This chapter discusses the regulation of architects, engineers and technical engineers. In 2015, the architectural and engineering services provided to Portuguese firms and households represented EUR 1 723.9 million and, in 2017 there were 96 690 individuals who were members of the professional associations related to architects, engineers and technical engineers. The exercise of these three professions and the legislation applicable to them are linked closely to public safety and health concerns. Nevertheless, several barriers to competition have been identified, including reservation of specific activities and specialisations for certain professions; requirement of a minimum number of years of experience in order to perform certain tasks; and limitation of freedom to establish prices. These barriers inhibit cost savings. They increase legal and regulatory uncertainty for potential and existing architects, engineers and technical engineers while also allowing some of them to be placed at a competitive disadvantage.
OECD Competition Assessment Reviews: Portugal
Chapter 5. Technical and scientific professions
Abstract
5.1. Introduction
The technical and scientific professions correspond to the professions that require specific scientific knowledge (such as mathematics and physics), practical skills and operating methods which will, in the exercise of the respective profession, be applied in the performance of tasks in areas such as construction, communications, industry and transport. Those professions include architects, engineers and technical engineers, which can perform several activities, in particular related to construction, such as surveying construction sites, or developing, managing and co-ordinating projects or works.
These professions are also confronted with similarly high levels of risk regarding public security, public safety and the environment. In fact, mitigating risk is the main driver behind the regulation of these professions.
5.1.1. The professions
Architects
Architects have a university degree in architecture and practical knowledge about planning, designing and overseeing the construction of buildings and surrounding space.
In Portugal, architects can only practise their profession if they are registered with the Professional Association of Architects (Ordem dos Arquitectos). In accordance with its bylaws,1 the Professional Association of Architects regulates the exercise of the profession of architect in Portugal and, also, represents the professionals before other entities.
The bylaws of the Professional Association of Architects2 state that an architect develops and assesses architectural studies, projects and plans and, also, participates in studies, projects, plans and activities carried out in the scope of activities of consultancy, management, supervision and management of works, planning, co-ordination and assessment related to the construction, urban planning, conception and design of the spatial framework of the population.
Engineers
Engineers have, at least, a university degree in engineering and also have practical skills specifically aimed at developing ways to use materials and forces of nature efficiently. The exercise of such a profession involves a wide range of activities, including conception, design, development and formulation of systems and products as well as the implementation, production and operation of systems.
In Portugal, engineers must register with the Professional Association of Engineers (Ordem dos Engenheiros) in order to practise their profession. According to its bylaws,3 the Professional Association of Engineers grants the title of engineer, ensures that engineers comply with the rules of professional ethics, regulates the exercise of the profession in Portugal and protects its members’ rights.
The bylaws of the Professional Association of Engineers4 mention that an engineer applies engineering sciences and techniques to the activities of research, conception, study, design, manufacture, construction, production, assessment, supervision and control of quality and safety, expertise and audit and, also, co-ordinates and manages those activities and other activities related to them.
Technical engineers
Technical engineers are individuals who have, at least, a bachelor's degree (discontinued in 2005) in engineering and who also have practical skills specifically aimed at developing ways to economically use materials and forces of nature, similarly to engineers. Since 2005, technical engineers face the same requirements and are allowed to practise the same activities as engineers, with the exception of technical engineers who graduated before 2005.
In Portugal, technical engineers must register with the Professional Association of Technical Engineers (Ordem dos Engenheiros Técnicos) to practice their profession. According to its bylaws,5 the Professional Association of Technical Engineers is responsible for promoting the professional and scientific value of its members, defending their respective ethical principles, exercising disciplinary jurisdiction over technical engineers in the exercise of their profession and defending technical engineers’ rights and interests.
5.1.2. The relevant institutional bodies
The activities performed by these technical and scientific professionals fall within the scope of the respective professional associations that are briefly described in Section 5.1.1, and of the Ministry of Planning and Infrastructures (Ministério do Planeamento e das Infraestruturas) and of the Institute of Public Markets, Real Estate and Construction, (Instituto dos Mercados Públicos, do Imobiliário e da Construção, I.P. – IMPIC).
The Ministry of Planning and Infrastructures is responsible for transport-related development and cohesion policies and infrastructure policies in the construction, real estate, transport and communications sectors.
The IMPIC is responsible for implementing and applying the regulation concerning the construction and real estate sectors and the regulation concerning public markets and contracts. It also supervises public electronic contracting platforms used for public procurement and develops manuals of good practice on public procurement.
5.1.3. Main applicable legal framework
Architects
The professional qualifications required of the professionals responsible for specific activities concerning several operations and works are defined in Law 31/2009. Those qualifications have been largely harmonized to allow for automatic recognition under the Directive 2005/36/EC of professional qualifications.
As mentioned in Section 5.1.1, architects are mainly governed by the bylaws of the Professional Association of Architects. Additionally, the regulation concerning ethics and disciplinary procedure applicable to architects6 establishes the rules, conditions, principles and procedures that those professionals need to comply with, as well as the sanctions in cases of transgression.
Since 2006, architects have a dedicated Ombudsman, briefly described in Box 5.1. The Ombudsman of Architecture has an important role in the profession of architects and in the relation between those professionals and consumers.
Box 5.1. The Ombudsman for architecture
In 2006, the Professional Association of Architects designated the Ombudsman of Architecture, an individual independent from the association governing bodies whose main role is to defend the interests of the recipients of the professional services provided by the members of the Professional Association of Architects, according to its bylaws (Art. 32 (1)). The Ombudsman’s main tasks include analysing complaints and providing recommendations for their resolution, as well as recommendations for the improvement of the performance of the Professional Association of Architects, in accordance with the bylaws of that association (Art. 32 (3)).
The Ombudsman of Architecture, including the regulations applicable to him and his remunerations, is appointed by the assembly of delegates of the Professional Association of Architects, according to the bylaws of the Professional Association of Architects (Art. 19 (1) (i)). The individual appointed shall be a citizen with a proven reputation for integrity and independence and who enjoys full civil and political rights. If applicable, the Ombudsman must request the suspension of his registration in the Professional Association of Architects, in accordance with the bylaws of that association (Art. 32 (5)).
The Ombudsman of Architecture regularly publishes his recommendations, findings and opinions, which is in line with his informative and pedagogical functions, as well as with his aim of ensuring the implementation of correct procedures by architects and the Professional Association of Architects.
The involvement of the Ombudsman for Architecture in a specific situation does not preclude or limit a complainant’s rights to involve the General Ombudsman and to appeal to Courts. Similarly, it does not prevent or limit the use by the Professional Association of Architects’ competent bodies of their disciplinary powers.
Source: Professional Association of Architects (2018a).
Engineers and technical engineers
Engineers and technical engineers are mainly regulated by the bylaws of the Professional Association of Engineers and by the bylaws of the Professional Association of Technical Engineers, respectively. Each one of those regulations establishes the legal regime for the organisation and operation of the respective association and for access to and exercise of the profession in question.
Additionally, the code of ethics applicable to technical engineers7 establishes the rules, conditions, principles and procedures concerning ethics and behaviour that those professionals need to comply with.
Further Portuguese regulations relevant to the exercise of both professions are the following:
Law 14/2015, which establishes the minimum requirements to access and carry-out the activity of entities and professionals responsible for electrical installations;
Law 15/2015, which determines the minimum requirements to access and exercise the activity of entities and professionals which operate in the field of combustible gases;
Law 31/2009, which approves the legal regime that establishes the professional qualifications required for technicians responsible for developing and signing projects, inspecting works and directing works, as well as the duties applicable to them;
Law 41/2015, which approves the legal regime applicable to the exercise of construction activity.
5.1.4. Economic overview
In 2015, the engineering and architectural services provided to firms in Portugal represented EUR 1 723.9 million,8 having decreased by 27.0% since 2008. That value corresponds to 13.0% of all services provided to firms in Portugal, a decrease from 17.2% in 2008.
The majority (76.8%) of the engineering and architectural services provided to firms in Portugal in 2015 related to engineering services, while 13.3% of them corresponded to architectural services, from which 10.5% related to architectural services for buildings (see Figure 5.1).
Figure 5.1. Distribution of the engineering and architectural services provided to firms in Portugal, 2015
Note: The class “Services provided to firms” includes services provided to households, despite its name.
Source: INE (2017), “principais indicadores económicos, segundo a atividade principal da empresa”, https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_destaques&DESTAQUESdest_boui=281447433&DESTAQUESmodo=2 (accessed on 23 March 2018).
In November 2017, there were 23 396 members of the Professional Association of Architects,9 of which 17 398 practise the profession in Portugal. On the same date, the Professional Association of Engineers had 49 030 members,10 of which 49% were members of the Civil Specialisation College (see Figure 5.2). In 2017, the Professional Association of Technical Engineers had 24 264 members,11 of which 5 044 may register with the Professional Association of Engineers, given that they fulfil the minimum requirements to do so.
In November 2017, there were 62 firms which provide architectural services registered in the Professional Association of Architects, although no firms of architects were registered in it. This is due to the possibility that architects can practise their trade within firms that supply architectural services. In 2017, there were 290 architects from countries other than Portugal working in Portugal.12
In 2011, there were 671 civil engineers working in Portugal for every 100 000 inhabitants, a penetration that is higher when compared with the respective EU28, of 321 civil engineers (see Figure 5.3).
Figure 5.2. Distribution of members of the Professional Association of Engineers, 2015
Source: Professional Association of Engineers (2017).
Figure 5.3. Number of civil engineers for every 100 000 inhabitants, 2011
Source: EC (2015).
5.1.5. Methodology for competition assessment
We analysed 89 Portuguese laws and regulations13 applicable to the technical and scientific professions. Among these, the project identified 71 provisions as potentially harmful to competition and 68 recommendations were made.
Table 5.1. Summary of analysed provisions applicable to the technical and scientific professions
Source: Some pieces of legislation analysed are applicable to more than one of the technical and scientific professions.
In some cases, barriers to competition in different professions are analogous to each other, as far as their scope is concerned. Therefore, those barriers to competition were analysed jointly in the scope of the Project and such analysis is presented in Chapter 3.
The majority of the provisions applicable to the technical and scientific professions identified by the Project as potentially harmful to competition concern reserves of activities and, as such, are analysed in Section 3.2, as mentioned above.
5.2. Choosing the technician responsible for determining the level of conservation of a structure
5.2.1. Description of the relevant provision
The designation of a technician responsible for determining the level of conservation (strength and safety) of an urban building or a flat for the purposes foreseen in the scope of urban lease, urban rehabilitation and building conservation14 is carried out through a random draw among the architects, engineers and technical engineers who are included in a list of qualified and available professionals, developed by the respective professional associations.15
5.2.2. Harm to competition
The use of a draw to choose the professional responsible for determining the level of conservation (strength and safety) of a construction does not guarantee that the outcome will correspond to the optimal or preferred choice by the customer. In fact, the individual selected to carry out that duty may not be the best qualified or suitable individual for the service.
Additionally, the use of a draw removes the incentives of professionals to compete for the job by for instance proposing lower prices and better services. In fact, architects, engineers and technical engineers who are included in the lists of professionals know that the characteristics of and the price applicable to the services provided by them do not influence their probability of being chosen.
As a result, the provision leads to an avoidable increase in the costs incurred by potential customers. This is driven by the inability (resulting from external and, in particular, regulatory factors) of those entities to choose professionals who apply lower prices or are better suited for carrying out the specific service to be provided. That, in turn, prevents professionals from competing with each other and, thus, discourages those who incur lower costs from passing on those savings to the entities in question.
5.2.3. Recommendation and benefits of implementation
The procedure for choosing the professional responsible for determining the level of conservation (strength and safety) of a structure should be changed from a draw to a tender (competitive award) procedure.
The implementation of this recommendation will encourage architects, engineers and technical engineers who are included in the lists of professionals suitable for the proper determination of the level of conservation of a construction to compete with each other and will, consequently, create cost savings for entities interested in that service.
5.3. Price as a factor of competition for architects
5.3.1. Description of the relevant provision
Architects are required to abstain from competing based solely on remuneration.16
Therefore, architects are required to use factors other than price, such as design, technical quality and swiftness of provision, to compete with each other.
5.3.2. Harm to competition
The price applicable to the provision of a service is one of the main factors used by consumers to decide on the supplier to use and, hence, on the service to purchase. Nevertheless, that decision may also depend on other factors, which tend to become more relevant in cases in which the services available to purchase are identical, in terms of their relevant characteristics.
Services provided by architects are, by nature, different depending on the architect that provides them. In fact, each architect has their own style and, because of that (if for no other reason), his work will necessarily differ from that of other architects, even if the service requested is the same.
Thus, architects will tend, on their own and without need for external intervention, not to compete based solely on remuneration.
Nevertheless, there are cases in which the service requested is so specific that the differences in the outcome of its provision arising from the supplier used do not influence the consumer’s choice of supplier. In those cases, price might be the determining factor used by consumers to choose the supplier and, hence, the service to purchase.
Therefore, the provision prevents architects from effectively and efficiently competing with each other and, as a result, reduces the benefits of businesses and consumers arising from services provided by those professionals. In fact, the provision prevents architects who incur lower costs from passing on those savings to businesses and consumers in cases in which the service provided does not differ between architects.
5.3.3. Recommendation and benefits of implementation
The prohibition on competition based solely on remuneration for architects should be abolished.
The implementation of this recommendation will allow those professionals to use only price to compete with each other and will, consequently, increase the benefits of businesses and consumers arising from services provided by the professionals in question.
5.4. Ambiguity of terminology used in provisions
5.4.1. Description of the relevant provisions
Several provisions included in the legislation applicable to the technical and scientific professions analysed establish rules and principles concerning, in particular, the professional and ethical duties to be followed by the respective professionals.
The implementation of many of those provisions requires the intervention of the professional association in question, in particular by taking the necessary and appropriate measures to punish any violation of the above-mentioned rules and principles by professionals. However, some of the same provisions use terminology with an ambiguous meaning, a situation which leaves it to the discretion of the professional association in question to choose the connotation to be applied in a specific situation.
Amongst those provisions are:
Art. 52 (b) of the bylaws of the Professional Association of Architects and Art. 2 (b) of the Regulation concerning ethics and disciplinary procedures applicable to architects, which establish that architects must show themselves worthy of their responsibilities;
Art. 10 (7) (b) of the Regulation concerning deontology and disciplinary procedure applicable to architects, which establishes that architects may not carry out any manoeuvre or pressure that may negatively affect the freedom of choice of a potential consumer;
Art. 142 (4) of the bylaws of the Professional Association of Engineers, which establishes that engineers should determine the prices applicable to the services they provide taking into account their fair value;
Art. 143 (3) of the bylaws of the Professional Association of Engineers, which establishes that engineers must use as much sobriety as possible in professional advertisements that he makes or authorizes;
Art. 79 (d) of the bylaws of the Professional Association of Technical Engineers, which establishes that technical engineers must set a remuneration which is adequate to the services provided;
Art. 13 (b) of the Code of ethics applicable to technical engineers, which establishes that technical engineers should be remunerated only for services that they have effectively provided and in proportion to their fair value, not distributing fees between themselves and other technical engineers.
5.4.2. Harm to competition
The lack of clear and specific language for the rules and principles to be followed by architects, engineers or technical engineers allows professional associations to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation:
allows a professional association to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage;
results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.
5.4.3. Recommendation and benefits of implementation
The provisions mentioned above should be amended to use as clear and specific language as possible. Furthermore, in cases in which the provisions have been superseded in their substance by more recent legislation, have lost their usefulness or have become obsolete as a result of technical developments, they should be expressly revoked.
The implementation of these recommendations will increase predictability and transparency in the application of provisions. As a result, it will create regulatory certainty and provide cost savings for those individuals who want to become architects, engineers or technical engineers and for existing professionals.
References
EC (2015), “Mutual evaluation of regulated professions – Overview of the regulatory framework in the construction/craft sector by using the profession of electricians as example”.
Professional Association of Architects (2018a), e-mail of 24 February 2018.
Professional Association of Architects (2017), e-mail of 6 November 2017.
Professional Association of Engineers (2017), e-mail of 2 November 2017.
Databases
INE (2017), “Principais indicadores económicos, segundo a atividade principal da empresa”, https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_destaques&DESTAQUESdest_boui=281447433&DESTAQUESmodo=, (accessed on 23 March 2018).
Annex 5.A. Benefits to consumers
Consumer welfare can increase to as much as EUR 44.17 million with the lifting of restrictions arising from regulations applicable to the technical and scientific professions, making them more competitive with regard to entry and exercise requirements, allowing for more competition between professionals.
Table 5A.1. Impacts of the value of engineering and architectural services provided to all firms in Portugal, 2015
Source: Data from INE (2017), “Principais indicadores económicos, segundo a atividade principal da empresa”, https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_destaques&DESTAQUESdest_boui=281447433&DESTAQUESmodo=2 (accessed on 23 March 2018) and methodology presented in Annex A.2.
Notes
← 1. Published in Decree-Law 176/98.
← 2. In accordance with Art. 44 (2) and Art. 44 (3) of the bylaws of the Professional Association of Architects.
← 3. Approved by Decree-Law 119/92.
← 4. In accordance with Art. 7 (1) of the bylaws of the Professional Association of Engineers.
← 5. Published in Decree-Law 349/99.
← 6. Approved by Regulation 336/2016.
← 7. Published by Regulation 888/2016.
← 8. Source: INE (2017), “Principais indicadores económicos, segundo a atividade principal da empresa”, https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_destaques&DESTAQUESdest_boui=281447433&DESTAQUESmodo=2 (accessed on 23 March 2018).
← 9. Source: Professional Association (2017) of Architects.
← 10. Source: Professional Association of Engineers (2017).
← 11. Source: Professional Association of Architects (2018a).
← 12. Source: Professional Association of Architects (2017).
← 13. Henceforth called “Pieces of Portuguese legislation”.
← 14. Henceforth called “Technician responsible for determining the level of conservation of a construction”.
← 15. In accordance with Art. 3 (3) of Decree-Law 266-B/2012.
← 16. In accordance with Art. 57 (c) of the bylaws of the Professional Association of Architects.