Unauthorized Services – Lessons Learned from Designing a Medical Center

In August of 2017 the Sun Star CEBU wrote an article stating that the City of Cebu (in the Philippines) was refusing to pay an Architectural Firm for Schematic Design Services.  The Firm Perez-Espina & Associates is seeking 42 Million PHP ($840,000 USD) in fees for services rendered in connection with the design of the Cebu City Medical Center.

Mayor Mike Rama was the Mayor at the time the design of the Medical Center began. The current Mayor Tomas Osmena claims that the firm performed the services in violation of the Procurement Reform Act and has requested that the firm produce a Letter of Award confirming their appointment.

In 2013 the Cebu City Medical Center was severely damaged by a 7.2 magnitude earthquake.  Former Mayor Rama has stated that during a City Council Meeting, Perez-Espina offered to perform the design services for free.  Mayor Rama who accepted Espina’s offer, claims to have this in the City’s written record.

Espina claims that the offer was for Schematic Design Services only and in a second article was quoted as saying that he assumed the detailed design would be done by the City’s Engineering Department.

It all seems like series of miscommunications with some politicking sprinkled on top, but perhaps not!

The facts of this story tell me that neither party acted entirely in good faith and the likely result of all of this will probably be some kind of a lawsuit.

The City of Cebu has no right to accept an Architect’s work product without fair and equitable compensation. Conversely, Espina performed the work without proper authorization or even documentation.  Any fair judge would probably cut the fee in half and split the difference between the two parties.

So the take-away for you Today, whether you are on the Owner’s side or you are on the Consultant’s side are as follows:

Nothing is free

Whether it’s a site visit to attend a pre-bid walk-through, a budgetary quotation, or a hand drawn sketch on a napkin someone is investing time in your project.  Before you accept free services ask yourself what you are giving up in exchange.

You get what you pay for

In the same vein as the previous take-away, when someone does something for no pay, the chances that they will provide valuable service is low.  The fees and the time it would cost to have a proper estimate or a thoughtful design are far more valuable than anything you can expect to get pro bono.

ALWAYS get it in writing.

In several articles related to this story, Espina has been quoted as saying, “The mayor’s word was good enough for us to proceed”.  Obviously it was not.  Not that I believe Rama intended not to pay Espina, but even Rama could not anticipate that he would have lost the election.

No one can predict the future and in business nothing is as valuable as a documented agreement.  I see far too many Owners, Architects, and General Contractors operating without as much as a letter of agreement.  Taking the time to document your agreement not only helps to memorialize your intentions, it helps both parties establish clarity of thought.  You can never have too much documentation.

Closing

So what about you?  Have you operated without documentation?  Did that work out, or did you have issues?  Have you provided free services or received free services?  What did you give or get in exchange?  Tell me your stories.

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One thought on “Unauthorized Services – Lessons Learned from Designing a Medical Center

  1. The two common problems I heard from operation without documentation were price and deliverable discrepancy. Thank you for sharing.

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