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MEP Design Fees
- Thread starter tlhoo
- Start date
First I would like to say good luck with your new firm. Second that the design fees are always too low to do a good job for the client.
If it is standard commercial buildings the firms that I have worked for used either a % of construction cost or $/sq.ft. You got the standard slam/bam design with nothing special or innovative. I could only handle this for less than a year.
In the industrial side (which most people are not) we approached every job from the number of motors, number of piping connections, etc. Some jobs may have one piece of expensive equipment and the MEP's would be simple where others were very complex.
I believe that the NSPE has some papers on how to set consulting fees. See the Private Practice portion of the website at
If it is standard commercial buildings the firms that I have worked for used either a % of construction cost or $/sq.ft. You got the standard slam/bam design with nothing special or innovative. I could only handle this for less than a year.
In the industrial side (which most people are not) we approached every job from the number of motors, number of piping connections, etc. Some jobs may have one piece of expensive equipment and the MEP's would be simple where others were very complex.
I believe that the NSPE has some papers on how to set consulting fees. See the Private Practice portion of the website at
ChrisConley
Mechanical
90% of our work is percentage. Our fees is based on mechanical construction dollars with everyone on the design team recieving the same % (7,8,9 on new 10,11,12 on reno). The percentage decreases with project size.
We then ship over 20-25% of our fee back to the architect as a co-ordination fee.
We then ship over 20-25% of our fee back to the architect as a co-ordination fee.
Chris- nice percentages. Up here in the Pacific NW we are just coming out of a 20 year depression on fees for mechanical building services, but unfortunately many of the now partners were brought up through the "lean'n'mean" times and haven't caught up to "real fees" yet. The industry locally in the commercial building sector is still being shopped on a fees basis with 3% to 3.5% fees common, and even lower for high-rise or "bottom feeding" light commercial office spaces. The Institutional sector (Universities, post-secondary buildings) are generally able to provide the 6% fees (6.5% is "book fees") that most of us would like to see, but considering the way the Contracting industry is going (mostly fast-tracked design/build construction management) there is even more work required to stay on top of a construction project.
Percentage fees will be an interesting discussion for green/sustainable buildings that require more $$ thrown at the envelope to enable less mech/elec systems - so consider this- for a low energy green building with minimized mech systems, you do more work, but the mech construction cost goes down along with your percentage fee. Right, do more work for a smaller fee. The percentage of contract cost fee basis will have to get thrown out, and more performance and hourly fees used till a defined scope of work can be required.
Percentage fees will be an interesting discussion for green/sustainable buildings that require more $$ thrown at the envelope to enable less mech/elec systems - so consider this- for a low energy green building with minimized mech systems, you do more work, but the mech construction cost goes down along with your percentage fee. Right, do more work for a smaller fee. The percentage of contract cost fee basis will have to get thrown out, and more performance and hourly fees used till a defined scope of work can be required.
You can do % construction, $/sq ft, $/drawing.
I work hourly and advise my clients that my fee will be least with an hourly fee.
I will point out that, if you let your client shop your price to get the lowest price, he will get the least Engineering care. It is also worth pointing out that, if you bid for consulting work like a contractor, your client will treat you like a contractor.......Engineering is a profession.
I work hourly and advise my clients that my fee will be least with an hourly fee.
I will point out that, if you let your client shop your price to get the lowest price, he will get the least Engineering care. It is also worth pointing out that, if you bid for consulting work like a contractor, your client will treat you like a contractor.......Engineering is a profession.
ChrisConley
Mechanical
For our 'green' projects we tend to make-up fees lost on smaller mechanical systems with additional fees for building simulation as well as additional fees for commissioning. It all balances out fairly well.
You don't actually have to clarify your fee basis as a percent of construction cost, or $/SF, etc. The fee in your proposal should probably be a lump sum or time/material "hourly" rate structure (perhaps not to exceed) as suggested. You should run through a couple of these different iterations/approaches to arrive at a comfortable fee--compare the various methods suggested.
As an example of standard approach (assuming I'm not doing an industrial job and it leans itself to a more commercial type), I first figure the value of say the mechanical construction effort via Means or other similar resource (e.g., RSMeans Square Foot Costs). This book also has architect fee percentiles, but other better resources include PSMJ's "A/E Fees and Pricing Survey" and ZweigWhite's "Fee & Billing Survey of AEP&Env Firms". This will give you some good ideas on what other firms are doing and the percentiles will vary with the type of building, etc.
All three cited resources are annually issued products, and therefore there are costs associated with keeping up to date with these items.
I personnaly like to play with a spreadsheet with hourly billing rates assigned to the individuals/classes of personnel I will actually use on a job, and then plug in some hours based on various specific tasks (e.g, meetings, field trips, CAD time, etc.) and see if we can do it in that amount of time/for that amount of money.
As an example of standard approach (assuming I'm not doing an industrial job and it leans itself to a more commercial type), I first figure the value of say the mechanical construction effort via Means or other similar resource (e.g., RSMeans Square Foot Costs). This book also has architect fee percentiles, but other better resources include PSMJ's "A/E Fees and Pricing Survey" and ZweigWhite's "Fee & Billing Survey of AEP&Env Firms". This will give you some good ideas on what other firms are doing and the percentiles will vary with the type of building, etc.
All three cited resources are annually issued products, and therefore there are costs associated with keeping up to date with these items.
I personnaly like to play with a spreadsheet with hourly billing rates assigned to the individuals/classes of personnel I will actually use on a job, and then plug in some hours based on various specific tasks (e.g, meetings, field trips, CAD time, etc.) and see if we can do it in that amount of time/for that amount of money.
EmeraldCoastHVACR
Mechanical
I'm hearing around 10% from licensed PE's.
I'm not too excited about using MEP -- very poor parametric modeler and export to CAE programs, but it doesn't make sense to go against the grain with Architects, etc.
I'm not too excited about using MEP -- very poor parametric modeler and export to CAE programs, but it doesn't make sense to go against the grain with Architects, etc.
EmeraldCoastHVACR
Mechanical
ChrisConley,
Could you expand on those co-origination fees to architects.
Seems like a kick back or something.
thx
Could you expand on those co-origination fees to architects.
Seems like a kick back or something.
thx
EmeraldCoastHVACR
Mechanical
CountOlaf,
I assumed the poster used Autocad's MEP(mechanical/electrical/plumbing) software in his design venture and not about mechanical/electrical/plumbing design.
Wouldn't be surprised tlhoo uses Autocad MEP.
I assumed the poster used Autocad's MEP(mechanical/electrical/plumbing) software in his design venture and not about mechanical/electrical/plumbing design.
Wouldn't be surprised tlhoo uses Autocad MEP.
EmeraldCoastHVACR
Mechanical
omg -- I gave the gentleman a 10% parameter that PE's use --it's just a guideline.
I just wanted to state that I think Autocad's MEP software sucks, but it's what architects & engineers seem to use.
I just wanted to state that I think Autocad's MEP software sucks, but it's what architects & engineers seem to use.
ChrisConley
Mechanical
EmerardCoastHVACR, feels like a kick back, but the co-ordination fee is essentially that. All of the subconsultants (S,M and E) receive fee based on percentage of construction cost, as does the architect.
The architect is the prime consultant, because of that they feel that they can charge a 20-25% fee for: printing, having meetings, actually finding the clients, co-ordinating the disciplines.
The plus side is that they take a big chunk of the liabiltiy for design co-ordination. I actually enjoy having a beam/duct/light conflict and looking at the architect and saying: "Co-ordinate"
Just to clarify further on the MEP thing. In some places firms are classified as MEP, no referece to software was implied I believe.
The architect is the prime consultant, because of that they feel that they can charge a 20-25% fee for: printing, having meetings, actually finding the clients, co-ordinating the disciplines.
The plus side is that they take a big chunk of the liabiltiy for design co-ordination. I actually enjoy having a beam/duct/light conflict and looking at the architect and saying: "Co-ordinate"
Just to clarify further on the MEP thing. In some places firms are classified as MEP, no referece to software was implied I believe.
EmeraldCoastHVACR
Mechanical
ChrisConley,
well they don't call it "architorture" at GT for nothing.
The biggest complaint I see from PEs & Goverment Inspectors is that the architects draw up plans that show a poor understanding of HVACR principles -- duct routing, etc.
I like the idea that architects take the liability hit, but the important concept is to communicate early in the design process -- as HVACR engineers, we need to express our voice LOUDLY early in the design process.
when I see MEP -- I think of Autocad's MEP software -- must be a brainfart.
well they don't call it "architorture" at GT for nothing.
The biggest complaint I see from PEs & Goverment Inspectors is that the architects draw up plans that show a poor understanding of HVACR principles -- duct routing, etc.
I like the idea that architects take the liability hit
, but the important concept is to communicate early in the design process -- as HVACR engineers, we need to express our voice LOUDLY early in the design process.when I see MEP -- I think of Autocad's MEP software -- must be a brainfart.
I've never charged out on a percentage basis - it's usually lump sum, but occasionally an hourly rate. I've got a couple of questions on the practice:
1. What happens if the project doesn't go through? I assume there is some sort of provision to get payment - what is it?
2. As stated above, it does seem to be a sort of kickback. Do you have a more difficult time selling clients on systems with this arrangement? I could envision a client being skeptical about what you say the "best" way to go is if the method increases your eventual payday by some percentage.
3. The percentage is on installed cost, right? Or is it simply based on equipment and materials cost?
Thanks.
1. What happens if the project doesn't go through? I assume there is some sort of provision to get payment - what is it?
2. As stated above, it does seem to be a sort of kickback. Do you have a more difficult time selling clients on systems with this arrangement? I could envision a client being skeptical about what you say the "best" way to go is if the method increases your eventual payday by some percentage.
3. The percentage is on installed cost, right? Or is it simply based on equipment and materials cost?
Thanks.
PatBethea: There probably are other arrangements, but here's what I think:
1. The percentage thing is just used to establish your fee which is still offered as a lump sum, hourly or other. It's based on an anticipated cost of construction which is why I mentioned Means in my previous post. I suppose it could be tied into actual cost and go up (or down) depending on final outcome (like a performance-based contract). Especially since (hopefully) you'll be getting paid before the thing is built.
2. I'm confused on the kickback thing too. Chris, you stated "We then ship over 20-25% of our fee back to the architect as a co-ordination fee." Did you mean you simply deduct that from your number you arrive at in the proposal--it's built into your quote to the architect, right?. It's not like you actually return money, right?
3. The percentage is on labor and materials.
1. The percentage thing is just used to establish your fee which is still offered as a lump sum, hourly or other. It's based on an anticipated cost of construction which is why I mentioned Means in my previous post. I suppose it could be tied into actual cost and go up (or down) depending on final outcome (like a performance-based contract). Especially since (hopefully) you'll be getting paid before the thing is built.
2. I'm confused on the kickback thing too. Chris, you stated "We then ship over 20-25% of our fee back to the architect as a co-ordination fee." Did you mean you simply deduct that from your number you arrive at in the proposal--it's built into your quote to the architect, right?. It's not like you actually return money, right?
3. The percentage is on labor and materials.
DonPhillips
Structural
On larger projects where the design takes months, my contract requires progress payments due each month. If the project dies mid-stream, I get most of the fee that is due.
Don Phillips
Don Phillips
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