Project Outsourcing 1

[wjsd]

I am not sure what the correct forum is for this question, so here goes.

What is everyone's perception of project outsourcing. For instance, I know of a major engineering company who uses overseas personnel to do the work, quite possibly without supervision of an ABET educated and qualified PE.

Is there any agency watching this type of activity? I personally think it is the next phase of watching American jobs travel "South of the Border" or across the Atlantic.

How am I supposed to compete against some guy in India who will work for $1 per hour? I am equal to him mentally and in experience, but he can underbid me every time....why are we allowing this to happen?

 

[BJC]

I know of one also. The correct way to report it is to notify the State Board of Engineering Examiners.
You cannot ( in any of the states I am registered in ) make such a report anonymously. The reality is that if you make a report you might as well look for a new career, you life in engineering would be over.

 

[GregLocock]

Is there any particular reason why you expect to be paid ten, twenty or one hundred times the Indian engineer's pay, if you can only provide the same standard of work?

Personally I find it quite easy to compete, on a global basis. FWIW on one of the sites I am registered on, the vast majority of contracts go to the mechanical engineers who charge the top 10% in hourly rate. I wonder why that is?

The problem of ensuring that the work is overseen by a PE is solvable several ways, not all of which involve relocation.



Cheers

Greg Locock

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

 

[Theophilus]

I love it! Capitalism at its most opportunist, pure form. (Keep in mind, I'm often "outsourced" to.) Merit-based competition drove the U.S. to its success in the first place. There's no reason why it cannot continue that way.

However, I also understand where you're coming from (if only in spirit). And, in accordance with GregLockock's post, I also frequently land gigs (often on-line) while not being within the realm of the low bids at all. In fact, I believe I'm usually within the upper 10% for hourly rate or overall job bid as well.

Face it, if what you're offering is only discernibly unique by a low bid, you won't be able to float the typical American dream. You'll need to compete on a different level. A book I've just started reading--you may find insightful:

http://www.danpink.com/aboutwnm.php

Are you sure you're seeing so much cross the Atlantic? Over 95% of what I'm designing is crossing the Pacific--and will be for a significant time in the future. (Just curious if you're seeing something I'm not--certainly could be.)



Jeff Mowry

http://www.industrialdesignhaus.com

Reason trumps all. And awe transcends reason.

 

[ctopher]

It's the "I'm smarter than him/her" and "I should be paid more" attitudes is the start of what's driving a lot of work to be outsourced.
If workers can set aside greed, companies wouldn't have to look elsewhere.
A lot of engineering jobs are staying home, it's mostly manufacturing that is getting outsourced.

Chris
SolidWorks 06 5.1/PDMWorks 06
AutoCAD 06
ctopher's home (updated 02-10-07)

 

[dtn6770]

I know of two majors in the EC biz that mill out work overseas, one to Poland the other to India. In both cases the work wasn't the engineering, per se, but the drafting. Those folks can churn out the paper, the majority of which was reviewed by true engineering tallent state-side.

From a project management standpoint, the prospect of getting more for less at an acceptable quality is extremely appealing and often helps "sell" project that otherwise wouln't fly.

And don't think domestic engineering is all about true-blue Americans. The state-side engineering tallent I spoke of was made up of a signigicant number of foreign nationals.

 

[BJC]

Greg
In the instances I was refering to it's not about who or where the engineers are. The laws governing engineering work are state laws and we have 50 sets of those.
Work that requires a PE stamp must be done under the "responsible charge" of the engineer who stamps the drawings. Most state boards do not allow someone to be in "responsible charge" via the internet, email etc.
If drawings are done in India, Australia etc. and arrive on an engineers desk via Fed Ex or are printed out from an emailed electronic file he cannot stamp them.
A drawing review doesn't count as responsible charge.

 

[csd72]

wjsd,

I worked for a company in the UK that tried to outsource their drafting to India.

The senior Engineer told the management that it wouldnt work, but they decided to give it a trial anyway. It was a disastrous failure because the act of design is not a linear process, there is some to and thro between the engineer and the draftsman as well as between the engineer and the client. It is not always easy to put everything on paper.

Good clients will realise that having someone with local knowledge and local experience, who they can actually meet with to resolve issues, is more important then the cheaper design fee.

 

[dtn6770]

Sending work overseas is way more applicable to grass root or green field installations since they can work in a 3D modeled environment. Retrofit projects better be done by people that can freely travel to and from the site.

A practice I've seen employed is to use different engineering firms for outside batter limits (OSBL) and inside battery limites (ISBL). The ISBL guys didn't touch anything existing and the OSBL guys got dirty with all the retrofits and tie-ins to existing facilities. Sure there had to be interface points between OSBL and ISBL and they were addressed in a very controlled manner.

Relitive to the thread, the ISBL firm is the one that had the drafting done across the pond.

 

[wjsd]

<quote>Is there any particular reason why you expect to be paid ten, twenty or one hundred times the Indian engineer's pay, if you can only provide the same standard of work?</quote>

This doesn't make sense to me. I think of an invisible line that surrounds the United States. People working on the inside of that line must pay certain amounts to live, eat, and function in America - the Cost of Living. For this money we get a quality of life.

Across that invisible line is a whole other ball game, and subsequently a lower quality of life (in general).

Are we supposed to work for $1 an hour too?

For example, any goods that pass that invisible line have tariffs and fees which make global product exchange equitable. So, now this digital and less trackable product called Engineering Services is being exchanged without any balancing.

Thus, it is not capitalism. It is unfair trade practice, and another step towards lowering our quality of life. Just as a job in construction became no longer very appealing to Americans with the arrival of cheap mexican labor. Carpenters just could not have any kind of quality of life anymore at what a mexican was willing to work for.

Just today ASCE sent me a newsletter saying they were going to start giving radio announcements to encourage young people to go in to math and science related careers. Why would anyone want to invest in a career in Engineering when they have to compete globally in an unregulated market thus continually lowering their potential earnings.

 

[EddyC]

BJC,

I recently reported a firm that was doing its work overseas and having a stateside PE as "overseer". The particular state in question told me that what this firm was doing was OK.

 

[Theophilus]

Capitalism is never "balanced", nor is it "equitable"--it's free. It is, in its pure form, free trade at what the market will bear. I am a trader. I trade my intellect, insight, experience, and resulting services for a fee. If I find nobody willing to make that trade, then I am the only one able to make the appropriate changes to my formula (price or offered services) such that I can compete.

If you'd like to work for the slashed wages that others are willing to offer, you'll find that a dollar where they're willing to work will go much further than here in the states. These folks aren't exactly living in poverty (at least you'll need to re-convert to the appropriate culture what each earned dollar will give). You may find they're much better off than you as standards of livings go.

I believe it's morally wrong for our government to attempt to "even the playing field" in international trade. If we can no longer prop up our existing standard of living by attempting to trade the same old thing, then we need to trade something more novel and valuable.

Get out of jobs that are merely formulaic and can be done (just as effectively) by people in countries with higher bang/buck ratios for their respective standards of living. If a computer can do your job more efficiently, change your output to add value. If the market is swamped with your commodity product, you'd better have a creative alternative with more value.

That's what I do, and I'm just an industrial designer. My clients seem to think it worth their while to pay me to add value to their products--to set their stuff apart from the teeming masses of commodity-saturated markets. If we can transcend the mere commodity, we're vaulting into the realm of art--which gives us a distinctive advantage in the free market and requires no third-party intervention to tilt the scales in our favor.



Jeff Mowry

http://www.industrialdesignhaus.com

Reason trumps all. And awe transcends reason.

 

[johnsmith2]

While we hate to complete with cheap labour oversea, we enjoy the lower price of products, such as in Walmart, made in those countries!

 

[Lion06]

johnsmith2-
I think there is a major difference in what you are talking about as cheap labor and what everyone else is talking about.
If I get a poorly made blender from Walmart, it isn't THAT big of a deal. If, however, I am going to be entering public/private buildings here in the U.S., I expect someone who is recognized by my jurisdiction as being capable of performing such functions, and has a legal (and legally enforceable) responsibility to see that it performs as expected.
After all, A failing girder or column or lateral resisting system is much more of a problem than a broken toaster, right?!

 

[michfan]

I don't really care for the "cheap labor" designing my buildings OR building my toasters.

I've had 2 microwaves, both from WalMart, catch fire now at my store over the past year and they could have easily burned the place down. They were a major brand name. I'm pretty sure they weren't Made in USA, but I'm going to double check when I get there tonight. I still have the boxes.

That cheap labor is taking away from our workers any way you look at it. If my store goes up in flames, that's 3 other people besides me out of work, not to mention the $100+ I've wasted on poor quality appliances.

 

[kbits]

You might also know that there are also "minor" companies that develop relationships with overseas firms to draft and design for engineers in the USA and elsewhere. A local company here (100 +/- employees), one I used to work for, ships land development and flood control plans overseas for drafting and designing by Filipino engineers.

The Filipino engineers are gradually learning the local standards of construction. All of their work is supervised by an expatriate Filipino engineer registered in the USA, who moved back to the Philippines to manage the workshop. When it is shipped back to the USA via the Internets, another registered engineer of the USA and her staff checks the plans again. Oftentimes, one set of improvement plans travels back and forth across the Pacific three or four times before its submitted to the local agency for a review. Some Filipino engineers even traveled across the Pacific to visit the local company to see how things were done in-house. By the way, the first time that happened, I was laid off. But, perhaps, that is irrelevant.

This is being done, of course, to cut costs and compete in a hot development market. As you would understand, there are plenty of land developers who could care less where or how the sausage is made, so long as it's cheap and tastes sweet off the grill, so to speak. But public agencies, organizations representing the local people here in the USA and elsewhere, are often offended by such an operation, so the local company tends to front its local staff and avoid revealing the nature of its business unless asked directly.

There are local agencies who are aware of this company's activities, and whenever plans come in from this company for review, the plans are given much, much greater scrutiny and endure five, six and often seven or more rounds of plan review--which is a ridiculous number of quality checks. Of course, local agencies have a lot of power in its approval of improvement plans for parcel and tract maps. Whether it's done to combat the undercut wages or because the quality is worse is anybody's guess, since local, registered engineers set quality controls for, review and sign off on the plans.

 

[civilperson]

Why do you think no PE is in direct charge of the the overseas work? List of addresses for registered engineers in my state includes Mombai, India and Manila, Phillipines.

 

[GregLocock]

BJC - I have this vision of a long row of drafting tables, at which the poor old junior engineers and the drafties sit, scratching away at their drawings. In the background they can hear the thrum of the overhead fans, but become aware of the footsteps of the PE returning after a long lunch with a client. They cower. The PE throws the door open and starts pacing up and down between the lines of desks, stopping occasionally to cast his laser-like vision over the chicken-scratchings....

Does it really happen like that any more, or is it just possible that some people can supervise some other people without breathing the same air? I'd have to say yes, as it is standard business practice in my industry.

wjsd - I compete on quality not price. If your work is only as good as that, that I can get for $1, then that's what you deserve to be paid, in a free market. I don't force you to live in an expensive neighbourhood/country. I don't force you to only generate average work. But I'm damned if I'm going to pay over the odds for average work.



Cheers

Greg Locock

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

 

[atlas06]

Only the unprotected trades such we poor engineers suffer from these kind of heartburns, you will not see the US lawyers and doctors worrying too much about outsourcing. One reason, they have a lobby that fights and truely lobbies congress for its members, unlike the whatever "governing bodies" such as ASHRAE and the likes that we engineers have.

We've got to put our money where our mouth is, and i.e pass local or national laws that prohobit these practices.

look at US farmers, thanks to their powerful lobby, US farmers get US subsidies to compete with overseas farmers and don't back down in front of WTO complaints.
Look at the US pharmaceutical industry, they dictate their prices in the US at will and no foreign drug gets in through the FDA without them taking their cut.

That's what you call lobbies, until then, we will have to suck it in.

 

[csd72]

Michfan,

It is that same 'cheap labor' that makes the most expensive microwaves as well, probably in the same factory, it is the quality control that counts.