Last year ushered in a number of initiatives in the world of sustainable design, construction and operations and maintenance that should be of interest to developers, contractors, subcontractors, material suppliers, industry consultants, public agencies, sureties, and insurers, among others. Some of these apply to jurisdictions across the country, but we also summarize a couple of DC-only initiatives.
AGC’s Contractors Environmental Conference
Echoing the increasing impact of sustainable projects on contractors and subcontractors, the Associated General Contractors of America (AGC) held its first annual Contractors Environmental Conference, providing tools for contractors and subs to help manage risks and set priorities. Topics included integrating sustainability plans into a business, new stormwater requirements, legislative developments, green standards and green codes, managing owner expectations on sustainable projects, and operations and maintenance strategies. The second annual AGC Contractors Environmental Conference will be held in the metro DC area on June 13-14, 2013.
The United States Green Building Council (USGBC), having developed LEED 2012, retreated from issuing its next iteration of the LEED rating systems. LEED 2012, which was actually not issued during 2012, has now been denominated LEED v4, with the next voting period to occur in summer 2013. The LEED v4 rating systems will increasingly focus on, among other things, optimization of energy and water use. A key goal is to increase the emphasis on an integrated project process and building performance measurement and verification.
AIA Sustainable Project Documents
In May 2012, the American Institute of Architects (AIA) issued five Sustainable Project (SP) documents:
- A101-2007 SP, Standard Form of Agreement Between Owner and Contractor, for use on a Sustainable Project where the basis for payment is a Stipulated Sum
- A201-2007 SP, General Conditions of the Contract for Construction, for use on a Sustainable Project
- A401-2007 SP, Standard Form of Agreement Between Contractor and Subcontractor, for use on a Sustainable Project
- B101-2007 SP, Standard Form of Agreement Between Owner and Architect, for use on a Sustainable Project
- C401-2007 SP, Standard Form of Agreement Between Architect and Consultant, for use on a Sustainable Project
Notably, the AIA SP documents emphasize that the architect designs the building but that the construction and operations and maintenance are beyond the architect’s control. Similarly, the SP documents stress that the contractor constructs the building but that the design and operations and maintenance are beyond the contractor’s control.
Two other AIA SP documents are currently in the drafting process: (1) A133-2009 SP, Standard Form of Agreement Between Owner and Construction Manager as Constructor for use on a Sustainable Project where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price, and (2) A134-2009 SP, Standard Form of Agreement Between Owner and Construction Manager as Constructor for use on a Sustainable Project where the basis of payment is the Cost of the Work Plus a Fee without a Guaranteed Maximum Price.
FTC’s Green Guides
In 2012, the Federal Trade Commission issued its revised Guides for the Use of Environmental Marketing Claims, known as the “Green Guides.” The Green Guides are designed to help marketers avoid making environmental marketing claims that are unfair or deceptive. They apply to claims about the environmental attributes of a product, package, or service in connection with the marketing or sale of an item or service to individuals or in business-to-business transactions. They apply to environmental claims in labeling, advertising, promotional materials, and all other forms of marketing in any medium, through words, symbols, logos, depictions, or any other means. The Guides will help contractors and subcontractors avoid making claims about their environmental services that are unfair or deceptive.
Financial Security Requirement under DC’s Green Building Act
And what is the status of the controversial “green performance bond” requirement in the District of Columbia’s Green Building Act (Act)? The Act originally required that applicants for green certification must provide a “performance bond” guaranteeing that certain green requirements were met. In other words, the bond was intended as an enforcement mechanism. If a project failed to meet verification requirements in the Act, the bond would be forfeited to the DC agency that determined if the verification requirements were met. Various stakeholders in the industry objected to this bond requirement, and the Act has been amended. The bond requirement has finally morphed into a “financial security requirement” that can be met through one of four methods, only one of which is a bond.
On November 14, 2012, the DCRA Construction Codes Coordinating Board adopted emergency rulemaking, effective immediately, to amend the Building Code Supplement of Title 12 of the DC Municipal Regulations. The Notice of Emergency and Proposed Rulemaking provided as follows:
This emergency rulemaking is necessitated by the immediate need to implement provisions of the Green Building Act dealing with the applicability of the law to construction projects, the process for submitting a financial security for certain projects, drawdowns of the financial security, and verification of compliance with the Green Building Act.
The emergency rulemaking will expire on March 14, 2013. The Notice also gave notice of the intent to take final rulemaking action to adopt the amendment. The amendment was submitted to the DC City Council for final rulemaking action.
The regulation provides, among other things, that for privately owned projects a financial security must be submitted to the DCRA before issuance of the first certificate of occupancy for occupiable space in a story above grade plane. This financial security would cover the amount of fine that could be imposed under the Act. The amount of financial security is determined by a formula involving gross floor area of the project, with the amount of the security not to exceed $3 million.
Section 1301.1.5.2 of Chapter 13A of the Building Code sets forth the four methods allowed for financial security:
1301.1.5.2 Security for performance/form of delivery. The financial security requirement shall be met through one of the following four methods:
1301.1.5.2.1 Cash. If this option is elected, cash shall be deposited in the escrow account in a financial institution in the District in the names of the applicant and the District. A copy of a binding escrow agreement of the financial institution shall be submitted to the code official in a form satisfactory to the Office of the Attorney General, which provides that the funds can be released upon direction of the District . . . . If cash is used as the financial security, the amount of the financial security posted shall be discounted by 20 percent.
1301.1.5.2.2 Irrevocable letter of credit. If this option is elected, an irrevocable letter of credit benefitting the District shall be submitted to the code official in a form satisfactory to the Office of the Attorney General from a financial institution authorized to do business in the District. The irrevocable letter of credit, issued by the financial institution, shall comply completely with applicable regulatory requirements. If an irrevocable letter of credit is used as the financial security, the amount of the financial security shall be discounted by 20 percent.
1301.1.5.2.3 Bond. If this option is elected, a bond benefitting the District, which complies with applicable regulatory requirements, shall be submitted to the code official in a form satisfactory to the Office of the Attorney General. If a bond is used as the financial security, the amount of the financial security posted shall be discounted by 20 percent.
1301.1.5.2.4 Binding Pledge. If this option is elected, a binding pledge shall be submitted to the code official in a form approved by the Office of the Attorney General. The binding pledge shall be recorded as a covenant in the land records of the District against legal title to the land in which the project is located and shall bind the owner and any successors in title to pay any fines levied . . . .
The regulations further provide that, if a project fails to provide satisfactory verification of compliance with specific requirements within the prescribed time frame and any extensions granted by the code official, the code official is authorized to draw down on the financial security submitted as cash, irrevocable letter of credit, or bond, by submission by the District of the original security documentation. If a binding pledge has been provided, the District can enforce such pledge agreement pursuant to its terms.
International Green Construction Code
The much anticipated International Green Construction Code (IgCC) was released by the International Code Council (ICC) on March 28, 2012. It is a model building code for new construction and substantial renovations, to establish minimum green requirements, from design through construction, to certificate of occupancy, through operations and maintenance. It is a legally enforceable baseline of compliance, which is enforced by the adopting jurisdiction, not a third-party certification body. A legally enforceable green code is unlike the LEED rating systems, which were designed to be voluntary, aspirational goals. In the (former) absence of a model green code, various jurisdictions--from federal agencies, to states, to counties and towns--adopted versions of LEED as mandatory building requirements.
District of Columbia’s Proposed Green Building Code
The release of the IgCC last year generated much interest and discussion across the country. The regulations are not designed to replace existing regulations but to function as a green layer on top of the existing regs. The code applies to all commercial projects 10,000 square feet and larger and to multi-family residential projects four stories or higher. The IgCC is designed to be amended, if necessary, for local implementation.
The IgCC has been adopted by a number of towns, and several states have adopted portions of the IgCC. In 2011 Maryland became the first state to authorize local jurisdictions to adopt the IgCC; thus far, however, no local Maryland jurisdiction has adopted the IgCC into its building code.
The District of Columbia has been taking the lead in developing a Green Building Code based on the IgCC. A green task force has reviewed and studied carefully the provisions of the IgCC and proposed revisions to the IgCC to customize it for feasibility of application in the DC area. The code is in public comment period until February 22, 2013. The goal of the task force is to finalize the code and have it voted on by the DC City Council in Spring 2013, with full compliance required by Spring 2014.
DC’s Proposed Green Code: Selected Provisions Making DC a Greenlight District
- Alternative compliance paths could be one of the following: DC’s Green Building Act of 2006, with amendments; LEED certification; IgCC; and ASHRAE Standard 189.1
- Management of vegetation, soils and erosion control: soil reuse and restoration, containment and removal of invasive plants, 50% native planting requirement
- Light pollution control requirements
- Building site waste management - 75% diversion of debris and excavated soil
- Construction waste management - 50% construction waste recycling
- Material selection - 40% of materials shall be: made with recycled content, used materials and components, biobased materials, locally manufactured (500-mile radius), and recyclable materials
- Modeled performance path
- Energy metering and monitoring requirements
- Auto demand-response infrastructure - HVAC
- Building envelope systems - insulation requirements during roof replacement
- Various energy conservation measures - mechanical systems, water systems, electrical power and lighting systems, appliances and equipment, and renewable energy systems
- Water resource conservation measures
- Indoor environmental quality - building construction features, HVAC systems, material emissions and pollutant control
- Commissioning requirements
- Appendix A to the Code contains about 75 possible electives, of which fifteen are required for new construction and thirteen are required for substantial renovations. Some of the electives are enhancements of code requirements, and others are new features.
The IgCC and iterations of it have the potential to change how buildings are designed, constructed, operated, and maintained. The District of Columbia is crafting a code that will “green” the construction code to the maximum extent practicable. It is likely that other jurisdictions will look to the enacted DC Green Code as a model for amending and implementing the IgCC. Thus, it makes good business sense and is good risk management for building industry stakeholders to become familiar with the IgCC, DC’s iteration of the IGCC, and the potential impacts of the code on their businesses.