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fee for structural design 2
- Thread starter 041964
- Start date
041964. An interesting query. How much can you ask. Reminds me of the little girl selling lemonade. She was selling it for $5/glass. Someone asked her why she was so expensive. "Oh, all I need to sell is one glass!!" Similarly, if you are reknowned in your field, you can ask for the moon - $150 isn't too much from the "first class". If you are trying to get started in the business, you better be at or near your competitors. Find out how much they ask, then match or beat them! It is sad - I don't like the idea of such a thing - but we have had this discussion in other threads. Where we should be giving our clients a good product for a fair price (not a bargain basement price); we are being asked to give the bargain basement variety due to supply and demand, I suppose, and a desire to put food on the table. Such is the fact of engineering fees, in many cases with uninitiated clients. Too many engineers are cutting fees - following the Baron von Richthoven approach: "Find the enemy and shoot him down. Everything else is nonsense."
I do know, though, that geotechs will only get a fraction of what you'll get!
Hope others can help you out, but this was my![[soapbox]](/data/assets/smilies/soapbox.gif "[soapbox] [soapbox]")
![[cheers]](/data/assets/smilies/cheers.gif "[cheers] [cheers]")
I do know, though, that geotechs will only get a fraction of what you'll get!
Hope others can help you out, but this was my
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davetipler
Structural
Good question.
I too had the same point of view as BigH. But then things turned around when I decided not to concern myself with my competition. It is pointless to accept all the responsibilities that come with being an engineer only to be compensated at the same hourly rate as the local grocery store clerk. We used to be in fierce competition with another engineering firm for a client's business. To get more work, we would each in turn drop our fees. After a few years of this, I realized that nobody was getting ahead. We were working like crazy until all hours of the night, but we were not making any money. So I tried something a little different. Instead of lowering my fees, I raised them. Not by a little, by a lot. Here's what happened. My competition got all the work from this client for the first little while. It didn't take long before they were overloaded with projects that weren't making them very much money. Eventually, they couldn't handle all the work, and the client was knocking on our door again, paying us at our new higher rates. We were working less, and making more money. What a concept!
In my opinion, you will advance your career much faster if you provide quality work rather bargin basement prices. You'll also be much happier!
As for fee recommendations, refer to your associations recommended rates.
I too had the same point of view as BigH. But then things turned around when I decided not to concern myself with my competition. It is pointless to accept all the responsibilities that come with being an engineer only to be compensated at the same hourly rate as the local grocery store clerk. We used to be in fierce competition with another engineering firm for a client's business. To get more work, we would each in turn drop our fees. After a few years of this, I realized that nobody was getting ahead. We were working like crazy until all hours of the night, but we were not making any money. So I tried something a little different. Instead of lowering my fees, I raised them. Not by a little, by a lot. Here's what happened. My competition got all the work from this client for the first little while. It didn't take long before they were overloaded with projects that weren't making them very much money. Eventually, they couldn't handle all the work, and the client was knocking on our door again, paying us at our new higher rates. We were working less, and making more money. What a concept!
In my opinion, you will advance your career much faster if you provide quality work rather bargin basement prices. You'll also be much happier!
As for fee recommendations, refer to your associations recommended rates.
This is an age-old question. Some day I like to write a book about it. Let me start by saying that I hate it when some asks me how much does it cost to engineer this. Folks, pick the most qualified engineer to do the job. Cost, while important, is secondary. You wan an experienced, competent and well-qualified engineer to do your design. Otherwise, you are left wide open for poor design, incomplete design, design performed by junior engineers and you the client will be left out to deal with the short comings of such designs.
Having got that out of my chest and without divulging my trade secret of how much to charge (result of being in the business over 23 years) I would refer you to the ASCE publication titled "How to work effectively with consulting engineers, getting the best project at the right price. This publication can be purchased directly from the ASCE at
Your question cannot be simply answered by saying $1500 per sheet. There are so many factors that impact the design fee. You also may price your self out of a project.
Her are some factors to consider:
1. The complexity of the project
2. Are there many details to generate?
3. How complicated the details are there
4. How many design reviews are you going to hold with the client
5. Is the client easy to deal with?
6. Do you have to meet with regulators?
7. Do you have to acquire outside help (i.e. Geotechnical consulting, building envelope consultant, etc.)
8. Are you going to support during construction
9. Are you going to be asked to design within normal relaxed schedule?
10. How much printing do you have to do?
11. What is your overhead?
12. Is there any travel to be done and how and what si the duration
13. Do you have support the bidding process?
14. Do you have to answer to several reviewers within the client organization?
There has been long standing percentage numbers that the federal government uses such as 6%. This percentage drives me up the wall because it has no strong rational any more plus it is very old.
I think I will stop here. I think this will give you an idea that there is not one set figure to price engineering work.
Good luck
Having got that out of my chest and without divulging my trade secret of how much to charge (result of being in the business over 23 years) I would refer you to the ASCE publication titled "How to work effectively with consulting engineers, getting the best project at the right price. This publication can be purchased directly from the ASCE at
Your question cannot be simply answered by saying $1500 per sheet. There are so many factors that impact the design fee. You also may price your self out of a project.
Her are some factors to consider:
1. The complexity of the project
2. Are there many details to generate?
3. How complicated the details are there
4. How many design reviews are you going to hold with the client
5. Is the client easy to deal with?
6. Do you have to meet with regulators?
7. Do you have to acquire outside help (i.e. Geotechnical consulting, building envelope consultant, etc.)
8. Are you going to support during construction
9. Are you going to be asked to design within normal relaxed schedule?
10. How much printing do you have to do?
11. What is your overhead?
12. Is there any travel to be done and how and what si the duration
13. Do you have support the bidding process?
14. Do you have to answer to several reviewers within the client organization?
There has been long standing percentage numbers that the federal government uses such as 6%. This percentage drives me up the wall because it has no strong rational any more plus it is very old.
I think I will stop here. I think this will give you an idea that there is not one set figure to price engineering work.
Good luck
hernma
Structural
- Apr 30, 2003
- 17
Just to give an idea, we charge from 1 to 1.5% of the net value of the construction, or the 4% of the value of the structure, whichever is higher.
Of course, due consideration is given to different factors, such as those very well expressed by Lutfi.
I agree completely, that quality in the job is of prime importance.
Of course, due consideration is given to different factors, such as those very well expressed by Lutfi.
I agree completely, that quality in the job is of prime importance.
DaveTipler - I agree with your note completely. That is why, perhaps, I took the first intiative, on my soapbox, and wait for the second to gage the ambiance and give a second note. I've been doing geotechnical consulting work for many years and I always tried to develop my relationships with my clients. I many times told them, when I was informed that this was a "bid", that I won't be the lowest price, but I will give a fair price and I will give them quality deliverables. I won several good jobs that, with time, developed into some big ones in this manner. So - you are right in riding out the initial storm until clients see who is providing the real quaity and the necessary deliverables. And many times, I told perspective clients that, to be honest, although I could do the work, it was not my expertise and that perhaps they might consider X, Y or Z. This also bore fruit in a number of ways - you don't want to "snow" clients into thinking that you can do "everything."
My old mentor used to tell me that this bid pricing is doing nothing but "prostituting the practice" - and he was right.
Good discussion - and yes, a book would be good, but it would be one without end. . . . .
My old mentor used to tell me that this bid pricing is doing nothing but "prostituting the practice" - and he was right.
Good discussion - and yes, a book would be good, but it would be one without end. . . . .
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Usual engineering fees around here are 2 to 2.5 times salary cost for the engineer doing the work. Salary cost is annual salary / 2080 plus markup for employer paid taxes, employment insurance, pension vacation etc.
The 2 times rate is used for long term projects and the 2.5 is used for short-term projects.
Disbursements for such things as travel, meals, phone, etc are additional. Some firms mark this up by 10% some do not.
This normally works out that the experienced senior engineers who earn more money have a higher charge out rate that reflects the market value on their services.
There is some debate if computer and other equipment costs are allowable disbursements. If you are clear in the proposal it should not be an issue. Some firms charge extra for secretarial time some do not.
Percentage fee calculations average 5 to 10 % of the construction cost depending on the size of the work and the complexity. They are not as common around here since the incentive is not for the engineer to save construction costs.
Some clients like to have a cap on the fees and some do not use them. I would never work on an hourly basis with a cap unless the cap was quite large.
Personally I prefer to quote a firm fixed price and not have to justify how many hours I spend on a task. I have enough experience in my practice to be close to the 2.5 times salary figure for most work.
I also define the scope of the work clearly and precisely. I will often absorb some additional work rather than get a reputation as someone who nickels and dimes a client to death.
If I underestimate then all I lose is my time is I over estimate then I get an extra profit. In either case the client knows his costs going in.
I usually try not to waste my time submitting detailed proposals to potential clients who will base their decision only on price. All they usually get from me is boilerplate proposals and a cost.
Rick Kitson MBA P.Eng
Construction Project Management
From conception to completion
The 2 times rate is used for long term projects and the 2.5 is used for short-term projects.
Disbursements for such things as travel, meals, phone, etc are additional. Some firms mark this up by 10% some do not.
This normally works out that the experienced senior engineers who earn more money have a higher charge out rate that reflects the market value on their services.
There is some debate if computer and other equipment costs are allowable disbursements. If you are clear in the proposal it should not be an issue. Some firms charge extra for secretarial time some do not.
Percentage fee calculations average 5 to 10 % of the construction cost depending on the size of the work and the complexity. They are not as common around here since the incentive is not for the engineer to save construction costs.
Some clients like to have a cap on the fees and some do not use them. I would never work on an hourly basis with a cap unless the cap was quite large.
Personally I prefer to quote a firm fixed price and not have to justify how many hours I spend on a task. I have enough experience in my practice to be close to the 2.5 times salary figure for most work.
I also define the scope of the work clearly and precisely. I will often absorb some additional work rather than get a reputation as someone who nickels and dimes a client to death.
If I underestimate then all I lose is my time is I over estimate then I get an extra profit. In either case the client knows his costs going in.
I usually try not to waste my time submitting detailed proposals to potential clients who will base their decision only on price. All they usually get from me is boilerplate proposals and a cost.
Rick Kitson MBA P.Eng
Construction Project Management
From conception to completion
I used to charge bargain basement fees but one day I realized a bit about human psychology. People are more comfortable paying a high fee for a few hours work than a low fee for a lot of hours. In addition, some people are just more comfortable paying top dollar.
Some days a job just takes longer than you think it should have. With higher fees I can afford to sacrifice a few hours here and there. In other words I don't always bill the client for all the hours I actually put into the job. With higher fees I can afford to do this. I based my fees on what I knew to be one of the higher priced firms in the area. $95.00 an hour for calculations and $60.00 an hour for everything else. I have a friend who just charges a flat rate of $90.00 an hour for everything. He is absolutely swamped with work.
One break we both try to give clients is if we have to travel to various job sites during the week we try to cluster those trips and prorate the travel time. In other words three clients get off with one third of the hourly rate when we can arrange our schedules that way.
Some days a job just takes longer than you think it should have. With higher fees I can afford to sacrifice a few hours here and there. In other words I don't always bill the client for all the hours I actually put into the job. With higher fees I can afford to do this. I based my fees on what I knew to be one of the higher priced firms in the area. $95.00 an hour for calculations and $60.00 an hour for everything else. I have a friend who just charges a flat rate of $90.00 an hour for everything. He is absolutely swamped with work.
One break we both try to give clients is if we have to travel to various job sites during the week we try to cluster those trips and prorate the travel time. In other words three clients get off with one third of the hourly rate when we can arrange our schedules that way.
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