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Engineering

RacknRoll

RacknRoll

Civil/Environmental
Jun 8, 2022
15
Good morning!

I’m a California-licensed PE (structural/civil) who runs a small engineering firm. I’m considering taking on construction services for certain projects, specifically for residential homes. I suppose this would be a small-scale design/build firm.

I’m cautious about the ethical and regulatory implications—both from a conflict-of-interest standpoint and to ensure I remain in good standing with the California BPELSG and my own professional reputation and ethics. Has anyone else here combined the roles of designer/engineer of record and contractor on the same project? If so:
  1. How did you address potential conflicts of interest or appearance of bias?
  2. Did you obtain independent testing or inspections for critical elements?
  3. Did you set up separate legal entities (engineering vs. construction), or was it handled under one umbrella?
  4. Are there any specific California code references, board guidelines, or best practices you’d recommend reviewing?
  5. Did this setup affect your professional liability/general liability insurance?
I’m hoping to gather real-world examples or resources—board rulings, case studies, insurance guidance—that could clarify the do’s and don’ts. Any experience or advice, links to documentation, or suggestions on how to structure it ethically and legally would be greatly appreciated.
 
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As far as I know you would need to have your general contractors license, including all the insurances, experiences, tests, that go along with it. Even if you subcontract all the actual work to another contractor.
 
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what experience makes you qualified to be a contractor? Why are you shifting this direction?
Legally these need to be different entities due to liability protection afforded to contractors and not engineers.
 
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There is a guy around here who does the evaluations and then the repair as well. Got busted by The Board due to a conflict of interest. I think he had to create a separate company to do the repairs. Still seems like a conflict to me though.
 
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jhnblgr said:
what experience makes you qualified to be a contractor? Why are you shifting this direction?
Legally these need to be different entities due to liability protection afforded to contractors and not engineers.
Click to expand...
I'm considering shifting this direction because 1. there is a lot of money to be made in contracting; 2. the work is enjoyable; 3. I think design/build makes better engineers who are more connected to the product
 
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There was a professional liability insurance guy/attorney who gave a great presentation on this topic a few years ago. Otherwise, I can never find much information about the topic. I cannot remember off hand who the gentleman was. It was referred to as engineer led design/build, or designer led design/build more generally, because the concept can be tailored to architects or engineers. I love the idea. Anyone who is tempted to think of the arrangement as a conflict of interest should first consider the current norm of contractor led design/build, which is certainly worse in that regard by a large margin. If design/build is going to be allowed at all, then it should naturally be designer led, not contractor led, in my opinion. The concept harkens back to the lost profession of the master builder, who was responsible for all aspects of their creations, beginning with the design. Bridge engineers in the 1800's were good examples of engineers who were master builders and also constructed their own designs. Great architects in centuries gone by also used to design the structures (structural engineering) and oversee the construction of their designs.
 
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I understand there's a conflict from a client's perspective, but surely it is legal right? That's the whole premise of EPC companies that provide turn-key projects.

Maybe it's different in the residential sector, but in industrial its very common as long as you have all your licenses, insurances, etc.
 
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