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Signing as "Designated Principal Engineer" for company's COA

Signing as "Designated Principal Engineer" for company's COA

Signing as "Designated Principal Engineer" for company's COA

(OP)
I work for a large industrial corporation and am one of the few engineers, in a management position, with a PE license. I have been asked to take on the role of "Designated Principal Engineer" in the Certificate of Authority for various states in which we conduct business (total number of employees > 1,000). We do not provide "engineering services" in the traditional A/E or consulting sense as we are a manufacturer (we hire AEs for all building modifications and any design requiring a PE seal); however, I can see much of the work could be constructed to be engineering in a court of law exposing me to legal risks. My company has full professional liability insurance and is willing to include me as a named insured on the policy.

I'm seeking advise and opinions before moving forward.
-Is it reasonable to request additional compensation and/or benefits? If so, what is considered fair and reasonable for this role?
-Should I consider additional insurance or request my company provide additional coverage, policies, etc.?
-Other considerations and questions I should be asking my manager and our attorneys?

Any feedback is greatly appreciated.

RE: Signing as "Designated Principal Engineer" for company's COA

Discussing it with your own attorney would certainly be advisable.

I would push for an indemnification. That way, regardless of what happens, the company is legally bound to defend you at their cost. If they do that, my understanding is that they are essentially taking all of the risk from you (with the exception of personal risk to your license, which follows you around regardless). So in that case, I would say no to the additional compensation. If they don't, then it comes down to your comfort level with the amount of insurance. If you think it is sufficient to cover the risk, then I wouldn't worry about it. If you think it's insufficient and still leaves you reasonably exposed, or there's a chance you could be held responsible for the deductible somehow (which I would doubt), then compensation commensurate with your elevated risk exposure would be called for.

RE: Signing as "Designated Principal Engineer" for company's COA

Quote (Polyhedron)

...we hire AEs for all building modifications and any design requiring a PE seal...
...however, I can see much of the work could be constructed to be engineering in a court of law exposing me to legal risks.

Why aren't the AE contracts structured to limit your employer's professional liability?

www.SlideRuleEra.net idea

RE: Signing as "Designated Principal Engineer" for company's COA

(OP)

Quote (SlideRuleEra)

Why aren't the AE contracts structured to limit your employer's professional liability?

For the services they provide (primarily building/structural modifications and improvements), they are; however, we are a large manufacturer with many production/process changes that don't always go to AE firms (e.g. conveyor/assembly line modifications, robot cell relocation, etc.). These projects are carried out by other process groups outside of my department. My concern is related to the many unknown activities these groups could be leading without my knowledge and oversight.

The various state's Professional Engineers and Surveyors code language states-

"In order to qualify for a certificate of authority, a corporation, firm or partnership must have at least one licensed professional engineer as a principal officer, partner or designated principal engineer of the firm who has management responsibility....

It further states-
"An engineer who renders occasional, part-time or consulting engineering services to or for a corporation, firm or partnership may not, for the purposes of this section be designated as being responsible for the professional activities of the firm."

RE: Signing as "Designated Principal Engineer" for company's COA

much ado about nothing

I am not convinced that a Certificate of Authorization is required for your industry. unless I am mistaken and from the references I have seen, that only applies to engineering or architectural firms that offer engineering services (to the public). your firm manufactures items and does not offer engineering services.

RE: Signing as "Designated Principal Engineer" for company's COA

I once worked for a 5,000 person firm had never met or talked to the person named on the CofA. Given the size of the consulting firm they were in constant legal disputes from one division to another. I can't see how that engineer would bear any responsibility for other engineers work. I think the role is more confirming the engineers stamping designs are actually licensed and working within there area of practice.

RE: Signing as "Designated Principal Engineer" for company's COA

Quote (Polyhedron)

...we are a large manufacturer with many production/process changes that don't always go to AE firms.
These projects are carried out by other process groups outside of my department.
My concern is related to the many unknown activities these groups could be leading without my knowledge and oversight.
My company has full professional liability insurance and is willing to include me as a named insured on the policy.

I too question the need for a COA and don't see a problem for you.

www.SlideRuleEra.net idea

RE: Signing as "Designated Principal Engineer" for company's COA

Agree with the others - if the work you're doing is all in house you don't need a CoA. Start sealing the stuff the company is doing for outside clients/customers, then yes - but not if it's facility management work for your own company.

RE: Signing as "Designated Principal Engineer" for company's COA

(OP)
My first meeting with the corporate attorneys was my contesting the need for a COA based exactly on your comments. My company has the word “engineering” in its title which kicks-in the COA (even though there is a clear exemption for manufacturing, R&D, and railroads). Their final strategy is for me to sign the COA.

My previous experience has taught me, when a company gets sued, everyone involved becomes named in the claim. Having my name on a public record seems an easy target for an attorney in the event something bad happens.

RE: Signing as "Designated Principal Engineer" for company's COA

Ah. The name thing. That does make a difference. I go back to my previous statements, then. Ensure the insurance is sufficient to cover the risk, and seek indemnification from the company and commitments to pay for your defense upfront with no recourse to collect money paid on your behalf. You'll be named, alright, but it won't be your checkbook getting drained (in theory...).

RE: Signing as "Designated Principal Engineer" for company's COA

Quote (Polyhedron)

My company has the word “engineering” in its title which kicks-in the COA (even though there is a clear exemption for manufacturing, R&D, and railroads). Their final strategy is for me to sign the COA.

In that case, I consider it reasonable for you to request the creation of and promotion to "Chief Engineer", or something like it.
Alternatively, the attorneys can pursue the manufacturing exemption and leave you out of it.

"Designated Principal Engineer" sounds like you are made the "fall-guy".

www.SlideRuleEra.net idea

RE: Signing as "Designated Principal Engineer" for company's COA

I am that person for my company for about 20 states. We are much smaller - about 75 employees and only 2 in the engineering department. I have always seen it as more of a way for the state(s) to ensure the company putting itself out there as capable of doing engineering work, actually has a licensed engineer (in that state) on staff.

If you (and no one else at your company) are not stamping anything, then I don't see how your name on the COA will add anything to your personal liability. Every state is different, some require only one name, some want all of the names of all of the PE's licensed in that state that will be stamping drawings.

Most states do have the requirement that the person on the COA actually has the final say for engineering decisions (essentially is the EOR). If you have that in your current role I'm not sure the higher compensation is warranted, if you don't, I would say that it is.

RE: Signing as "Designated Principal Engineer" for company's COA

In some states you are actually required to be an officer of the corporation. You have not said that you are a corporate officer. Back when I was in the "corporate" world, working for a large international consulting firm, I was one of several designated COA engineers for my home state. The company fully indemnified and insured us. I also work in a state that both the company and the engineer, individually can be sued.

Since I started my own business 15 years ago I have been the designated engineer on the COA. Just recently in my state the state board did away with the COA....now companies only have to "register" with the state as an engineering business.


RE: Signing as "Designated Principal Engineer" for company's COA

This is absolutely more legal than engineering. I have my own company so I am a the "person to point the finger at" and I really have little idea what that all entails but it is my company, not someone elses. Having worked at a large company in the past, I have little faith of the support to expect when something really bad happens. To survive, most will stop the bus, throw you under it, get back in the driver's seat and run you over however many times necessary. With that in mind:
  • What is each states expectation of the Designated Principal Engineer? It could very easily be different state by state.
  • Do you have any say over how things are done in these arenas where you say it could be "engineering in a court of law"?
  • Do you periodically review what these "potentially engineered" items are? Would sound bad in court when asked if you periodically review these engineering policies you said No.
  • I would expect an increase in benefits.
  • I would not ask their lawyer, after all it is their lawyer. Have them front the money for you to consult with one of your own choosing.
  • Never doubt a crafty lawyer's ability to drag you into court. Basically, go back to my first bullet point, what are you signing on for?

RE: Signing as "Designated Principal Engineer" for company's COA

I'm not a PE and I'm not familiar with this. I am familiar with the machinations of corporations though. If you do accept this I would consider attaching to your acceptance a statement saying any change in the nature of the business after your acceptance voids your acceptance. Don't allow yourself to be set up as a fall guy. Most have said what's being asked of you isn't needed so why would they be asking? CYA.

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