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________________________________________________________________________________________
American Council of
Engineering Companies
Volume XXII, Number 18
August 3,
2001
1015 15th Street, NW
Washington, DC 20005
202-347-7474
Fax
202-898-0068
www.acec.org
E-mail acec@acec.org
Francis George, Editor
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Business
Risk and the Design Professional
Design Professional as
Subconsultant
When performing services to a design-builder as a subconsultant, the design professional should negotiate a "stand alone" contract with the design-builder rather than accept references to language in the prime agreement.
Given the key role played by the designer, the professional service contract should be negotiated before the prime contract is signed. The design-builder will rely on the designer to provide a design that meets its contract requirements. The design-builder may also rely on the designer to provide information that will be the basis for pricing the job.
As a result, it is common for the design-builder to require the designer to make commitments regarding the design in its subcontract, and for the designer to be held liable for risks associated with a failure to meet its commitments. Conversely, if the designer is to be held responsible to standards that exceed the industry norm, it is appropriate for the designer to share in the profits of the endeavor, as discussed below. In negotiating appropriate indemnification and insurance provisions, a design subconsultant should not merely adopt whatever provisions may be included in the prime design-build agreement.
Subcontract agreements should identify the specific scope of services contemplated by the parties as well as any exclusions and/or additional work. This will avoid a misunderstanding between the parties as the project proceeds. Additionally, the up-front effort typically expected of a designer as subconsultant should be identified in order to assure that the designer is either compensated for these efforts or that the risk of loss is spread equitably among the parties. Unless appropriate provisions are made in the contract and teaming agreements, the designer’s up-front risk in assuming these up-front responsibilities can be disproportionate to the designer’s ultimate rewards for completing this work.
Excerpted from Multiple Delivery Systems Handbook on Design-Build Project Delivery, by the ACEC Professional Procurement Committee and Ben Perez, Editor. Design-Build Project Delivery is available for sale through the ACEC Bookshop #LW-371, $29 members, $39 non-members, $4 s/h. FAX orders to (202) 789-7220, e-mail at publications@acec.org, or purchase this item online at www.acec.org. Include your Mastercard, Visa, or American Express number with the expiration date, contact name, firm name, street address, phone number, and e-mail address.
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Bush Administration Appoints Kalavritinos; Successor Is Steve Hall ACEC’s veteran lobbyist Jack Kalavritnos has been appointed to the White House Office of Management and Budget (OMB) as Associate Administrator of Procurement Policy; and Steven Hall, former Congressional Chief of Staff for New York Representative Sue Kelly, has been appointed to succeed Kalavritinos to direct ACEC’s government affairs operations. "This is a win-win for both ACEC and OMB," says ACEC Chairman Stephen G. Goddard. "Jack will have responsibility for important government competition and outsourcing issues, and Steve Hall brings to ACEC remarkable depth of congressional experience and accomplishment." Announcing the ACEC government affairs personnel transition, ACEC President Dave Raymond said, "We couldn’t have a better situation. Jack’s appointment was anticipated and he worked closely with us on the selection of a successor. Our relations with the Bush Administration will be strengthened, and Steve Hall is a big coup for us. He is highly regarded in Washington." Hall has served for more than a decade in senior legislative positions with several Congressmen for whom he handled issues of primary importance to ACEC including regulatory reform, environment, labor policy, infrastructure appropriations, and taxes. Washington political consultant Wayne Vallis told the Last Word that Hall "is a master at building legislative coalitions" and that "more than any other Hill staffer, he was responsible for passage of sound regulatory reform." Parsons Brinckerhoff’s Cathy Connor, Senior VP for Government Affairs, said, "Steve Hall was a key player in the passage of TEA-21." Other Personnel News: Kern, Mann Raymond also announced that Tom Kern will be leaving ACEC to take a position with a community service-related organization. "Tom has served us with diligence and distinction. We have appreciated his achievements, and we respect his desire to pursue another opportunity." At the same time, Diane Mann, a lawyer and former director of business development at Donohoe Construction, joins ACEC’s Business Affairs Department as director of project delivery systems and management practices. CH2M HILL’s Vice President and Vice Chairman of the Design Professional’s Coalition Richard Corrigan noted that "ACEC continues to build one of the strongest and most effective staff operations in Washington. Members should feel exceptionally proud of developments over the past two years." Goddard Meets with OMB Head On Major ACEC Issues ACEC Chairman Steve Goddard met recently with the director of the Bush Administration’s Office of Management and Budget (OMB), Mitch Daniels, to promote ACEC’s positions on outsourcing, QBS, and implementation of the FAIR Act. ACEC continues to work with the Administration to advance our industry’s concerns on federal procurement policy including the disparities between OMB circular A-76 and the Brooks Act. OMB has moved quickly to strengthen the provisions of the FAIR Act (Federal Activities Inventory Reform) and combat anti-outsourcing legislation such as the anti-outsourcing TRAC bill. "The Administration is with us on contracting out, but the unrelenting legislative threats to outsourcing require ACEC to engage in continuous legislative combat on this issue," said ACEC President Dave Raymond. Although the Senate version of the TRAC bill, unlike the House version, now includes a waiver for certain engineering services, ACEC will continue its vigorous campaign to defeat the entire bill in both houses of Congress. According to ACEC’s new government affairs director Steve Hall, three reasons for seeking defeat of the entire TRAC bill, instead of being satisfied with a "carve out," are: n The House waiver language relating to our firms reads as follows: The Act does not apply with respect to the following.... Contracts for the study, planning, surveying, design, engineering, and construction of new structures or the remodeling of or additions made to existing structures, facilities, and capital projects, except this Act shall apply to all contracts for the repair and maintenance of any structures.This language does not cover environmental remediation, operations and maintenance contracts, or other areas. n TRAC supporters are vowing to attach TRAC-like amendments to other legislation.n ACEC firmly believes that outsourcing is sound public policy.In recent weeks, Congressman Albert Wynn (D-MD) announced that he would continue his efforts to attach TRAC-like amendments to FY 2002 appropriations bills. He recently introduced an amendment to the Treasury Postal Appropriations bill that would have stopped federal outsourcing to the private sector. ACEC was instrumental in helping to defeat the amendment. While introducing his amendment, Wynn claimed that there is no clear evidence that outsourcing saves money or is better than having the work performed by federal employees. "Clearly such thinking is anathema to our vital interests," according to Raymond. For more information: Camille Fleenor (cfleenor@acec.org) at ACEC. Mars Exploration, Market Realities, Engineer Millionaire, and More . . . ACEC’s Fall Conference in Orlando, FL, will feature a Private Sector Market Conference and a Human Resources (HR) track. The Sept. 19-22 meeting also includes roundtables on HR and IT; CEO roundtables; a presentation by ACEC engineer Kevin Olmstead, ABC’s top-money-winner on Who Wants to Be a Millionaire; a keynote speech by Donna Shirley, former head of NASA’s Mars Exploration Program; behind-the-scenes Disney tours; and much, much more. Register online at www.acec.org. Reserve your room at Disney’s Yacht & Beach Club Resorts by August 20 to receive a discounted room rate of $179 single/double occupancy. This facility offers a quaint and charming atmosphere–with lots of Disney appeal! Call Disney’s group reservations, 407-934-3372, or visit World Wide Travel (www.wwts.com), our preferred travel agency. Reference "ACEC" when securing your accommodations. The following editions of the Last Word are available online, to retrieve a particular issue, choose the date from the drop down box below, and click "Go Get It!" |