The economic crisis has hit the building industry hard in the past couple of years. While Wall Street professionals (is that the right word?) have recovered, we are still looking for the light at the end of the tunnel for designers and builders. Since not much is changing these days in the building industry, I think we should take this time to rethink our consulting services. It is pretty common today to hear consultants say they can’t make money with the fees they are getting because the owner demands more, the contractor wants more, and consultants have to do more for less.
MORE IS BETTER?There was a time when consulting engineers would scope out how they were going to use their design and construction administration fee, as well as scope out the HVAC design. I don’t see or hear much of the scoping-of-fee happening anymore. Instead, we seem to jump into the design with little discussion on how we are going to make a profit from the project.
Recently, I sat in on a two-day integrated project delivery forum and an architect mentioned that her firm had designed a project about fifteen years ago and, at the time, they produced approximately 150 drawings that included the structural, mechanical, and electrical documents along with about 200 pages of specification to make up the construction documents. Today, she was designing an identical project (application and size) and she was delivering over 400 drawings and a specification that was twice the size of the project completed fifteen years ago. When she said the project was identical, she meant exactly that. So what has changed?
I believe two things have changed. First, we are in the computer age where more is better than less when it comes to producing documents that you believe will protect you from errors and omissions claims. Computerized drafting standards and master specifications are easy to create and you can always add more to the library as time goes by. Simply click and save.
Construction documents of the past had one detail sheet. Today, we are more apt to have three, if not four or five detail sheets. The same can be said for the master specification that specifies more than what is required.
THE SCENARIO-BASED ESTIMATION TECHNIQUEYears ago (and I still do this today), I would estimate how much I needed for a consulting fee based on two scenarios.
First, I’d estimate how much the HVAC system was going to cost to build based on cost per square feet and multiply it by a fee (e.g., 6%, 8%, or maybe 10%), based on the difficulty of the project. This would give me one consulting fee value.
The second scenario was to itemize how many drawings I really needed to produce the contract documents and I’d estimate it would take about one hundred hours per drawing at an average hour rate (e.g., $95/hr). I’d also carry hours for other activities such as specification writing, meetings, etc., come up with a second fee to compare to the percent of construction fee, and then decide on what was the more realistic fee to propose to the client.
So what does it mean to produce more drawings and specifications these days? Well, whether you want to admit it or not, every drawing requires a certain amount of time to create and to edit. The same can be said for 400 pages of specification vs. 200 pages of specification.
All this extra time cuts into the fee a consultant receives. While thinking more is better, how many consultants have invested their time networking with builders to research what is really needed to build a building these days? Integrated project delivery (IPD) is intended to achieve this design-and-build joint venture but that is a topic for another day. Instead, I’m suggesting design engineers sit down with contractors who are frequently hired to furnish and install the engineer’s design and ask these builders what is needed for the construction documents.
As the designer and not the installer, what makes you think you know everything there is to know to efficiently and cost-effectively furnish and install your design? I suggest that before the designer starts to turn on that CAD software program or master specification electronic document, the design team meet with a couple of likely contractors who could end up building the project and discuss what is really needed in the construction documents. There are a lot of consulting fee cost-savings opportunities if we first communicate with the builder rather than through computer software. Ask a contractor rather than tell him what is required. You may be surprised with the bottom-line results! ES
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