Smart questions
Smart answers
Smart people
INTELLIGENT WORK FORUMS
FOR ENGINEERING PROFESSIONALS

Member Login




Remember Me
Forgot Password?
Join Us!

Come Join Us!

Are you an
Engineering professional?
Join Eng-Tips now!
  • Talk With Other Members
  • Be Notified Of Responses
    To Your Posts
  • Keyword Search
  • One-Click Access To Your
    Favorite Forums
  • Automated Signatures
    On Your Posts
  • Best Of All, It's Free!

Join Eng-Tips
*Eng-Tips's functionality depends on members receiving e-mail. By joining you are opting in to receive e-mail.

Posting Guidelines

Promoting, selling, recruiting, coursework and thesis posting is forbidden.
Jobs from Indeed

Link To This Forum!

Partner Button
Add Stickiness To Your Site By Linking To This Professionally Managed Technical Forum.
Just copy and paste the
code below into your site.

pce3 (Industrial) (OP)
4 Oct 05 13:45
I am investigating the "Average Cost of Engineering" on capital projects in individual industries?  ie Agricultural, pharmaceutical, Food, etc.
NCCaryME (Mechanical)
4 Oct 05 13:56
What exactly is your question?  The costs can vary wildly depending on the project, as you can imagine.  Different projects will require different amounts of various engineering disciplines, and I doubt you'll find any sort of generalizations for "engineering" on "capital projects".  Not to discourage you, but good luck!

pce3 (Industrial) (OP)
4 Oct 05 14:12
naygoo -

ie. 1. 2 story office building with cafeteria. what would you say the % of engineering ought to be? 10500 sqft per floor.

    2. process packaging line epc - what would be an expected cost of engineering on capital cost of $11M.

I understand many different variables...
cvg (Civil/Environmental)
4 Oct 05 14:45
depends on your scope of work, which of these are you including?

data gathering
preliminary planning
benefit / cost analysis
risk assessment
feasibility study
design criteria report
preliminary design
final design
post design / pre-construction services
bidding and project award
construction administration
inspection
quality control
quality assurance
operation and maintenance plans or programs
emergency action plans

is the work done for / by a private company, public works agency, industry, federal government?

Is the work done by a consultant?

Is there an element of risk that the consulting fee will cover?  Is the work done time and material or lump sum?  Are you building a dam, nuclear powerplant or just paving a parking lot?


pce3 (Industrial) (OP)
4 Oct 05 15:37
I understand and appreciate the input. I'm sure you are aware that clients tend to try to keep Engineering dollars to a "percentage" of the package and try to negotiate from that aspect.  This was my motivation in inquiring.
dbuzz (Structural)
4 Oct 05 21:26
For minerals processing projects, with capital value greater than $1m, we use the following indicative ranges for the value of the engineering services:
- Concept/Prefeasibility Study, 1-2% of total installed cost
- Feasibility Study, 2.5-5% of total installed cost
- EPCM, 15-25% of total installed cost

That said, we always prepare a 'bottom-up' estimate at the task and deliverable level.  The indicative ranges help as a 'sanity check' on our estimates.
cvg (Civil/Environmental)
5 Oct 05 11:19
We also have some clients that expect the fee to be in a certain percentage range, however, they don't always factor in the scope of work or risk involved.  A good example is our work designing and constructing dams.  For a smaller dam rehab project, the engineering might be 30% of the cost to rehabilitate the dam.  And the construction inspection, testing and field engineering might be 18% for a total engineering cost of nearly 50% of the construction total.  Couple that with a client that has a very small capital improvement budget and you have a difficult time negotiating the contract and the eventual change orders...
RDK (Civil/Environmental)
5 Oct 05 14:27
The Manitoba association has a guide on how to hire a consulting engineer.

http://www.apegm.mb.ca/keydocs/cguide/index.html

One of the methods is to use a percentage of construction cost method. The guidelines have three ranges, basic, complex 1 and complex 2 fees.

Some examples are Basic is municipal design, complex 1 is dams and complex 2 is sewage treatment plants.

The suggested percentages fees are also dependant on total dollar volume of construction and range from 6 to 14% at the lower dollar contracts and from 5.5% to 9% for larger dollar contracts.

They are given in this graph:

http://www.apegm.mb.ca/keydocs/cguide/epce-appb3.pdf

Hope that this helps

Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion
www.kitsonengineering.com

dave472005 (Mechanical)
6 Oct 05 9:31
Suspect that you are looking for some sort of Rule of Thumb.

From my experiences in power utilities,

Nuclear - small design work - minimum of 120-150 man-hours engineering
- large design work - need a detailed evaluation

Fossil - Small projects (<100k), engineering ~$10k or 10%
Medium projects (100k - 500k), engineering 10-15%
Large projects (>500k) - should do a detailed evaluation

During a short stent in an Engineering firm doing HVAC/Plumbing - Total mechanical/electrical installed cost ~30% of overall construction.  Engineering - Mechanical and Electrical - ~25% of architectural fee.
dogleg43 (Electrical)
6 Oct 05 11:59
Your question has a lot of variables assoiciated with it.  

In the pharmaceutical industry there is the issue of validation, which drives engineering costs up tremendously.
Example: The eng. costs for a small sterilizer that needs "validated" are about $110,000.  For one that does not require validation is about $40,000. (Validation is a FDA requirement to require piles and piles of testing and documentation).

Reply To This Thread

Posting in the Eng-Tips forums is a member-only feature.

Click Here to join Eng-Tips and talk with other members!

Close Box

Join Eng-Tips® Today!

Join your peers on the Internet's largest technical engineering professional community.
It's easy to join and it's free.

Here's Why Members Love Eng-Tips Forums:

Register now while it's still free!

Already a member? Close this window and log in.

Join Us             Close