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53 A wide range of entities provide professional services, including, but not limited to, architec- tural and engineering firms, law firms, concessions consultants, financial services firms, and real estate professionals. This group of providers is distinguished from Contract Services providers in that many of the consultants staffing the provider firms are licensed and/or have advanced edu- cational degrees. Successful professional services contracts have a clearly understood and well-defined scope of services, a realistic timetable to perform the services, and timely compensation to the service providers. A scope should be defined for each contract, clearly defining the services to be per- formed by the services firm. The scope should be accompanied by a schedule/timetable and a list of deliverables and be contained in a separate exhibit of the contract. The mantra of professional services firms is to finish on time and within budget. The airport facilitates successful delivery of services by providing well-managed contract administration. To maintain control of the budget and expenditures, a list of reimbursable expenses should be defined in the terms of the contract. These may include, but are not limited to, travel, telephone calls, overnight delivery expenses, and reproduction expenses. 7.1 Critical Issues in Professional Services Agreements There are a number of critical issues for an airport sponsor to address in professional services agreements. These issues are discussed individually in the following sections. The critical issues in professional services agreements are as follows: ⢠Designated representatives (both parties) ⢠Project deliverables ⢠Additional services ⢠Relationship of parties ⢠Ownership of documents ⢠Schedule and excusable delays ⢠Budget ⢠Confidentiality ⢠Warranties/errors and omissions insurance ⢠Professional certifications ⢠Payment terms ⢠Assignment ⢠Place of work ⢠Termination provisions C H A P T E R 7 Professional Services
7.1.1 Designated Representatives (Both Parties) The service provider and the airport should designate the project managers or key project leadership and the liaisons for both parties. The project managers should be identified by name and title, and the procedures for replacing them should be outlined. 7.1.2 Project Deliverables Project deliverables include documents, drawings, and any other forms of work product to be developed under the Scope of Services to be performed. Deliverables should be described in terms of the format to be provided (e.g., electronic, hard copy, color or black/white, and CDs), method of delivery, and relationship to the project schedule. 7.1.3 Additional Services When a service provider performs well and the airport establishes a good working relation- ship, the airport may want the provider to perform additional services related to the original con- tract, but going beyond the services defined in the Scope of Services. This provision allows the airport to expand the scope and increase the compensation to the service provider. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the CHS Consultant Services Agreement for example of provisions regarding procedures for authorizing and paying for additional services. 7.1.4 Relationship of Parties The contract should contain language that specifies that the service provider is not an employee of the airport, but is an independent entity. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the IAH Concessions Services Agreement for an example of provisions for defining a rela- tionship as an independent contractor. 7.1.5 Ownership of Documents The airport sponsor should have a provision that it is the owner of the work products, deliv- erables, and all documentation produced under the terms of the contract. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the MWAA, IAH and CHS Consultant Services Agreements for example of provisions regarding ownership of the work product. 7.1.6 Schedule and Excusable Delays The schedule provided under the contract is typically based on time estimates to which both parties agree. Delays may occur that are out of the control of the service provider and may result from the airportâs delay in providing required inputs or task orders. A well-written agreement provides for these types of delays. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the IAH Concessions Services Agreement for example of provisions regarding schedule and excusable delays. 54 Guidebook for Developing and Managing Airport Contracts
7.1.7 Budget The project budget is typically found in an exhibit of the Professional Services contract. It com- prises the estimated costs for labor, materials, and reimbursable expenses based on the schedule of work. The budget may have been developed as a response to an RFP or negotiated/modified after the award of the contract. The budget is the basis for billings and compensation to the ser- vice provider and should incorporate as much detail as can be reasonably tracked by the spon- sorâs staff. 7.1.8 Confidentiality The professional services contract should contain a provision of confidentiality with regard to information the airport provides to the contractor and also with regard to the work product. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the IAH Concessions Services Agreement for example of provisions regarding confiden- tiality of information. 7.1.9 Warranties/Errors and Omissions Insurance Errors and omissions insurance is a requirement for architectural and engineering services because of the potential liability associated with such work. Risk management staff should be involved in determining the indemnification, insurance, and errors and omissions coverage for other Professional Services agreements. 7.1.10 Professional Certifications The contract should specify that all necessary professional certifications and licensing require- ments should be met by the contractor in accordance with local, state, and federal regulations. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the JAX Ground Handling Agreement for example of provisions regarding compliance with licenses and permits. 7.1.11 Payment Terms Many professional services contracts involve a monthly billing cycle with payment due within a specified number of days. Sponsors should seek terms that are favorable, yet fair, and do not adversely affect the airportâs cash flow. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the IAH Concessions Services Agreement for example of provisions regarding payment terms. 7.1.12 Assignment Assignment of a professional contract should be prohibited without consent of the airport. The provider was selected on the basis of its qualifications and experience and should not be allowed to freely assign the contract to another entity. In instances where the contractor is acquired by another firm while a contract is in progress, the airport should consider assignment only if the same per- sonnel remained assigned to the project or if comparable or superior staff from the acquiring firm is assigned. Professional Services 55
See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the CHS Consultant Agreement for example of provisions regarding assignment. 7.1.13 Place of Work The contract should state where the work is to be performedâwhether at the contractorâs offices or at the airport if the airport is providing work space. 7.1.14 Termination Provisions The contract should clearly provide conditions and terms for termination by both parties. It is especially critical that any provision for termination with cause be as detailed as possible to ensure such action is defensible against protest or civil suit. See CRP-CD-81 (enclosed herein), Appendix to Chapter 7, Professional Services, for excerpts from the CHS Consultant Agreement and the LAS Mystery Shopper Agreement for example of provisions regarding the rights of termination. 7.2 Selection Process The selection of firms to provide professional services is often accomplished through the RFP/RFQ process to ensure the selection of experienced, qualified providers. Selection of archi- tects and engineers for projects that will be funded through federal grants must be done through an RFQ process. Cost may not be a factor for selection. The Scope of Services is the key contract element defining the services to be provided. Typically, the scope of services is found in Exhibit A of professional services contracts because the language is customized for each type of service whereas the rest of the contract may contain standardized provisions. Exhibit A may also contain the schedule for services to be performed and should also list any deliverables to be provided under the contract. Exhibit B typically contains the terms of compensation and may detail a list of staff or positions performing the services and their respec- tive hourly labor rates. The total compensation may contain a not-to-exceed amount. In some cases, compensation may be based on a cost- plus fixed-fee basis where the service provider is compensated for the cost of services provided plus a fixed-fee amount. Another consideration commonly factored into professional services contracts is the owner- ship of the work product and use of the work product. From the airportâs perspective, the airport should stipulate that it is the owner of the work product. Airports establishing good relationships with professional services firms may add tasks or ser- vices to the Scope of Services defined in the contract. It may be useful to have a provision to enable the airport to request additional services and have a mechanism to determine the appropriate compensation for additional services. 56 Guidebook for Developing and Managing Airport Contracts
