Engineer and Cornell
University Professor Paul G. Carr says civil engineers are
getting stiffed. In the 33 years since the U.S. Justice Dept.
first enforced antitrust laws against engineer and architect
associations, the groups stopped updating fee guidance for
members. As a result, practitioners found that "percentage
of construction," a widely used fee determinant among
many public sector owners and some private, hardly changed
much in that time. From the Florida Dept. of General Services
to the Kentucky Education Dept., many owners still are awarding
fees based on the same percentages used in 1972.
And that, say Carr and co-author
Pamela S. Beyor in a July article in the American Society
of Civil Engineers Journal
of Management in Engineering, has allowed inflation
to eat away at the value of feeswith unhappy consequences
for the profession. But there are possible solutions, as seen
in a fee increase agreement in Washington state that took
effect last month and could be a model for practitioners elsewhere.
Fee curves are graphs depicting
fee percentages that generally show higher value jobs receiving
lower-percentage amounts. Frozen in time since the early 1970s,
the percentages on the curves vertical axis and the
fees based on them no longer pay for enough design and related
services to fund new ways of building and working, says Carr.
here to view graph
Fee erosion since the mid-1960s,
about 20% according to Carrs calculations, matches erosion
in civil engineer and architect salaries. "Go to a construction
site and they are the lowest-paid people there," he says.
"Why should salaries go up 100% of the cost of living
for laborers and electricians and only 80% for engineers and
There have been two key consequences as civil engineers
have struggled with the new realities, Carr says. One has
been lower wages, so that a civil engineers starting
salary, which he believes should be around $60,000 a year,
is about $46,000. The other is to shift away responsibility
for construction-phase services, which now commonly are handled
by a construction manager.
Erosion of fees, combined with
the changing nature and complexity of services have produced
some unrealistic expectations about what engineers and architects
are supposed to do.
Aligning those expectations was
a major goal when architects, engineers and officials in Washington
state first sat down to discuss fees in 1998. The eventual
result? Last month, fees for architecture and engineering
went up about 9%, the first increase since 1993. A joint public-private
fees committee had studied the issue, concluding that architecture
and engineering services had become more complex and time-consuming.
Collaborative building processes,
construction-phase services and complex mechanical, electrical
and communications systems all required more effort, the committee
found. Representatives from the state chapter of the American
Institute of Architects, Consulting Engineers Council of Washington
and the states Office of Financial Management hammered
out updated schedules to reflect industry realities.
The accomplishments included adjusting
the fee schedule using current construction cost indexes,
adjusting the distribution of basic fees to provide more time
for architects and engineers to support the construction phase
and beginning the fee schedule at $500,000 worth of construction
cost. The pact also increased the maximum hourly rates for
added services to $120 per hour for staff and $150 per hour
for principals, with a maximum multiplier of 3.2. In the future,
fee schedules would be updated every two years and scopes
reviewed every four.
Designers are not satisfied with
everything about the pact, but they are pleased in general.
"This increase was way overdue," says Craig Curtis,
partner in architect Miller Hull Partnership LLP, Seattle.
"And what should happen is some-thing that keeps increases
on a cost index so we dont have to go back and negotiate
fees every 15 years."
Officially, ASCE discourages use
of percentage-of-construction fees. The most recently published
manual of practice, How to Work Effectively with Consulting
Engineers, published in 2003, contains historical fee curves.
ASCE issues median fee curves based on survey of members,
but it is careful not to produce a minimum fee curve.
The federal consent decree did not officially speak to fee
curves but only prohibited ASCE from classifying price competition
as unethical. But cautions a knowledgeable association staff
member, "in making recommendations, thats where
we run into problems" with the Justice Dept. and antitrust
law. Tom Smith, ASCE assistant executive director and general
counsel, says Carrs arguments about fees "are an
advertisement for qualifications based election."
Carrs views about engineering
fees are based on both self-interest and heartfelt worry about
the profession. He is a retired founding partner of civil
engineer Bernier-Carr Group of Cos., Watertown, N.Y., and
currently is an assistant adjunct engineering professor at
Cornell University, Ithaca, N.Y. Prior to the governments
antitrust actions in the early 1970s, ASCE had adjusted the
fee curve based on cost indexes...