USE A ROBUST PRODUCER STATEMENT
One of the functions undertaken by ACENZ is to ensure that robust, equitable and practical contracts of engagement and work performance documentation are available to clients and member firms. In the current climate of meeting requirements relating to new compliance and certification processes, and particularly associated with BCA accreditation, there is a focus upon the use of appropriate Producer Statement forms.
Producer Statement origins
The original Producer Statement forms were developed by ACENZ, IPENZ and NZIA, together with builders and Building Officials, to meet requirements of the Building Act 1991. They have since been modified (January 2007) to reflect the intent and regulations under the 2004 Building Act, which requires a suitably qualified person to verify that design or construction complies with the Building Code. Work on the new documents has been facilitated by the same three professional organisations, along with input from BOINZ, the insurance industry, public sector clients, and DBH (Department of Building and Housing). DBH have recently provided support for these documents through their ‘Codewords’ magazine.
A valid and robust Producer Statement can provide part of the evidence of what a BCA requires to satisfy itself, on reasonable grounds, that aspects of a design comply with the Building Code. A correctly worded Producer Statement should:
- Originate from a reputable firm, and a professional within that firm who will be either an engineer or architect and who is judged by peers to be competent;
- Confirm compliance of design work with clauses of the building code, and/or confirm satisfaction, on reasonable grounds, that construction has been completed in compliance with the approved design;
- Represent pertinent professional responsibility for that part of the project design or construction that is stated in the form
- Provide a standard document that is recognised by DBH and many local authorities, and that is approved by the design industry and their insurers,
- Be easy to use and understand, and be consistent - rather than being a variable document likely to cause confusion and ill-defined liability;
- Clearly identify what the professional has designed, reviewed or observed.
Producer Statements are not a guarantee that nothing will go wrong, but they should give some assurance that work has been carried out by, or under the control of, a competent professional. As the forms require confirmation of professional indemnity insurance they also provide some security of financial redress for valid claims that relate to negligent work for which a consultant is liable. ACENZ member firms (even sole practitioners) are required to hold a minimum level of Professional Indemnity Insurance of $500,000
Producer Statement issues.
Perhaps due to a rush for BCA accreditation, a significant current issue for engineers, architects and surveyors has been a plethora of miscellaneous local authority documents appearing in place of industry accepted producer statements. Amongst the issues are:
- Personal liability to the PS signatory – By such requirement clients can negate their financial redress, which is guaranteed through PI insurance carried by the firm, not the individual.
- Inclusion on documents of Indemnities, warranties and guarantees – the insurance industry advise that PI insurance is valid for ‘reasonable endeavours’. If a firm has been required to commit to any of the aforementioned, it may have invalidated their insurance cover.
- Excessive Liability and PI Cover – ACENZ is now frequently hearing of engineers and architects engaged on small jobs being required to carry $2,000,000 or more liability and PI insurance cover. ACENZ requires members to carry a minimum cover of $500,000, and member firms do expect a higher requirement on large and complex jobs. A higher requirement on smaller jobs will exclude smaller consultancies from the market, will increase the cost of all cover and will increase the range of insurance “exclusions”
- The designer is required to carry insurance for the client and/or contractor – this is a no-no for the insurance industry, and they will not meet a claim under such an agreement.
- The professional being required to be a signatory for work for which he was not responsible – more often ACENZ is hearing of attempts to have a designer sign a Producer Statement that covers construction works for which they have had no observation or supervision responsibilities.
Any of the above can nullify the availability of insurance to a consulting firm, and ACENZ actively recommends to all member companies that they do not sign such forms. Increasingly, consulting engineers are taking a united stand in rejecting excessively onerous documentation.
Producer Statement Signatories
Some council’s are compiling lists of ‘authorised signatories’ for producer statement sign-off. We believe that list already exists in a consistent and nationally recognised context.
The signatory of a producer statement is likely to be a Chartered Professional Engineer (CPEng) or a Registered Architect. By that status (reinforced by an engineering firm’s
membership of ACENZ) the Building Consent Authority can reasonably expect that the design professional is currently competent and is bound by a code of ethics to work within the range of his or her competency. CPEng or Registered Architect are relatively new certifications, and some practitioners may not yet have completed the process to achieve that status. IPENZ (for CPEng) and NZIA (for Reg.Archs) can provide access to the registers. ACENZ can provide lists of firms with expertise in particular engineering disciplines.
Professional Services during Construction Phase
ACENZ encourages Building Consent Authorities to require that the range and level of services carried out by the design professional during construction is appropriate to cover the project concerned. No design professional can provide a PS4 producer statement unless they have been engaged to undertake an appropriate level of construction monitoring or observation services.