Define: Proposed Design

What Proposed Design Means in a Contract

Proposed Design is a defined term used in construction, engineering, and energy-related agreements to describe the computerized simulation model of a building as it is actually intended to be built, including its envelope, mechanical systems, lighting, and other energy-consuming features. Contracts reference this term to establish a fixed, documented basis for evaluating whether a project satisfies energy code requirements or contractual performance targets before construction is finalized.

The term matters because it creates a measurable, agreed-upon representation of the building that all parties, including designers, contractors, code officials, and sometimes lenders or utility providers, can rely upon. Rather than describing the building in narrative terms, the Proposed Design exists as structured data within an approved energy modeling software package, which allows for consistent comparison against benchmarks.

How Proposed Design Is Defined or Measured

Most contracts tie the Proposed Design to a specific energy modeling methodology or software tool approved under the governing building code or standard. The model typically incorporates architectural plans, mechanical specifications, insulation values, glazing performance, and equipment efficiency ratings as submitted by the design team at a defined project stage.

Measurement usually involves running the Proposed Design through simulation software to calculate projected annual energy usage, then comparing that figure against a baseline or standard reference design required by the applicable code. Contracts often specify:

• The exact software or calculation methodology to be used
• The project milestone at which the Proposed Design must be finalized
• Who bears responsibility for updating the model if design changes occur
• How discrepancies between the Proposed Design and the as-built structure are resolved

Because the Proposed Design is a snapshot in time, contracts frequently require that it be revised and resubmitted whenever material design changes affect energy performance, ensuring the compliance analysis remains accurate through to construction completion.

Where Proposed Design Appears in Agreements

This term commonly appears in design and construction contracts, energy performance agreements, and compliance documentation tied to building codes. It is especially relevant in construction projects where energy code compliance is a condition of permit approval or project financing, and in the broader energy sector where efficiency benchmarks affect incentive eligibility.

It may also surface in agreements adjacent to power procurement, such as an Energy Purchase Agreement, where anticipated building energy consumption informs supply terms or rate structures. In addition, compliance-oriented documentation, including environmental compliance certificates or declarations, may reference the Proposed Design as supporting evidence that a project meets applicable energy performance thresholds.

Architects, engineers, and energy consultants are typically the parties responsible for producing and certifying the Proposed Design, while owners and contractors rely on it for scheduling, budgeting, and regulatory submission purposes.

Why the Exact Wording Matters

Precise wording around Proposed Design protects all parties from ambiguity about what version of the building model governs compliance decisions. If a contract fails to specify the software, methodology, or update triggers, disputes can arise over whether the correct model was used, particularly when design revisions occur late in a project.

Clear wording also determines liability. If the Proposed Design ultimately understates energy usage or fails to reflect the as-built condition, the contract's drafting will dictate whether the design professional, contractor, or owner bears responsibility for remediation or code violations. Ambiguous definitions increase the risk of disagreements about compliance timing, cost allocation, and remedial obligations.

Drafting Considerations

Drafters should clearly identify the approved modeling software or methodology, the specific code or standard against which the Proposed Design will be measured, and the project phase at which the model must be finalized. Provisions should also address how updates are triggered and documented if the design changes after initial modeling.

It is prudent to assign clear responsibility for preparing, certifying, and revising the Proposed Design, along with a mechanism for resolving discrepancies between the model and the completed building. Where the contract intersects with broader compliance obligations, cross-referencing relevant compliance frameworks, such as a Environmental Compliance Agreement, can help ensure consistency across related documentation and avoid conflicting standards within the same project.