Contract advice - engineering for fabricator

[ikerdanolcam]

Hi forum goers,
I practice in the state of California, where to my understanding, everyone is supposed to work under a contract. Normally I work for owners or architects, but this is a job I thought I had already negotiated that is now in jeopardy because the client wants to work via purchase orders.
Are there any engineers here that have done calcs and developed details directly for a fabricator? There is a lot of facade work here, so someone who's done something like that might enlighten me. I basically want to know if I just don't know the secret handshake to working with this sort of agreement, or if I'm negotiating with a fabricator who doesn't have a clue.
They claim they've worked with engineers before, under a purchase order agreement. I've not even seen it (the purchase order, or the precedent), so I don't know for a fact I should be worried. I've been in touch with my E&O carrier who seems to think I should be, but I think they mostly see typical A&E building contracts.
Many thanks in advanced for sharing your experience.

 

[ron9876]

You have to review the purchase order language. It may well have conditions that you/your E&O carrier can't tolerate.

I have done it but the language had to be modified.

 

[ikerdanolcam]

Thanks, ron. I guess P.O.'s can be considered contracts? I didn't realize that.

 

[Ron]

A Purchase Order IS a contract. Unfortunately, as ron9876 noted, it contains language that E&O insurers do not like.

Purchase orders are geared to the supplying of goods, not services and are written under the Uniform Commercial Code in the US. It is difficult to modify the terms and conditions of a purchase order to fit professional services.

One thing you can do, since they are probably set up for accounting to only pay from a purchase order, is to provide your proposal with your terms and conditions, then have them reference your proposal on the purchase order and strike all the UCC provisions. That keeps their system intact and satisfies your E&O carrier.

Take a look at the attached booklet on contracts for engineers. You might find it to be helpful in this regard...

 

[ikerdanolcam]

And thank you, Ron.
I've endured webinars on contract language that weren't as informative nor concise as this looks to be.

 

[connectegr]

We do the majority of our work directly for fabricators. And we always work under our subcontract. The terms of our contract are required to be within the coverage of our E&O policy. I have been presented with PO agreements with contract language, which is not acceptable with our carrier. Primarily standard of care, warranty, and indemnification wording must be reviewed carefully. I suggest having you insurance carrier review any contract wording you are considering, before you add your signature. In 20 years I have two fabricators with unacceptable PO/contract wording. In both cases we had to walk away. Their primariy defense was that other engineering subs signed their contract regularly. Our carrier clearly explained the issues and refused coverage if we accepted the terms. Our contract is fair to all parties and is a requirement for all our projects.

http://www.FerrellEngineering.com

 

[Ron]

connectegr....I hear that one routinely..."well, the other engineers sign our agreement"...good for you for not folding. It makes life more difficult for those of us who take risk management seriously.

 

[ikerdanolcam]

Thanks for the encouragement. I have no intention of signing anything that leaves me exposed. I have already been (counter)sued... I know you can design a project to perfection and still become embroiled in a legal dispute.
I told the client they should be worried about an engineer who would.

 

[Ron]

iker...read the section on "Standard of Care"...perfection isn't required.

Remember a couple of things about contracts.....

First they are intended to keep you from being invited to the party.

Failing that, they are intended to allow you to go home early from the party.

 

[woodman88]

I have been sealing jobs in CA with a letter, per job, from the client. I include all the requirements per the state website (see attached) in the letter. If I was you I would have each PO include this information or get a letter stating that each PO you get will be under this letter requirements. But, please understand that I am only an engineer. Maybe you should talk to your lawyer or insurance company.

Garth Dreger PE - AZ Phoenix area
As EOR's we should take the responsibility to design our structures to support the components we allow in our design per that industry standards.