Asked to "bid" for professional services 6

[kylesito]

It seems like the new trend for architects is to "bid" consulting services when putting together their teams; meaning they ask us to submit estimated fees for a particular project and then select the low bidder from several consultants. I think this is HIGHLY dangerous for us as a profession to engage in. It completely undermines the professionalism of our work and cheapens our services to commodity level. We can talk until we are blue in the face about providing exceptional service but if architects are only going to base their project teams on "fees" then there isn't much we can do to demonstrate value to our clients.

Has anyone else noticed this trend? What does your firm do to counter this threat?




PE, SE
Eastern United States

"If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that builder shall be put to death!"
~Code of Hammurabi

 

[kylesito]

You get 2% of the cost of construction as a fee?!!! We are lucky to get 1%.

PE, SE
Eastern United States

"If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that builder shall be put to death!"
~Code of Hammurabi

 

[glass99]

kylesito: I was just quoting the "classic" number. I don't really do much primary structures engineering so my comparisons are wrong. For a glass stair, my fee is approx 8% of construction, but varies considerably (2% to 30%).

 

[beej67]

I tend to think everything anyone buys is a commodity in a sense.

I go to buy a watch. Maybe I buy the cheapest watch. Maybe I don't. Maybe I buy the watch that looks the best, or has the best features, or has the best combination of looks and features for my money.

I go to hire an engineer. Maybe I hire the cheapest engineer. Maybe I don't. Maybe I hire the engineer that has the cutest intern, or that has the project CV closest to my project, or has the best combination of experience and cute interns for my money. In truth, the chances are I hire the engineer that I have the best confidence will get done what I need done, for a fee that's somewhere in my budget.

I think you guys are getting your knickers way too in a twist about commoditization. Yes it sucks and impacts your fees, but the best thing for the economy isn't to somehow uncomodotize your services, it's to comodotize everyone else's, so nobody's making any more money than you are, and the consumer saves.

I have a friend who works at GE. He talks about how they intentionally tell their clients that if the client puts the project out for bid, GE will tell them to take a hike and not bid it at all. They do it as a threat to keep the project on a no-bid basis, so they can rake a higher profit. This guy's department makes 30% or 40% pure profit on their projects, by the way, while I'm over here in civil making much less.

Well sure, I'd probably do that too if I was them. But I'm a strong personal believer in a free marketplace, and that's not a free marketplace. That's a cartel.



Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -

http://www.campbellcivil.com

 

[JedClampett]

beej67, carrying your logic to the ridiculous, they could decide not to hire an engineer at all, just look at other buildings and tell the contractor to build one like it.
There's different disciplines in this thread, so there's some confusion. I'm a structural and I design structures. So let's say the client uses the engineer with the cutest intern. Will they put a sign on this building and say "Design by Hot Intern?"
The entity making these decisions will be one of many users of the facility. If they choose wrong, it might affect (kill) people who had no input in this decision, but simply entered the building.

 

[glass99]

If you get three prices, you are tripling the chances of your low bidder not understanding how difficult the job was going to be.

 

[CELinOttawa]

Glass: I can't decide if that's a confusing bit of misreason, or an argument contrary to fact... But I get what you're trying to say.

 

[glass99]

Bid mistakes are a classic, much beloved by general contractors. The key is to really rush the bid. "I need your price tomorrow!"

 

[BrianPetersen]

Been there ... 99% of my business is repeat customers. I treat them fairly without exception and I get the repeat business. But then there's "that guy" ... The one who asked for a quote on something, let's say my quote was $7k. I hear nothing for three months. Then a panic phone call inquiring whether I could start the next day and as it turns out, I could. "But I can only give you the job for $6k because that's what the other guy quoted, but he can't start the work for another week." Sorry, no can do.

And then ... a year later, wants a quote on something else. I realized that the project would require reworking a considerable portion of an existing system. Let's say my quote was $4.5k. Didn't get the job. Someone else quoted $2.5k. "No way. Does he realize that you are going to have to do this, and this, and this?" Not my problem. Sorry ...

The cheapskate clients get the service that they deserve. If they learn, perhaps you will get the next job. If they don't learn, they're probably not worth having as clients anyhow. I sure didn't lose any sleep over not getting either of the two jobs described above.

The cheapskate firms who undercut everyone have a fair chance of a hard ending, too. If they underpay their employees, they will only get inexperienced ones who will leave when they get enough experience (and once upon a time, I WAS that underpaid employee-engineer). If they have no profit margin, they won't survive. If they shortcut the work, we all know where that ends.

 

[urgross]

The same customers asking for professional bids would probably not go to a low bid heart surgeon.

 

[CELinOttawa]

In fact, the opposite is true in medicine: Doctor who are less qualified, and charge more, get more clients than ones who simply charge fairly. Ironic, but factual.

 

[MacGyverS2000]

That's true in plenty of fields, CE... people often equate high price with quality, and therefore make uninformed decisions based solely on price.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[CELinOttawa]

Insane, but you're right of course... Such behaviour is just nuts, but probably has an evolutionary explanation.

 

[debodine]

CELinOttawa and MacGyvers200, I can share an anecdotal story that supports your point about the perception that pricy is better. Many (many, many) years ago I worked for a company that built radar systems for general aviation aircraft. They decided to get into the heavy iron world of business turbo props and business jets. To make their radar operate properly at the higher altitudes, they redesigned their existing radar with a better high altitude magnetron and a few other minor circuit board changes. The total cost increase (without burden) of the changes was about $200 per unit.

At that time their general aviation radar was priced as a system at $15,000 but marketing said there is no way the heavy iron would accept a $15,000 radar as "good enough" to be installed in their aircraft. So marketing priced the system at $30,000 because that was in the range the heavy iron drivers expected to see.

I thought you might find this interesting.

 

[urgross]

For $50,000 I'll find it interesting-is that priced for enough cachet?