Clients are loading new liability onto engineers
It was during the Association of Consulting Engineering Companies (ACEC) summit in June that I began to hear a lot about consulting engineers being pressured by clients to sign unreasonable contracts. Clients are attempting to load engineers...
It was during the Association of Consulting Engineering Companies (ACEC) summit in June that I began to hear a lot about consulting engineers being pressured by clients to sign unreasonable contracts. Clients are attempting to load engineers with liability in areas far beyond their traditional professional responsibilities. The obligation to ensure safety on the construction site, for example, or to provide warranties for materials and products, has traditionally fallen to the contractor, but these responsibilities are also creeping into engineers’ contracts with clients. Then there are new expectations such as that the consultant will warranty that the project will reach a certain level of LEED certification — scary stuff!
During interviews for writing the article “Under Pressure” (p. 24) I had some interesting discussions about what could be driving this legal juggernaut. “How have we moved from 20 years ago, when things were much more trust-based?” wondered one engineer. “Contracts used to be based on a handshake and short-form agreements. Now we have multi-page legal documents.”
One theory I heard was that clients, especially government clients, are young and lacking experience. Evidently the demographic predictions of Generation X staff shortages have come home to roost. With few managers in their 40s and 50s available, young men and women in their 20s are often put in charge of projects. They sometimes mistakenly think, for example, that they can simply use the same contract for procuring widgets as they use to hire professional services.
Several interviewees also talked about the influence of wider social changes. Construction projects figure high in the media spotlight these days and with the internet and social media, any activist with a cause has an easy platform for complaint. Consequently politicians and bureaucrats are much more leery of projects hitting technical snags and going over budget, and so they are keen to cover all their legal bases in their contracts with the consultants.
While many clients and municipalities are willing to negotiate the terms of their contracts, I also heard that others are virtually blackmailing their consultants to agree to unreasonable terms.
As for remedies, there is only so much that consulting engineers can do. Any attempt by firms to stand together as a group and refuse to work for a particularly demanding client could be taken as collusion and therefore is illegal. But consulting engineering associations such as ACEC-BC and CEO have been able to issue general advisories to clients about different contractual issues as they come up. Another tactic they have taken is to visit individual clients and try to persuade them to drop their demands.
The best advice I heard was to try to convince clients to use ACEC contracts, pointing out that they are an industry standard. Failing that, consulting engineers have to keep on plugging for higher fees to cover any new risks, or simply turn down work where the liability demands are too precarious. And finally they need to train, train, and train all their staff in contracting and to be careful about what they agree to.