Our clients are typically the ones paying the bill to get things built. Some see consultants as a necessary evil mandated by regulations in order to get the approvals needed for construction. They view engineering fees as a cost that needs to be reduced as low as possible to help control their total costs while shifting ever more risk to the consultant.
The conflict of these views tends to favor the client since they are paying the bills and determine who they will hire. Consultants, like any other business, need work to bring in revenue. Some may reduce their fees in an effort to generate what they hope will at least cover their operating costs. This process leads to the commoditization of the services we provide. The inevitable result is a reduction in the service provided to those clients.
Ironically, the commoditized engineering service provided in this scenario is actually more likely to increase the cost of the project. This effect is not always obvious, but it is there. Without time to innovate or search for the best options, the same materials and designs are used over, and over again which can result in an inefficient design leading to higher construction and/or operating costs. All of this goes back to the misguided attempt to save a fraction of the total cost up front.
Bidding construction work is a good way to have competition to control costs. All contractors are bidding on a uniform set of plans and specifications. This does not translate to engineering work. Engineering consultants are developing the plans, or instruction set, based on many variables. This includes site conditions, owner requirements, regulatory agency requirements, long term performance goals, environmental issues, etcetera. All of these variables must be addressed as part of the design process and included in the plans to provide contractors the information they need to generate their best bid for the project. Cutting costs for the development of these crucial documents is counterproductive. Good quality plan sets with efficient designs will result in more competitive bids, fewer change orders and lower long term operating costs.
Let’s assume an engineering consultant’s fee is 10% of the construction cost. An owner focused on initial cost might want to lower that fee by 10%, or 1% of the construction cost. An inefficient design could easily cost the owner much more than 1% of the construction cost. That additional cost might not even be apparent. Forcing the consultant to spend less time finding the best solutions is not in the best interest of either party.
The answer to resolving this conflict is twofold; (1) Qualifications Based Selection (QBS) should be used to select the most qualified consultant to ensure an efficient, effective design; (2) Consultants must be prepared to substantiate their fees by preparing a thorough scope of work through good communication with their client. Good communication between the client and consultant must continue throughout the duration of the project to minimize changes and keep costs as low as possible. When these things are done correctly, the consultant and the client work together as a team to achieve the client’s goals and everyone is happy with the results.