I sent out a survey agreement to a large firm in this area yesterday. The price I put on the agreement was very good in my opinion and hasn't been questioned at all. This project will keep me busy for a month and will lead to other work on this project later. I have terms of payment on there stating payment in full is required before the final survey is delivered. All seems good, but I was asked to remove this statement from my agreement.
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??Client agrees?ÿ to pay Surveyor for a reasonable attorney fee (15% of the outstanding amount due and owing) if any attorney is required to collect any past due amount under this Agreement.??ÿ
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To remove or Not to remove?
Are you working for an engineer, or the project owner?
It's a design build firm, contract will be with them. The owner is a municipality.
I would rewrite it to say the client agrees to pay collection costs on overdue accounts. Include a definition of overdue, such as not paid within 30 days of the date of the invoice. Also, include an interest rate on overdue amounts. That way, any time you spend chasing the money is also payable as a collection cost, not just attorney's fees, if you should wind up going to court over it.
Include a definition of overdue, such as not paid within 30 days of the date of the invoice.
If you can get a design-build firm -- or just about any commercial client -- to pay within 30 days, you're doing way better than I am.?ÿ My commercial clients are typically 45 to 60 days, and some run as long as 120 days.
Be sure you have your expectation of payment clearly stated in your contract. My experience with DB projects is?ÿ90 days from payment is not unusual.?ÿ If the DB wants to pay you when then they get paid, you need to know the terms of their contract. You will also want to see the terms of their contract to evaluate your liability. If they will not share this with you, you may want to pass or adjust your fee accordingly. If they don't want any penalties for late payments, that is a bad sign.
I do have the expectation of payment stated pretty clearly. They did not question that. It reads like this...
For and in consideration of the Services to be rendered in connection with the Project, Client shall pay Surveyor the base contract sum of $________________ If within the scope of Services, Client shall additionally pay Surveyor for the costs of any revisions, inspection fees, zoning and annexation application fees, assessment fees, engineering fees, soil testing fees, photogrammetry fees, permit fees, bond premiums, blueprints and reproductions thereof, and any and all other similar fees and charges. Surveyor will submit progress invoices on a _________________ basis and provide a final invoice prior to delivering the finalcertified product. Upon payment of all outstanding progress invoices and final invoice, the final certified product will be delivered. Progress invoices are considered past due 15 calendar days after the date of invoice at which point past due amounts shall accrue interest at the highest rate (percent per annum) amount allowed by applicable law. Client's obligation to pay Surveyor is not contingent upon Client's receipt of funds from third parties. Client agrees to pay
Surveyor for a reasonable attorney's fee (15% of the outstanding amount due and owing) if any attorney is required to collect any past due amount under this Agreement. Additional rates are - field work $___ hr, office $___ hr, mileage $___ mile to and from site.
This is actually the second swing. I have required a 25% retainer from clients for about two years now. They said their firm doesn't work with retainers and the accounting department would not okay it. I talked with a mentor and he said he would probably waive the retainer in this case so I politely waived the retainer for this project. Probably should have put the foot down then but I didn't know they were going to comeback with this. I was also asked to provide COI'S which doesn't bother me much but I may have to up some of the coverage limits to fulfill their insurance requests. I am checking on that now. If that's the case it looks even more like a bad deal for me.?ÿ
What's sad is for the past few years I have listened to the wealth of knowledge from the pro's on here and because of that I have upped the anty and added things like retainers and attorneys fee's to my agreements. I've done these and other things because I know how "we" are treated by "them". I have a hard time finding the middle ground between telling them to **ck off and letting them run over me. Seems there is no middle ground.?ÿ
Who here has had requests such as those, accepted them, and ended up developing a good relationship with a client of this sort?
In my experience, the larger the client, the more onerous the contracting requirements, and the less respect they have for subs.?ÿ The administrative overhead of dealing with those clients can be so large that you need to raise your hourly rates just to accommodate the red tape and payment delays.
A few years back I did a forensic job for AECOM (a big multi-national) on a project that had gone sideways due to out-of-compliance work by a surveying sub.?ÿ My $10k invoice was minuscule compared to the project budget, but it took about 8 months to get paid.?ÿ The PM blind-CC'd me on an email to his boss that said, in part, "This is why we can't keep good subcontractors."?ÿ And he was right:?ÿ I axed them from my client list, it's just not worth the hassle.
These guys are requiring some above normal insurance coverages in my opinion.?ÿ
Worker??s Compensation:?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ Statutory
Employer??s Liability ??
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ Each Accident:?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $100,000
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ Disease, Policy Limit:?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $500,000
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ Disease, Each Employee:?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $100,000
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General Liability ???ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ Each Occurrence (Bodily Injury and Property Damage):?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $1,000,000
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ General Aggregate:?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $5,000,000
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Excess Umbrella Liability ??
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ Each Occurrence:?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $5,000,000
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ General Aggregate:?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $5,000,000
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Automobile Liability ??
?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ Bodily Injury (Each Accident):?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ?ÿ $500,000
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My insurance carrier said she had never seen a request with an excess policy of $5,000,000.
When I get such high coverage, I make them pay for it or give a letter that removes the requirement.?ÿ ?ÿI keep the minimum and that is enough for insurance.
If you are willing to wait for payment like Jim Frame stated in a post above. I would go for it.
The term in your contract?ÿ??Client agrees?ÿ to pay Surveyor for a reasonable attorney fee (15% of the outstanding amount due and owing) if any attorney is required to collect any past due amount under this Agreement.? will never hold up in court,?ÿ?ÿa smart Attorney would rip it to shreds??ÿ
What's the nature of the work they want you to do??ÿ It's a little odd in my experience to ask for such a?ÿlarge umbrella coverage amount and not require Professional Liability/E&O coverage.?ÿ $5M is really high for umbrella regardless.?ÿ Like Scotland said above though, whenever I'm asked to get a higher limit on a job I say sure, this is how much it will cost you.?ÿ Around here I can't get project specific riders so whenever I have to bump my limits I'm opening those limits to every Client, not just the one making the request.?ÿ I include the cost for this as well.?ÿ To date I've never actually had anyone press the issue and make me go over the $1M PL/E&O I carry.?ÿ
I would nix the attorney cost recovery language and just go with an interest rate on past due invoices.?ÿ If it gets to the point you have to engage an attorney to get paid you'll be happy to get whatever you can.?ÿ Here the interest rate is recoverable through the mechanic's lien process, I don't think attorney costs are.
They are requiring E&O too. They just forgot to include it in the reply email. The work is topography and easement surveys for a sewer project.
That's a crap ton of insurance for design work!
Here was my reply, we will see what how it works out. He said that him and the accounting team will review it and let me know. My reply is in red text. Hopefully, it will work out.
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Hi John Doe, below in red are my responses to your requests.?ÿ
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I have the following requests for edits regarding the agreement based upon the review.
Under compensation and Payment Terms:?ÿ Please remove ??Client agrees?ÿ to pay Surveyor for a reasonable attorney fee (15% of the outstanding amount due and owing) if any attorney is required to collect any past due amount under this Agreement.??ÿNO THANKS
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?ÿAlso, at the end please add that ??No additional work is to be performed without written consent from the Client.??ÿOK
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I also will need to request a copy of your General Liability and Professional Liability Insurance Policies?? naming The John Doe Company as a certificate holder and additionally insured as pertaining to General Liability policies.?ÿ I was just advised of this need by our main office.
SEE ATTACHED COI WITH MY CURRENT INSURANCES.?ÿ I CAN'T JUSTIFY PURCHASING THE EXCESS BALLOON POLICY AND UPPING THE AGREGATE GENERAL LIABILITY POLICY FOR THE FEE LISTED ON THE AGREEMENT I SENT EARLIER. TO FOLLOW THRU WITH THE REQUESTS FOR ADDITIONAL INSURANCE I WOULD HAVE TO ADJUST THE FEE DRAMATICALLY.
??Client agrees?ÿ to pay Surveyor for a reasonable attorney fee (15% of the outstanding amount due and owing) if any attorney is required to collect any past due amount under this Agreement.??ÿ
To remove or Not to remove?
It's poorly worded. I agree with them. Suppose you bill something in error, and you lawyer up to collect, and lose your case? With this clause they would have to pay your attorney, as well as their own, to fix your screw up. That's not fair.
Nevertheless I get what you are trying to say, so reword it.?ÿ ?ÿ
I do have the expectation of payment stated pretty clearly.
...Progress invoices are considered past due 15 calendar days after the date of invoice at which point past due amounts shall accrue interest at the highest rate (percent per annum) amount allowed by applicable law. ...
I think past due at 15 days is unreasonable for this type of contract.
I don't know of any firm we've worked for who was prime on a government/municipal project that wouldn't have been subject to interest as you've got it written - nobody likes to pay interest. Our approach is to give them 30 days to pay before any interest charges accrue and we reserve the right to suspend all work at 60 days. Here's our language (but we rarely use it - only when the prime doesn't give us their language - which we edit to make it mostly conform to this.):
Payment on undisputed invoice amounts is due upon receipt of invoice by CLIENT and is past due thirty (30) days from the date of the invoice. CLIENT agrees to pay a finance charge of one and one-half percent (1-1/2%) per month, or the maximum rate allowed by law, on past due accounts. If payment remains past due sixty (60) days from the date of the invoice, then [Adam's Company] shall have the right to suspend all work under this Agreement, without prejudice. CLIENT shall pay all reasonable demobilization and other suspension costs. CLIENT agrees to pay attorneys?? fees, legal costs and all other collection costs incurred by [Adam's Company] in pursuit of past due payments. Our hourly rates do not include a sales tax and these will be added if they become applicable in any jurisdiction. CLIENT shall pay final invoice prior to [Adam's Company's] signature or delivery of final document(s).
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And the insurance amount has never been set in stone - when the prime insurance language gets too complicated I just cross it all out and say something like "Insurance coverage shall be as shown on the attached Certificate of Insurance Coverage" and I attach an ACORD Cert with the client identified as the Certificate Holder. It's easier for them to accept as-is than to try to get us to do something different (we have insurance that has worked for most every contracting agency - 2m umbrella).
I sent out a survey agreement to a large firm in this area yesterday. The price I put on the agreement was very good in my opinion and hasn't been questioned at all. This project will keep me busy for a month and will lead to other work on this project later. I have terms of payment on there stating payment in full is required before the final survey is delivered.....
BTW - Not that you have asked, but demanding payment on delivery from a property owner is one thing. Giving another firm - who you hope to do continuing business with - some time (30-60days) to turn the bill around is standard business practice.?ÿ?ÿ
All well noted and greatly appreciated guys!!! Thanks for your wisdom.
Thank you JK for letting me see your wording. It's a big improvement on what I had and they may be okay with it.
