Brokering Engineering Services
Brokering Engineering Services
(OP)
Scenario 1:
Can Company A (licensed engineering firm) provide engineering services for Company B (not engineering or architectural firm) who combines engineering services and building materials into package to resell to a customer? Basically can Company B broker engineering services?
Scenario 2:
If Company B in the above scenario is a licensed engineering firm, but does not provide a specific service and does not want to assume liability for that service, can that service be subcontracted to Company A without Company B assuming liability? Is it permissible for Company B to still offer/advertise the service, even if they do not actually provide it or assume liability for it? (they just want to sell it)
Can Company A (licensed engineering firm) provide engineering services for Company B (not engineering or architectural firm) who combines engineering services and building materials into package to resell to a customer? Basically can Company B broker engineering services?
Scenario 2:
If Company B in the above scenario is a licensed engineering firm, but does not provide a specific service and does not want to assume liability for that service, can that service be subcontracted to Company A without Company B assuming liability? Is it permissible for Company B to still offer/advertise the service, even if they do not actually provide it or assume liability for it? (they just want to sell it)





RE: Brokering Engineering Services
RE: Brokering Engineering Services
- Steve
RE: Brokering Engineering Services
Or sub-contract the work to Company A - but make it clear to all that "B" is not an engineering company. Done all the time.
RE: Brokering Engineering Services
RE: Brokering Engineering Services
I provide geotechnical services to a builder who combines that with bnuilding materials to make a house / building, and sells it to an end user.
A truss manufacturer has no in-house eng serveces, so they purchase the design from a PE to cary x load over y dist., combine that with the wood / metal and sell a truss to a builder.
For Scenario 2: The liability can be contracturally shifted (check local laws), but regardless, Company B will still likely have to defend the suit. These costs can also be shifted contractually. Laws may limit the transfer of liability to costs incurred because of Company A only.
RE: Brokering Engineering Services
RE: Brokering Engineering Services
RE: Brokering Engineering Services
Anyways, I purchased a set of home plans from Architects Northwest here in Washington State. They had contracted with a professional engineer to do the structural engineering on the home.
So I guess you could say that company B brokered engineering services from company A, where company A sold me engineering services and architectual plans in a combined package. So I would say this is fine in Washington.
RE: Brokering Engineering Services
- Steve
RE: Brokering Engineering Services
This comes the NYS Office of the Professions FAQs:
"12. Can an entity not authorized to provide professional engineering or land surveying services in New York, such as a general contractor, subcontract with a licensed professional engineer or land surveyor in order to provide such services?
No. An entity not authorized to provide professional engineering and/or land surveying services, such as a general contractor, can not subcontract with a licensed professional engineer or land surveyor in order to provide professional services to a third party client. The basis for professional regulation is that the service of the professional must be provided directly from the professional to the client without any unlicensed third party between the client and the professional. This unlicensed third party may have other interests (such as financial) that could jeopardize the level and/or quality of the professional service received by the client."
To do so is a felony in NY. I do not know if there are other states which have similar requirements. I have worked on design-build outside of NY where it is legal.
NY has specific requirements on entities who can practice engineering. In general, an "Inc." cannot practice engineering (even if the entity can practice in another state)and all owners of the firm must be licensed professionals.
If anyone else knows of another state I would be interested.
RE: Brokering Engineering Services
RE: Brokering Engineering Services
RE: Brokering Engineering Services
I am located in Wisconsin (USA) and we have done this type of project in Wisconsin, Alabama, California, and Ohio.
In the case that there is an issue, the customer holds my company liable for the entire project, including sub-contracted portions, and my company can then hold the sub-contractor liable if appropriate.
I know in Wisconsin (in residential/commerical architecture), design/build firms exist, so it is legal here.
-- MechEng2005
RE: Brokering Engineering Services
I've never bought an engineered product personally where I contracted with a design engineer or architect separately, although on many pipeline jobs the company I worked for has 1.) Contracted for one or several design engineering companies separately,
2.) Combined contracts to include engineering design and construct projects under one constructor's umbrella,
3.) Combined separate engineering design and construction services under a still yet a 3rd party as a project management and finance consortium.
**********************
"Pumping systems account for nearly 20% of the world's energy used by electric motors and 25% to 50% of the total electrical energy usage in certain industrial facilities." - DOE statistic (Note: Make that 99.99% for pipeline companies) http://virtualpipeline.spaces.live.com/
RE: Brokering Engineering Services
That's different than company B offering company A's services to the public or a third party.
In the first case, company B is selling a tangible product, while in the latter, company B is offering engineering services of another party.
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Brokering Engineering Services
Quick summary of the last few posts: It is permissible to resell an engineered product, but not an engineering service.
Followup Question: What constitutes an engineered product vs. an engineered service? It is pretty clear if we are discussing a machine or a wood truss to resell to a customer, but consider the following:
Engineering Firm A provides Company B with structural design construction documents (foundation plan, framing plans, wall sections, details...) and supporting calculations for a given building design and location (not generic to be used multiple times). Is it permissible for Company B to resell this "product" to a customer? Or is this considered a "service"? Would it make a difference if Company B were an Engineering Firm?
RE: Brokering Engineering Services
And, company B is usually even allowed to modify such plans for cosmetic changes that do not affect structural integrity.
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Brokering Engineering Services
As discussed above, it would vary with the laws of the state/country. Dig1 has identified New York State as one jurisdiction which prohibits design-build contracts, and he says it is a felony there. I think NY is in the definite minority, but there may be others.
RE: Brokering Engineering Services
RE: Brokering Engineering Services
Please post what they determine and in which state you are in.
Thanks,
Dermott
RE: Brokering Engineering Services
Original question, this is very common. The nature of the contract between the firms buying and (re)selling the services is unique. Often, consortium are established, usually with a senior partner, sometimes jointly. The contract determines this, as it affects communication with the owner.
RE: Brokering Engineering Services
If you are making widgets, chances are you fall under an industrial expemtion and you can do whatever you please.
RE: Brokering Engineering Services
New York State does not prohibit design-build if an engineer/architect is the lead entity, with construction contractors as a sub. It is the reverse that is prohibited.
RE: Brokering Engineering Services
RE: Brokering Engineering Services
Thanks for the clarification.
RE: Brokering Engineering Services
(c) The practice of engineering includes:
...
(10) a service, design, analysis, or other work performed for a public or private entity in connection with a utility, structure, building, machine, equipment, process, system, work, project, or industrial or consumer product or equipment of a mechanical, electrical, electronic, chemical, hydraulic, pneumatic, geotechnical, or thermal nature; or
...
RE: Brokering Engineering Services
in my state, the definition of the practice of engineering is almost identical in wording, but it goes on to say "except where covered by an industrial expemtion".
As a senior engineer I sign off on the work of others. I also sign off on my own work. My calculations are frequently checked by no one other than myself. I am not a PE.
RE: Brokering Engineering Services