Buying an engineering or architecture firm in Florida

These firms sell design work and land surveying. Civil engineers design site plans, roads, drainage and utilities for developers and local governments. Structural, mechanical and electrical engineers design building systems. Architects design buildings and carry drawings through permitting. Surveyors map boundaries, elevations and construction layouts. Florida adds steady work of its own: stormwater permitting, hurricane damage assessments, and the milestone inspections now required for condominium and cooperative buildings of three or more stories. They're due when a building turns 30 (25 where local officials require it near salt water) and every 10 years after (section 553.899).

Clients pay by the project: a fixed fee for a defined scope of work, hourly rates or a share of construction cost. Public clients (cities, counties, school districts, the state transportation department) pick firms by formally ranking their qualifications, and often sign continuing contracts lasting several years. Private clients include developers, contractors and property owners.

The work depends on licensed professionals who sign and seal the drawings, backed by designers, drafters, field crews and project managers. A firm's backlog, meaning signed work not yet done, is the best guide to its next year.

• A backlog of signed work several months deep, with proposals out for more.
• Continuing public contracts the firm has kept through more than one selection round.
• Several licensed professionals, so no single person signs everything and the firm can survive a departure.
• Repeat clients spread across developers, contractors and public agencies, so a slowdown in one doesn't stop the firm.
• A clean record on claims and solid professional liability insurance.
• Project managers who track hours against fees, so fixed-fee jobs stay profitable.
• Current design software, drone or scanning equipment for survey work, and well-kept project files.
• Younger engineers or architects working toward licenses: the firm's future signers.

A firm can offer this work only through licensed principals, under each profession's board:

• Engineering: Firms register with the Board of Professional Engineers, and a Florida professional engineer must qualify the firm. One or more principal officers or partners, and everyone practicing engineering for the firm, must be licensed (section 471.023 of the Florida Statutes).
• Architecture: The firm's qualifying agent must be an architect registered in Florida. One or more principal officers or partners, and everyone practicing architecture for the firm, must be registered (section 481.219).
• Surveying and mapping: Firms need licensed principals and a certificate of authorization from the Board of Professional Surveyors and Mappers, part of the Department of Agriculture and Consumer Services (section 472.021).

These laws don't require owners to be licensed, but licensed people must hold real officer roles and sign the work. A professional corporation or professional LLC is different: every owner must be licensed in that profession (section 621.09). If you aren't, you may need to convert the company. If an engineering or architecture firm's only qualifier leaves, it has 60 days to name a new one. Licenses belong to people, so the deal has to keep those people. Confirm your plan with each board.

• Backlog and proposals still out, by client.
• Which licensed people sign and seal the work, and whether they'll stay. Consider employment agreements or a share of ownership.
• Professional liability insurance and claims. Claims can come years after a project, so arrange coverage for past work.
• Public contracts: how they were awarded, whether they transfer, and any certifications (small, women- or minority-owned) that depend on the current owners. A firm holding federal small business contracts must recertify its size and status within 30 days after an acquisition (13 CFR 125.12).
• Work in progress and unbilled fees on long projects.
• Reliance on one developer or government client, and how the firm did in the last construction slowdown.

• Who signs and seals the firm's work today, and do they plan to stay?
• How many months of signed work do you have lined up?
• Which public agencies do you have continuing contracts with, and when do they renew?
• Have you had any professional liability claims in the last ten years?
• How much of your work comes through you personally?
• Do any contracts depend on certifications tied to you as the owner?
• What software or equipment is due for replacement soon?