Engineering Fees 12

[lowedogg]

So I just read the whole "co-worker not claiming all hours worked" thread that included an interesting discussion of engineering fees, or the lack thereof. I would like to get a thread going that is focused solely on this topic.

I have seen the commoditization of engineering services accelerate over the past few years. I work in the construction industry and I can think of several reasons for this occurance.

One of the big drivers is the advent of "design-build". Rather than retaining a professional services firm to design a product that meets their requirements, many owners have resorted to hiring a contractor that can give them "something" as cheap and fast as possible. Government project managers have been driven to this contract type by the unreasonable schedules manadated by Congress for certain programs. The private sector is driven solely by first cost. I think that 10-20 years from now, both entities will realize that their money would have been better spent on a high quality product instead of something cheap and fast. Essentially, design-build has reduced the demand for superior design services, thus destroying the suppliers who are capable of delivering a high service level.

A second reason for the devaluing of our services is the eagerness of the majority of firms to capitulate to the demands of the "cheaper and faster" market place. If professional service providers were less willing to push the quality level down to "just barely good enough to meet code", then the demand side of the market would have to adjust to the limited supply of "cheap" engineering. If we do not value our services, then no one will.

There is also a noticeable decline in the technical ability and confidence in the emerging generation of lead engineers. I feel that this has been brought on by a job market that rewards frequent employment changes and punishes loyalty with mediocre salary adjustments. If firms would fairly reward their top performers these individuals would be less compelled to seek greener pastures. The only real way for engineers to learn is to see projects through from craddle to grave. Given the duration of most projects, this is not possible unless a position is held for 5 or more years.

Lastly, we as individual engineers are far too meek when it comes to what we will tolerate for our working conditions. If we refused to work for "sweat shop" firms, then these firms could not exist. It is ultimately up to us to demand fair pay, reasonable schedules, and a work life balance. Given that we are highly skilled, integral to the modern world, and historically in short supply, we are in a unique position to command respect. We should encourage a sort of arrogance in the junior engineers that we mentor and expect it from our collegues. We should always talk in jargon that is impossible for outsiders to understand and we should reveal as few of our methods as possible. These are the things that doctors and lawyers do, why should we be any different?

I want to write more, but I must go to bed. I have a 12 hour day in a salaried position waiting for me tomorrow...oh the irony.

 

[GregLocock]

"just barely good enough to meet code"

That is the definition of an efficient design, is it not? you might wish to add bells, whistles and flags, but frankly if the client doesn't want them why should he pay for them?

Why design a mall for a 30 year life when the code says 20 and in all likelihood the thing will be flattened in 10 years?




Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[moltenmetal]

GREAT topic- one that will no doubt generate a great deal of very heated discussion!

Thanks for starting it- but unfortunately I disagree with your own point of view almost entirely!

Very funny that you should blame design/build for our collective woes, because I blame the design consulting/EPC model for exactly the same thing!

I'm a chemmie and not at all in the building contruction field, but we're a "design/build" operation (i.e. we have a factory attached to our design office, in which our own employees build the equipment and systems we design). We're set up this way PRECISELY because it allows us to be properly compensated for our engineering services!

A wise engineer once explained to me that to him, an engineer was someone who could safely execute for a dollar what any damned fool could do for ten. I believe that wholeheartedly. Where we've failed is in two primary ways:

1) Being satisfied with receiving $0.02-$0.10 of every dollar the client ultimately pays for the thing they're building, rather than profiting on the full $1, and

2) Permitting ourselves to be contracted under compensation systems where we're more likely to design a system which costs $3 than $1, because the we get ZERO percent of the savings we generate- and worse still, every dollar we SAVE actually generates RISK for US!

By integrating engineering and manufacture, and by bidding fixed price for design AND fabrication lumped together, WE are afforded choices that the T&M design firm does not have. If we innovate, become more efficient in what we do, or take calculated risks to save money, we can choose whether to take the money we save as profit or to pass all or part of it on to our client as a reduced price for the finished product in order to attract business. Of course there's risk in there too, which is a fair trade for the added reward.

In my view, the commodification of engineering services has arisen from the following things, amongst others:

1) First and foremost: we're training too many engineers. FAR too many engineers. In Canada, only 1/3 of engineering graduates actually WORK in engineering occupations. Our profession is not immune to supply and demand!

2) The "time and materials" billing model of the engineering consulting industry: by separating engineering services from MOST of the value chain, price competition on an hourly rates basis becomes automatic. Many clients have no meaningful basis upon which to judge the quality of the services rendered, hence all engineers become equal- a commodity. Downward wage pressure, uncompensated overtime etc. are a natural result.

3) The rise of the "stationery engineer" (no, that is not a spelling error!): engineers whose only product is paper drawings, specifications and other documents, a great many of whom are NEVER afforded an opportunity to see the true product of their designs. Feedback is ESSENTIAL toward making an engineer better. Far too many engineers confuse the process with the product!

4) Too many of us are self-important prima donnas who believe the hype about our own profession. We think we're in demand and we're important, so we believe stories which validate that point of view- sometimes even in the face of factual evidence to the contrary. We even try to RECRUIT people into our profession! Too many engineers cling to a 1950s notion of what an engineer is, even though we're being paid less than HALF what a 1950s engineer was paid in comparision with other professions!

5) A reliance on codes, standards and specifications etc. as an excuse NOT to do real engineering. A view that the responsibility of a professional engineer to hold the public safety as paramount requires over-design, over-specification and an utter avoidance of risk. Resulting designs are suboptimal, costing the client more money, simply because engineers are unwilling or unable to take on their professional responsibility.

I'm very interested to hear what others think on this most important topic!

 

[ash060]

Commodification of engineering what a great topic, but a horrible time to be discussing.

Because of the current econmic condition every firm in my area is treated strictly as a commodity. Give me the cheapest price for you services as possible because that is who owners are going with. It makes it almost impossible to compete. What really ruffles the feathers is that I look at drawings are competitors and the drawings are not that good, but no one but another engineer would know it.

I do know what it would take to make people to treat us differently.

 

[dvd]

I like the direction of the message, lowedogg. I think engineers need to get a lot tougher on employers, customers and, especially, the institutions that educate engineers. Engineering is being watered-down to the point of becoming design and detailing. This attitude is permeating the system from freshman courses in college to engineering firms to customer expectations. Engineers who bend the rules, through ignorance or ambition, seem to be rewarded. The individual who says that some aspect of a project is not well-advised is labeled as a malcontent or chastised for not being a team player. Money seems to rule; engineers either lust after it, or worship those who do.

I think another reason to add to your list is computer software. There is software now available which in the hands of the right designer makes them capable of "calculating stuff" and making pictures and graphs and things that look really engineery, but mean very little. Since management doesn't really care about engineering they are game to buy the software and get rid of the more capable engineers. Besides, with software your choices are limited on the direction of your investigations. If there isn't a software routine that performs what is needed then we don't have to worry about that aspect, right?

 

[lowedogg]

just barely good enough to meet code isn't really the definition of efficient design. often times, the standard of care is greater than code, and what about environmental stewardship and pushing the envelope to advance technology and the profession. My point is that client criteria often ask for more than bare bones, but the design build model rewards those competitors who provide the bare bones solution anyways.

I can see the advantage of design build if a single firm is delivering the whole package. It seems like this works well in the manufacturing realm. In the construction industry, design build means engineering firms working for contractor firms, who then work for owners. So now when there is an issue where standard of care conflicts with cost, the contractor demands that cost prevail and has no professional risk because they are not stamping the plans. The whole arrangement puts engineers in a very bad position.

I don't see any hype about our profession. Please name one TV show about engineering. I can name 10 each about doctors and lawyers. There should be some hype. I don't know where you went to school, but I had to work my arse off for my engineering degree. I would have had a lot more free time in college had I gotten an economics degree instead of ME. Our work is complex and not everyone can do it. I see a lot of engineers who don't fully get it. I want to see some hype so that I can start duplicating it and spreading it around.

I agree with dvd's point about software. The powerful calculation tools available to us today are a dangerous thing in the hands of an inexperienced engineer. Just punch in the numbers and the answers come out. There is no perception of whether those answers are even reasonable. We specifically structure the calc process to force the engineer to perform some hand calcs so that they have to stop and open the black box. Only a limited amount of output can be used and a hand calc is required prior to ultimate equipment selection.

 

[GregLocock]

So hang on, does the bare bones guy's proposal meet the customer and statutary requirements or not? If he doesn't, then why does he get the job? I'd guess if it was a government contract you could sue, and sort of remember even non government cases.



Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[cry22]

LOWEDOGG
I do see the same thing, and I relate to all you are saying.
Cheap design/build projects with nightmares of maintenance, accessibility, durability and so on, are very common.
They say D/B is 30% faster and 15% cheaper. D/B is also 70% less value. The materials specified, the wrong systems in place, systems that do not work after building sare turned over to owner, etc.

The contractors have this wrong notion that cheaper fees mean lower construction costs. Foolishness.
Granted that on the other hand, higher fees do not necessarily mean cheaper costs of course.

As for engineers commanding fees and respect: I do not see that happening in the near future. The employers do not value engineers at all, we are just commodities, no more.
You can tell a good employer by the training his employees get.
How many engineers get a training, or a seminar per year? compared to doctors and other trades. They put together a series of brown bag sessions with salesman catered lunches to listen to a sales pitch and call it XYZ company university, that's the definition of continuing education at most companies nowadays.

 

[lowedogg]

greg,
many times yes, the stated requirements do not get met. the client is often not technically capable of even realizing this without it being pointed out to them. in the current economic climate, trying to sue the client for non-enforcement of RFP criteria is a risky move.

 

[ajack1]

Doesn’t this all come down to supply and demand?

Whatever level of service is demanded will get supplied, I agree with Greg to surpass this is bad engineering. If customers demand higher specs that is what they will get and be charged for.

Everything in life is only worth what someone will pay for it, the environment, houses, stocks and shares everything.

If you want to make a difference lowedogg next time you go to buy a car instead of trying to reduce the 30K asking price say you are willing to pay 45K as you feel the standard of engineering involved is worth more money, do the same with your house and everything else. Get enough people to think the same as you and all these problems will go away, if you are not prepared to do this or find other people who will why would any company?

If enough people want a car built to Rolls Royce standards and are prepared to pay for it that is the standard cars will be built to, until then things will stay as they are, or get worse.

 

[bunyala]

Cost is but one factor clients look at before hiring a professional consultants. Professional firms utilize different strategies to maintain a sustainable competitive advantage. If a firm cannot compete on price, the executives may have to reevaluate their competitive strategy (... may compete in a niche market segment and offer specialized services) or they will not be successful.
To influence clients perception from viewing professional services as commodities, professional service firms need to educate them on the value of services offered (... champion knowledge-based relationship). That said, I will not be surprised if the marketing budgets for professional firms - as a percentage of revenues - is significant less than the design builders.
Most of the previous threads focused on external forces that led to less than ideal remuneration for professional services. My take is we - the professional services community- fell asleep at the wheel as other competitive forces penetrated our market. Professional service firms need to have strategies on how they will remain competitive in this dynamic market. I recently worked for a 300 person MEP firm that did not have a strategic business plan! That boggled my mind!

 

[Krautso]

I think a big part of it is the lack of interest from engineers in their own self-regulation. Doctors have benefited from having a great majority of their industry involved in public institutions which have served to ensure that all practicing professionals are licensed and held to a more consistent standard.

In Ontario you can practice engineering without being licensed as long as a licensed engineer signs off and takes responsibility for the work. If it was a requirement that ALL engineering graduates working in the field of engineering were to obtain a license then you would see this problem greatly reduced. Instead you find companies with only one or two engineers and a team of unlicensed graduates/technicians/draftsmen/surveyors produce a product at a much lower cost than the companies which dedicate a team of engineers to the task.

I'm not saying to get rid of skilled trades and technicians as they are invaluable to almost any product but the balance that used to exist is no longer there. It is this framework and lack of action by our regulatory organizations that has placed significant pressure on our profession to drive down costs for highly skilled work.

Unlicensed engineering graduates and a lack of clear delineation between engineering and tech/survey/drafting duties is leading us down a path of deteriorating costs, product quality and image of our profession.

Its easy to blame the guy down the road for doing more or inferior work for less but the ability to control this lies in our hands as a self regulated profession and we have no-one to blame but ourselves.

 

[SNORGY]

Most unfortunately, the true value of good engineering is only realized through experiencing the consequences of its absence.

The solution - the only acceptable, ethical one in light of the above - is to keep it's value completely concealed by constantly striving towards never exposing the most accurate yardstick by which it can be meaured.

Too bad it makes no business sense to a board of directors. Money, not quality, not safety, is what drives business. Business understands two things: (1) higher profits are good (2) higher costs are bad. So, what businesses do, especially when profits are down, is cut costs by getting rid of engineers and their services. By some convoluted logic, with a view towards mitigation of liabilities arising from the consequences of error, they view it as more cost effective to spend money on crafty accountants and good lawyers.

The value of good accountants and lawyers is readily quantifiable: both can either help the widow and children of the deceased plant operator maximize the money received in the ensuing settlement, or help the business minimize the amount paid out. Meanwhile, the value of the good engineer can only be measured by the disgruntled plant operator who goes home to his wife and children every night complaining about what a pain in the backside engineers are and how the world would be better off without them.

However sad it might be, let's keep it that way.

Regards,

SNORGY.

 

[MRM]

With many of you good folks mechanicals or disciplines other than civil, this may not go over too well...

We need to have engineers become licensed. It's the first step to gaining more respect with the public, and within our own group.

I've also noticed that employers promote junior engineers to senior engineer positions within a couple years out of school. Some of the "senior" engineers I've seen haven't even passed their PE yet (although they may be planning to take it). This is probably a result of the employer not wanting to lose good talent, since careers are very "fluid" now and it's easy for an employee to pick up and move to another firm. What to do about that one? Not sure yet.

My understanding is that in the good old days, becoming an engineer was quite a bit more work than it is today. There were more credit hours required in school, you had to work under an engineer directly, you probably had to call him "sir" while you were learning from him, and you had to do some work in the field for a good chuck of time-maybe for a decade. There was a certain level of respect expected out of a green engineer. There was a hierarchy. Now all of that seems to be gone.

One thing I'm enjoying about being back in grad school is the differences in how we interact with our professors. I'm actually enjoying addressing the faculty using the title "Professor." I like the fact that they command some level of respect with their students and colleagues. It's quite a contrast to my days in my old engineering firm. One reason I'm excited about this is that when I finally finish, I'll know I'll be in a fairly exclusive club especially when they invite me to call them, "Jim," for example. You’ve got to hand it to them: academia has done a pretty good job of making sure they get a certain level of respect. This clearly increases their perceived value to society, whether it’s actually justified or not.

Don't think for a minute that doctors and lawyers don't play up their own exclusive club throughout medical and law school...

Just some thoughts.

 

[SNORGY]

I actually agree with you MRM.

Licensure and the restoration of projecting a professional image, the way doctors and lawyers do, would go a long way towards mitigating the erosion of our professional dignity. The onset of the cancer that has brought us all here might well have been the day that suits and ties no longer became required office attire. The psychology of that little change - what seemed a great idea at the time - is what gave rise to more open-door, less structured relationshps throughout the rank and file of the organization chart. That was the day when the CEO's name changed from "Mr. Burns" to "Monty" (to paraphrase). It is possible that, in trying to achieve a balance between formality and familiarity, we went too far the other way, and now we have a system of sweat shops in which the accountants and MBA's rule and the former bourgeoisie have become the proletariat.

Speaking from experience, it's gone so far that throughout the local EPC industry where I now work, the junior accountants, secretaries and file clerks tell the engineers what do do in surprisingly condescending tones, and the *engineers* actually make coffee for *them*. In my case, I am extremely fortunate to have found a work culture where people just do that sort of thing to be nice to each other - without the condescending tones - because everyone values everyone. Nonetheless, the fact remains - as one client actually put it to me when I was on loan in his office to help him tie in 148 gas wells within three months - "...Engineers are worth just a little more than the white stuff that you sometimes see on the bottom of your shoes...".

I think we probably need to do a better job of marketing to the public and to the schools what it is that we do and why it is that we do it. It starts with young kids. I have a colleague at work (the General Manager) who is actively involved with high school kids as a coach in the First Robotics competition program. To watch those kids "think" and "create" - before their minds are poisoned by the cycnicism and self-flagellation that we, ourselves, have installed in the workplace environment that we, ourselves, have created - is a refreshing reminder of the way things in engineering could be. I have seen what Texas Instruments is doing (or trying to do) with their calculators (TI NSpire, TI-83 / 89 / 89T etc.) and their training for teachers in how to use these products and tools in the classroom towards the understanding of real-life phenomena, and I believe that this is what we need to be doing more of. Every physics lab, every chemistry class where a concept is taught, we should be doing a better job of explaining where in life this is of use. In post-secondary education, professors would do well to support the theory that they are lecturing with real-life practical examples, since not all of their students are destined for a career in academia.

Lowedogg states:

"We should encourage a sort of arrogance in the junior engineers that we mentor and expect it from our collegues. We should always talk in jargon that is impossible for outsiders to understand and we should reveal as few of our methods as possible."

I am not sure that is quite the way I would put things, but stripping away the word choice, I believe the core message - that we would all do well to put a bit of pride in ourselves for what we do, and do a better job of expecting the same from employers and the public at large - has a distinctly clear ring of truth. We are living the legacy of not doing that: cube farms, less-than-professional pay, chronic self-depreciation, obnoxious bosses, and bullies for clients, some of whom are actually complete idiots. However, my preference would be to put all of our cards and skills on the table and educate everybody we come into contact with - in plain and respectful layman's language - and hide nothing. In my mind, elitism and misplaced arrogance spawn resentment and mistrust, giving rise to counterproductive adversarial posturing between us and the very people whose respect and trust we are trying to earn.

Out of the ashes of all this mess that we have created rise the true visionaries of the "Engineering Business", like Scott Adams. What a brilliant mind! Yet, sadly, while I commend the genius, the flipside of it is that "Dilbert" is yet another wildly popular example of how we have encouraged en-masse the perpetuation of our image as simple, nerdy buffoons who are destined for a future of rejection, ridicule and submission to the authority held by others of considerably inferior intellect.

We get what we ask for.


Regards,

SNORGY.

 

[moltenmetal]

Ontario has the C of A program, permitting non-engineers and non-licensed engineers to work under the direction of a P.Eng.- we have this because prior to the C of A, engineers could not form corporations: they could only form partnerships. We also have the "industrial exemption", for limited non-structural engineering work on an employers' own means of production, afforded to their employees only.

As a result, we license about 20-25% of graduates from Canadian engineering programs.

We have these BECAUSE the United States has what amounts to a general exception from licensure for anyone who works in industry.

...and since only about 30-35% of engineering graduates here actually WORK as engineers, the licensure scenario isn't as bad as it seems at first blush.

The engineering labour market, on the other hand, IS every bit as @)(*) up as it appears to be.

What we HAVE is a MASSIVE OVERSUPPLY OF ENGINEERS!

Licensure isn't the solution. Even if we had and could enforce a universal licensure requirement, we'd STILL have far too many engineers. We would not eliminate fee and hence wage competition.

Lowedogg and cry22: I do not work in your industry and hence do not know how it works. I freely admit that. However, it appears your argument is that you know better what your client actually needs than they do- enough that you're happy to spend THEIR money to buy it for them. Surely that's why they hired you, after all?!

This begs the question: who wrote their bid spec, and who is reviewing the bids? Who figured out what the client needed, and wanted, and put it into writing? Did they actually DO that, or did they short-cut that effort by piling on a bunch of ill-considered, inappropriate boiler-plate specifications that the client didn't even bother to read? And who is inspecting both the proposals and the construction to ensure that the stated requirements are met?

Is your argument that it is impossible for that job to be done adequately UNTIL the design work is done?

In our "design/build" operation, it's not "the engineer working for the contractor". Rather, it's BOTH working for the CLIENT, making optimal use of their money to meet their needs. Exceeding their needs benefits nobody- it WILL waste their money in ways they won't even notice or care about

The notion that making engineers responsible to use their client's money wisely inherently compromises the integrity of their design is ludicrous. ALL engineering is a dynamic balance between cost and function. Fail to maintain that balance in EITHER direction and you won't be in business for long!

 

[MRM]

SNORGY,

I've seen exactly what you're talking about concerning secretaries, accountants, etc. After a while, I realized that they had (very effectively) somehow trained ME to do things for them that they should have been doing themselves.

Accountants, especially, seem to be very unique and special people (just about everywhere I go)... there were times when they were very condescending in how they responded to my simple requests to, say, prepare an invoice right away for a client, or to prepare a listing of the hours spent on a project, etc. I asked myself more than a few times who was the one bringing in the money and business and who was supposed to be supporting that person-but I held my tongue. It's not surprising that I held my tongue either-this whole discussion is about how engineers tend to not want to control their own destiny by managing their profession!

moltenmetal,
I agree with you that we have a massive over supply of engineers. I don't agree with you, however, that licensure is not the answer. On the contrary, you're helping me prove my point in a way:

Licensure would help those individuals who want to become recognized as Professional Engineers to do just that. Because there is a set list of requirements, we would eventually find that there would not be as many people that the public knows as "engineers." Over time, those who are not Professional Engineers would be known more as engineering assistants, technicians, or other engineer-supporting roles.

Therefore, the supply of engineers has just decreased all because we're doing nothing more than just being more specific about what a professional engineer is and defining what gives them that tremendous responsibility to the public that they have.

If the medical doctors were having a problem similar to the problem the engineering profession is having at the moment, everyone would be indiscriminately calling everyone they come across in a hospital "doctor." They would be calling the nurses, x-ray technicians, and lab people all "doctor." If this were to happen, the supply of doctors (as perceived by the public and by the owners of the hospital) would certainly be increased. If everyone is running around actually thinking they are a doctor, over time, others will too. Pretty soon, the hospital board of directors would not be able to give everyone a doctor's salary. As I mentioned before, though, the medical profession has been careful to not allow this to happen to them.

 

[Krautso]

I think we'll have to agree to disagree on the licensing issue. You're scenario of only licensing a fraction of your engineers because their work can be approved by a licensed engineer is at the heart of the problem. We have lost control over that boundary between what constitutes engineering and what constitutes technical support activities. There is a loose guideline in place but it is not enforced nearly well enough. Our massive oversupply of engineers is due to the fact that one engineer and three techs are bidding against four engineers. In many cases it may only require one engineer with technical support but in many others it involves underqualified staff performing the work of engineers under the direction of an engineer who has economic pressure to drive costs down which can seriously impact the product. Non-licensed engineering graduates work as engineers but have had no evaluation of their experience or training and are not bound by the Professional Engineers Act or Code of Ethics, which lowers the standard of practice and ultimately the image of engineers.

Universal licensing would make it much easier to control this issue, keep engineers employed, raise the profile of Professional Engineers and improve the final product as well.

 

[Krautso]

MRM beat me to it!

 

[swivel63]

"Most unfortunately, the true value of good engineering is only realized through experiencing the consequences of its absence."

co sign