Structural Engineering Fees - is it broken? 20

[Enhineyero]

Hi guys and gals, do you think that the current level of our fees is where it should be? In my experience, structural + civil fee is usually no more than 2% of the total construction cost.

I've seen numerous debates about how real estate agents get 5% commission for what seems to be less responsibility and work, this is for each time the property is sold (imagine selling the property 10x over and benefiting from the capital gains!). Do we (engineers) just have it bad? or do they (Real estate agents) just have it soooo good?

If we have it bad, does anyone have a solution? Most engineers talk about this issue but no one really does something or tables a solution for it. I even saw a video of Ashraf (founder of ETABS) discussing this issue but, again, no solution presented.

 

[Tomfh]

For those mentioning fees of 2%+, 2% of what exactly? In Australia it's more like 0.3% - 0.6% of the total cost.

 

[TLHS]

In industrial stuff, I've generally found that the overall engineering is around 10% depending on the number of front end or screening phases. Some of the big industrial clients will be more than that if they burn through a half dozen front end stages. Also, you sometimes get complicated stuff that cracks 10% but that tends to be smaller or sometimes medium sized specialty projects.

Structural, depending on the project can be anywhere from 5-30% of that scope on a multidiscipline, with it hitting closer to 10-20% most of the time.

What work counts as structural is pretty fuzzy though. If you pulled out stuff like metal buildings as architecture or had mechanical guys doing pipe supports, equipment seismics and dynamics things would shift.

So one or two percent (10-20% of 10%) for structural seems in the ballpark depending on how you want to split things

 

[Enhineyero]

2% fee is what i see for small projects (not more than 500k) and this included contract admin. I think we are all just shooting ourselves on the foot for anchoring on a % of construction cost rather than charging based on estimated hours (I try to do this but cap it to what is considered acceptable using % of construction cost, then place limits on meetings/inspections etc). But then again as Dik said, someone else would always come in cheaper and faster.

1) Developers = contractors = lawyers = insurers = good clients.

2) Architects = bad clients.

3) Being contractor/developer friendly often = being decent to deal with and as technically permissive or more permissive than your competitors.

You know, broad strokes.

This makes sense developers make money by selling a development (professional fees are minuscule compared to other cost in the real estate game, heck gov't charges are higher than professional fees), while architect's earnings are very much affected by how much their sub-consultants charge.

 

[Enhineyero]

For those mentioning fees of 2%+, 2% of what exactly? In Australia it's more like 0.3% - 0.6% of the total cost.

Is contract admin included in the 0.3% - 0.6%? How big of a project are we talking about $1B?

 

[dik]

Every penny they pay, comes directly out of their profits...

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[Aesur]

Is contract admin included in the 0.3% - 0.6%? How big of a project are we talking about $1B?

Typically the 0.6% would be for projects from say $500,000 to around $5 million in cost in my area and then drop to 0.3% up to around $90 million at which point it drops again to a lower %.

 

[phamENG]

I found this document a while back and found it helpful, though I had to calibrate it some to my market baseline. Note that it is for the ENTIRE design team, not just the structural engineer.