Brokering Engineering Services

[msdengineer]

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)

 

[diarmud]

You are really better off presenting this to your state licensing board. Not surprisingly, different state boards can give different answers to the same question depending upon the state law, state regulations and their interpretations by the board staff.

Please post what they determine and in which state you are in.

Thanks,
Dermott

 

[pierdesign]

All contracts I have seen include a third party refusal in the terms and conditions. Essentially, the purchaser of services cannot resell the deliverables to others or for other project not otherwise described in the original contract.

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.

 

[spongebob007]

"Let's say that our company B sells widgets. Surely we can pay company A to design the widgets. Instead of widgets, lets sell two-story houses. Someone else prepares a standard set of plans that we build in a repetitive manner. This week our client wants our standard plan, except they want to add a cantelevered porch. Why can't we estimate the additional cost and sell that porch for what we think that we can add, then pay the design firm for new plans that include the porch? Scale the scenario up to the point that it exceeds the PE sealing requirements for your state to avoid that objection. My house building firm is not an engineering firm but we buy engineering services and pass the end product along to our client."


If you are making widgets, chances are you fall under an industrial expemtion and you can do whatever you please.

 

[EddyC]

Hokie66,

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.

 

[civilperson]

New York also allows a joint venture between a contractor and a engineer to provide design-build services to a client. The engineer must make all design decisions and approve changes and have financial interest in the successful completion of the project,(not fees only but have skin in the game).

 

[hokie66]

EddyC and civilperson,

Thanks for the clarification.

 

[JLSeagull]

My hypothetical widgets would be covered in Texas:
(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
…

 

[spongebob007]

JL,

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.

 

[JLSeagull]

I stamped lots of stuff in 1995 and very little since. All of our work is suposedly checked by someone else. Often, litle time is spent checking.