Letter from PEPP Chair, Dawn Edgell, P.E.
Welcome to a new and hopefully exciting year with PEPP. At the recent NSPE conference in San Diego, I took over as this year’s chair of PEPP after a successful year with Andrea’s leadership. I’ve been with the PEPP organization for many years now, having started as a member of the Young Engineer’s Advisory Council, and I’ve worked with both past chair Andrea Graves, and Eric West, our current Chair-Elect for some time now.
A lot was accomplished during this past year, including the recent release The Role of the Consulting Professional Engineer, and I hope our group can continue with several ongoing projects in the coming months. We have a lot on the horizon as PEPP continues to change and grow as the needs of our members continue to change.
With recent changes to our Interest Group’s bylaws, PEPP is looking forward to obtaining more direct input from our members including those states that have active PEPP groups, and those states that may be interested in starting a group. A recent addition to the PEPP Board is a State Representative position, which is currently being filled by Tery Glunt from Florida. We at the National PEPP group are truly interested in not just sharing information with the states, but receiving input back on what we could or shouldn’t be doing.
One of those items is receiving input from the states and our many members for the PEPP Awards. I realize it’s early in the year yet, but don’t let time slip away from thinking about nominations for next year’s awards. There are so many people and organizations out there that deserve recognition for their efforts and what they bring to our community. This was evident with the recipients of this past year’s PEPP Awards that were handed out at our dinner at the San Diego meeting. Congratulations to all of the award winners. I’m looking forward to a successful and busy year with PEPP.
Professional Liability/Risk Management: Serving as a Conduit for Services
In general, an engineer should never subcontract to any other
service provider unless the following criteria are met:
- The right of selection;
- The right of developing the scope of services for the
subconsultant or subcontractor;
- The skill to evaluate the services being provided by the
subconsultant or subcontractor;
- The ability to control the activities of the subconsultant or
- The ability to either cover the risk or pass the risk of the services
of the subconsultant or subcontractor directly to the client.
Due to budgeting processes or contracting with only one provider,
some clients are asking the engineer to either hire the client’s independent
consultant or serve as a conduit for payment to an independent service provider
under a “master” contract.
If the client only wants the engineer to serve as a conduit for
payment rather than actively managing the services of a specific subconsultant
or subcontractor, the engineer and client should structure a contract that
protects the engineer from activities over which the engineer has no real
control. The dangers that accompany the engineer being responsible for the
billings of the subconsultant or subcontractor services are addressed below.
Avoiding Liability for
the Work of the Subconsultant or Subcontractor
The risk to a firm when serving as a conduit for the independent
services of any other firm, whether another engineer, subconsultant , or
subcontractor, far exceeds any benefit from this arrangement. Care must be
taken to keep the subconsultant or subcontractor solely responsible for their
services. The engineer should not assume responsibility for services or work
over which the engineer has no control.
Contract with the Client
Whenever possible, there should be separate contracts with the
client. The engineer’s contract should be for professional services only and
should indicate that one of the services being provided is to serve as the
conduit for payment. It makes the most sense to have the professional services
contract clearly state the engineer’s separate status and that it has no
responsibility for services or work performed by, or billed to, the client on
behalf of the subconsultant or subcontractor.
It is important to reinforce the engineer’s independent
professional status in other contracts with the client. Under no circumstances
should the firm include an administrative mark-up on the charges of the
subconsultant or subcontractor. Rather, the firm coordinating payment should
charge a separate administrative fee. It is unlikely that the firm’s
independent professional status would be challenged if it is indicated exactly
what service the firm serving as the conduit is providing for this fee. The
billing statement should indicate that the charges of the subconsultant or
subcontractor are submitted only for the administrative convenience of the
client and that no representation is made that the charges are accurate. Again,
this invoice could reinforce the disclaimer by restating that the engineer has
no responsibility for the services or work performed by, or billed to, the client
on behalf of the subconsultant or subcontractor.
The above concerns are basic. An additional aid in establishing
the independence of the service provider is a clear statement by the client. An
acknowledgment that the common billing is to meet the client’s administrative
needs and does not imply a joint effort would be helpful in minimizing the risk
of the design firm.
© 2012, 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 Schinnerer and CNA Professional Liability Insurance Program, commended by NSPE/PEPP since 1957.
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Happenings on the Hill
NSPE Attends White House Briefing on Budget Sequestration
NSPE Senior Manager of Government Relations Sarah Ogden attended a White House teleconference with Office of Science and Technology Policy Director John Holdren, Office of Public Engagement Director Jon Carson, and Office of Management and Budget Executive Associate Director Robert Gordon on the potential impacts of budget sequestration on science and technology funding.
Budget sequestration—an automatic reduction of federal spending—will be triggered in January 2013 if Congress fails to approve a deficit-reduction bill with at least $1.2 trillion in cuts. The sequester is set to last from FY2013 through FY2021 and, if enacted, will have a profound impact on research and development and STEM education funding. It could also affect funding for government contracts.
NSPE Sets Federal Public Policy Agenda for 2012–13
The NSPE Legislative and Governmental Affairs Committee met at the Annual Meeting in San Diego to discuss the committee's goals for the coming year and to determine NSPE's primary public policy agenda for 2012–13. Based on committee discussions, NSPE will focus on the following federal issues:
Congress Passes Transportation Bill
On June 29, Congress agreed to the final version of the Moving Ahead for Progress in the 21st Century (MAP-21) Act. The two-year, $118 billion bill maintains transportation spending at current levels and contains reforms to streamline environmental reviews for highway projects. The bill is expected to be the last major piece of legislation Congress passes before the elections.
NSPE believes enacting multiyear transportation legislation is critical because it provides the funding certainty that states need to plan long-range projects, which are vital to bringing our nation’s infrastructure into a state of good repair.
Senate Committee Discusses Future of Commercial Space Flight
NSPE attended the Senate Commerce, Science and Transportation Committee's Science and Space Subcommittee hearing, "Risks, Opportunities and Oversight of Commercial Space." The hearing focused on the role of the commercial space industry in the national space program and its contribution to U.S. competitiveness in the global market. Witnesses representing the private sector, NASA, the Federal Aviation Administration, and the Government Accountability Office were also questioned on the safety of the commercial space industry. The FAA has been prohibited from regulating commercial space flight until 2015.
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NSPE Fall 2012 Web Seminars On Sale Now!
This Fall, NSPE brings a wide selection of new and live online education opportunities. Each session can be viewed per site, offering outstanding value. So don't hesitate to earn your PDHs, sign up for one of our online sessions now!
Contractual Indemnity and Other Poison Pills: A Webinar and An Anecdote
September 18, 2012
This Web seminar will provide an overview and analysis of some recent California cases that have received national attention. These cases outline a scenario which presents potentially disastrous financial results to the engineering community at large based on fairly common contractual indemnity language. Dealing with onerous contractual indemnity has practically become a way of life for engineers involved in contract negotiation. The discussion will center on how and why the cases were decided the way they were and what engineers can do to protect themselves.
Engineering Ethics: Professional Issues
September 26, 2012
This session will examine a variety of issues including conflicts of interest, confidentiality, competence, protection of the public health and safety, and other issues. Participants will have the opportunity to offer comments, ask questions, and participate in interactive polling surveys.
For all of NSPE's Web seminar offering, please visit our Web site. [ return to top ]
PEPP Presents Prestigious Awards at Annual Meeting
The purpose of the PEPP Award is to honor an individual who has made an outstanding contribution to the role of private practice serving in the public interest.
The 2012 recipient is Littleton "Skip" G Lewis, P.E., F.NSPE. Lewis is a professional engineer and chairman of H2L Consulting Engineers located in Greenville, South Carolina. Lewis has more than 45 years of design and construction experience, and is licensed in 13 states.
Lewis has been a member of NSPE for more than 40 years. He has served in all of the office ranks for both the local and state society organizations. He is a long standing member of the PEPP Professional Liability Committee and serves also on the NSPE Licensure and Qualifications to Practice Committee.
PEPP Professional Development Award
Since 1960, NSPE has used this award to recognize engineering employers who have made significant contributions to the advancement and improvement of engineering practices.
This year’s recipient is CME Associates. CME’s five offices and over 150 staff are located in New Jersey. Established in 1983, CME Associates provides a complete range of environmental, geotechnical, engineering, surveying and planning services and has represented both the public and private sectors on a wide range of projects. CME Associates finds one of the most important elements in providing consulting services to clients is selecting and organizing professional personnel with the appropriate skills. CME Associates believes in and utilizes the team approach to address and successfully resolve project elements and has developed a track record of providing consistent and thorough professional services. Further, they take great pride in their commitment to personal service and responsiveness to our clients’ needs.
PEPP Merit Award
This Award is presented to members who have made significant contributions to the private practice.
Julia M. Harrod, P.E., is the President of MWM DesignGroup, an interdisciplinary firm providing civil engineering, architecture, land surveying, landscape design, and governmental relations services throughout Texas. Harrod has over two decades of professional experience, successfully overseeing hundreds of utility, transportation, and land development projects. She received a BSAD from MIT and an MSE from UT Austin.
Harrod is passionate about her chosen career, devoting significant effort to promote the engineering profession and education in math and science. She currently serves as TSPE Past President and Texas Engineering Foundation Trustee. She has also served as the Texas chair of the Professional Engineers in Private Practice.
PEPP Chair Award
Kevin Skibiski, P.E., F.NSPE
PEPP Outstanding Service Awards
Mark Davy P.E., F.NSPE
Karen Stelling, P.E., F.NSPE
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A Look Forward and Back with PEPP Award Winner "Skip" Lewis
Littleton "Skip" G. Lewis
It is either this year or the next that I will log 40 years of membership to NSPE and PEPP. During these four decades, I have been privileged to work in a number of roles, with a number of volunteer organizations, and a great cadre of engineering professionals. To me, I have gained more from these relationships than I could ever contribute with my limited talents.
In looking over my time in NSPE and PEPP, I have seen our profession and our society evolve and devolve in many ways. These changes have affected the way we do business and they have affected the way in which engineers allocate their time and interests in volunteer services.
I know we are but a microcosm of other professional and trade groups, but in retrospect, the change is staggering. Back in 1972, when I left the Department of Defense to enter the Private Practice of Engineering, I was encouraged to join NSPE and PEPP by a mentor more than a decade older than me, whom I am still blessed to be working with.
As a young engineer, I profited greatly from membership in NSPE, especially so at the state and local chapter levels. For me, the society membership pool was an ever expanding source of brain power to tap for experience and knowledge I did not have. It was also a source of second and even third opinions on conclusions I had independently developed. Each of these individuals were mentors in their own ways, who returned tenfold the contributions of my time and talents.
As time passed, I sensed the transition from being the mentee to becoming a mentor, to shaping my experiences and advice with the generation (now generations, plural) behind me. This, I think, is the value of membership with NSPE and PEPP and other such organizations. Notwithstanding the exceptional member services and programs offered by NSPE and PEPP, for me the greatest benefit of membership has always been in networking with peer professionals, knowing each time I serve on a committee, assume a leadership role, or present a white paper, I help contribute to the advancement of our profession while expanding friendships and contact sources of expertise well beyond my own.
Sadly, I feel the younger generations have less incentive to become members of such organizations, at least in comparison to my earlier years. For today’s engineering professionals, available time is perhaps more precious, and competing interests may be luring them away from professional society involvement. NSPE, PEPP, and the like have felt the impact. Our challenge, for a number of years, has been to find incentives to draw them in.
For me, greed was certainly not an absent motivator. I profited greatly (perhaps not always in a pure economic sense, but profited nonetheless) from my contacts within this society and practice division. Somehow, I think greed is still a strong motivator. Greed, however, is in the way we define and practice it. Some forms of greed are good. Greed for knowledge, greed for excellence in services, greed for success and recognition…these are some descriptions of greed channeled in a positive direction. My hope is we, as members of NSPE and PEPP, will find a way to develop the motivation keys and incentives for membership in today’s graduated and young professionals. I am convinced that NSPE is and will continue to be the most effective voice on professional matters for our diverse and multidisciplinary group of licensed professionals.
In whatever way I may have helped to advance our profession and our society in Greenville, South Carolina, or even at the national and international level, I shall forever be grateful. Thank you for honoring me and for allowing me this moment in the sun.[ return to top ]