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Soils Exploration Fee and Scope
4

Soils Exploration Fee and Scope

Soils Exploration Fee and Scope

(OP)
I recently read through an interesting thread that turned toward the history of fee trends in geotechnical and structural engineering, which was very interesting to me.  It was sort of disappointing that the fees (and presumably, the scopes of work) for geotech work as a percentage of total construction cost appear to have declined over the years, in general.

What do you attribute this to?  Do you think that people are more tolerant of what used to be considered "unsatisfactory" performance in their buildings?  Do most of the real costly soil-related problems go unannounced for the most part so few know about them even occurring?  Or perhaps people want the lowest bidder and the geotech engineer who knows the least about the potential problems on a site is likely to deliver it?  "One boring should be enough-we want to get the work, right?"  Is ignorance bliss when it comes to developing fees and scopes of work?

RE: Soils Exploration Fee and Scope

I think that the rate of fee increase has not kept up with construction costs due to two main issues:

1)  Commoditization of the market - Many owners/clients perceive engineering services from all firms as equivalent.  Therefore, they shop for the lowest price, and many firms are willing to give them a low fee by doing minimal field and laboratory work, minimal engineering analyses, and providing canned geotechnical reports.  The recommendations provided by these high volume firms are typically overly conservative due to the low confidence level in the geotechnical data.  The owners fail to recognize that paying a little more (in terms of overall cost) to get thorough analyses will usually result in significant construction savings that more than offsets the slightly higher fee.

2)  Technology - The engineering community has become more efficient at design through the use of CAD programs, word processing, spreadsheets, etc.  All of the cost savings from technology have been passed on to the clients, therefore the services are relatively less expensive than they were before PCs were around.

RE: Soils Exploration Fee and Scope

Good comments by Baldie - I'd like to add a few comments.  MRM was probably referring to a thread in the Structural Forum by JHeidt on "Safety Factor Questioned" - if I remember correctly.  As I had indicated, the costs of normal geotechnical investigations have gone down over the years with chargeout rates soaring at a faster rate.  

There are a number of reasons for this, I believe:

1.  Owner wants "lowest bid" - agree, but not generally with savy industrial clients.  He generally goes out to four or five firms for a $2000 job.  What a bloody waste of engineering time - 4 firms of 5 will lose the bid - spend a fair amount of dollars (say 4 to 6 hours) putting together their bid, hence at a cost of say $500/firm.  That is $2000 aggregate "loss" for a $2000 job - and so the owner saves himself a couple of bob - oops, or is that quid?  

2.  There are now too many small time geotechnical firms (not disparaging of quality that many such firms produce). With so many and the number of firms usually being asked, there is always a firm who will take the job just to get the job - it might pay for his operation for a week.  The work might be first class, but the market has been driven down by those who want to just get a job.  Many do this with the intent of making the money on the inspection - and this is rightly so.

3.  Many firms have done business in the same area for so long that they can just "clean off the last report" and turn it in with a new client name and address.  Perhaps, they will change 2 inch OD split spoon sampler to 1-3/8 inch ID split spoon sampler.  Word processors can do this quickly. Baldie is right in that the designs are likely too conservative - but in many instances, foundation designs for small structures (not large warehouses, hangers or hundreds of house foundations in a development) will only result in a saving of a minimal amount of concrete, say 10m3 - so why would geotechs want to specify a 1.2m wide strip footing (at a marginally higher allowable bearing pressure) over a 1.3m footing at a bit lower value.  Not really much savings.

4.  Baldie was correct about the current use of computers. But there is a caution in this.
     Everyone can now buy software, input some data and - wow!!! - obtain results.  The rub is if the engineers know what the results really mean.  I wonder if many times this is a result of the way universities are putting out young lads who want to sit at the desk looking at a screen rather than travelling up to Hopewell Labrador on a single engine float plane to live in an old hut in a mining camp that has to thaw out the crapper lines for 5 hours each morning so that there is a comfort or two - to sit waiting for a chopper to come get him at twilight time . . . trampling through 3ft of snow just to get a couple of piezo readings . . .  Digression - sorry .  To get back to the computers, yes, they can put out some pretty darn good answers - but do the doers know the real input? . . . or the reliability of the output?  I would say for many jobs - especially the more routine ones - setting up the model just isn't really that necessary.  The faster computer chips now make the 20minute wait for a slope stability search pare down to seconds - but, for many jobs, the back of the envelop by experienced geotechnical engineers is just as fast (not so, of course for analysing deflections of laterally loaded pile groups, say). There was another thread this year that talked about computers and "accuracy".  Remember GIGO.

5.  Many structural engineers/designers/clients do not really understand the worth of the geotechnical engineer - to them, it is just an unnecessary appendage to the project team in their view but a requirement, so there be it.  As such, they do little to develope a proper scope of work nor do they hire the geotech to do the work necessary to save constrution money - many times they are only worried about the design money.  Comes back to haunt them, many a time, during construction - when you find you don't have the "tools" in the contract to do the proper job because some "unforseen" problem arises.

6. The above leads to the idea of geotechs promoting their own worth.  We see this in many professional organizations - PEO Professional Engineers Ontario), for instance - about the lack of respect for engineers.  Engineers aren't even permitted to sign as a guarantor on passports - although a mayor or some small town is - even a banker can do it (politician/bankers over an engineer - trustworthy???).  
    To gain more fees, the geotechs need to really do a grass root campaign to educate those who hire their services on the principal that you get what you pay for.  Also, that the relationship of the geotech with the owner/designer is as important to a successful job as the money saved.  Repeat business - we have a number of geotechs in these forums who have indicated their "repeat" business.  This is the way that we need to go in order to gain respect and hence earn more fees, maybe not in drilling and initial report preparation but in the true partnership of the geotech during the design and constrution phase.  How many of us really are involved in the design after the issuance of our reports?  Turn in the report and the next you hear is a request to do a Proctor and a few field densities.  But, the double edge to the sword is that to get the foot in the door, geotechs are forced to follow as per comment 2.

I apologise for the rambling.  It is a bit of a tiger chasing its tail.  But the lack of fees are more often than not simply due to the old law of supply and demand.  Too many geotechs for too few jobs - so the jobs get taken on the down and dirty.  This is more likely the scenario than the use of computers (ever see how long someone (not a secretary) spends getting the format "just right"?)

Thanks for "listening" -

p.s.  How I long to see stratigraphic sections in geotechnical reports at scales to which I can apply my engineer's scale. I always found that such helps me in formulating project specific recommendations and comments. Many newbies hardly know what an engineer's scale is.  I'm interacting with one now who hasn't used his since university (5 years ago).  EVERYTHING is done on the computer screen.

RE: Soils Exploration Fee and Scope

I would agree with most of the comments so far.  In terms of writing new engineering reports from old documents, I would comment as follows.

In my experience, geotechnical engineering is a regionally driven practice.  Those who have practiced in the area for a time have faced the majority of the types of challenges that are common to that area.  They have thought through various recommendations and have experience with those that seem to work.  I see nothing wrong in being able to recognize a geotechnical issue and then using a remedy that was previously thought through.  They real key, in my opinion, is to properly recognize the geotechnical issue.

In terms of falling geotechnical engineering fees, I would comment as follows.

In my experience, another reason why geotechnical engineering fees may be dropping is the marketing strategy used by firms to enter a particular project on the front end by doing the subsurface investigation at or below cost with the anticipation that they will be in the front seat when the Construction Observation and Materials Testing contract is given.  The real profit is realized by putting lower paid technicians on a site and having them work lots of hours.

The potential problem in marketing geotechnical services in this manner is that less effort may be spent in characterizing the site and identifying the geotechnical issues.  Where difficult issues exist, the owners are often faced with gut wrenching decisions during construction to address unanticipated geotechnical issues.

I know of no solution to this problem (including education of clients) when geotechnical engineers themselves are saying by their actions that the subsurface investigation and engineering analysis is the least important part of the construction project.

RE: Soils Exploration Fee and Scope

All of the comments have been interesting and appropriate.  The authors, I can tell, are seasoned practitioners.  The real issue is that engineering is a business.  I have practiced for 30 years as a staff member of a firm and as an owner of "a small geotech practice".  The major difference in cost of doing business is in the overhead costs.  

Regarding re-using established formats for reports, I consider the clients dollars...where should I spend my time or the client's fee...writing a new report from scratch about a geologic setting and foundation type that is similar to the last 100 I worked on or in really focusing the available fee on good engineering.  Just like each of us, the owner has a budget.  

In my current practice, working for a mid-sized firm, the real key to getting a fair fee is to carefully select your clients.  Who said you have to go after every job out there.  If you don't like the way a client does business, stay away from them.  The good clients...those that appreciate your good work and pay in a timely manner are all willing to pay a fair fee.  Let someone else work with the firms that just select on the basis of cost. What does it say about someone who just selects on the basis of cost?  How financially strong are they?  How much experience do they have at understanding things can change quickly when working underground and how willing will they be to work with the design team to solve the problem?  

I have seen things change a lot in our business.  I think some parts of our business are better and some things can be improved a lot.  We need to stay smart and positive.  The way I look at it, if I don't like something I need to work to change it.

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