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Re: Catch-22 Software Cost

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Richard,
 
Being much in the same situation as yourself, I would probably consider if the software is the type of product that most competing engineering firms would already have.  If so, and it is a product that you will use over and over again, then it should be a capital investment only.  Such examples would be Enercalc, Risa, etc...
 
However, if you are purchasing a specialized software package for a specific type of engineering, then perhaps you could explain to the client that you will be charging them a quantity of hours equal to a portion of the cost of the software.  The architect or engineer reviewing your invoice might be happy with that.  The bean counters won't see that their employees were covering a portion of your capital expenses - which is probably a no-no unless it is agreed to up front in a contract.  If they can understand that you are 'saving' them money and that you are willing to invest in a product to better serve them, that might invite even more work in the future.
Best of luck,
Jim Wilson, PE
Stroudsburg, PA

Rich Lewis <sea(--nospam--at)lewisengineering.com> wrote:
I would like to know if anyone charges for the use of software in their
design.

Let me explain a particular situation. I am a small, one-man firm, that
is getting established. I am working on the design of a special
foundation. The project is an hourly fee plus expenses. I don't have a
choice on that right now. I could do this design with the limited
software I have and by hand calculations, but it would be much more
efficient if I bought some special foundation software and designed it
with that. The dilemma is that since this is an hourly fee the software
that helps me be more productive actually reduces my fee. On top of
that I still have to put out for the software. That's what I think is
the Catch-22. If I become more productive by making a capital
investment then I reduce my fee, hence making my capital improvement
harder to pay for.

Now you could say that I still have the software to use on future
projects. That's true, but future projects are again cut short fee wise
due to the increased productivity. That means I need a lot more
projects to recoup the cost. That also assumes I will have the kind of
projects that will need this software.

I was thinking about charging a "use" fee on the software to help recoup
some of the cost. Is this commonly done by others?

If you are tempted to change this thread into an argument of "for or
against" hourly fees I ask that you start another thread because I would
like this one to address the issue of capital improvements and recouping
costs and not get sidetracked.

Thanks.


-------------
Richard Lewis
Lewis Engineering




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