Technical Engineers: Professional Practice & Contract Types
Technical Engineers: Roles and Organizations
The exercise of the engineering profession occurs within various organizational structures, often in increasing order of complexity: Free Exercise (Sole Practitioner) > Technical Project Office > Engineering Technology Office > Engineering Company/Firm > Consulting Firm > Macroengineering Organization.
Private Practice for Engineers
Architects and Engineers are empowered to write projects, direct works, and write reports – all activities associated with the free exercise of the profession.
To engage in the free exercise of the profession, an engineer must typically:
- Register with the appropriate Professional College.
- Obtain a tax license.
- Register for the Economic Activities Tax (IAE).
A simplified financial representation might be:
Turnover = Fees + Reimbursable Expenses = Taxable Income + VAT (e.g., 16%) – Income Tax Withholding (e.g., 15%)
Technical Offices vs. Engineering Firms
Technical Office: An organization dedicated to performing technical work by applying scientific, technological, legal, and economic principles. It often arises from the grouping of several engineers in free practice who combine resources to handle increased demand or cover a wider field of action. Its structure typically includes management, specific technical areas, design/drafting, and administrative services.
Engineering Firm: A service company primarily composed of technicians from various specialties. It can undertake both project design and construction management. Engineering firms are often incorporated (e.g., S.A.) and vary by:
- Size: Dependent on the projects undertaken, geographical area covered, and scope of services offered.
- Portfolio: Can include engineering design, technology projects, or engineering consulting (advising on economic and organizational problems).
- Coverage: Local, regional, national, or international.
The fundamental difference often lies in scale; a technical office typically has fewer personnel, is smaller, and handles less complex projects than an engineering firm.
Engineer Responsibilities and Professional Bodies
The functions of technical engineers often include:
- Drafting and signing projects for construction, alteration, repair, or installation, provided these fall within their specific qualifications.
- Direction of the aforementioned activities, even if the projects were prepared by a third party.
- Conducting measurements, calculations, assessments, appraisals, etc.
- Teaching activities as permitted by relevant educational laws (e.g., University Reform Law).
- Management of industries and farms, and pursuing activities related to the above.
Professional Colleges and Associations
Professional colleges and associations are public law corporations, protected by law and recognized by the state, possessing legal personality and the capacity to fulfill their purposes.
Their primary intent is to represent graduates, protecting and defending their interests. Registration is essential for the free exercise of the profession. Colleges operate according to their own statutes.
Purpose of Colleges:
- Organizing professional practice.
- Exclusive representation of the profession.
- Protecting members’ interests.
Roles of Colleges:
- Participating in administrative councils and advisory bodies.
- Representing and defending the profession.
- Taking measures against unauthorized practice (professional intrusion).
- Approving/validating members’ professional work (in some jurisdictions).
Private Construction Contract Types
Overview of Private Contract Types
Different contract structures are used in private construction projects:
Unit Price Contracts (Measured Works):
Unit prices for different work items are agreed upon. The total amount payable by the property owner is determined by measuring the actual work performed and applying these agreed-upon prices.
Advantage: Work can commence even if the project isn’t fully defined, without significant risk to the constructor.
Disadvantage: The property owner doesn’t know the final cost in advance, which could escalate.
Lump Sum Contracts (Fixed Price):
The contract involves a fixed price, calculated beforehand, for which the contractor agrees to complete the works. There are two main types:
- Absolute Lump Sum: The contractor works from a preliminary draft provided by the property owner and agrees to develop the full project and execute the work for a fixed amount.
- Detailed Project Lump Sum: Based on a detailed project plan, allowing the contract price to be determined with less risk for both parties.
Cost Plus (Administration) Contracts:
The contractor acts as an administrator, providing labor, materials, and machinery. The property owner pays the actual costs incurred plus an agreed-upon fee or percentage for the contractor’s services (overhead and profit).
Labor costs are typically based on fixed hourly rates per category, applied to the actual hours worked by each employee.