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Re: SE Fees for Building

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I agree with Mr. Watson's perspective.  I would think Mr. Hari would consider his role in a project as a provider of professional consulting services.  Since a building/structure is only conceptually defined at the outset of a project, a service provider can only offer a fee to provide consulting services, not a "bid."  How can someone offer a "bid" to provide something that's not defined, especially when the extent of decision changes made by the Owner or the Architect over the development of a design is not defined?  A Contractor can tender a "bid" because the drawings define the entity he is agreeing to deliver.

We consulting engineers need to edify the public that we provide engineering services, and that we are not merely "drawing preparers."

Jeff Taner, S.E.



In a message dated 2/11/03 8:00:34 AM Pacific Standard Time, jwatson(--nospam--at)utahisp.com writes:

Rules of thumb are great to get in the ballpark, but we have found that tasking out a job is better for everyone involved.  We typically will try and do a breakdown of what needs to be done on each job, assign hours and cost to each step, then discuss the outline with the client.  When you show a client exactly what they are paying for, they seem to be more likely to approve of higher fees.  If they don't like the higher fees, then you can discuss what part of the scope to cut.  "Do you really need six site visits?  Maybe four will work.  Do you want us to make an allowance for changes, or is this a one time through for the cheapest price?" You get the idea.
 
The other upside to this, it generally keeps us from competing on fees.  Sometimes clients will come to us and say: "I only have $2000 to spend on engineering, what can you give me for this?"  Or the other approach, "Joe engineer said he will do it for $1500.  What can we trim from the scope to get to $1500?"  We don't always come to an agreement.  We have walked away from many jobs when the client is trying to use us as profit centers by simply bidding engineering services.  The good news is that they almost always come back when they have trouble with the other guy.  Joe engineer starts losing money 2/3 through the project and stops responding.  Client gets mad, and comes back to us on the next job.
 
Because of this approach, we have been awarded fees that range from .4% total cost of construction to about 15% the cost of construction.  Remember you are selling a service - make your fee match the service the client expects.
 
Moral of the story - I wouldn't use percent of construction for more than ballpark numbers.  If the client wants to word you contract as percent of construction, to the task list and then tie that to percent of construction.
 
Best of luck,
 
Jake Watson, P.E.
Salt Lake City, UT
 

-----Original Message-----
From: Hari A [mailto:hari_pe(--nospam--at)hotmail.com]
Sent: Monday, February 10, 2003 3:21 PM
To: seaint(--nospam--at)seaint.org
Subject: SE Fees for Building


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