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Re: Design fee guidelines

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Dennis, et al.

I couldn't take it anymore and I had to jump in. Fees can be addressed in a
variety of ways. In my days at corporate hell (i.e. any organization greater
than 100 employees), the fees were figured based opun actual manhours times a
multiplier (usually 2.65). This number was then compared to the total
construction cost. Since the competition were bidding in a similar fashion, it
all washed out.

However, in the world of micro-hell, this is not possible since many of us do
not believe that we have the power to dictate our fees, but rather that the
market determines our fees (in other words when an owner says that the fee is
outrageous and they can get it for less we fold. Half a loaf being better than
none). So we work for $1.99/hour.

What needs to be done is better negotiations. Owners (they ultimately pay the
bills) view engineering as a line item on a bid similar to a quantitiy of
concrete. Therefore, their first reaction is to take the lesser bid. But, at
this point, it must be shown that the structural engineering design can drive
a large percentage of the construction cost well over the design fee. With
this in mind, show the owner that your services (not fees) will result in a
less expensive structural cost through value engineering and a good set of
plans that will limit the time and money lost due to change orders,
clarifications, etc. If the owner can be convinced that the structural
services (not fees) that you are proposing will lower the project's total
cost, then a reasonable owner will pay the premium for the service. If they
still can't be convinced, you don't want to work for them.

Remember, it is services and not fees that you must sell to the clients. And
if you don't believe me, ask Richard Meier what he got to do the Getty.

Greg Riley PE