RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/77
8 December 1998
(98-5008)
Council for Trade in Services Original:  English
COMMUNICATION FROM THE UNITED STATES
Construction and Engineering Services
The following communication received from the delegation of the United States was
circulated informally on 25 June 1998 to the Members of the Council for Trade in Services to assist in
the discussion on Construction and Engineering Services in the context of the Information Exchange
Programme.
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A. CONSTRUCTION
1. General
In the Uruguay Round, the U.S. made market access commitments on construction and
related engineering services, except marine dredging, for modes 2 and 3.  Mode 1 is unbound, but it isdifficult to visualize how construction could be conducted on a cross-border basis.  Mode 4 is
unbound, except as indicated in the horizontal section.  The only reservation is that an in-state office
must be maintained by all contractors in Michigan.  For national treatment, the U.S. has undertaken
commitments in modes 2,3, and 4.  Again, Mode 1 is unbound, but cross-border construction probably
is impractical.
2. Regulation
In general, most regulations on construction exist at the local rather than at the state level.
Foreign companies are subject to the same registration requirements as U.S. firms.
In general, each state requires all construction companies (both domestic and foreign) to
obtain some form of insurance and/or performance bonding.  Most states require such insurance
and/or bonding to be from a company registered to do business in that state.  This is done for fiduciary
reasons; the registration provides the customer a legal recourse in the event of contract default.  Suchrequirements affect contractors seeking building contracts from either Government Agencies or
private developers.  Some states may require a minimum level of insurance and/or bonding for a
building contractor to do business regardless of the value of any individual project undertaken by such
a contractor.  For fiduciary reasons, insurers and/or bonders may require a minimum level of assets
before any insurance or bond may be issued to a contractor.
Federal bonding requirements apply only to Federal procurement projects or federally-funded
state projects.  Federal bonding requirements do not apply to private sector contracting.  There is noS/C/W/77
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Federal registration system for bonding companies.  Federal Agencies accept bonds issued by state
registered, and regulated, insurers and bonders.
Limited bonding exceptions for ethnic minorities and small businesses are applicable only to
some Federal, state, and local procurements.  At their discretion, private sector customers can providepreferences for minority enterprises and small businesses.
Minimum qualifications and licenses to do plumbing and electrical work apply only to
individuals, not companies.  In general, such licensi ng is done at the local level rather than the state
level.  This ensures familiarity with local building codes.
Even when work is completed by a licensed plumber or electrician, such work must be
inspected and approved by a local building code authority staff member.  Such work cannot be
self-certified by a licensed professional.
Federal and state procurement laws on construction are subject to the GATS  Procurement
Code, which is the proper vehicle for discussion.
3. Economic Benefits
Economic benefits in construction accrue not only to the supplier of the services in the form
of sales revenue and income, but to the buyer of the services in the form of local employment and thecompleted structures (roads, buildings, bridges, seaport and airport facilities), which become part of
the basic infrastructure of the country and lead to further economic growth and development.  The
construction sector also contributes to transfers of technology, improvement of local worker skills and
to modernization of facilities.  The completed structures become visible signs of economic progress.
B. E
NGINEERING AND INTEGRATED ENGINEERING SERVICES
1. General
In the Uruguay Round, the United States undertook market access commitments for
engineering and integrated engineering services in modes 1, 2, and 3. Mode 4 is unbound, except as
indicated in the horizontal section.  The only reservations are for citizenship requirements for
licensing of professional engineers in the District of Columbia and in-state residency requirements ina dozen states.
2. Regulation
For all functions performed by an engineer that require licensing (signing drawings,
blueprints, certifications), a license is required in all jurisdictions for both indigenous and foreign
persons.
For individuals, registration is based upon education, experience and examination.  U.S.
citizenship is not required.  For those educated in foreign schools, a determination of academicequivalence is necessary.  As a general rule, every state permits an applicant who graduates from a
four-year approved engineering program, who has four years additional engineering experience
acceptable to the state board, and who successfully completes both the eight-hour fundamentals in
engineering and the eight-hour principles and practice of engineering examinations prepared by the
National Council for Examiners of Engineering and Surveying (NCEES) to be registered as aprofessional engineer.  Most states provide for registration on a temporary basis for foreign engineers
working on a specific project.S/C/W/77
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For corporations, states generally require that all personnel of the corporation who act in its
behalf as professional engineers be registered.  State laws vary, but registration reciprocity provisions
often will permit an individual who is registered in one state to practice in the corporate form in
another state if the former’s state registration requirements are equivalent to those of the latter state.
Almost every state requires that, when issued, a ll drawing, plans, specification, plots, reports,
etc. involving the practice of engineering must be dated, signed and bear the seal and registration
number of the professional engineer in responsible charge of the engineering work or activity.
U.S. jurisdictions (states plus the District of Columbia) have their own education, experience
and examination requirements.  Generally, the states require a bachelors degree in engineering.  U.S.
engineering schools are accredited by a non-profit organization known as the Accreditation Board forEngineering and Technology.
Two 8-hour examinations are given nationwide in the U.S. twice a year (April and October).
The dates are determined years in advance.  One exam is in fundamentals; the other in principles and
practice.  To sit for the exam, a candidate needs to have completed his degree requirement andexperience requirement (usually 4 years).  The exams are taken at separate sittings-- 4 years apart.
NCEES model law defines the scope of practice and basic requirements for education,
experience and examination.  While states vary in some of the requirements, the model law tends to
bring the states closer to uniformity.
3. Economic Benefits
Development of engineering skills adds to the wealth and resources of nations.  The
availability of capable and competent engineers makes it easier to plan and produce projects topromote health, welfare and safety of the population.
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