Marine/Waterfront Design 1

[phamENG]

Good evening (or morning, or midday, or whatever time of day/night it is where you are) everyone. I have a question on another contentious subject...fees!

I have plenty of experience doing waterfront work from residential bulkheads to fishing piers to marinas to bulk terminals for 60,000t ships. What I don't have experience in is negotiating the fees for them. The firm where I came up had one guy who handled the business for all of those - and then handed the designs to me. Now that I'm on my own, I'm digging up some of this kind of work for myself, but I'm having trouble landing on a comfortable price point.

Given the increased risk, the fees are generally higher than, say, a house. I've been shooting for around 7-10% of the structure cost for residential docks (which, in marine, is essentially the cost of the entire project), but I'm getting a bit of push back. For reference, these are mostly in tidal rivers and sheltered bays, some wave action but usually the fetch is limited. My point of reference for the 7-10 is the "rule of thumb" of 6% of construction costs for design fees in buildings (of which structural is only about 10-12%).

Anyone out there mind sharing their insights?

 

[Enable]

No clue on fees for coastal kinds of work so hopefully someone else can chime in. However, I did want to mention another avenue to calibrate: your insurance. If there is an increased risk in undertaking activities of this nature then sure as you are born your insurance company will know about it. I'd do the following:

(A) inquire if they want a different percentage of fees for this type of work (which you'll want to do anyways to make sure they won't walk out in the case of an issue)

(B) see what a fee ratio'd based on the increased insurance premium nets you. For example, if your typical project fee is 2% with an insurance premium of X but now the insurer wants Y (Y>X) then see what 2% * Y/X is

(C) move the fee up / down depending on where it lands relative to what you think the market is and how much the PIA is worth to you

Anyways, that's a starting point!

 

[milkshakelake]

I use hourly rates instead of total construction fees, because construction cost is hard to estimate for me. I only have residential/commercial experience, but my fees are $200/hour (regardless of drafting or engineering) and I base all proposals off of that, using the number of hours I think the project will cost. It's a fixed cost but it's based on hours needed on previous projects. This has worked well and has been competitive without too much pushback.

This is in New York City. Using an hourly rate, fees are really hard to judge for an outsider without knowing the exact location. About 20 miles away from where I practice, the fees are 30% lower.

Edit: It's worth noting that your kinds of projects, especially if they're large or scary, might need different insurance premiums. You can build that into the proposal. And the insurance provider I'm working with can work with specific projects and premiums, which I build into the proposal. That way, you don't pay the same for a residential marine project and a 60,000 ton project.

 

[phamENG]

Enable, milkshakelake - thanks. I've already considered the insurance side, though I haven't checked in with my broker yet. I want to run through the thought experiment and then I'll reach out to her.

To clarify, I'm going after mostly small residential to large residential/small recreational commercial waterfront for now. I may get back to industrial scale eventually - that was mostly a statement of qualifications.

$200/hour would be a nice number to get. Around here, principals of large, established firms can't justify that as an hourly rate. But then, you have to put up with NYC. (Great place to visit - I passed through a couple days ago - never want to live there.)

 

[Enable]

Aw that's my mistake. In that case the fee schedule from our advocate association (not the same as that which regulates us) might be useful to you. It contains hourly fee rates based on class of work / responsibility + discusses other methods of compensation.

https://www.ospe.on.ca/public/documents/general/2012-fee-guideline.pdf

 

[milkshakelake]

@phamENG Exactly, the price is adjusted to the location. It's absolutely bananas when trying to file something in NYC and the liability is higher than other places, as well as cost of living. I imagine it's the same in high seismic areas like San Francisco for other reasons. Experienced developers understand the price and will pay, and not negotiate too much. For small projects like recreational waterfronts, I suggest giving a fixed price and sticking to it and explaining why you're worth the price. Smaller clients will shop around and try to bargain, whereas big and/or experienced developers will accept the price right away. That's the main reason I try not to take on small jobs.

For the record, I'd hire you in a second and I trust you more than I trust myself. It's just a matter of conveying your experience to the client.

 

[phamENG]

Enable - outstanding. Thank you. There's tons of really useful info in there I'll try to soak up.

milkshakelake - thanks for the kind words. I endeavor ever day to be worthy of them.

 

[dik]

Enable... the OSPE does more for engineers in Ontario than the PEO does... I'm still on their mailing list.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik