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RE: Design fee guidelines

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I think what bothered me most was the concept of Valued Engineering and/or
Economical Design. I'm not sure we are off on ideology, but I think the
concept of fee's is a harder nut to crack than most of the respondents to
this thread are willing to admit.
One engineer responded to me privately. His firm has been around for quite
some time. I know his reputation and it is one of the best in California. I
believe that his clients know the range of fee's they are going to pay
before they walk through the door and they expect to pay for it. This
engineer has a track record with years of experience in the community.
I believe that it is harder for smaller firms who do not have the repeat
business or reputation that this well known engineer has.
Before I get reprimanded for my comment let me explain further - I am not
arguing for lower fee's but am trying to put this into the perspective that
I see occurring in my market place.
Independent engineers are growing in private practice year after year - and
most are not returning to the employment of others. This may be attributed
to "downsizing", dissatisfaction, lack of security, or simply peer pressure
to strike out on their own.

In addition, independents are cutting their overhead, few or no full time
employees, home offices, networking - even reduced expenses. This drives the
economy by creating a very competitive market.

How much is the engineers time worth? Five years ago the answer may have
been "as much as I can get?".  I think times have changed and the clients
are cognizant of this.

A 2% fee does not end up in the engineers pocket. The office that I referred
to will use up a great deal to cover employees, benefits, state and local
taxes, office overhead, E&O Insurance, printing and utilities and much much
more.
Take this into consideration and compare it against the fee's charged (and
the majority pocketed) by an independent who works from the home. I charge
my clients for reimbursable expenses (mailing, blueprinting, plotting, long
distance phone calls etc.). I don't think we making a fair comparison. If I
were to take 2% of a $2000K project - I would only need two jobs a year and
I can still save money.
My position is typical of the engineers in my area. We compete based upon a
similar formula but this is not to say that a large office won't be brought
into a project and get the fee's that they request.

Greg is correct that you essentially get what you paid for. I can't
guarantee the same delivery schedule as a large office. I need to market,
complete work, observe and interact with clients while the work is under
construction, complete a plan check cycle and juggle the phones through all
of this. Add to that about three hours a day on this List:>) and I don't
have a personal life (not seriously).

There has to be another formula that looks at the net dollar rather then the
gross receipt.

One last comments - I've been told that this is a discussion that should not
be held since it appears to promote price fixing. I think this is bull. None
of us are suggesting that we set a price. I think what we have a right to
know is what our services are worth. When you bring your car in for service,
the mechanic will look up the recommended number of hours that it should
take to complete the work and at what labor rate. Insurance companies set
limits for what a doctor can be reimbursed for based upon services and even
narrowed by geographical area.
When was the last time that you saw a wide spread in the cost of software
that is similar (Office suites are within $10.00 each and the upgrade prices
are almost identical) Hardware is priced almost to the penny etc.
I believe that anyone who offers a service has a right to know what range of
fee's they should be able to collect. The final fee will be contingent upon
how well and how fast the job is completed. It also comes down to how
responsible the engineer is that you hire to do a good job and provide the
best representation that a paying client deserves.

A final final comment. I have been forced to take less - I don't expect my
clients to take less. I provide the same quality of package and services
regardless of how much I have charged. I may not be happy about it and may
desire to spend my time on the most profitable, but I feel ethically bound
to forget the fee and look at the quality of the work I deliver. If the fee
is not what I want - I will learn the next time or never work for this
client again.

Respectfully
Dennis Wish PE


-----Original Message-----
From: GRileyPE(--nospam--at)aol.com [mailto:GRileyPE(--nospam--at)aol.com]
Sent: Wednesday, November 04, 1998 2:09 PM
To: seaint(--nospam--at)seaint.org
Subject: Re: Design fee guidelines


Dennis,

Yes, you and I are friends and I really don't think that any discussion here
can change that. And for those of you who are being amused on the sidelines
by
this thread, Dennis and I have respect for each other as engineers.

I guess that my ideas were not consistent with my electronic pen on this
one.
What I was really driving at was the need to educate the client as to what
services are being provided and not necessarily price (or fee). An
inexpensive, low-ball set of plans will lack the clarity and detail that a
more complete set of plans will provide. This vision, called the
construction
documents, can lead to a smooth job completed on time, or a problem job, not
completed on time. In other words, you get what you pay for. If the owner
can
clearly understand the difference in services provided, a more intelligent
decision can be made by the owner. A good client (owner) can understand
professionalism and quality and will more than likely go that route. A
client
that you don't want to get involved with won't. However, sometimes the good
ones get sucked into price. Then the construction goes sour. At this moment
they wish that they had the good services. When the next project comes
around,
they will remember this and give a call. If you don't believe me, it's
happened to me more than once or twice.

Next, in regards to value engineering. That was probably the wrong phase
since
it carries with it negative conotations. Dennis, I too have been accused of
"over-engineering". This is mainly by low-ball hacks. I agree with 3x
plates,
proper design for deflection on floor joists over 15 feet, etc. By saying
value engineering I didn't mean going through the code like a lawyer and
using
loopholes to lower the quality of the building. What I meant was an
intelligent and experienced overview of the global structural design in the
beginning to ensure that the design ideas at inception weren't either bad or
wasteful.

This is what I meant by educating the owner and hopefully not allowing the
lowest fee to dictate the engineering selection. In other words, learn how
to
sell services to get better fees.

Greg Riley PE