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Terms of Engagement...
Terms of Payment...
The Terms of Engagement and Terms of Payment sections
deal with the primary principles in most typical Prime Consultant/Subconsultants
agreements. There are a number of other considerations, however, which
affect the Client/Prime Consultant/Subconsultant relationship in the
execution of a project.
The guideline has been written assuming a "typical" Client/Prime Consultant/Subconsultant relationship. The Client retains the Prime Consultant for the total project and the Prime Consultant in turn retains Subconsultant for specific portions.
Other organizational arrangements can be made but any changes should take into account shifts in responsibility between the parties. In come cases the Client may take part in the selection and/or the payment of Subconsultants. In such situations it is important that the Prime Consultant be a party to and approve such selection and payment in order to maintain control of the project.
Regardless of the organizational structure, all Consultants in the chain must continue to recognize their overriding responsibility to the Client and to the public.
Following is a sketch of a typical organizational structure
based on the concept that the Consultants act as a extension to the
Client's own staff whereas the Contractors are at arms length.
4.3 ERRORS AND OMISSIONS INSURANCE
It should be recognized that the quality of the finished project is not enhanced by Errors and Omissions insurance. Its purpose is to fund the risk associated with errors in design or other deficiencies in the services included in the scope of assignment. In the fee negotiation process, Errors and Omissions insurance should therefore be dealt with as a separate and distinct entity.
The Client should consider the need for Errors and
Omissions insurance in relation to the risk associated with the execution
of a project by a competent design team. Prime Consultants and Subconsultants
should emphasize, during the engagement and fee negotiation process,
their quality control procedures in design, design checking, review
during construction, shop drawing approval and contract administration.
4.4 SCOPE AND FEE CHANGES
As indicated in Article 2.2 items 3, 4 and 5, the Prime consultant is responsible for establishing an appropriate scope of assignment. Article 2.3 describes the principles on which the basis of fee for both Prime Consultants and Subconsultants should be established.
Changes in the Client/Prime Consultant/Subconsultant
agreements with respect to fees are justified if there is a change in
scope which was not anticipated. Such changes should be negotiated through
the involvement of all parties affected. In the negotiation process,
the significance of the proposed scope changes and the consequences
of not modifying the agreements to accommodate the changes should be
clearly communicated by the Prime Consultant to the Client with copies
to the affected Subconsultant.
4.5 RESOLUTION OF DISPUTES
Resolution of disputes can be achieved through a variety of procedures including negotiation, mediation, arbitration or litigation.
Regardless of the procedure adopted, a members' professional responsibility under the Code of Ethics cannot be ignored during the resolution of disputes.
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