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While there are many ways in which a design-build firm or other construction provider can furnish design services, many firms are increasingly turning to offshore outsourcing for architectural and engineering services. As compared with firms that have in-house licensed staff performing professional services or firms that have subcontracting arrangements with U.S.-based firms, those that choose to outsource design services may be exposing themselves to additional risks.
Usually, foreign firms providing design services, even those that employ individuals with the necessary skills and education, do not have the legal authority to provide those services directly in the U.S. It is also likely that offshore providers have neither a presence nor an insurance policy in the U.S. It is critical that construction-related firms understand the risks they assume when entering into these types of relationships.
Firms serving as conduits for design services or providing design services as part of their construction activities need to select professional and specialty subconsultants carefully. Firms are vicariously liable for the services provided by others, even if they have no practical or legal means for controlling those services. If a firm selects subconsultants who are uninsured or legally unaccountable, their risk (and the price of their insurance) goes up.
The growing financial pressures for timely and efficient project delivery—with significant consequences to those companies that cannot react—may recast the construction industry. Companies that form ongoing partnerships with foreign professionals who are trained and kept up-to-date in both local and national U.S. codes and standards may be able to reap benefits while providing services legal under U.S. registration laws.
Firms must remember, however, that the least expensive (or even the most efficient) provider of design services may not be legally qualified to provide those services in the U.S. Firms may be facing not only design liability exposures, but also the risks of providing unlawful services.
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