Need a book? Engineering books recommendations...

Return to index: [Subject] [Thread] [Date] [Author]

RE: SE Fees for Building

[Subject Prev][Subject Next][Thread Prev][Thread Next]
Hari:
 
Jan, David, Keith, Vic, and Abe have all responded with fee guidelines as a percentage of construction cost.  I urge you to ignore those guidelines!  Although they have clearly attempted to be helpful, how could any of these engineers possibly know what fees are appropriate for any of your projects?  Do they know anything about your practice, or the size and complexity of your projects, or the scope of your services, or the nature of your client?
 
From my perch high upon my ivory tower, I bemoan the idea that structural engineering services can be sold on the basis of price, whether it be percentage of cost or dollars per square foot.  When engineers blindly bid their services in contests where lowest fee is the overriding determinant, everyone loses, even the client.  With so many structural engineers out there selling their services as a commodity, it is no wonder that so many complain about their inadequate income.  Many blame it on the structural engineering profession, when in fact, they should be looking in the mirror.  "We have seen the enemy, and it is us!"
 
There are only two ways to price your services successfully in the long term.  One, as eloquently described by Jake, is to base your fees on the actual cost of providing those services.  Figure out exactly what you are and what you are not going to be doing on each project.  Then use a spreadsheet to accurately work up the cost, including contingencies and profit.  As long as your proposal clearly defines your services, this method works good.  Over time, it will even work better as you accumulate a valuable database of the effort expended on each project.
 
Another, and even better, way to price your services is to determine what they are worth to the client.  This assumes that your practice has been able to distinguish itself from the masses, or at least is perceived as having done so.  What special, added-value does your firm bring to the project?  How does this benefit the client?  If you can demonstrably save time or money, part of the savings should end up in your pocket.  Believe it or not, there are a lot of clients who understand this as a "win-win" scenario.  They will employ you repeatedly, at least on their more demanding projects.
 
From experience, I can attest that both of these methods work great.  I can also attest that commodity pricing leads down a road to nowhere.  Will you lose clients by taking the high road?  Absolutely!  Will you lose any good ones?  Probably not, but then "good", like beauty, ultimately exists only in the eye of the beholder.
 
HTH,
 
Stan R. Caldwell, P.E.
Dallas, Texas
 
******************************* 

Misers aren't much fun to live with,

but they make wonderful ancestors.

                           ...Terry Glaspey
*******************************
 
Hello:
 
There are some rule of thumbs for estimating the fees for structural engineering of buildings.  I am interested in how other engineers bid on projects especially new construction.  I understand the Architects generally charge about 10% for the architecture based on the total cost of construction.
 
Your input is appreciated.
 
Hari