Consulting fee for a repetitive system 1

[SteelPE]

I have been asked a number of times from the same client to look at a potential project over the last 18 months. The project is to design a solar panel support rack systems. Each time I have given my client basic information on a proposed design and my professional opinion to help them out but have never gotten into the nuts and bolts of the design. Basically I don't think the project is going to go forward and I don't want to waste my time. The project is coming back around again and #'s seem to be a little more realistic.

From what I can tell, my design would involve the design of the rack systems (support racks, purlins and foundations) for the solar panels. I would basically design 1 rack system and then that system would be repeated however many times on the same site (possibly hundreds of times). The racking system would be designed to be site specific and not be allowed anywhere else except for the proposed project.

I ended up wondering what I would charge to design a full system? I was thinking of figuring out a set fee to design the system and then adding to that fee another fee based upon however many times the system was to be reproduced on the same site (say 2%-5% the initial design cost x # of systems needed). If something needs to be fixed..... it could potentially need to be fixed 100's of times and I want to make sure I properly account for this exposure. How do others handle billing for a project of this type?

 

[MikeHalloran]

>>>repeated however many times on the same site (possibly hundreds of times).<<<
I'm thinking thousands per site, based on the few solar installations I've seen.

>>>not be allowed anywhere else except for the proposed project.<<<
Absent a patent, how could you enforce this?

If somebody tools up to make thousands of your systems for one site, they'll be strongly tempted to sell the same system elsewhere, especially if it's worth a crap in terms of ease of manufacture or assembly. Perhaps you'd be better off getting a piece of that action.



Mike Halloran
Pembroke Pines, FL, USA

 

[strucguy]

Now that's called thinking like a business man. Wish more engineers think in those lines. A star for you, Mike

 

[SteelPE]

I was going to say 1000's but I'm not exactly sure how large the project would be. My design would be simple. Design one and then repeat.

How do I enforce this? I sign and seal drawings with project specific information (address, wind loading, snow loading etc...). The drawings would include a typical disclaimer about the information only being used for the proposed project. If the client manufactures this for some other location and it fails that's not my problem, it's theirs. If the client took my drawings to another engineer who would take responsibility for another site.......... I'm not sure if I would even care as long as I was paid for the initial project.

I thought "a piece of the action" was discussed somewhere on this site recently (although the case was slightly different) and it was determined that getting a piece of the action was not allowed under the engineering code of ethics (think conflict of interest).

 

[IRstuff]

Does your design incorporate some unique intellectual property? Barring that, I can't see why a a royalty fee is justifiable.

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[SteelPE]

I just found out that the client is going to need approx 4,000 frames

IR stuff, if it takes me 1 week to design a frame and the frame is used 4,000 times that is a huge amount of liability. In my terms, 1 week of work is billed at $5,000. I don't think my insurance company would appreciate this type of exposure for such a little fee (since they base my premium off of my billings).

 

[cvg]

if your design is adequate, not sure why your liability would be "huge". its not a dwelling, failure risk is not high, not likely that life safety is an issue. no moving parts and no cyclic loading. So other than extreme wind or earthquake, how is this thing going to fail?

 

[SteelPE]

CVG

How is it going to fail? I don't know. If I knew specifically how it was going to fail I would design the system so it didn't fail in that manner. As far as I know, my major concerns are wind, snow and earthquake..... mostly wind and snow.

I agree with the life safety issue, none as far as I can tell. With the repetitive nature of the system the client is looking for the most efficient system that I can design. We have worked together before in the past so he is aware of my capabilities. Now that I think about it, while material cost is a concern, I believe a large portion of the cost comes in the required "man hours" for fabrication and installation of the systems. So, efficiency while important, is probably not a primary concern.

So, if it took you $100 worth of work to design the system and prepare a set of drawings showing the required sizes of the members, would you only charge the client $100 for a this system that he was going to employ 4,000 times on the same site?

 

[MikeHalloran]

I'd mark up your labor a lot.
I'd also put in more of it, in the name of DFMA. (You can find a little reading material; take a course someday if you can.)
e.g.
- Minimize the number of fasteners.
- Minimize the number of different fasteners.
- Minimize the linear inches of welding.
- Maximize the use of each 'stick' of metal. Ideally, the only waste should be chips under the saw, or better, burrs under a metalworker.

Ideally, you'd work up a process sheet and a spreadsheet for whatever assemblies are needed, get some quotes as needed, and try to minimize the total assembled and installed cost right down to the paint, backfill and grass seed.

So, efficiency is paramount, but it's defined over a larger scope than just structural efficiency.




Mike Halloran
Pembroke Pines, FL, USA

 

[cvg]

in addition to what Mike said, you need to also evaluate transportation, installation, long term maintenance etc in your DFMA analysis. Are you using painted steel, zinc plated, galvanized, stainless, grounding, cathodic protection etc. And in my experience with solar, for a solar farm which is what your installation sounds like, not all panels / groups of panels will be identical - there will be variation in order to squeeze every last panel possible into the site. There may also need to be a trade study to determine the recommended foundation design (concrete piers, steel piers, drilled caissons, etc - which may affect your design as well.

 

[IRstuff]

OK, so I misunderstood. Your "fee" is really some sort of warranty fee. However, let's consider the worst-case, where every frame produced had to be re-built; there would no way for you to levy anywhere near a replacement cost. I can't see my way to a plausible warranty cost that wouldn't break the bank. Perhaps you can get an insurance policy just for this particular item and amortize the cost of the policy over the 4000 units.

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[SteelPE]

My fee isn't for a warranty. My fee is for the work that I do. I carry insurance for all of the work that I do (professional liability). This insurance covers me, to some degree, against any lawsuits that may arise due to mistakes I may have made during the design process (most structural guys carry a similar policy). The amount I pay for the insurance is based upon the fees that I collect (at least I have to tell the insurance company how in design fees I have collected while the policy is in place). The more I expose the insurance company, the more they will want to collect in fees from me.

The separate policy is a thought though.

 

[KENAT]

Would asking the insurance company for input be an option?

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[IRstuff]

I think, but not know for sure, that warranty insurance is fairly common. There's really no other way to really deal with funding a potential liability. I can't see how the builder would buy into paying a per unit cost to cover this potential liability; if anything, I would think that it would almost be a deal breaker, since it sort of implies a lack of confidence in your own design.

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[FixedEarth]

I would treat it as a repeat client. First project is full price and if the scope is the same, subsequent jobs are 10% off.

 

[SteelPE]

IRstuff,

I already know how many of these need to be used onsite. My proposal would include the "fee" based upon the number of frames needed. So all the client would see is a lump sum cost for engineering.

 

[thepieman]

If your insurance company covers you for a failure of your design, and you have one design that is built several times (or 4,000 times) dont you still only have one design? Doesnt this mean that in the eyes of the insurance company its the same as any of your other one off projects?

It is a tricky question though in relation to fees, and seeing your design produced multiple times and not getting a bit of the pie every time would be tough!

 

[GregLocock]

It'd be a fairly silly insurance company that charged the same rate for a one off as something that is made at a rate of 40000 per year.

Cheers

Greg Locock


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[FSS]

4000 frames means 4000 times the liability as one frame. Make sure your fee is appropriate.....