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Re: Fee Information Sharing

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Seaintonln(--nospam--at) wrote:
> Laurence
> It is neither unethical nor illegal to discuss fee's. It only becomes illegal
> when a group mandates a fee for services or prevents someone from competing
> for work. This was the decision against SEAONC some years ago that came up on
> this list about a month or two ago.
> I was discussing this another engineer yesterday and he claimed that
> engineers don't discuss fee's because it is, as most employees feel, the same
> as sharing your salary - protected by the individuals privacy.
> Our discussion led to a topic of fee's verses quality of work. The old phrase
> "You get what you pay for" is not necessarily adequate in Engineering, but
> seems to be so in fields like construction. A lower fee does not necessarily
> mean lower quality - it could be weighed upon lower cost of business and
> lower standard of living. However, most engineers will agree that had they
> known more about the competition in the area, they would be more apt to raise
> their fees so as to be in a tighter range than those with no knowledge and
> who have lower costs of doing business.
> The only way I can see to raise the average is to discuss our fee's and
> promote fair competition.
> One problem is that when fee's are constrained by a range - anyone (engineers
> included) will start to look for ways to maxmize profit by automating or
> reducing certain chores. This could mean more "generic" details, less caution
> for detailing, etc.
> This is similar to what we see in construction. When bidding apples for
> apples, most contractors should be within 15% of one another. However, most
> start to look for what can be changed later on to reduce cost or increase
> profit.
> A good example of this was the boom of seismic retrofit that occured in the
> 80's and early 90's in Los Angeles. Contractors low bid jobs knowing that
> they could redesign and pull permits using their own engineers to produce a
> lower cost job. The problem was that they did not lower their price in
> proportion to the amount of work saved but simply increased their profits.
> Most owners were not aware or not concerned about what steps the contractor
> took to do the work - only that it get done for what they perceived as the
> lowest price.
> The control of quality of engineering work is something that I believe should
> be left to the building official. If the detail does not work, the permit
> should not be issued until the drawings reflect a workable or at least, job
> specific solution. Granted, there will always be details that are used over
> and over. One engineers way to deal with this is to provide a "generic
> detail" sheet that applies as a standard of construction package. It neither
> detered from or was used in place of specific details - nor were the details
> referenced. The contractor was simply required to use the conventional detail
> wherever it applied.
> Dennis Wish PE
> In a message dated 7/3/99 8:51:59 AM Pacific Daylight Time,
> viacalx(--nospam--at) writes:
> << I'd like to chirp in on the fee issue.  Isn't it funny how lawyers set
>  Title Insurance fees by statute (at very lucrative levels), but then
>  don't let engineers even discuss fees?
>  I think we should have an on-line database of project descriptions and
>  fees.  If the legal profession wants to claim "price-fixing" then let
>  the burden of proof fall to them.  How can they prove "price fixing"
>  when it doesn't occur?  Even Home Depot is allowed to keep track of
>  competitors posted prices!
>  If there is disquiet about showing fees, then how about a database of
>  project scope descriptions along with associated professional and
>  technical hours expended?  This would be even more useful, since we all
>  have different local billing rates.  It also is even further from the
>  "price-fixing" claim since no dollars are discussed (would the lawyers
>  want to stop doctors from comparing notes on how long heart bypasses
>  take?).
>  Laurence Oeth, P.E. >>
I agree with most of what you say about fee-sharing.  However, I thought
the original problem (for us) started in the 70's with the Justice Dept.
forcing the ASCE to no longer publish fee as %% of Cost curves.

Several other thoughts you discussed:
1.	Generic details (assuming they work) are good.  Repeatability lowers
cost, and contractors get used to using them and are generally better at
building them.  I worked for a firm that did a LOT of tilt-up design
work and repeated several details on all jobs.  One of the local steel
fab shops, who sold to many of the tilt-up contractors, would have
workers fab up panel bottom connectors when work was otherwise slow. 
They knew the connectors would be used soon when another tilt job came
2.	When the contractors low-bid those retrofit jobs, did their redesign
figure (and make sense), or not?  If they could design/build for less
then more power to them.  If they were cutting too many corners, then I
would expect our profession to discuss the problem w/ local building
officials and some control mechanism created - like adequate plan check.

When I look around our society, at the degree of standardization in
consumer products and drive to lower costs, I'm amazed that more of this
hasn't crept into our industry.  Mobile homes and metal buildings have
only scratched the surface.  Should we thank the selling ability of
architect's for the design diversity out there? 

Laurence Oeth, P.E.