Architect/Structural Fee Residential 11

[jgeng]

I sometimes do residential structural engineering work and have recently got into discussion with this contractor regarding design fee. Some of the time the jobs I work on our small enough where I am the only professional involved preparing the plans (i.e. no architect). I told him I thought architect's charge about 7% of the construction cost for a custom home plans. He was blown away by this number and said I was way off base, am I? Maybe his only experiences are with clients who purchased a set of starter plans and had the design professional bring it up to local codes or had a "designer" draft up the plans and bring them to arch or eng to bring up to code and seal. I base my fees for every job based on an hourly estimate it takes me to do what calculations and/or drawings need to completed. I think he thinks everything should be a flat fee regardless of complexity...like a "small addition prepare plans and seal = $1,500"....this guy is frustrating me. Interested in others thoughts on the 7% on archs fee for custom home plans and what you charge for small residential work? How much do you think location plays into costs...I am in florida.

 

[peal724]

good discussion.

i've got a arch client that i typically do minor residential engineering for. he's pretty good alligning load path and he can pick his own joists sizes out of the IRC, but calls me when he needs an LVL sized. i don't mind this work at all. it's the little per diems here and there that fill the cracks between the large rocks.

he did however send me dwgs to give a proposal by, the first house from scratch that needs a full structural set and yes i would classify it as a "rich guy house." i gave him a percentage fee that definitely reflected the residential market; we'll see how it goes.

BA's remarks about dentists and lawyers are dead on the money, no pun intended. for residential repair type jobs where the home owner calls, i've been requesting they provide a check for one or two hours of per diem time at the initial site visit. this weeds out the payers from the non-payers and it at least covers your initial time spent if the job never pans out.

 

[dik]

We 'outsmart' ourselves... there is always an engineer that can do something cheaper and better than the next... As Shakespeare noted, 'like an engineer, hoisted by his own petard...'.

Dik

 

[DWHA]

In regards to BAretired post, the problem as I see it is this:

A person will not have anyone other than a dentist drilling into his teeth, just a fact. If you were to go to court on something with out a lawer 95% of the time you lose.

However, you can get a contractor that can guess (hopefully an educated guess) at what he is doing based on past experiences and be sucessfull 90% or more of the time. Add onto that, local building inspectors who do not spend the time or have the time to validate when an engineer is needed.

This is one reason the bridge industry is more controlled in term of engineering than the building industry. All bridges need to have an engineers seal, from a box culver to a suspension bridge. While someone somewhere has said that if the building is a certain style or less than xx dimensions an engineer may not be required.

 

[woodman88]

When talking about fees it is important to understand that the person closest to the original client gets the most money. As engineers we mostly deal with the architects and contractors middle men. Architects and lawyers deal directly with the clients. Doctors and dentists also, unless you have insurance and the insurance companies always pay them less (even under cutting their own schedule of fees) than a private individual would as they can pick who you can see.
Unfortunately, this is why sales people get so much money.

Garth Dreger PE - AZ Phoenix area
As EOR's we should take the responsibility to design our structures to support the components we allow in our design per that industry standards.

 

[pmblair]

SteelPE... Construction costs are estimated based on cost per square foot based on type of building in a particular area.

DWHA...

Contractors guessing only works 90% of the time until an actual life safety event occurs, like ANDREW, or a major earthquake and then sh*t hits fan.

 

[DWHA]

pmblair

I agree 100%. The tough part is making & enforcing the requirements of having an engineer sign off on everything.

While I do believe that most government departments are over staffed, from my experience the building code enforcement department is understaffed. And in the case of small communities, there are many that do not have a position at all.

Here is an example:
When I was in High School I was taking a AutoCAD class. At the same time my father who is an auctioneer was wanting to build an Auction House. I drafted it up based on what my father wanted. He was able to get a permit based on these drawings alone. This is a public facility with no Architect/Engineer sign off. To add to the issues of this, 10 years later my father sold the building and it is now a chruch. All built by a local carpenter. No Engineering!!!

The city I grew up in had no code official. They are currently now working (in 2011) on determining the building code they want to adopt, the city officially has no official building code.

 

[csd72]

Some very good points made,

We should not let our services be treated as a commodity to be bought at the lowest price. People shouldnt even be buying coffee based purely on price let alone something as complex as engineering services.

Our profession should blow their own trumpet far more often. On buildings like the Burg Dubai or similar that are very large ENGINEERING achievements you will probably find a sign telling you who the builder was, who the architect was, and possibly even who the project management company was but most likely not a sign saying who the engineer was.

Believe in the value of what you offer. If there is a acost blowout on a project these things are rarely less than 10%, spending a measly 1 or 2% extra on engineering fees can help minimise the risk of these things happening as well as potentially reduce costs. Leave the budget price wars for the bottom feeders and try and charge what you think is a reasonable fee for your services.

I could go on.............

 

[spats]

Regarding the original question regarding architectural fees: especially on higher-end homes, real architects will get a 7-10% fee, but must pay the structural, MEP, civil, etc. out of their fee. Usually, he wind up with half or more of that total fee. If there are other consultants, like an interior decorator, kitchen designer, pool consultants, etc. that get paid out of the architectural fee, it is on the higher side of that range.

What I really love... I worked for an architect once on a high end home that came in $1 million over budget, so he sent the owner an invoice for an additional $70,000! boy, I sure wish my business worked that way!

 

[ash060]

I noticed that you mentioned dentists and lawyers when discussing professionals. Engineers have it a little different than those professions because the end user has a better understanding of the product.

For example, you go to a dentist because your teeth hurt after you leave your teeth don't hurt anymore. I am sure most people would not pay dentists if they didn't do the job right.

For an engineer who is designing a house the end product is the same, a house. The owner has no idea what is good engineering practice (same goes for many contractors), they just see the final product and the price, and they have no way of knowing if the job is done right from any engineering standpoint.

If one engineer charges $5,000 for a project and another charges $500 what would a home owner notice more than the extra $4,500 he is having to spend and he is getting the same house. I don't think I would even attempt to explain load paths and anchorage forces to a lay person because no matter how much I try I doubt they would give me the $4,500 more to make sure that all that has been checked.

It is even harder to explain that to an owner when a contractor is telling him that the engineer is "over-designing" the structure and is just wasting money, and that if you don't put in that roof blocking I can get you a stainless steel refrigerator instead. Even though during the design event there is the very real possibility that the roof could pop-off because the owner would rather have that refrigerator.

I hope that someone comes up with a way to get engineers the same level of respect as other professions.

 

[sailsam]

I am "only" a civil, but I had been specializing in engineering calculations for single family residences and additions until I retired in 2005 at 70 years old and sailed to Mexico. I came back after 4 years and many of my old clients bugged me to go back into engineering. I did. My clients are building desiners, contractors, architects once in a while, and homeowners once in a while. I did not and do not bid for jobs. I usually quote an hourly rate, sometimes with a cap. But when there's a cap there's also the "baring unforseen circumstances" weasel out. I got a college education and many years of experience. There's no way that I'd even attempt to teach a prospective client to engineer his jobs in the few hours he's willing to spend and pay for. Clients have left me because of price - and returned because of my knowledge.

 

[BAretired]

sailsam,

Good for you!!! How much do you pay for professional liability insurance per year?

BA

 

[sailsam]

Nothing! My jobs are all small. Very few fees over $5000, most under $2000. I've made a couple mistakes and I paid them. Both together amounted to less than a couple years premium. Much of the early years of my practice I also surveyed and did minor subs. when I was doing minor subs. But I was contacted by atttorneys wanting to know who handled my mistakes. When I said I wasn't insured they hung up on me. Both were faulty claims. A competitor of mine, and a friend, did work for a company that required he be insured. He said that in signing with an insurance company you agree to turn EVERY claim over to them. The deductible was $5000. He said every claim cost hime $5000. The insurance company settled for less than $5000 and they sent him a bill for "$3000 payment of claim, $2000 legal fees". The lawyers know that and they know that they can pick up a couple grand for just filing, and they get 30-50%! It's easy work. If I had been insured I would have payed $5000. That's more than I've ever paid myself, and I only paid when I was wrong. And only one time was I sued, just a minor john doe in a large suit where I should have known better than to take the word of my client. My other mistakes I negotiated fairly.

 

[BAretired]

Small jobs can result in large claims. Personally, I would not consider re-entering the consulting engineering business without professional liability insurance. The risks are simply too great in this litigious society that we live in.

BA

 

[sailsam]

You're correct that small jobs can result in very BIG claims. But I've been in private pratice since 1964, except for a 5 year hiatus, and have had 4 claims, two of which were completely fraudulant, one that cost me $2000 for taking the word of my client (suit by HIS customer), and one that cost me $4500 (survey error cause by my relying on an erroneous recorded survey by another). The fraudulant claims were for tens of thousands of dollars lost profits for not completing the job within a "promised 30 days" when the law says that the public agency has 60 days before they even have to schedule a meeting to determine if they are going to grant permission or not. Not a bad average for over 40 years in practice! Of course it helps to not have "deep pockets".

 

[zstructural]

Great discussions, by the way.

I just wanted to suggest that perhaps not having E&O insurance wasn't as big a deal 30-40 years ago. MY firm is 1 year old, and I can't imagine that I'd be able to make it 40 years without needing my insurance in today's society. I appreciate your perspective sailsam. And maybe I'm wrong - but I just thought I'd throw my 2 cents out there.

 

[sailsam]

Maybe my situation is different because I am a sole practitioner. No firm to protect. And my net worth is pretty low when compared to the net worth of all the professional members of a firm. What my "firm" does was done by ME. Nobody else.

 

[bylar]

I see where this discussion has drifted somewhat from the original post but I want to add my imput.
I am 71 years old and my primary income for many years was as a general contractor. I retired 15 years ago and moved to the mountains. I started drawing house plans as a way to occupy my time and eventually got into a lot of projects (mostly residential) to perform engineering. The area requires all Log homes to be sealed by an engineer or architect. I did a great deal of research for this engineering.
Regarding fees I always gave a firm bid. It was always based on my estimate of time that the job would take never based on a percentage of the construction. I got about 50% of the jobs I bid and some of the ones I did not get eventually came back to me to fix the poor job they got from my competitors. In retirement(?) I earned app. $90K per year. Not bad for being retired and working part time.
I worked for several architects on a regular basis, contractors and some home owners.
I never have had E&O insurance. I was named in one suit by the insurance company of the contractor because they thought that my insurance would be a possible deep pocket. We I was deposed the lawyer dismissed me a defendant and hired me as an expert witness. It cost me nothing!

 

[sailsam]

bylar - As I see it two things worked in your favor. Primary - you were a sole practitioner. You weren't signing for the work of an inexperienced person with no financial responsibility for his work. And second, you weren't "deep pockets" attractive to a contingency fee lawyer. Big projects may require engineering firms with many employees. But the type work you and I do is done better when the same engineer talks with the client before the job, actually performs the engineering work, and then is responsible for it.

 

[GoodDeal]

i'm pleased to see that there was only one real reference in this thread about how we need to toot our own horns and puff out our chests more because...well........look at the Burj Dubai! can't have that without an engineer!

how many people reading these have designed "Burj Dubai's"? go on, raise your hands. i'm sitting in very populated metro area and when i look out my window you know what i see? lots and lots of 2 to 3 story buildings mixed in with houses. let's be realistic.

the dentist comparison was a great one, really makes me think....dentists and doctors have special skills and have developed processes that very very few people can even understand let alone employ as a professional. sizing wall studs? answering RFI's? sizing rebar for a slab.....let's be honest, it's based on simple logic and is not exactly difficult. dealing with people? that's difficult. taking RESPONSIBILITY is a whole different issue as well. last comment: the bar for the profession would be raised if we moved from associating fees with hours needed to do something. that is contractor mentality, and i do not mean that in a condescending way. looking back at a project of course it's worthwhile to see if you made money comparing time spent to fee, but how do you put hours on responsibility? how many hours do you include for "peace of mind"?

 

[HeavyCivil]

GoodDeal:

Do we all engage in menial tasks on a regular basis? Sure - it's part of the job. Just like doctors spend half their time charting. I spend a good chunk of time in Revit, zoning out clicking around the screen. But I would guess that most designers also find themselves regularly dealing with some real head-scratchers as well as dealing with Construction phase challenges and balancing relationships clients and contractors.

I'm the first to acknowledge that most engineers are not on par with surgeons or members of SEAL Team 6 in terms of invaluable expertise, but it can be a tough job and its hard not to feel like the market value for our services is on the low side.