things are happening the way that they should be. Okay.

Tim: Right, and in this case, you know, stepping back really left everybody vulnerable in this project.

Liz: Absolutely. And you know what Tim, what really strikes me most is how small decisions here, right? Dropping a geogrid, rushing the review, skipping documentation, how it really snowballed here, and it really ended up becoming a multimillion dollar loss.

Tim: Absolutely. It's really a reminder that engineering isn't just about technical solutions. It's about good judgment, good communication, and protecting yourself and your client, through good [00:22:00] performance.

Liz: Oh, absolutely. It's about courage. I mean, we've talked about this a little bit, right? But about having that courage to, to say no to a client who wants to cut corners. Like that's not an easy thing, but it's necessary and I think it's important for us, to teach our staff that of, hey, what authority they have and when can they say no or not say no, or hey, when is the right time to, to go up the chain and get somebody else involved if they see something that's not right.

Tim: Right, because at the end of the day, quality always wins and shortcuts are always gonna bite you.

Liz: Oh, absolutely. So really, if you are a project manager listening to this, remember that documentation is everything. Trust your professional judgment and don't let budget pressures push you into ignoring red flags.

Tim: And if you're a client, know that cutting corners doesn't save money. It just [00:23:00] delays the bill.

Liz: Right. So this concludes this episode of the Case History Series brought to you by the GBA podcast. I hope that you are able to take away some useful information that will help you and others at your firm make good risk-based decisions in the future.