Purchase order?

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Author Message David G. Axt, CCS, CSI ,SCIP Senior Member Username: david_axt Post Number: 1761 Registered: 03-2002 Posted on Friday, March 08, 2019 - 03:26 pm:    I have a new architectural client that wants our form of contract to be a purchase order. I have never heard of hiring a consultant that way only to buy products. Can someone please enlighten me? Thanks. David G. Axt, CCS, CSI, SCIP Specifications Consultant Axt Consulting LLC John Bunzick, CCS, CCCA, LEED AP Senior Member Username: bunzick Post Number: 1772 Registered: 03-2002 Posted on Friday, March 08, 2019 - 04:34 pm:    Purchase orders that I've typically seen have preprinted language with lots of references to the Uniform Commercial Code, which would be totally inappropriate for consulting. I think this may sometimes be driven by accounting departments so they can "encumber the funds." If you have a standard consulting contract, but there is a purchase order too, you may be okay. However, I can't imagine that an architectural firm doesn't have a better mechanism to engage consultants, since they would be doing a lot of that. Wayne Yancey Senior Member Username: wayne_yancey Post Number: 891 Registered: 01-2008 Posted on Friday, March 08, 2019 - 05:59 pm:    David, I think it may be what we call a Master Services Agreement. Michael Chusid, RA FCSI CCS Senior Member Username: michael_chusid Post Number: 467 Registered: 10-2003 Posted on Friday, March 08, 2019 - 06:04 pm:    Most of my clients are manufacturers and they frequently require me to use purchase order numbers. As John says, the PO number provides accounting a way to track their accounts payable. I have never had one with preprinted language. If a client wanted to use such a form, I would put language in my agreement form stating that the agreement supersedes terms on their PO. Sometimes a client insists upon certain clauses; if I am agreeable, I add it into the consulting agreement form instead of referencing it. Having to use a PO is not a burden for me; I include it on the invoices I send to my clients. I have no idea, however, what they mean by a purchase order as a form of contract. Perhaps a visit with their CFO is in order. Anyway, congratulations on having a new prospect. Michael Chusid, RA FCSI CCS 1-818-219-4937 www.chusid.com www.buildingproduct.guru Ron Beard Senior Member Username: rm_beard_ccs Post Number: 456 Registered: 10-2002 Posted on Friday, March 08, 2019 - 07:30 pm:    John, you hit the nail on the head. Decades ago I spent time writing specifications in the power industry where a large percentage of the contracts going out for bids were for procurement** only. For example, a large 3-story high water pump which was a design-build contract but with no installation and with a 3-4 year lead time. As a procurement contract, they were preformed under the Uniform Commercial Code not construction law. AIA documents were not applicable as they are written under construction-contract law ‘jurisdiction.’ As a service agreement, architects-specifiers are providing a Project Manual (a part of the Contract Documents) and related consulting services usually before, during, and after the preparation of the PM. There is no doubt in my mind (as a non-attorney) that such a consulting agreement for services would fall under contract law. Also, a properly worded services agreement should clearly state that such specifications services are subject to the review and acceptance of the Architect-of-Record. I see no issue (again, as a non-attorney) with attaching such an agreement to a purchase order as long as your client executes the agreement. ** Does anyone remember that procurement specifications were covered under our CCS exams? "Fast is good, but accurate is better." .............Wyatt Earp Robin E. Snyder Senior Member Username: robin Post Number: 763 Registered: 08-2004 Posted on Saturday, March 09, 2019 - 10:40 pm:    Ask to see what it is. It may just be a contract that someone in the firm named "purchase order" by mistake/ignorance Gail Ann J. Goldstead, AIA, CSI, CDT, LEED AP, BD+C Senior Member Username: ggoldstead Post Number: 15 Registered: 03-2015 Posted on Monday, March 11, 2019 - 10:50 am:    Adding to David's original post: In one of my prior firms, where we did nothing but hospitals and MOBs, the use of Purchase Orders to procure architectural services in lieu of signing a real Owner-Architect Agreement was quite common. I believe it was an administrative shortcut, where the hospital's contracting officer only had authority to authorize work to a certain $ amount, (enough to cover professional fees for usually a somewhat smaller project), whereas to write/edit a legit Owner-Architect agreement would require authorization from the board of directors. It was commonly believed among the professionals involved was that these administrators didn't really understand what they were doing. The bottom line was that upon receipt of an authorized "purchase order", the design firm was authorized to design and prepare specs and drawings. Everyone was always paid, so everyone was always happy, but it was a bit weird. I brought this issue up at one of the AIA conferences. The attorneys who work for the AIA aware of the practice, but to the best of my knowledge, there is no specific AIA Purchase Order contracting protocol. You can read more about it at this link: https://www.schinnerer.com/risk-mgmt/Documents/UnprotectedFiles/AIA-Members/vep2-1.pdf Gail Goldstead Ronald L. Geren, FCSI Lifetime Member, AIA, CCS, CCCA, CSC, SCIP Senior Member Username: specman Post Number: 1532 Registered: 03-2003 Posted on Monday, March 11, 2019 - 11:36 am:    I've performed very few services under a purchase order, but this and other reasons (no contract, letter agreements, etc.) are why I have developed my own "Proposal and Agreement" document. When I submit a fee to a client, they literally get a contract with all my terms and conditions, and I state that they have the option of using their own form of agreement; but in the absence of such other agreement, my agreement is in effect. Also, I state that any notice to proceed with the services offered (e.g., purchase order, letter, email, etc.) without using another agreement form means that they have accepted the terms of my "Proposal and Agreement." Thus, I'm never in a position where I don't have an agreement/contract in place when performing services. Ron Geren, FCSI Lifetime Member, AIA, CCS, CCCA, CSC, SCIP Dan Helphrey Senior Member Username: dbhelphrey Post Number: 12 Registered: 12-2018 Posted on Monday, March 11, 2019 - 01:12 pm:    What I have done in this situation is executed a standard form of agreement, then had them attach and reference it in the PO. Gail Ann J. Goldstead, AIA, CSI, CDT, LEED AP, BD+C Senior Member Username: ggoldstead Post Number: 16 Registered: 03-2015 Posted on Monday, March 11, 2019 - 01:50 pm:    I agree with Dan Helphrey, I recall that my prior firm did exactly the same. Gail Goldstead Nathan Woods, CSI, CCCA, LEED AP Senior Member Username: nwoods Post Number: 761 Registered: 08-2005 Posted on Monday, March 11, 2019 - 05:30 pm:    Long ago a major firm did I worked at did the HQ Bldg for a major auto mfr. They gave us a purchase order for a contract, to which we attached an AIA contract as an addendum. Worked out okay. Mark Gilligan SE, Senior Member Username: mark_gilligan Post Number: 874 Registered: 10-2007 Posted on Tuesday, March 12, 2019 - 12:41 am:    My understanding is that purchase orders typically have language that creates increased liability exposure for design professionals and as a result you should never accept one for professional services. Consult with your attorney. Gail Ann J. Goldstead, AIA, CSI, CDT, LEED AP, BD+C Senior Member Username: ggoldstead Post Number: 17 Registered: 03-2015 Posted on Tuesday, March 12, 2019 - 09:14 am:    Mark / or others, I'm wondering if most of the agreements you have with architects or possibly other engineers utilize the AIA C401-2017 Standard Form of Agreement Between Architect and Consultant or do your agreements mostly use other customized letter forms of agreement? Do you specifically try to avoid or refuse to use agreements that involve Purchase Orders? Getting back to David's original post, I'm wondering if most Specifiers have agreements with other Architects that utilize the AIA C401-2017 or some other customized letter Form of Agreement? Gail Goldstead Jeffrey Wilson CSI CCS SCIP Senior Member Username: wilsonconsulting Post Number: 274 Registered: 03-2006 Posted on Tuesday, March 12, 2019 - 09:51 am:    As an independent consultant, I typically use a standard letter form of Proposal/Agreement. A few clients prefer the C401, which I accept w/ about a dozen revisions that eliminate "design" related responsibilities. My liability insurance carrier prefers AIA forms, but they have reviewed my standard form and are fine w/ it. I would avoid an agreement based on a purchase order. It is simply an inappropriate contract form for the services we provide. There are fitness of merchantability obligations for "products" -- which do not apply to our work. Jeffrey Wilson CCS CSI SCIP Wilson Consulting Inc Ardmore PA Dave Metzger Senior Member Username: davemetzger Post Number: 746 Registered: 07-2001 Posted on Tuesday, March 12, 2019 - 10:05 am:    We typically use AIA C402 Standard Form of Agreement Between Architect and Consultant for Special Services (this replaced the previous AIA C727). This agreement form is better suited to the type of services provided by specifications consultants. Some of our clients have insisted that we use the same agreement they use for their other consultants, and this has resulted in major editing to delete those services we do not provide (estimating for "the consultant's portion of the project"; CA services; not signing/sealing the specifications; etc) This is a link to an AIA article describing differences between C401 and C402: https://www.aia.org/articles/6068394-which-aia-agreement-should-architects-sele