It’s not uncommon to have two consulting firms to work on a project together. The prime consultant is the firm that the client agreed to take a particular project. The prime may go out to find a sub consultant to work on an aspect of the projects perhaps because their skill set may closer align. However it’s very important that all of the details are ironed out prior to accepting this agreement and put into a contract.
There is an article that underscores some important information to ensure the prime and the sub consultants have a good relationship, written by Frederick Aufiero, P.E., is owner of Aufiero Engineering & Consulting LLC and was formerly the vice president of Kleinfelder’s risk management/expert witness/litigation support practice.
Subconsultant contracts
Once a design firm has selected subconsultants for a project, it wants to be certain it has a written contract with them for services. Subconsultant agreements may take various forms. One form is a general subconsultant agreement that contains the overall conditions a firm wants in all subconsultant contracts. The subconsultant’s scope of services and fee can then be added.
Other types of agreement/contract forms can be on-call or task-order service agreements. These can provide a convenient way to work with subconsultants that a firm has worked with previously and where the client project contract is structured on the same basis.
Another option is to use standard agreement documents, such as those produced by the American Institute of Architects or the American Council of Engineering Companies. These organizations have industry-approved prime/subconsultant contract forms that can be a good starting point if a firm does not have a company standard.
Also consider the following issues with respect to subconsultant contracts:
Do not use the subconsultant proposals as the contract. Language in proposals generally does not make good contract language. Often it is not sufficiently definitive and may contain statements about items that the subconsultant may or may not be committing to do on the project.
If the subconsultant’s proposal is to be added to the contract as an exhibit, be aware of the general conditions in the subconsultant’s proposal/contract form. A firm must delete those general conditions that do not conform with the general conditions in the prime/subconsultant agreement contract. If there are overlaps in general conditions language, it will only cause confusion should there be an issue that is later contested.
Subconsultants should be required to carry professional liability insurance at an appropriate level that corresponds with their responsibilities and impact on the project. A firm must get an insurance certificate that clearly spells out the professional liability coverage and deductibles that the subconsultant has.
Never give a limitation of liability to a subconsultant unless there is one with the client. A subconsultant’s proposal/contract form will often contain a limitation of liability in the general conditions. As mentioned above, this is something a firm needs to read carefully so as not to provide protection to the subconsultant that it does not have as the prime consultant.
Make sure to effectively flow down, incorporate, and give precedence to all desired and mandatory terms and conditions in the prime contract with the client. To the extent the design firm’s subconsultant contract terms do not line up with its prime contract terms, the design firm takes risks it will need to justify taking or effectively mitigate.
Managing the subconsultant
Now that a design firm has a contract with the subconsultant, it needs to have a plan to manage and oversee the work. The scope of services in the subconsultant contract must be clearly written, with identified deliverables milestones and a clear statement of the fee and how the subconsultant will be paid. A firm will also need to think about how it wants to manage the subconsultant’s activities. Should it hold weekly or less frequent meetings to understand the subconsultant’s progress on the work and to answer any questions it might have? There may also be the need to coordinate and integrate subconsultant activity, particularly if more than one subconsultant is on the project.
A firm needs to make it clear to the subconsultant what the performance expectations are so that its level of performance meets the same level of performance being held to by the client. This also will provide the basis of monitoring the subconsultant’s progress and quality of performance at project meetings. A firm should also require a quality assurance/quality control (QA/QC) program plan from the subconsultant. By doing this, a firm will be putting them on notice that there are clear expectations of their level of performance with regard to QA/QC. Implementing safety and quality controls will also provide another topic of conversation at progress meetings.
Ensuring good subconsultant performance
The job of managing the subconsultant contracting process and performance needs to be as structured as other aspects of project management. A client looks to a design firm as the overall responsible party for its contract with them. Therefore, the design firm needs to be equally diligent with its subconsultants to be sure their performance is going to enhance the overall project results and meet the goals and expectations of a client. The steps presented above outline a process for ensuring good subconsultant performance.
