How Much Should be Your Engineering Fee?

Recently, I lost several contracts due to someone else with a much lower price. This has been extremely frustrating, considering my fees now are about half what they were two years ago, and I'm also having a difficult time finding these jobs. Certainly, I can lower my fees, but is it worth it?

A friend of mine recently placed a $1000 bid for a soil boring test. The client wanted a lower price. So they settled on $500, basically a break-even price. The client then wanted a proof of insurance certificate, which ended up costing my friend $250 to obtain the certificate from his insurance company. Needless to say he lost money on this job.

Times are tough and the number of available jobs are few. To top it off engineering fees are also dropping. Unless you are working out of your home office, you almost can not compete. With few jobs and lower fees it is difficult to maintain insurance, professional license, business licenses, and paying office expenses and sub-consultants.

As a hold engineers must hold the line on our fees. We must realize that we are a professional service business, not contractors. In that respect we are no different than lawyers and doctors. The client gets what he pays for. Not to say that our abilities diminish with lower fees, but our ability to deliver is restricted. Our fees should be insignificant to what the engineer can provide to the client. A good engineer can reveal several cost saving designs that can more than pay for the engineer's fees. I have personally redesigned plans that have saved the client hundreds of thousands of dollars, and my fees were quite a bit less.

No two engineers will provide the same set of design plans for the same project. Should an engineer with decades of experience in the industry be held to the same level as a young engineer straight of college. I would think that the experienced engineer is worth far more and his fees should reflect that experience.

What are your thoughts? Please leave comments.