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Re: FEE Survey

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Well, you might get some help from one department, and an unlikely one.

We reorganized two years ago and started a new engineering corporation.
Our insurance broker of six years called and said, "Gee, there's been some
litigation, and now the underwriters won't write a general liability for
an engineer without them also having E&O." Not believing him, and receiving
feedback from many colleagues either not buying E&O or getting $2MM for
under $10,000, I went online and conducted a national search.

Bottom line, no E&O, then you don't get general liability. And as we all
know, without general liability, you might as well shoot your foot now.
Since nobody else in our area carries E&O, (and does most of their work
with non-professionals to keep their costs down) that was it for me.

So you might find the curve is rising a bit after a 'nother couple years.
(And a fair warning to those seeking to reorganize their practice!!!)

At 07:16 AM 8/21/97 -0700, you wrote:
>I believe this is where we are today. It is a competitive market. If we
>have a small backlog, we write tight proposals. If we have a large backlog,
>we write fat proposals. Someone out there tell me this is not standard
>practice. I don't have a problem with this since I am a capitalist at heart
>(soul and mind for that matter). The only thing that bothers me is that we
>have to go too low to get the work and I believe this is because the
>regulations permit just about anyone to do structural engineering work.
>This includes architects, civil-civils, civils doing structural engineering
>but with only two years of experience, practicing professionals without E&O
>insurance. If the field was a little more restricted, we would still
>compete for the work, but gravitate to a little higher level. I must say
>that, since Northridge, it hasn't been as tough convincing clients I have
>to spend quite a bit of time designing and detailing the lateral force
>resisting system. Maybe we need a few more natural disasters to get the
>code writers to tighten this up for us.
>Bill Allen
>> From: MJSLAYSMAN(--nospam--at)
>> To: seaoc(--nospam--at)
>> Subject: Re: FEE Survey
>> Date: Wednesday, August 20, 1997 7:51 PM
>> Item for disucssion:
>> Do you think that fees would go up if we were in a pure bid enviorment
>> as the contractors?  We have to understand that our fee is generally
>> by the fee that the client, i.e, architect gets for the entire project.
>>  Consider this:  If  projects (all architects' and engineers'  fees) were
>> in a pure competive basis with a defined scope of work and open bid it
>> that an initial drop in fees the fees would rise to what "the market
>> bear".  All you have to do is look at the contractors.  They bid tight
>> the market is tight and fat when the market is fat.  We on the other hand
>> seem to price ourselves tight when the market is tight and tighter when
>> market is fat to absorb more work to make our profits up by volume.
>> Interested in hearing discussion
>> Mel Slaysman
Robert Marmaduke PE
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