Letter: technical challenges vs. profitability

Following is a letter received in response to Andrew Steeves’ Chair’s Report, “Half the price gives you half the job,” ACEC Review, October-November 2001.

No one doubts Mr. Andrew Steeves’ concern, which is the enhancement of the engineering consulting firms’ profitability. The problem is real and the issue is being brought up most opportunely. However, it may not be quite suitable to pit technical challenges against profitability and to lock this vision into the half-price, half-job expression or formula, whereby no solutions are proposed although discussion is stimulated.

First, let us agree that all projects convey technical problems and challenges, which are the consulting engineering firms’ raison d’tre. The technical and scientific issues involved cannot be precisely defined in the call for tender process whereby the selected firm is, as a matter of course, also assigned to carry out the solution-seeking research and/or studies. The margin of error in the evaluation of the professional fees may therefore be important, particularly where complex or creative solutions must be designed. In a competitive environment, professional fees may easily be underestimated.

In addition to these rather unfavourable initial conditions, the engineer has an obligation to fulfil his/her assignment adequately in order to comply with the requirements of the Engineers’ Code of Ethics. The engineer is therefore “not a contractor like the other ones” (Plan, January/February 2002) who enters into a contract on the premise of “half the price for half the job.” The engineer’s fees often do not reflect the value of the services he/she has an obligation to provide.

Even the Corporation of General Contractors of Qubec (CEGQ) has denounced the granting of lump sum projects to consultants and says it and a too-short preparation time are the major causes for litigation and legal action (Qubec Construction, March 2002). It is then difficult to understand why consulting engineers would so easily endorse the requirements of clients who foster this cut-rate approach.

The less disruptive way — if not the only one — to avoid performing engineering services at half the price involves insurers who could actually take this context into consideration and, except in obvious cases, decline insuring lump sum projects. Fees should be paid at an hourly rate or as a percentage of the work cost according to minimum rates and to other provisions established by the Association of Consulting Engineers of Canada in agreement with industry representatives and relevant government agencies. Engineering firms may then provide adequate and self-contained technical services while preserving nominal profitability.

Lucien Viel, P.Eng., Groupe Conseil Gnivar, Qubec, Que.