This article was written for the AGC’s Law in Brief and first appeared here.

Part I of this series traced the history and development of sustainability in construction and explained why design-build (“DB”) contracting is particularly well suited to achieve sustainability objectives. But selecting DB contracting does not by itself ensure a sustainable outcome. The parties must define their sustainability objectives with precision, establish measurable performance criteria and identify who will measure compliance with the criteria, and also draft contract terms that clearly and fairly allocate the associated responsibilities and risks. Otherwise, the completed project may fall short of its sustainability objectives and expose the parties to claims, disputes, and litigation. Part II offers a non-exhaustive list of practical guidance for addressing these issues and reducing those risks.

This article references the ConsensusDocs 310 Green Building Addendum, in conjunction with an agreement between the Owner and the Design-Builder (e.g., ConsensusDocs 415)[1]^, [2] and AIA Document E204–2017 Sustainable Projects Exhibit,[3] together with AIA A141,[4] as its contractual baseline. The five-part framework that follows is a roadmap for allocating sustainability risk between private owners and design-builders: define the requirements, identify hidden performance guarantees, map out the sustainable objective, address third-party certification risk, and track performance against agreed benchmarks.

A. Analyzing Sustainability Requirements

The threshold task in any sustainability-driven DB project is specifically defining the sustainability requirements. Both ConsensusDocs 310 and AIA E204–2017 contemplate that the owner will identify a “Sustainable Objective”—for example, the certification level or performance standard the project must achieve.[5] Under AIA B101, if the owner identifies a Sustainable Objective in Article 1, the architect “shall provide, as a Supplemental Service, the Sustainability Services required in AIA Document E204–2017.”[6]

At this preliminary stage, the parties should engage competent construction counsel to guide them through several key risk determinations and allocations. First, the parties should evaluate whether the sustainability objective is outcome-based (e.g., achieving LEED Gold certification) or process-based (e.g., incorporating specified sustainable measures regardless of certification). Second, the parties should evaluate the degree to which the objective is negotiable during design development—ConsensusDocs 310 establishes a “Sustainability Plan” that governs project execution, including procedures for adapting to mid-project certification system requirement changes.[7] Third, the parties should evaluate whether the project program requirements, budget, and schedule can realistically support the stated objective. A contract that specifies LEED Gold without budgetary commitment to the modeling, enhanced commissioning, and materials documentation required to accumulate the required points under the applicable third-party review system,[8] potentially creates latent risk for all parties.

B. Identifying Hidden Performance Guarantees

A significant contractual pitfall in green building projects is the inadvertent creation of performance guarantees. A DB agreement that states that the design-builder “shall achieve” or “will deliver” a specific certification level may be construed as imposing a guarantee rather than a best-efforts commitment, thereby potentially creating an ambiguity in risk-allocation.

In private DB contracts, counsel must carefully distinguish between, and parties must be aware of, three tiers of obligation: (1) a guarantee of certification outcome, (2) a commitment to design and build the structure to specified sustainability measures with certification as an intended but not guaranteed result, and (3) a best-efforts obligation to pursue sustainability goals. ConsensusDocs 310 sets the tone by allocating responsibility for executing the sustainability plan while contemplating that certification decisions ultimately rest with the third-party certifying body.[9] Practitioners should review specifications, Request for Proposal language, and proposal commitments for terms that could be interpreted as unintended guarantees.

C. Evaluating What It Takes to Meet Sustainable Objectives

Achieving sustainability objectives requires the parties and their respective counsel to understand not only the target certification level but also the pathways available to accumulate the required points or meet applicable performance thresholds. For private projects, the contractual sustainability plan should map available credit categories against the project program requirements and budget. Parties must understand that it is impossible to certify a building by maximizing any single sustainability metric (e.g., energy efficiency)—certification under both LEED and Green Globes requires balancing credits across multiple categories including energy efficiency, water efficiency, materials and resources, indoor environmental quality, and site sustainability.[10] Where state regulations impose sustainability requirements on private projects, even these prescriptive regulatory frameworks mandate achievement across multiple sustainability fronts.[11]

The DB contract should clearly define which party bears responsibility for each element of the sustainability path—from energy modeling and lifecycle cost analysis during design to materials procurement documentation and commissioning during construction. AIA E204–2017 addresses this through its framework of “Sustainable Measures” that the design-builder must incorporate, providing a contractual mechanism for pursuing the sustainability objective.[12]

D. Weighing Third-Party Evaluation Factors Against Contractual Obligations

A common tension in green building contracts is the relationship between the parties’ contractual obligations and the requirements imposed by third-party certification systems. LEED, managed by the U.S. Green Building Council, operates as a self-assessing system that awards Silver, Gold, or Platinum certification based on total credits earned across defined categories.[13] Green Globes, supported by the Green Building Initiative, employs a web-based audit tool using questionnaires for each project phase, awarding one to four “globes” based on the percentage of achievable points earned—with One Green Globe requiring 35% or more of total possible points.[14]

For owners and design-builders trying to choose an evaluation system, the federal statutory framework under 42 U.S.C. § 6834 provides useful criteria for evaluating certification systems: (i) the ability of assessors to independently verify criteria; (ii) the capacity for public comment in the standard’s development; (iii) whether the standard was developed through a consensus-based process; (iv) the robustness of criteria for high-performance buildings; and (v) national recognition within the building industry.[15] Private parties can use these same factors to select which system to require contractually.

The contract must also address the risk that a third-party certifying body may change its requirements, interpretation, or point allocations during design or construction of the project. ConsensusDocs 310 accommodates mid-project certification system changes, thereby mitigating delays and confusion by providing a contract mechanism to adjust the parties’ performance obligations when certification targets shift during the project.[16]

E. Reviewing Scoring Methods to Track Sustainability Performance

Effective sustainability management requires ongoing performance measurement against contract objectives. Both LEED and Green Globes employ point-based scoring systems—for example, LEED Gold requires accumulation of 60–79 points, and achieving a single Green Globe requires earning thirty-five percent of achievable points across categories, including energy, water, resources, emissions, and indoor environment.[17]

Once the project is complete, it is very difficult or impossible to cure a substantial failure to meet the sustainability requirements. As a result, it is important that the DB contract incorporates a scoring methodology that enables parties to track progress toward the sustainability objective at defined intervals throughout the project lifecycle. The parties should consider specifying the following in their contract: (1) a baseline scorecard identifying targeted credits or points with responsible parties for each; (2) periodic reporting intervals at schematic design, design development, construction documents, and substantial completion; (3) a threshold below which the design-builder must notify the owner that the sustainability objective is at risk; and (4) a dispute resolution mechanism specific to sustainability performance disagreements.

Federal performance standards offer a useful model: for example, 48 C.F.R. § 36.104 mandates implementation of “high-performance sustainable building design, construction, renovation, repair, commissioning, operation and maintenance” practices.[18] Private contracts should similarly establish measurable benchmarks and periodic verification protocols, using the certification system’s scoring framework as the contractual measurement tool.

Conclusion

Taken together, the foregoing five-part framework, which is not exhaustive, provides a general roadmap for allocating sustainability risk between the private owner and the design-builder. The parties should define the objective, avoid unintended guarantees, assign responsibility for the means of achievement, account for changes in certification requirements, and use measurable checkpoints to identify and address risk before it becomes a claim.

Thoughtful risk allocation protects both parties: owners receive a realistic, measurable path to their desired outcomes, while design-builders are provided means to control the risks added by the sustainability objective. Prudent owners and design-builders will treat sustainability objectives as a living risk-allocation plan by documenting responsibility, cost, schedule, change, and verification issues during procurement and revisiting them at regular, predetermined design and construction milestones.

Stay tuned for Part III.

[1]ConsensusDocs 310, Green Building Addendum (2011).

[2]ConsensusDocs 415, Standard Design-Build Agreement and General Conditions (2025).

[3]AIA Document E204–2017, Sustainable Projects Exhibit.

[4]AIA Document A141–2014, Standard Form of Agreement Between Owner and Design-Builder.

[5]AIA Document E204–2017, Sustainable Projects Exhibit §§ 1.2.1–1.2.3 (defining “Sustainable Objective,” “Sustainable Measures”, and “Sustainable Plan”).

[6]AIA Document B101–2017 § 4.1.3 (requiring the architect to provide the Sustainability Services required in AIA Document E204–2017 if the owner identifies a Sustainable Objective in Article 1).

[7]ConsensusDocs 310, Green Building Addendum §§ 2.3–2.4; 3.1; 7.9 (2011) (defining “Elected Green Measures” and “Elected Green Status” and establishing that Green Measures will be required to achieve the Elected Green Status and/or environmental benefits, and a method for adjusting the contract should changes that affect the Green Measures be required).

[8]See The Science Behind Green Building Ratings: Hearing Before the Subcomm. on Energy & Env’t of the H. Comm. on Science, Space & Tech., p. 112, 112th Cong. (2012) (stating that LEED Gold requires accumulation of 60–79 points).

[9]ConsensusDocs 310, Green Building Addendum § 4.7 (2011) (making the Green Building Facilitator responsible for compiling and submitting required documentation to the certifying body, but leaving the certification determination to that body).

[10]The Science Behind Green Building Ratings: Hearing Before the Subcomm. on Energy & Env’t of the H. Comm. on Science, Space & Tech., p. 112, 112th Cong. (2012) (explaining that neither LEED nor Green Globes can certify a building at any level using only energy efficiency).

[11]For example, Oregon regulations require facilities earning a LEED rating must accumulate “at least two points under Energy & Atmosphere Credit 1 (Optimize Energy Performance).” Or. Admin. R. 330-090-0110 (71) (2022).

[12]AIA Document E204–2017, Sustainable Projects Exhibit §§ 3.1–3.2 (establishing the framework for “Sustainable Measures” to be incorporated by the DB contractor).

[13] See https://www.usgbc.org/leed.

[14]Green Building Initiative, Green Globes for New Construction Technical Reference Manual (2024), p. 14 (stating that One Green Globe requires at least 35% of total possible points).

[15]42 U.S.C. § 6834(a)(3)(D)(iii)(I)–(V) (setting forth criteria for evaluating green building certification systems, including independent verification, public comment, consensus-based development, robustness of criteria, and national recognition).

[16]ConsensusDocs 310, Green Building Addendum § 7.7-7.8 (2011) (addressing changes in certification system requirements during the project and adjusting price and scope based on Green Measures through change orders).

[17]The Science Behind Green Building Ratings: Hearing Before the Subcomm. on Energy & Env’t of the H. Comm. on Science, Space & Tech., p. 112, 112th Cong. (2012) (stating that LEED Gold requires 60–79 points and that Green Globes uses a percentage of total achievable points across defined categories).

[18]42 U.S.C. § 8287(a)(2)(A); 48 C.F.R. § 36.104(b) (requiring annual energy audits and implementation of “high-performance sustainable building design, construction, renovation, repair, commissioning, operation and maintenance” practices).