CAA Commentary on “Consultant as Prime Contractor” Clauses
Updated: June 6, 2024

Summary of the Issue 

The CAA’s Procurement and Contracts Committee has noted that several public sector clients have included a clause in their consultant agreements assigning prime contractor responsibilities to the Consultant. 

We assume the intention is that, while on site preforming any site observations or investigations required prior to the appointment of the construction contractor as the “Prime Contractor”, the consultant team will follow applicable occupational health and safety regulations and Client protocols regarding site access. 

The CAA suggests that it is not reasonable on most design and construction projects for a client to require the Consultant to undertake the Prime Contractor responsibilities described in this clause for several reasons, as layout out in this Commentary. We are suggesting that members request the removal of this clause from client agreements and propose wording such as the following to address the client concern: 

“Prior to the appointment of the construction contractor as the prime contractor, the Consultant and its subconsultants shall comply with the occupational health and safety regulations during all investigations and activities occurring at the Work Site. No assignment of prime contractor for safety status to the Consultant is implied by this clause. ” 

 

Background 

There are no apparent restrictions directly within current OHS legislation as to who may be appointed as “prime contractor”. However, it is implied that this individual or entity be capable of performing these duties from legal, ethical, insurance, practical, and financial standpoints. There may be unintended consequences if these responsibilities are undertaken by individuals and entities who are not capable of performing these duties. Such duties are clearly beyond the scope of professional services and responsibilities on most building design projects. The exception would be projects where the scope of the Consultant’s work includes detailed site investigation services and clearly requires the Consultant to take control of the site and be responsible all activities on that site until appointment of a Construction Contractor. 

Recently several Client and Owner groups have inserted provisions within their standard agreements to designate a prime consultant, architect, or engineer as the “prime contractor” for various projects either on a temporary or permanent basis. 

 

Scope of Professional Services 

On most building design projects, it is not reasonable to designate a Consultant as “prime contractor” as the responsibilities and services required are outside of those normally provided by architects and engineers. Such a clause could be understood to make the Consultant responsible for ensuring parties 

whose actions are outside of the control of the Consultant meet the provisions the OHS act, regulations and code. 

There are many instances where a Consultant could be put in a position of responsibility for matters outside of its expertise and control or in a position of a conflict of interest by assuming the role of “prime contractor” in addition to the role of Consultant. 

 

Insurance 

Professional Liability Insurance (PLI) is a requirement for being licensed and providing services in various professions including architecture. PLI insurers have advised the CAA that they would offer no coverage for a scenario where an architect is acting as “prime contractor” because the services related to those responsibilities are not considered professional in nature. 

Similarly, Consultants accepting Prime Contractor roles could void their Commercial General Liability Insurance (CGLI) coverage. When obtaining CGLI, a firm must provide a description of their business operations, normally considered construction activities by Contractors and design activities by Consultants. If a firm is found to be providing services outside of their declared business operations, the insurer could determine the coverage is void, cancel the policy or both. 

 

Practical Issues 

It is not reasonable to designate a Consultant a “prime contractor” for practical reasons. Consultants do not perform this kind of work and are not “in control of the [project/construction] work site.” 

Consultants do not perform their work at a “construction work site” because their services are either design or reporting work, not construction work. A Consultant’s “work site” would be their office because they have control over it. A Consultant does not have control of the project site which is under the Owner’s control or the construction work site which is under the Contractor’s control. 

Consultants comply with the policies put in place by the Owner or Contractor at the project and construction work site as per the OHS Act. Contractors have the methods, ways, and means to secure a work site, and are therefore best suited to be the “prime contractor”. Where there is no Contractor in place on a project site, the Owner retains control of the project site and is therefore best suited to undertake the responsibilities outlined in the OHS Act. 

 

Illustration 

Here is a fabricated illustration to show what this issue might mean. Under this clause, a Consultant is designated “prime contractor” by an Owner on a renovation project within a large functioning hospital until a Construction Contractor is appointed. The Owner has cordoned of access to a dangerous portion of the site to be renovated. As part of its preliminary design scope, the Consultant visits the site to review it as part of the design process and prior to the appointment of a construction contractor. A patient gains access to the portion of the site that was improperly cordoned off and is seriously injured. 

The Consultant should have no responsibility beyond the actions of its onsite team members, but could be found responsible for the injury as, under this clause, the Consultant was assigned the prime contractor and owner obligations to ensure compliance with the OHS regulations. The Consultant’s insurers deny coverage for either the proceedings or damages and prime contractor obligations are not insured risks und the Consultant’s insurance policy. 

 

Current Example 

Here are two excerpts from a recent example of a City of Edmonton RFP quoted from Section 11 Prime Contractor: 

 

DISCLAIMER 

The Consulting Architects of Alberta offers commentary and suggestions on practice matters deemed important to our members but does not offer legal advice. There are no sanctions or penalties from the CAA for any members who choose not to follows CAA suggestions. CAA members are encouraged to seek legal advice on all matters of concern to their practice and govern their actions accordingly.