ASCE Curves for Engineering Design Fees 3

Scott...

According to this webpage, ASCE MOP 45 no longer includes "fee curves": Thus, there are no "current" fee curves.

Further internet sleuthing indicates a serious problem with using the curves, namely that the curves are outdated and lead to fees that are too low. For example: and
The last time I had a client suggest using the ASCE curves was about 1985. So, I say, good riddance.

Fred

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"Is it the only lesson of history that mankind is unteachable?"
--Winston S. Churchill

i'd sure like to see anything out there for price as percentage of construction. we get beat up on fee by private developers all the time at less than the old ASCE charts suggest

Back in the mid-1980s I gave one of our main clients (a water district) fee proposals to design a 2-million gallon AWWA D-100 water tank and a booster pumping station in a building. I had two fee proposals because the water district and a land developer were going to share different percentages for the design and construction of the two facilities.

The tank design fee (no bidding or construction services included at this point) worked out to about 3.5% of construction, while the pumping station fee worked out to about 11% of construction. The water district's chief engineer gave me a really hard time over this because he thought both fees should be right at the "magic 6%" that everyone touted back then. This was the first and only time he did this to me. All the other times, he was pretty easy to work with.

I first explained that I can design a water tank pretty cheaply because tanks are simple (thus easy to design from a civil perspective), contain lots of steel (thus relatively expensive to construct), and the structural design is delegated to the tank fabricator's engineer. I also mentioned that the fees for the previous half-dozen tanks I had designed for him were all in the ballpark of 3%-4% of construction. I further explained that pumping station design is expensive because it's far more complicated: the pumps are relatively cheap compared to engineering required to select the correct pumps (i.e. water modeling and browsing paper catalogs) and multiple disciplines were involved, including architectural, electrical, and structural. He still didn't buy it.

Then, I explained that with the 3.5%/11% fees I had come up with, the total cost to the water district would be less than if both fees were 6%. This he bought.

Fortunately, I had prepared both explanations before meeting with him.

I have run across a few other people in government who only remember the "magic 6%" and forget that the curves are actually curves and that the 6% is for a limited scope of work (i.e. design) for a relatively simple project of a specific size and that it doesn't include things like preliminary studies, surveying, geotech, etc. In today's world, we now have storm water plans to prepare, more extensive environmental documentation, and bunch of other stuff that the curves did not address. Even simple projects are complicated now, which means that any type of published fee curve would hurt us more than help us.

I have worked mostly on the public works and industrial sides of civil engineering, so I have generally been able to get the fees I need to do the work right. With good documentation, such as a detailed work breakdown structure with hours assigned to each task, I rarely get signification push back on fees. I often have to trim a little, but I have never had to trim a lot. I do understand the difficulties in the development market, even though I have done very little there. However, at my last firm we had a group that did only subdivisions. The top couple engineers in this group were almost always able to get reasonable fees from developers. The secret was working mostly for medium to large and well-funded developers that they had "trained".

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"Is it the only lesson of history that mankind is unteachable?"
--Winston S. Churchill

What I've done is determine roughly the amount of time involved in putting together the project, determined the number of drawings involved and calculate the cost on the number of drawings, and determine the value of the engineering component of the project... I look at the three prices and then determine what the fee should be... The values can be significantly different, and I'm not sure how a curve can estimate this...

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

Never got to perform estimate for fees, but agree with what dik is saying and doing. For mega projects, the fees usually tied with contingencies.

Without stating the obvious (but I will), using construction costs to gauge engineering effort is a horrible way to do it. Some projects are very analysis/design intensive and yet have minor construction costs. And some large civil projects have a lot of repetitive sheets that cost very little engineering to do, each, but there's a lot of dirt to be moved.
And it gives a perverse incentive to not use an efficient design. I've had clients question a fee because the bids came in low. Never the other way, though.
We do complicated multi discipline projects. And some PM from the client will say, "Joe's Garage Engineering did this curb and gutter project for 6% of the construction fee, so lets start from there and negotiate down."
Some of our offices, in high priced locales get $8000 a sheet, but we can get by at $4000.

Jed Clampett - I have no idea of structural pricing per sheet or for anything but $4000 a sheet seems like good money. As for 8,000 I hope they are A0

That's one of the 3 approaches that I use...

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

-Dik

I should also point out that basing your fee on the percent of the future construction cost, which you cannot know in advance and for which you will have no control over, is a potentially dangerous practice. It's OK to use a rule-of-thumb related to percent of construction (estimated) as a "smell test," but I would never base my fee on percent of construction cost. But, if you are compelled to use this method, make sure you include a contingency in your fee and make sure that if the project scope increases, your fee increase as well. In addition to a fee increase based on the new construction cost, make sure you get some additional fee to cover the transition from the original scope to the new scope. This transition is never free.

Fortunately for me, every fee estimate I have ever produced over the past 40 years or so has been based on a detailed work breakdown structure and estimated efforts for each and every task I and my team would have to perform, plus subconsultant and other non-labor costs, etc. I have prepared fee estimates ranging from $360 (for 3 hours of my time...I'm not kidding) to nearly $3M. I have been pretty successful over the years (1) getting a reasonable fee and (2) performing the work at or under budget. Not always, but most of the time. I have had a harder time meeting schedules due to nearly always having a >100% workload (and sometimes >>100%), but that's a whole 'nuther topic.

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"Is it the only lesson of history that mankind is unteachable?"
--Winston S. Churchill

Design fee - 3%-15%. Inspection/Construction Administration normally closer to 10%-15%. Both depend heavily on the client/how quickly you will get information/how many times they will want to change things.