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Re: $FEES, Capitalism, etc.[Subject Prev][Subject Next][Thread Prev][Thread Next]
- To: <seaoc(--nospam--at)seaoc.org>
- Subject: Re: $FEES, Capitalism, etc.
- From: "Bill Allen, S.E." <BAllenSE(--nospam--at)pacbell.net>
- Date: Tue, 26 Aug 1997 07:10:02 -0700
While I am not proposing unionizing our profession, there is a lot more we can do to help ourselves through various groups like SEAOC and CASE. Regards, Bill Allen ---------- > From: r marmaduke <avi(--nospam--at)az.com> > To: seaoc(--nospam--at)seaoc.org > Subject: Re: $FEES, Capitalism, etc. > Date: Monday, August 25, 1997 9:49 PM > > Bill: > > Here's a little brain-twister for you...appropo of your latest thread: > > Both commercial pilots and structural engineers are Board-certified and > have to take regular "checkout" (CEU) flights. There are far more > commercial pilots than structural engineers, yet commercial pilots make > far more than structural engineers (for example, UPS pilots $150,000 a > year, USAir pilots $180,000). > > What's the only difference between pilots and engineers? > > Pilots belong to a union. Ipso Facto. > > (Oh, and they don't have to pay E&O, and they don't have B.O.'s > second-guessing them either) > * * * > > At 08:56 PM 8/25/97 -0700, you wrote: > >Your comments appeal to me both in a general nature as well as specifics. I > >have little doubt that we can ably defend higher fees. Among ourselves, > >that is. We are in a profession where the majority have a highly technical > >background but, unfortunately, have not demonstrated that we are effective > >in changing status quo. While we are famous for six different ways of > >solving a simple technical problem, we cannot (or worse, will not) derive > >methods for balancing the inequitable risk to reward ratio of our > >profession. > > > >To illustrate my point, not long ago there was a debate here on the list > >serve about who we felt were qualified to provide structural engineering > >services. While it got very heated about civil engineers doing structural > >engineering, there was no argument (sp?) that extremely few architects were > >qualified. In fact, all of my current architectural clients (most of whom > >are very bright and successful) deny any capacity for structural > >engineering. We are much more willing to debate whether we should have a > >new seismic zone, consider 3Rw/8 for certain circumstances and ponder how > >much retained earth participates in ground motion during a design level > >earthquake than review a single line of the California Business and > >Professions Code which allows architects to practice structural > >engineering. > > > >Further, it is the perception of the general public that architects do > >structural engineering. It is not their fault. While they do not actively > >promote this concept, they will not deny it either. > > > >There has been little by the professional organizations I have paid dues to > >in the way of any form of public awareness campaigns regarding the value of > >the role of a good structural engineer on a construction project. In > >defense of the current organization I am now paying dues to, The Structural > >Engineer's Association of Southern California, they may argue that my dues > >will not cover such a campaign. I for one would firmly support an increase > >if I thought they were addressing the concerns of the PROFESSIONAL as well > >as the profession. > > > >My current SEAOC dues are $185 per year. A colleague of mine just renewed > >his AIA dues for $750. At one time, we in California had a governor for > >eight years with only one good idea. He was considered quite a space cadet, > >but he once proposed that architects do not need to be licensed at all > >since engineers were signing most if not all of the construction documents. > >Of course, AIA got quite upset and the issue died (they have a slightly > >better lobby than engineers). > > > >I don't really have a problem with engineers not making as much as lawyers. > >I would gladly take a pay cut for not being one ("my mother thinks I'm a > >bartender in a whore house, don't tell her I'm an attorney"). The issues > >lawyers deal with are much more on an individual, emotional level than > >construction, and that's O.K. Same with M.D.s. I sure wouldn't want to > >spend all day in a room with sick people. > > > >However, it should be obvious to both lay and professional people alike > >that we are providing services with such an unattractive risk to reward > >ratio. It is just frustrating on my part that we are not willing to do > >anything about it. > > > >Regards, > >Bill Allen > > > >---------- > >> From: BVeit(--nospam--at)aol.com > >> To: seaoc(--nospam--at)seaoc.org > >> Subject: $FEES, Capitalism, etc. > >> Date: Monday, August 25, 1997 5:22 PM > >> > >> Here are two previous postings that I find interesting: > >> > >> Jeff Smith: <<An architect friend of mine just got two proposals for a > >> $250,000 residential job. Both enginneers work primarily in this type of > >> work. > >> One bid was $2,400 the other $6,000. (excluding construction phase) I do > >> not feel percentages are not [sic] applicable to small jobs and they > >should > >> be bid on a case by case basis.>> > >> > >> Bill Allen: <<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.>> > >> > >> I thank these two gentlemen for their input, and add my own > >> philosophical discourse on price: > >> > >> Capitalism is too broad a topic for me to get into, but the part of > >> capitalism that is relevant to us is the part that states unequivocally > >that > >> the price of something is what the market will bear. (This is > >> incidentally why real estate appraisal is an absurd endeavor.) Thus, the > > > >> "intrinsic" worth of something is just one of many considerations in the > >> price calculus. > >> > >> I feel that too many engineers fall back on the idea that they are only > >> "worth" a certain hourly rate. These tend to argue that they calculate > >> the hours it will take and then "bill accordingly." But my question is, > >> why isn't the hourly rate $225, as it is for my lawyer, instead of the > >> $80.00 I bill at? I literally had an hour-long, three-way discussion > >with > >> a client and her lawyer the other day that went unbilled from my end > >> (hate to hit them with those pesky overs) yet cost $200 from the > >> lawyer's end. And I swear the lawyer said three words the whole time > >> while I summarized the problem and the solution. > >> > >> So hourly or percentage is a false dichotomy in the sense that they still > > > >> amount to a flat fee in the client's mind. They are both capped by the > >> market. The main reason I prefer percentages over hourly is that it's > >> easier to put a percentage into a context of overall cost: on a million > >> dollar project, ten thousand dollars is _only_ one percent of overall > >> cost. We leverage much higher costs with the stroke of a pencil. On an > >> hourly basis, ten thousand dollars is one hundred billable hours, and it > >> tends to stand alone. It's ten thousand in a vacuum, that could be > >> shaved by putting price pressure on the engineer. > >> > >> Now the interesting question is, why are they capped? I tend to agree > >> that competition (esp. with non-structural civils, contractor-designers, > >> etc.) is one main reason our fees are low, but I do think there's another > > > >> important factor we're missing. For example, the legal profession is > >> bursting at the seams with too many lawyers, yet lawyers still earn an > >> average salary three times that of an engineer. They are highly > >> competitive. Yet Daniel Webster's aphorism still rings true. When told > >> that there were too many lawyers already, he replied, "There's always > >> room at the top." > >> > >> The difference seems to be this: when you hire a lawyer, your rear end > >> is generally on the line. That is, you are very directly, intimately > >> involved, and you want to win. And you are generally competing > >> against another side. Whether you are suing someone over a house > >> falling down or defending yourself against drug smuggling charges. > >> The fact that a defense is on the other side means you've got a totally > >> different dynamic. Being "good" takes on new meaning. E.g., good > >> basketball teams can have a poor shooting percentage against good > >> defenses. The same goes for doctors -- you want the best possible > >> chance against the cancer, regardless of cost, and cancer bests even the > >> best doctors. > >> > >> In many cases, people choose a better, more expensive lawyer because > >> they want to win. > >> > >> But with engineering, there is no client recognition of "better" > >> engineering. There is no "rear-on-the-line" urgency, and no uncapped > >> "win" mentality. From the uninformed client's perspective, engineers > >> are all equal, all a commodity, almost like a material cost -- X gallons > >> of white paint, buy the cheapest paint that serves the purpose. Yes, > >> there's deluxe paint and crappy paint, but it's still just paint. > >> > >> Some have suggested a niche, or specialty. And this works in small, > >> isolated outposts of engineering, e.g., computer chip-fab plant design is > > > >> very stiff, dynamically isolated, etc., and therefore commands higher > >> design fees. But I'd like to point out that if the average goes up, so > >> would the niche market. So we really should worry about the little guy. > >> > >> And I suggest that if we are to have these fees creep up, they will do so > > > >> faster and more reliably from a percentage basis than from an hourly > >> basis. This will help to tie fees to overall market project value, not > >> intrinsic engineer hourly worth. > >> > >> I would really like solutions to this conundrum: How do we keep fees > >> competitive, but increase them overall? To get started, here's my idea: > >> tie engineering fees to cost savings. Bid the cost of the constructed > >> project, including the design fees, but don't bid the engineering itself > >per > >> se. This tends toward design-build I guess. If I save two-hundred > >thousand > >> in > >> steel costs, doesn't it stand to reason I should get some percentage of > >> this, as with a lawyer's contingency fee? Right now we're not directly > >> rewarded for this -- our reward seems to be that we get repeat clients. > >> (We get rewarded by getting to keep our minimum wage jobs....) > >> > >> The best definition I ever heard for engineering is "do with one what > >> any idiot could do with two." > >> > >> Let's get rewarded for it! > >> > >> > >> > >> > >> > > > > > > > > > Regards, > Robert Marmaduke PE > POB 28995, Bellingham, WA 98228 > 360.738.0854 VOX/FAX > avi(--nospam--at)az.com http://www.az.com/~avi > > >
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