The proposal is the document that represents your offer to perform a service or meet the needs of the potential clients. Too often the proposal is viewed by the design professional as being a marketing piece designed to sell the services of the design professional. The proposal, however, is the first written definition of the services that the design professional will provide. The design professional should be careful not overstate its qualifications; intended activities; or impliedly warrant its services or staff.

Even the most sophisticated client anticipates that the “team” and/or services represented in the proposal will be provided. If a different team handles the project, or services vary, there is a strong possibility that the client will blame any problems on the fact that the “proposed team” is not on the project. Therefore, representations need to be made carefully by the design professional during this phase.

Proposal Contents

a. Scope of Services

The project proposal can vary in form and length. Regardless of its form and/or length, the proposal should be as detailed and comprehensive as possible so that the client can understand what you intend to do based upon the concept and budget criteria provided by the client. A clear scope of work should be set forth in the proposal. The proposal should clearly delineate the services the design professional will be providing. The proposal should also clearly set forth the services you will not be providing, as well as the services the design professional expects the Client to provide. The proposal should also indicate that the identified services will be performed in accord with the professional standard of care that is recognized by the profession. As noted above, avoid expressed or implied warranties and guarantees.

b. Schedule

In addition to the scope of work, it is important that a proposal define the time frame in which services are to be performed. A tight or accelerated schedule can require the design professional to alter, or take short cuts in the performance of services. As a consequence, risk exposure may be greater. Therefore, it is necessary to evaluate the schedule the client is imposing, and using the proposal to educate the client concerning any implications or unreasonableness that may exist in the structure.

c. Client Controlled Services

It is also important to identify the activities that are beyond the design professionals control; such as permit approval and submission; obtaining of easement rights; changed conditions; etc., that may affect the project schedule and your ability to complete services as scheduled.

d. Fee Schedule

The design professional’s fee schedule should be a component of the proposal. Inclusion of the fee schedule in the proposal will establish the fee-risk relationship and sets up the payment expectations for the client. Recognizing that providing services at too low a fee may be a cause of liability problems, the fee schedule should be thoroughly reviewed with the client. Clients appreciate an open dialogue concerning anticipated fees and costs, including potential cost overruns or extras. A design professional who avoids discussing and documenting the subjects of extras and change orders during the proposal phase of the project will often find themselves as the focus of an client’s attempts to financially recover extra costs paid during the course of the project. Discussing and documenting the possibility of extra work arising with the client in advance, and seeking the establishment of a contingency fee, will reduce a design professional’s risk exposure.

Client Proposal

In some instances you may encounter client-developed proposals. The client generates the proposal in order to have a baseline by which to compare proposals from various design professionals. In some cases these proposals will contain a unilateral scope of services that contains a variety of assumptions about the design professional’s needs and preferences. This approach denies clients and consultants the ability to develop a shared vision of the project’s outcome and needs. It can also generate unrealistic expectations and misunderstandings because so many unknowns are not addressed. As a consequence the design professional’s scope of liability increases.

When presented with a “unilateral proposal,” take the opportunity to educate the client regarding the benefits of bilateral scope development and the inadequacy of a unilateral proposal. Discuss scope adequacy, inherent project risks, and the impacts of services listed and not listed. Also, impress upon the client the need for you to identify excluded services, and need for a contingency allowance in the proposal. Avoid stating that the client-authored scope is adequate or meets project needs.

In some instances, it will constitute the negotiation phase as well. Clients will frequently direct design professionals to commence design work prior to the execution of a formal agreement. At times no formal contract will ever be issued by the client or executed by the parties. As a consequence, the proposal can become the basis for the performance of work; scope of the services; and the terms of payment. While you should always pursue a formal contract, a detailed proposal will help control your risks where a contract is not executed.

Summary

In summary, a design professional’s risk exposure can be greatly defined and reduced during the proposal process. By clearly identifying the goals of the client, and the means by which to accomplish the goals, you can reduce ambiguity and confusion among the parties. By carefully evaluating whether to accept the project, and then drafting a thorough proposal, you can also identify the contract protections you will need to perform services.

TAKE THE PROPOSAL QUIZ AND TEST YOUR KNOWLEDGE

Proposals need to be in writing to be valid. True or False

False! You can promise services to a client, indicate an interest in responding to a RFP, or attend a pre-bid conference—all indicate that the client may rely upon your verbal interest. However, put things in writing to avoid confusion or misinterpretation from oral agreements.

Review your RFP’s closely before responding to them. Once appropriate blanks are filled in and you sign it, it can become the “contract” upon the client’s acceptance. If you want modifications, speak with the client prior to submitting your offer. In that way, you can assess the client’s attitude before spending time on what could be wasted effort.

Proposals are not contracts. True or False

False! A proposal can become a legally binding contract if a more formal contract is not entered, or the parties agree to proceed in accord with the proposal. Be aware, that if a more formal contract is entered with the client, unless your proposal is incorporated into that agreement by specific reference, any terms, conditions, or understandings contained in that proposal become null and void and unenforceable. Therefore, making sure it contains the advantage of adding terms and conditions is that it is specific to your services and professional exposures.

Proposals must be signed to be valid. True or False

False! If you offer services in a proposal, receive a verbal authorization, and begin services, the proposal may become a binding agreement.