Engineering Inc. - January/February 2015 - (Page 38)
BY G L E N R . M A N G O L D A N D C H A R L E S W. KO P P L I N
Don't Be Part of the 40 Percent:
Write a Detailed Scope of Services
Among the small firms that reported professional liability insurance
claims over the last year, 40 percent identified contract language,
including scope of services, as a cause of the claim.
Those findings come from ACEC's 2014 Professional Liability
Insurance (PLI) Survey of Member Firms. A smaller percentage
of large firms also indicated that contract language contributed to
Whether your firm is large or small, it is important to ensure the
scope of services within any contract contains sufficient detail. A
well-written scope of services significantly diminishes the chance of
a contract-related professional liability claim.
The four elements of a typical agreement are: scope of services,
terms and conditions, time schedule and compensation. In a clientdrafted agreement, it can be difficult to make changes to the terms
and conditions. The time schedule and compensation are based on
the scope of services. The design professional should take control
of and write the scope of services, because the designer has a better
understanding of the scope than the client, and he or she knows
how to tailor services to meet the client's needs.
An initial discussion with the client regarding the client's needs
and expectations should serve as the basis for the scope. A checklist
of all the firm's potential services is a good tool to use in the client
meeting. Another tool to consider is a matrix of the firm's services.
In addition to the services, the matrix can include columns
designating the services to be performed by the firm, services to be
performed for additional compensation, services provided by the
client and services not provided by the client.
There may also be circumstances when it is desirable to indicate
when certain services are excluded. If the firm does not have the
expertise or if it deems that performing certain services would
carry an unreasonable amount of risk, it should indicate that those
services are excluded. By indicating what services are included,
available for additional compensation, provided by the client and
excluded, the design professional greatly reduces the chances for
any misunderstandings regarding responsibility for performing the
services, and whether those services are included in the agreed-upon
The description of the scope of services should be detailed and
well defined, using plain language. Avoid jargon that is not easily
understood. Remember, if a dispute goes to a court of law, nontechnical people will sit on the jury that determines whether the
client exceeded the scope of services.
Avoid also the use of broad language and words such as "all,"
"complete" and "any." Examples of this include: "the design
professional will provide all necessary services"; "the construction
documents will be complete"; and "the design professional will
provide any required services." However, broad language may be
appropriate when describing information provided by the client.
Examples of this include: "the client will provide all available
JANUARY / FEBRUARY 2015
information on the existing structure"; "the client's list of project
requirements is complete"; and "any requests by the client for
the design professional to evaluate any contractor-requested
substitutions will be done so as an additional service for additional
The design professional may assist the client in obtaining
regulatory permits and approvals. However, the designer should not
agree to obtain them. If the design professional agrees to obtain
a regulatory permit or approval and the agency does not grant
it through no fault of the design professional, he or she will find
themselves in default of their contract.
The scope of services should also include a detailed description
of the project, including the size and location. If the project is on
only a portion of the client's site, the portion of
the property included in the project should be
described in detail. It is also valuable to include
any assumptions that were made when the
scope of services was developed. That way, if at of small ﬁrms
a later date there are significant changes to the identiﬁed contract
project, the design professional has established language, including
a basis to ask for additional compensation and scope of services,
time to complete the project.
as a cause of
Once the scope of services is clearly defined, professional
do not neutralize its power by going beyond
it. Too many examples of design professionals
"just trying to help" end badly, especially
Source: ACEC 2014
when the scope is exceeded without the
Insurance Survey of
design professional receiving any additional
compensation for providing additional services Member Firms
and taking additional risks.
Unmet client expectations are the genesis of many lawsuits
against design professionals. By following these steps, design
professionals can minimize the chances of finding themselves at the
center of a lawsuit due to contract language with a poorly written
scope of services.
Glen R. Mangold is the managing director of the Architects/Engineers
program for Markel Corporation, a leading provider of professional
liability insurance. He has more than 23 years' experience in the
insurance industry. He can be reached at gmangold@MarkelCorp.com.
Charles W. Kopplin has more than 40 years' experience as a consulting
engineer, including 14 years as the risk manager for an ENR Top 500
Design Firm. He can be reached at firstname.lastname@example.org.
The material in this article is provided for informational purposes
only and is not to be regarded as a substitute for technical, legal or
other professional advice. The reader seeking such advice is encouraged
to confer with an appropriate professional consultant or attorney.
Table of Contents for the Digital Edition of Engineering Inc. - January/February 2015
Engineering Inc. - January/February 2015
From Acec to You
The Business Case for Diversity
Closing the Gender Gap
Market Stability Keeping Pli Prices Low
2015 Legislative Scorecard
Made to Market
2014 Fall Conference Highlights
2015 Annual Convention Preview
Members in the News
Mergers and Acquisitions
Engineering Inc. - January/February 2015