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Re: FEE Survey

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We compute our fees on two methods. First we try to stay current with the
"going rate" for each class of employee just to keep a level playing field.
You can always obtain copies of other firm's rates and fees from your client.

Then we figure a 2% (or more) percentage of construction based on the
/SF building value obtained through several regularly updated periodicals like
Building and Construction, ENR and so on. That's the basis for discussion.

Then we break down the hours by staff and rate, combine them, multiply
by 185% overhead since that's all the local market allows, add 10%
for project management, add 1% for downline dickering with B.O.'s and
plan reviewers, and come up with a "firm estimate". It's always too high.

Then we decide how much money the client has indicated they want to
spend, try to remember how low other local consultants have bid on
similar work in the past, whether it's an important client and so on.

In the end, we cut our man-hour estimate by about half, just to get the award,
and make everyone work 80-hour weeks like slaves through the entire process.
(Of course, working staff on salary, you can afford to do that...)

And the client still bitches about how much money the structurals charge.
(But for some strange reason the client doesn't seem to complain about
the 7% realtor fee or 8% sales tax or 10% contractor profit margin....)

I'd suggest there a many, many more structural problems with the whole A/E
design contracting problem than just blaming it on failure to "hold the line".
The old ivory-tower "bidding is beneath my dignity" bit went out in the 70's.

[SEE ALSO recent posts on Ethics and Plan Review for contributing factors]

At 12:15 PM 8/20/97 -0700, you wrote:
>Thomas Chiu wrote:
>> Hi, I know that the standard structural fee is about 1% for a medium
>> to
>> large job.
>> Tom Chiu, SE
>> Thomas Engineering
>Well, I would dispute the 1% for medium to large jobs as being the
>"accepted" structural fee.  On very large projects perhaps, but our fees
>tend to range between 1% to 2%, and sometimes higher for small
>complicated projects.
>We do not set our fee based on a percentage of construction.  We
>actually figured what effort would be required to complete a project and
>base our fees on that.  We keep track of what our fee is based on
>percentage of construction so we have a ballpark idea of where we are,
>but we do not actually set our fee on that basis.
Robert Marmaduke PE
POB 28995, Bellingham, WA 98228
360.738.0854 VOX/FAX