Best Practices
Double Edged Sword: The Owner’s Separate Consultants

by James B. Atkins, FAIA, and Grant A. Simpson, FAIA

Never give a sword to a man who can’t dance.
—Confucius

Consultants are an integral part of providing design services. Architects by definition do not typically provide “engineering” services such as mechanical, electrical, plumbing, and structural. Nonetheless, we architects are quite accustomed to managing these services and typically include them in our design services agreement with the owner. A typical project will include certifying payments to the contractor and certifying substantial completion.

However, some owners choose to contract directly with the architect’s traditional consultants, and in recent years this trend has increased. This approach appears on the surface benign, but if it is administered by the architect in the same manner as if included in the architect’s agreement with the owner, the architect can assume increased risks. The scope of these risks can range from assuming responsibility for work outside the architect’s contract to violating state licensing statutes.

Many architects do business as usual, oblivious to the risks incurred. After all, it is not a subject that has been examined in depth. It is not currently addressed in The Architect’s Handbook of Professional Practice, but it will be in the upcoming 14th edition due for publication early next year.

Why is this issue of concern? Owner’s separate consultants are a viable and productive option only if it is administered appropriately. It can be quite workable if the proper steps are taken to separate the various design professionals of record. Unfortunately, many architects continue to sign and issue certifications for payment and certificates of substantial completion for work that is not in their contract. In good faith, they process these documents unaware of the potential risks that could threaten.

This article will examine an architect’s viewpoint of both options, and you can decide which edge of the sword you prefer to use on your projects. Be cautioned that this sword can cut both ways.

Looks OK from here

The pen is mightier than the sword, and considerably easier to write with.
—Marty Feldman

Architects who have done battle in claims involving disciplines other than architecture can appreciate the benefit of not having those disciplines under their contract. When consultants are contracted directly with the owner, claims for deficiencies in the consultant’s services cannot rightfully be made through the architect for those alleged misdeeds.

In addition, should the consultant fail to provide services in an acceptable manner, the architect can potentially criticize them without shooting oneself in the foot. Alternatively, when these services are provided through the architect in the prime owner-architect agreement, the architect is as responsible for the consultant’s work as if personally performing it, and criticism in this case could be perceived as self directed.

Although the separated contract approach appears beneficial, one downside can be that the architect has no leverage over the consultants to compel them to perform, since the consultant is not being paid by the architect. This criticism usually includes the reasoning that the consultant is primarily loyal to the owner and not the architect or other team members.

Cautions

Caution is the eldest child of wisdom.
—Victor Hugo

When the architect holds the prime agreement for the complete building design, she or he is the architect of record for the entire assignment, and in this capacity the architect issues drawings, signs change orders, processes RFIs, and certifies contractor payments. When the prime consultants contract directly with the owner, each consultant becomes a design professional of record for their portion of the work, and state licensing statutes may require them to administer these documents individually and under their signature. Complications can and often do arise for the architect when the documents are not processed and administered separately by the separate consultants.

When the design disciplines are contracted under one owner-architect agreement, construction documents are typically administered under one design professional’s signature. If this approach is taken when design disciplines are contracted separately, the signer can accrue additional risk for the work they did not design. In short, if you issue another designer’s documents within your documents, if you sign change orders for their work, if you receive and process their RFI’s, and only one certificate for payment or one certificate for substantial completion is issued that includes their work, you may be viewed by others as assuming, or you may actually be accepting, their liability as if you contracted for it.

In this instance, it is wise to consider which edge of the sword is cutting whom? One must use care in these contracted scenarios. Accommodations should be made to keep the documentation of the work of others separate from your contracted work and the representations and certifications you provide.

For example, if you package and transmit documents prepared by the other designers of record with your signed and sealed documents, you should have your documentation clearly indicate the separation of all parties’ services and responsibilities. It is wise not to include the other designer in your title block if your seal and signature is also included in the title block. By all means you should not affix your seal on their drawings without a clear qualification for why you have done so. If you issue their documents to the contractor, it is wise to include an explanatory notation that you have included the other designer’s documents in your package or transmittal for convenience only.

If a change order is required for another designer’s portion of the work, they should issue it under their signature. Change orders for each design contract should be identified so they can be differentiated within the project records. Although the architect may agree to be the “design manager” on a project, care must be taken to avoid endorsing or authenticating change orders involving design or engineering that is not within the architect’s contract, construction documents, or realm of responsibility.

Prefixes such as “A” for the architect and “SE” for the structural engineer , or “MEP” for the mechanical, electrical, and plumbing engineer can be used to tell documents apart in a change order, RFI, or shop drawing log. The objective is to have the tracking documents reflect a clear and undisputable delineation of design responsibility between each contracted designer of record. Complicated, isn’t it?

Similar issues arise in reporting jobsite observations. If you report on the work placed in accordance with construction documents that you did not prepare, beyond simple coordination with your own design scope, other parties may opine that you are accepting a portion of the design responsibility for that work. Field observation reports are covered further in our June 2006 AIArchitect article, “Visible Means.”

A more complex and challenging issue is the contractor’s application for payment. How do you identify your portion of the work certified when there is only one schedule of values and one amount certified? Have you signed such a document? For example, have you ever certified a payment application that included site work designed by a separately contracted civil engineer? If you have you are not alone. Many architects have taken these actions in good faith, failing to recognize that the owner’s separate consultant should rightfully bear the responsibility for certifying work performed on the basis of designs and documents that the separate consultant prepared.

The most desirable approach is to have separate application and certificate for payment forms for each contracted designer’s portion of the work. However, the contractor will likely want to use only one application and certificate for payment since it is less complicated and easier for the contractor to administer. After all, the contractor typically has only one contract with the owner.

If one application and certificate for payment must be used, the next most desirable option is to separate the disciplines in the schedule of values and include for each a certification signature line and separate amount certified line for each separate consultant on the front page. One contractor added separate columns in the schedule of values indicating his assessment of which design professional’s contract applied to the line item.

If these approaches are not achievable, the next option is to maintain one schedule of values with multiple certification signature lines on the front page. Include a corresponding note stating that each signing professional is certifying only the amounts applicable to the work related to their contracted portion of the project. As a last resort, if your certifying signature is the only one on the payment certificate, you should qualify the certification with a notation indicating that other work is contained within the application for payment, and you are certifying only the work under your contract. However, we consider this to be marginal documentation and it should be utilized only if all other efforts fail.

Finally, to aid in clarification, care must be taken to address only the work under your design contract when certifying substantial completion. You can accomplish this by qualifying your certification with a reference to your contract. It is also advisable to suggest that the owner obtain certificates of substantial completion from the other designers of record for their contracted work. Certificates of substantial completion are covered further in our January 2006 AIArchitect article, “Substantial Completion, Where Art Thou?”

En garde

When choosing between two evils, I always like to try the one I’ve never tried before.
—Mae West

These variances from the normal way of administering construction, although necessary for proper documentation, will likely encounter pushback if not established at the onset of the project. Your chances of achieving widespread cooperation will be greater if you broach these sensitive issues up front. The best occasion is when the owner first informs you that the contracts will be separate.

You should be prepared to explain the administrative complexities and why both you and your insurance carrier frown on you certifying work that you did not design and are not responsible for. You will not be in danger of over explaining the complexities of this issue to the owner. If you need assistance, have your attorney or insurance agent explain the issue.

Another opportunity to establish the desired format for all documentation is in the pre-construction conference. The more you address the subject and discuss the issues, the more likely you will achieve your documentation goals.

A good idea is to prepare general conditions, supplemental conditions, and bid documents to reflect the necessary special requirements for administering the project. Everyone should be aware up front that separating the design contracts is no less complicated than separating the trade construction contracts. It can be done, but not without extra effort and planning. The contractor should be given an opportunity to account for any additional administrative work in their bid or negotiation.

Alternatively, if the owner desires to simply hire you to report on the work of others, and certify pay applications and the certificate of substantial completion in the stead of other separate consultants, then you may have additional research to do and tough questions to ask. Will these activities be covered by your professional liability insurance policy? Are you prepared, or even qualified to replace the eyes, ears, and judgment of the other consultants? If you do so, will you be engaged in the unlicensed practice of engineering in your state? There are other responsibilities that you likely cannot provide without practicing engineering, such as checking engineering shop drawings, responding to some engineering related RFIs or revising the signed and sealed drawings of other separate consultants.

The issues involved can carry serious risk implications, and they must be approached and administered with great caution. It is easy and natural for the architect to do business as usual, processing the documents as if they were in one owner-architect contract. Risks can be managed if your project involves owner’s separate consultant contracts, but there is no simple solution.

The Last Word

Forewarned, forearmed; to be prepared is half the victory.
—Miguel de Cervantes

One last place to address the complexities of separate prime designers of record, but not the least place, is in the Owner-Architect agreement. While your scope of services will generally be addressed in your agreement with the owner, the AIA agreements also contain language along the following lines:

Terms in this Agreement shall have the same meaning as those in the edition of AIA Document A201, General Conditions of the Contract for Construction, current as of the date of this Agreement.

A201, General Conditions of the Contract for Construction define “Work” as follows:

THE WORK - The term "Work" means the construction and services required by the Contract Documents, whether completed or partially completed, and includes all other labor, materials, equipment and services provided or to be provided by the Contractor to fulfill the Contractor's obligations. The Work may constitute the whole or a part of the Project.

Relative to separate prime consultants this relationship becomes problematic in clauses such as:

The Architect, as a representative of the Owner, shall visit the site at intervals appropriate to the stage of the Contractor's operations, or as otherwise agreed by the Owner and the Architect in Article 2.8, (1) to become generally familiar with and to keep the Owner informed about the progress and quality of the portion of the Work completed, (2) to endeavor to guard the Owner against defects and deficiencies in the Work, and (3) to determine in general if the Work is being performed in a manner indicating that the Work, when fully completed, will be in accordance with the Contract Documents.

The architect, under the separate consultant scenario, would be well served to include a clarification to the A201 definition to the effect that the “Work” as it applies to the owner-architect agreement and the architect’s services includes only the work you have designed, and does not include work designed by other designers of record. Again, your attorney can help you with the specific language.

Conclusion

Our swords shall play the orators for us.
—Christopher Marlowe

Separately contracted design consultants are a growing trend in the industry. While it appears benign and it is in some ways perceived as beneficial, the advantages do not come without a price. The important message here is that the owner and the contractor should be made aware of the complexities up front to facilitate success in proper administration and to allocate the responsibilities and the risks appropriately.

Many people do not fully understand the implications of professional registration for architects and engineers. States do not require owners to be registered to be owners, and although some states require contractors to be registered, their requirements relate more to minimum competency than to practice requirements. But all states require architects and engineers to be registered in order to meet certain standards of practice, and each one has strict requirements for issuing, signing and sealing, changing, and certifying the work of another design professional.

Architects are licensed to practice architecture. Engineers are licensed to practice engineering. Although many states recognize these as allied professions where there is likely to be some overlap in professional services, generally they are viewed as separate but complementary disciplines. Checking engineering shop drawings, certifying engineering designs or work performed from engineering designs, or changing drawings prepared by engineers (as in responding to an RFI that effectively changes a design) may be deemed to violate the state licensing statutes and constitute the practice of engineering.

Owner and contractors are not going to study and be familiar with your licensing requirements. It is incumbent upon you to prepare them for the implications and documentation requirements of each method of project delivery. An architect is no longer the silent, learned design professional, with cape and flat brimmed hat, going about his or her duties in reverent separation. Our practice now requires decisive interaction and discussion if we expect clients and contractors to understand our risks and cooperate with us.

You may encounter push back as you negotiate these separate consultant issues because owners may not fully understand the risks involved. Nonetheless, if the issues are properly addressed and administered, having separate prime owner-designer agreements can and often does result in well designed and executed projects.

So as you gather your files and prepare for that meeting with the owner to discuss project contract structure, be prepared to discuss candidly all the issues involved with the project delivery approach they propose. Explain that each approach usually has advantages and disadvantages; two edges that may cut both ways. Use whatever time it takes to help them understand the risks and the rewards of each; and along the way, please remember to be careful out there.