色多多视频Design Professional’s Speakers Series 2024 kicked off earlier this month with an on-demand webinar entitled, “Our Proposal Said What? Stop Over-promising and Start Managing Risk.” Presented by AXA XL’s Risk Manager for Design Professional Loss Prevention & Client Education, Patty Huntley, the program offers advice on developing proposals that don’t contain overblown promises that may lead to misrepresentation. This article outlines some of the program’s main themes; the entire program is accessible on the .
A proposal can be an A/E firm’s first opportunity to set itself apart from its peers and win over a potential client. However, the exuberant language and over-promises common in proposals may be sincerely written but can cause unforeseen problems. Consider this excerpt from a proposal: “We are confident that no other consultant will provide [X].” This and similarly exaggerated statements can potentially raise your standard of care and create false promises in a claim situation. Language like this will be taken out of context and exploited by a plaintiff’s lawyers. It would be better to write, “We will work with you to achieve your goals.”
Look within
When deciding whether to respond to a request for proposal (RFP), we recommend that your firm carefully and objectively assess the areas of risk (including client experience, your relationship with the client, your firm’s suitability for the project, project risks, competition risks, and the risks presented by subconsultants and contracts) and evaluate whether the potential reward is worth the risks. Remember, you begin to incur project costs as soon as you begin preparing your response to the RFP.
An important factor to consider is your staffing capabilities—do you have the right people and resources to make this a successful project? While a new project can seem exciting and novel, there is potential for larger consequences and costs. It’s crucial to have an awareness of your firm’s ability to handle the risks and understand the possibility of varied outcomes.
Boilerplate risks
Using boilerplate proposals creates risks you need to examine. When they work, they provide consistency and save time; however, you must tailor your proposal to the project and demonstrate to the owners that you care enough about their project to customize. The risks arise when you use boilerplate language for unique projects; those are times when a custom proposal is necessary. Otherwise, you can end up spending more time editing your boilerplate than if you had just started with a unique proposal.
The language you include in your proposal can lead to unforeseen issues. You should delete ambiguous, imprecise words like “shall” from your proposal and contracts. “Shall” means “must,” but this is open to interpretation. A better practice is to use the more definitive “will.” Similarly, using the words “ensure” and “certify” can set you up for a breach of contract and/or breach of warranty claim. (See “Stop and ask: What’s in your contract?” to check for any “red flag” words.) “Sure” words, such as “insure,” “assure,” and, as mentioned above, “ensure,” are fraught with risk and may imply a guarantee. It’s best to replace them with action words, such as “verify,” “check,” “observe,” and “generally conform.” When using these or other action words, you’ll want to specify what you’re verifying, checking, observing, or conforming to.
While a new project can seem exciting and novel, there is potential for larger consequences and costs. It’s crucial to have an awareness of your firm’s ability to handle the risks and understand the possibility of varied outcomes.
Promises, promises
We also caution against over-promising. Sometimes, in a firm’s enthusiasm for winning the project and avoiding criticism for being boring, a proposal may make promises that are difficult, if not impossible, to keep. The law does not compel design professionals to be perfect; you’re required to perform to a degree that is ordinarily exercised; not to ensure an exciting project. Indicating in a proposal that your services, for example, will be “exceptional” or “shall meet the highest standards,” can override what is legally required and cause major problems, including increasing the standard of care by contract, which has the potential to lead to insurability issues if a claim were to be asserted alleging breach of that heightened standard of care.
If you’re using an AI software like ChatGPT to help you write proposals, AI may include exuberant language that over-promises. It’s important to review what AI creates to make sure your proposal avoids words that over-promise, such as “superlative” or “best.”
Before you respond
Risk management starts even before the proposal phase; it begins with business development. Using a go/no-go checklist, such as Exhibit 16 in the 色多多视频Contract Guide (available on the ), will help you evaluate potential risks and develop contingencies for identified risks. Such a framework provides a consistent internal process for generating proposals. Then, as you develop your proposal, you can look at the elements that you are able to control, like scope, schedule, fee, and contract terms and conditions. It’s crucial to be clear during the proposal phase. For example, you don’t want to put a fixed cost on a vague scope of services. Do not use the words “any,” “all,” “every,” “as needed,” or “as necessary” when discussing your scope of work, even if the client asks for “all services to be provided, as needed.” When RFPs are unclear, it’s up to you to clarify and define the project services, fee, and schedule.
Examine insurance requirements
It’s also important to consider contractual insurance requirements when responding to an RFP. Many contracts require a firm to have insurance coverage, limits, and various endorsements. The risks to a design firm increase when the contract does not align with the firm’s insurance policy. While some of these issues are minor, others may create an uninsurable risk if a claim develops. Review your insurance program early in the contract negotiation process to confirm that you are meeting the contract’s insurance requirements and not creating added risk for your firm.
After winning a project, ask the client for feedback on your proposal. Your client is now invested in your success and likely to supply beneficial commentary. This client insight can help you refine future proposals and make them even more effective.
The webinar, “Our Proposal Said What? Stop Over-promising and Start Managing Risk, is accessible on the .
