New Agreement Between Owner and Consultant for Professional Services
The Engineers Joint Contract
Documents Committee has released the 2014 edition of E-570, Agreement Between
Owner and Consultant for Professional Services.
E-570 is a comprehensive
standard contract used by an engineering firm to
delegate a portion of the professional services owed to the project owner under
a prime engineering agreement such as EJCDC E-500 Agreement Between Owner and
Order online at www.nspe.org/ejcdc.
NSPE members save
50% on the documents!
The likelihood of design
deliverables being released for approval or actual construction while
containing negligent errors or omissions is higher than most firms would like.
This is due to projects becoming more complex and design times being severely
constrained. As such, more projects are including design input from a wide
range of consultants and other entities. Design fees do not always compensate
for the level of service that engineering firms feel are appropriate.
Increasingly, engineering firms are
using independent reviewers to assess design deliverables before they become
final. Having independent experts, or even just another set of experienced
eyes, review the instruments of professional services appears to be reducing
incidents, claims, and costs.
Project Peer Reviews
For decades, engineering and other design
firms have used peer reviews. Some have used an organizational peer review
where outside practitioners evaluated the business operations of a firm. Increasingly,
engineering firms are seeing the advantages of routinely using a project peer
In the past, peer reviews were often
used on projects where performance was deemed to be critical or when innovative
materials or techniques were being incorporated into the design. The project
peer review effort provided an evaluation of design concepts to meet
performance objectives. On larger and more complex projects, reviews gave engineering
firms and their clients increased confidence in design and in the documentation
of the design through the deliverables. Now, that confidence is being provided
on a wider range of projects.
The effectiveness of a project peer
review is that it is performed by an independent team or individual not
associated with the original design team. While a separate firm often performs
the review—perhaps a firm trading review services with a peer—the reviewer can
also be a separate, experienced individual within the same firm. Whether the
review is performed internally or externally, the key is that the assessment be
conducted by an entity that did not participate in the original design and is
unlikely to miss some deficiency or possible problem because of time or budget
The review assesses the likelihood
that the instruments of service—the deliverables—would satisfy the client’s
stated objectives and would be in conformance with good professional practice.
A project peer review is not meant to shift or spread exposure for professional
liability claims. The goal is to provide feedback to reduce the probability of
claims and to make any filed claims easier to defend.
A key ingredient in the recipe for
the successful completion of a project is a thorough and independent
constructability review. On projects where the construction team is engaged
during the design phase, there is a much greater chance that the engineering
firm and client will benefit. A structured and well-documented constructability
review process provides for the timely integration of construction input into
project planning, design, and field operations. Clients are better served
because considerations for the fabrication, installation, operability, and
maintenance are addressed by representatives of the client, those responsible
for construction, and other project stakeholders.
Because a constructability review
should be an interactive process, the investigation should take place
throughout the design process. In many instances, however, the actual
construction team may not be identified until the design is nearly complete.
Still, a constructability review performed by a consultant can achieve many
As more projects are delivered
through a building information model rather than through two-dimensional plans
and printed specifications, the incorporation of a constructability review can
be an automatic procedure in the integrated design and construction process.
the Standard of Care
Every project is unique, meaning
that each is an exercise of professional judgment. Modifications to the
instruments of service and adjustments during construction are expected. As a
result, the law does not require faultless performance from an engineering
firm, complete and error-free deliverables, or a perfect project. Engineering
firms are not product vendors, and neither the deliverables nor the projects are
required to meet product liability standards. If professional services and the
projects they lead to are to meet client expectations, however, care has to be
taken to minimize problems that could lead to disputes and claims. Using
project peer reviews before deliverables are released and incorporating
constructability reviews into the design process are two techniques with proven
records of minimizing professional liability exposure.
© 2013, 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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NSPE Legislative Affairs News
June 12, 2014
On June 12, Manager of Government Relations Arielle Eiser participated in a political action committee event with Representative Paul Tonko (D-NY). NSPE’s top legislative issues were discussed, including the importance of the “E” in STEM. As an engineer in Congress, Representative Tonko has worked diligently to strengthen the American engineering workforce. The Congressman is the primary House sponsor of the Educating Tomorrow’s Engineers Act (H.R.2426). Congressman Tonko is a champion of STEM education, and throughout his tenure in Congress, he has proven himself to be a champion of engineers.
June 10, 2014
On June 10 President Obama signed the Water Resources Reform Development Act (WRRDA) into law. The conference report was approved overwhelmingly in the Senate by a vote of 91-7 and by an even more remarkable margin of 412-4 in the House of Representatives. WRRDA is the first Army Corps of Engineers authorization since 2007. NSPE endorsed this vital legislation and sent a letter of support to the bill’s primary sponsor, Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) in September 2013. In the letter to Chairman Shuster, NSPE President Robert Green, P.E., F. NSPE praised WRRDA for “overhauling and dramatically improving the process for federal water resources development. The legislation sets hard deadlines on the time and cost of studies, consolidates or eliminates duplicative studies and concurrent reviews that can hold up projects for years, and streamlines environmental reviews."
June 2, 2014
On June 2, the Environmental Protection Agency (EPA) issued its long-anticipated proposed rule targeting carbon dioxide emissions from existing power plants. EPA estimates that the new rule would help to reduce power-sector carbon dioxide emissions to approximately 30% below 2005 levels by 2030. The EPA’s proposal assigns a specific emissions reduction goal to each state. The rule’s requirements vary significantly among states. Certain states will have to dramatically reduce their annual emissions, while nine states and the District of Columbia already meet or exceed the proposed requirements for 2030.
NSPE strongly supports a diverse, comprehensive energy portfolio to ensure long-term, reliable, secure, and environmentally responsible energy supplies at predictable and affordable costs. NSPE recognizes the value of energy sources ranging from coal, oil, and natural gas to wind, solar, and biomass.
On June 2, NSPE’s members utilized the debut of NSPE’s new Legislative Action Center, now powered by VoterVoice, to send a clear and powerful message to Congress to immediately stabilize the Highway Trust Fund and ensure a long-term solution to prevent insolvency. In less than the first 12 hours, 100 NSPE members answered the call to action and sent an action alert to their senators and representatives. Grassroots advocacy campaigns usually lose substantial momentum after the first day or two. However, a week into this advocacy campaign, nearly 200 NSPE members have sent 539 messages to 214 Members of Congress. NSPE’s member-advocates have reached 84% of the Senate and 30% of the House of Representatives and continue to increase their reach.
For all the latest NSPE legislative activities visit the NSPE website.
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