NSPE's Gateway to Private Practice May 2011 

Observations of Inspection of the Work

The professional service agreements published by the Engineers Joint Contract Documents Committee establish the design professional as an agent of the owner during the construction phase. The authority and duty of the design professional on behalf of the owner and the responsibilities and obligations of the contractor are clearly defined. In practice, however, the role of the design professional during the construction phase is often misunderstood by clients, contractors, and even by the design professional him or herself. Until 1961, standard contracts stated that the design professional “supervised” construction. That term was interpreted by the courts as requiring the design professional to exert control over the contractor—a responsibility for which the design professional had no authority. The design professional’s true historical role was clarified by using the term “observation.” But design professionals can provide an increased level of service beyond defined observations and can usually manage the risk of such duties. This increased level of service can assist in minimizing mistakes on the site that generate claims.

Now, during the execution of the design in the construction phase, the design professional neither supervises nor directs construction. The consensus agreement forms require the design professional to conduct site visits for observation purposes only and to perform specific and limited inspections. Although this may seem like a considerably less important role than he or she plays during the design phase, the design professional’s presence in the process has a significant impact, not only upon the client, but also upon the contractor. Some clients want their design professionals to play a more aggressive role than that specified in EJCDC contracts; they may demand that the design professional conduct intensive inspections to discover failure by the contractor to perform properly, charge the design professional with additional responsibility if the contractor does not perform properly, and insist that the design professional use whatever skills necessary to assist the contractor in executing the design properly.

Obviously, design professionals agreeing to provide more extensive site services must be capable of doing so and must be compensated for the increased risk that the greater level of service involves. The term “inspection,” for example, should not be used unless the duties and resultant fees involved in providing such inspection services are clearly identified and are understood by the client and the design professional.

While “observation” involves a scope of services that only allows for a general review of the contractor’s work to visually determine if compliance is apparent, the use of the term “inspection” clearly expands the duties to include a critical evaluation of the work. Defining the extent of such inspections is imperative. The decision to provide inspection services should be articulated to include the following:

•    The scope of services that constitute inspection is clearly defined.
•    The ability to perform the necessary services is part of the design professional’s existing capability or is a professional service that can be obtained from qualified subconsultants.
•    The general conditions of the construction contract provide the authority to carry out the inspection duties.
•    The definition of the inspection services does not cause the design professional to assume responsibility for the work of the contractor.
•    The design professional is properly paid for the significant increase in services and risk.

Site services are but one part of the total professional services performed. A client may mistakenly believe that the design professional has been paid to ensure that the client receives that which it is entitled to receive under the contract for construction. To that end, the client may expect the design professional to oversee the contractor to assure that proper construction is achieved and to assume responsibility if the contractor does not perform the work properly. No design professional should assume such authority or can be adequately compensated for the services and risks that such a guarantee requires.

While assuming the responsibility for proper construction is not advisable, design professionals can reduce risk to themselves and their client and minimize problems in the interpretation of the contract documents by providing more comprehensive construction phase services. While, with most normal projects, the level of site involvement described in the standard documents as “observation” may be appropriate, design professionals can provide a more comprehensive scope of services—including inspecting the work—if that duty is accurately defined and if the increase in services and risk results in an appropriate increase in fee.

© 2011, Victor O. Schinnerer & Co. Inc. Statements concerning legal matters should be understood to be general observations based solely on our experience as risk consultants and may not be relied upon as legal advice, which we are not authorized to provide. All such matters should be reviewed with a qualified advisor. Victor O. Schinnerer & Co. Inc. is managing underwriter for the CNA/Schinnerer Professional Liability Insurance Program, commended by NSPE/PEPP since 1957.

Significant Legal and Legislative Activities
Art Schwartz, NSPE Deputy Executive Director & General Counsel (aschwartz@nspe.org).

This material is  collected from information provided by EJCDC member organizations and other source material, and the summary can be found here. A sampling of the headlines follows.

State Legislative and Regulatory Matters

  • Missouri Society Works To Close Low-Bid Loophole
  • Florida Attorney General Backs QBS
  • Louisiana Licensing Board Embarks On Gulf Oil Spill Investigation
  • Alabama PEs Oppose Bill to Override State QBS Law
  • Puerto Rico Society Fights Against Practice Restrictions

Federal Legislative and Regulatory Matters

  • Congress, President Give Boost To Science, Engineering
  • A/Es Make a Point as Congress Debates Earmarks
  • West Virginia PE Elected to Congress
  • Gains in International Development Depend on Gains in Engineering, Report Says

Court Decisions

  • Vague Law Creates Headache for Licensing Board
  • Court Backs Law Removing New York City PE Requirement

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Field Guide for Inspection of Sewerage and Drainage Construction

An inspector plays a crucial role in any construction project. The job demands knowledge, awareness, keen observation skills, and the ability to deal with contractors and project owners. A Field Guide For Inspection of Sewerage and Drainage Construction, published by the Professional Engineers in Construction, provides the inspector the necessary knowledge to inspect sewerage and drainage construction projects.

The guide, specifically written to advance the mission of high-quality construction standards, provides a series of proven policies, established procedures and techniques, and helpful resources such as “Inspection Checklists” that are applicable to construction projects on any size or scale.

This guide is available as a free download to all NSPE Members. Nonmembers can purchase the guide for $19.95.

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Yielding Results: NSPE Members Get Liability Insurance Credit

During a recent meeting of the NSPE/PEPP Professional Liability Committee, CNA/Victor O. Schinner & Co. announced that as of the second quarter this year, the NSPE membership 5% professional liability insurance premium credit had resulted in almost $200,000 in premium credits to NSPE members/firms who are insured under the CNA/VOSCO program. 

This program, started a year ago, makes qualifying engineering firms eligible for an underwriting premium credit of up to 5% if at least 50% of the firm's professional staff are NSPE members. To date there are still many members/firms that are eligible for this exclusive benefit but have not yet taken advantage. To learn more or find out if this opportunity is open to you contact  George.Boldarini@Schinnerer.com for details.

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NSPE 2011 Annual Meeting

Join your fellow engineers at the NSPE 2011 Annual Meeting from July 13–17, headquartered at the JW Marriott Las Vegas Resort. In addition to the State Leader Conference, there are many other opportunities to network, earn professional development hours, and learn about issues impacting the engineering profession and our Society. They include:

Thursday, July 14
NSPE Networking Lunch: Order of the Engineer Ceremony

Friday, July 15
NSPE Awards Lunch
PEPP Executive Board Meeting
PEPP Awards Dinner

Saturday, July 16
Young Engineers’ Forum (5 PDHs)

Sunday, July 17
Private Engineering Tour of the Hoover Dam and Bypass (6 PDHs)

For more information on how to register for the meeting and the above mentioned events, please visit the NSPE Web site.
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PEPP 2010-11
Executive Board

Mark Davy, P.E.
La Crosse, WI

Andrea Martinez-Graves,
Tampa, FL

Dawn Edgell, P.E.
Chicago, IL

Immediate Past Chair
Bill Clarke, P.E., F.NSPE
St. Louis, MO  

Vice Chair, Northeast Region
Randy Petersen,
Washington, DC

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Charlotte Maddox, P.E., F.NSPE
Tampa, FL

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Kent Buehrer, P.E., F.NSPE
Maumee, OH 

Vice Chair, North Central Region 
Karen Stelling, P.E.
Kansas City, MO

Vice Chair, Southwest Region
Chris Richard, P.E.
Lafayette, LA

Vice Chair, Western and Pacific Region 
Wes Segawa, P.E.
Hilo, HI 

Young Engineer Representative 
Carlos Gittens, P.E.
Spartansburg, NC
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Pat Christians
Birmingham, AL

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