Canadian Consulting Engineer

Engineers undercut each other on fees

Consulting engineers have often complained that they are forced to charge fees that are too low because they are co...

August 29, 2003   Canadian Consulting Engineer

Consulting engineers have often complained that they are forced to charge fees that are too low because they are competing against other consulting engineering firms who are undercutting them. They say that chargin low fees mean that sometimes they are not able to offer the kind of quality service they need to clients. Also, needless to say, low fees mean lower company profits.
A survey sponsored by Professional Engineers Ontario now supports those concerns. It has found that fee competition plays a role in how consulting engineers obtain projects at least half the time.
The survey was conducted by Decima Research on behalf of Professional Engineers of Ontario’s Fee schedule committee. Results were reported in Engineering Dimensions magazine.
More than 500 respondents took part in the survey, representing holders of Certificates of Authorization — the necessary licence that engineers and engineering companies have to obtain in order to offer their services to the public. The firms surveyed were those who generate at least 30 per cent of their annual revenues by providing services to external clients.
About 40 per cent of the respondents said that they had provided proposals at fees that were below the guidelines set by PEO. Most said that the fee schedule is rarely considered. About 20 per cent said that as a result of obtaining low fees they had assigned junior staff to tasks that they would have otherwise given to senior engineers.
Most of the respondents they prefer fixed pricing for engineering services, and said they obtain most of their work presently through ongoing relationships with clients who request their services directly.


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