Superior Engineering Solutions

"It is unwise to pay too much, but it is worse to pay too little. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing you bought it to do." John Ruskin (1819-1900)

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Windgineering provides Superior Engineering Solutions for small, medium and large businesses.

Windgineering is a professional engineering firm and is in private practice and registered in accordance with the Department of Licensing with no involvement in activities which might influence objective judgment on behalf of a client. Windgineering subjects itself and all consultant staff to a strict code of ethics and expects personal responsibility for one's professional acts and those of one's staff. Windgineering is a firm that only does work that is not only sound technically, but also takes into account the total socio-economic factors of projects for the benefit of the public.

Professional services provided by Windgineering include:

• Advisory services
• Feasibility studies
• Field surveys
• Engineering design services
• Construction related engineering services
• Commissioning
• Supervision of training, maintenance and initial operation
• Record "as-built" drawings/manuals
• Total project management
• Forensic/investigation services

Fees for Windgineering Services

The word "fee" is generally assumed to be the money paid for services rendered. As Windgineering is a private business in professional practice, the fee charged to clients must cover pertinent engineering business costs. These include the salaries of employees and their pensions, group insurance, medical, and other fringe benefits. In addition, Windgineering has operating expenses, such as office rent, furniture, telephone service, professional liability insurance, bank interest on borrowed funds to finance client billings until they are paid, municipal and professional licenses, accounting and legal fees, postage, software, insurance, repairs and maintenance.

The fee charged to a client is based on these costs as a function of the available working time in the year. This enables Windgineering to determine the fee per hour or per day (per diem) for each employee. Similarly, other time/dollar units are determined for groups or teams of engineering personnel for a particular project to be completed over a specific period of time.

Depending on the type of project, nature of the work, and the client/engineer working agreement for the conduct of the assignment, the following fee arrangements are commonly used:

• Per diem, plus out-of-pocket expenses
  (applies to all types of projects except project and construction management)
• Payroll cost multiplied by a factor, plus out-of-pocket expenses
  (applies to all types of projects except project and construction management)
• Payroll cost multiplied by a factor, plus out-of-pocket expenses
  (applies to all types of projects except project and construction management)
• Payroll cost multiplied by an overhead factor, plus fee, plus out-of-pocket expenses
  (applies to all projects except surveys, exploration, and reports; advisory services; short assessment studies and preparation of terms of reference)
• Fixed fee
  (applies to surveys, exploration and reports; short assessment studies and preparation of terms of reference)
• Fixed fee plus out-of-pocket expenses
  (applies to surveys, exploration and reports; short assessment studies and preparation of terms of reference)
• Percentage of cost of construction project, plus out-of-pocket expenses
  (applies to preliminary and detailed engineering studies and preparation of plans and specifications; supervision of actual construction of work; project and construction management)
• A combination of these methods.

The client may also consider an hourly rate which includes payroll and overhead costs only and fix the profit margin by a lump sum or percentage of construction cost. This method creates an incentive for Windgineering to expedite work and it also permits an innovative working arrangement with the client's technical staff.

In general, per diem and lump sum fees are for short-term assignments. Other types of fee arrangements are for intermediate to long-term projects.

“Engineering design” typically represents 1 to 2 percent of the overall lifecycle cost of a project, construction accounting for approximately 6 to 18 percent of the cost. All the rest - 80 to 93 percent of the lifetime asset cost - is accounted for by operations, annual and capital maintenance and decommissioning.

Background of Fee Guideline

This fee guideline was developed to help provide clients with a remuneration reference for the provision of engineering services.  The guideline offers commentary and discusses various fee arrangements; as well as offers a recommended schedule of minimum hourly rates for the various levels of professional and technical staff commonly employed by Windgineering. 

The rates presented herein are intended as a guideline for engineering services in the calendar year 2012 and are subject to annual revisions.

Selecting an engineering firm should be regarded not as a cost but rather as an investment. Quality engineering can contribute greatly to the control of project construction cost and schedule as well as result in lower long term project life cycle costs.  

Many clients have developed long-term relationships with Windgineering and as such select Windgineering based on a “sole source” basis.  This “sole source” process is based on qualifications rather than price.  

If a client elects to go the competitive route for consultant selection, then a Qualifications Based Selection process is recommended. Qualification Based Selection incorporates principles that helps ensure a competitive process that will achieve the goal of adding the greatest value for the client.  This selection process diverges from price-based selection practices in that it allows Windgineering to demonstrate how they can add maximum value to a client’s project rather than focusing on how to minimize their fees to ‘win’ an assignment.  

Regardless of selection process utilized, it's recommended that a formal client/consultant agreement be established describing the terms and conditions of the engagement prior to beginning the work.

Fee Arrangements

The word "fee" is generally assumed to be the money paid for services rendered.  Depending on the type of project, nature of the work, and the terms and the conditions of the client/consultant agreement, the following fee arrangements are commonly used:

• Fixed fee – a lump sum arrangement is recommended in situations when the scope of services and schedule can be clearly defined and understood. Fees of this type can be developed from the bottom up or derived as a percentage of construction cost. For example, the percentages utilized for building projects are listed in some Client standard agreements as well as in the Architects Association General Bylaws. In addition, when the Prime Consultant assigns sub-consultants to complete portions of the design, the fees for those services can range between 80% and 100% of the Prime Consultant’s fee for that portion of the design. The percentage fee may also apply only to the labor component of a fee with expenses considered extra. The consulting engineer assumes a risk to perform the work within the fixed fee offered. The consulting engineer’s return for assuming this risk is built into the fixed fee and therefore a breakdown is not usually provided.
• Hourly – a time and material arrangement is recommended in situations when the scope of services and/or schedule cannot be clearly defined.  Rather than commit to an upset limit which imposes a fixed return for unknown risks, it is recommended that Windgineering monitor fees and provide the Client with regular status and forecast updates.
• Per diem – or per day fees is a variation on the hourly rate type fee arrangement whereby a cap on hours per day is effectively implied.
• External costs include out-of-pocket expenses for mileage, meals, lodging, etc. as well as sub-consultants where applicable and these costs may be subject to a mark-up for handling costs. 
• A Combination of These Arrangements – may be employed for projects where a large part of the scope can be defined, i.e. fixed fee, but where additional services may be required, i.e. hourly or per diem.

Development of Hourly Rates

Since Windgineering is a business with a professional practice, the fee charged to clients must cover pertinent engineering business costs and margin as illustrated in the Typical Distribution of Consulting Fees:

Windgineering has a unique mix of professional, technical, and administrative support staff with differing levels of experience, expertise, and responsibility. These individuals are grouped into various staff classifications accordingly.  To enable the recovery of the costs associated with overhead and staff benefits, as well as to generate a profit, windgineering typically develop hourly rates predicated on a multiplier of salary costs. The Office of the Information and Privacy Commissioner has advised that the practice of disclosing salary multipliers to clients is not reasonable if a less privacy intrusive practice can be used.  Divulging salary information related to specific staff may contravene the Privacy Act and the security of such information may be at risk. 

The recommended minimum hourly rates presented in this Fee Guideline are predicated on staff working at a reasonable chargeability rate in a consulting engineering office.  However, for unique assignments, Windgineering can revisit the rates examining the circumstances under which an employee is working.  For example, a second employee’s benefits may be no different than those for an office based employee, however, the remaining elements may be different and may hold the potential to lower the hourly rate over the extent of the project.  Similarly, if the work is highly specialized and/or high risk in nature and Windgineering has niche resources to do the work, then this may hold the potential to increase the hourly rates charged.

Staff classifications describing various levels of responsibility, experience and training are presented.  Recommended minimum hourly rates for those categories are presented below.  With some interpolation, most engineering and technical positions can be categorized to align within these classifications.

Lastly, note that since hourly rates are derived from the Typical Distribution of Consulting Fees, the rates listed in this Fee Guideline are subject to revision annually.  Similarly, for multiple year assignments, it is recommended that a rate escalation clause be included in the terms and conditions of the client/consultant agreement.

 

Staff Classifications

Profesional Services E1 Member-in-Training University graduate from an accredited engineering program. E2 Junior Project Engineer The individual has obtained professional status. Assignments are of limited scope and complexity. Work supervised in detail. May give guidance to technicians, technologists, contractor, and/or other employees, etc. E3 Intermediate Projects Engineer A fully qualified professional, independently responsible for varied assignments. Work not generally supervised in detail, however, difficult or complex issues are typically referred to a more senior authority. May give guidance to one or two other professionals, but supervision is not usually a continuing responsibility. This position may see the individual act as a Project Manager. E4 Senior Engineer/Discipline Lead First level of direct and sustained supervision over professionals or full specialization. Recommendations may be reviewed for soundness of judgement but usually accepted as technically accurate and feasible. This position may see the individual act as a Project Manager and may include marketing and business development responsibilities. E5 Senior Specialist Engineer As a specialist, may engage in research or advanced technical studies. May have authority over large groups containing professional and technical staff. Recommendations generally accepted except perhaps those involving large sums of money or long-range objectives. This position may see the individual act as a Project Manager and may include marketing and business development responsibilities. E6 Senior Consultant Has received recognition as an authority in a professional field. As a specialist, may engage in research or advanced technical studies. May have authority over large groups containing professional and technical staff. Work is reviewed to ensure conformity with policy and in coordination with other groups and functions. This position may see the individual act as a Project Manager and may include marketing and business development responsibilities. E7 Division/Branch/Engineering Manager A senior administrator responsible for the direction of groups containing professional and technical staff. The individual has achieved recognition as an authority in a professional field or is considered to be of major importance to the firm. Independently conceives of programs to pursue and actively manages resources to that end. Provides recommendations to corporate management on all matters and receives direction from corporate managers related to organizational policies and procedures. This position may see the individual act as a Project Manager and marketing and business development responsibilities are primary. E8 Corporate Manager/Expert Generally has authority over all classifications listed above as a senior administrator responsible for organizational policy and procedure development and execution. This position may also cover individuals who provide a high level of specialized expertise or unique consulting advice.

Technical Services T1 Technician (Entry Level) Under close supervision, carries out straight-forward duties such as preparing uncompleted or repetitive drawing, maintaining drawing files and assisting with field surveys. Little independent judgment required. Performs according to standardized procedures T2 Technician/Technologist (Junior) Under close supervision, supports engineering personnel in field, design or CAD drafting activities. Performs clearly defined, straightforward tasks. Acts according to standardized procedures. Carries out straightforward computational work using standard accepted formulae and manuals. T3 Technician/Technologist (Intermediate) Under direct supervision, supports engineering personnel in field, design, drawing production or construction specifications and quality control. Performs a variety of defined assignments with some independent judgment required. May provide technical advice to less experienced technicians/technologists in same area of specialty. T4 Technician/Technologist (Senior) Under minimal supervision, completes design tasks or complex CAD assignments or performs field quality control functions. Analyzes, provides recommendations and makes decisions with related to technical problems. May provide technical advice or supervise the daily activity of less experienced technical staff concerning processes and procedures. Verifies accuracy and adequacy of their work. This position may see the individual act as a Project Manager. T5 Technician/Technologist (Supervisory) Has achieved recognition as a specialist in a technical field. Supervises directly or indirectly the work of less experienced technical staff while and undertakes independent project related functions on a continual basis. Prepares production and progress reports as required. Reviews and verifies accuracy of work performed by others. This position may see the individual act as a Project Manager and may include marketing and business development responsibilities. T6 Technician/Technologist (Manager Level) This is a responsible project managerial and administrative position. Work involves the supervision and review of complex technical assignments as well as the personnel executing the work. Work is assigned within broad guidelines and is not normally subject to rigorous professional review. This position may see the individual act as a Project Manager and marketing and business development responsibilities are primary. T7 Technician/Technologist (Discipline Lead) Independently represents the company with clients on an ongoing basis. Manages and supervises staff on a continual basis. Manages major projects. Typical role is that of Group Manager or Discipline Lead. This position may see the individual act as a Project Manager and marketing and business development responsibilities are primary.

 

Charges for Disbursements

Internal disbursements are recommended to be captured for invoicing in a single charge as a fixed percentage of professional labor. This will vary, but typically ranges between 5-10%. Internal disbursements may include: local communication costs (office and cell phone, fax, PDA’s, etc.); long distance phone expenses; routine production of drawings and documents; local travel expenses ; courier and messenger services; standard software and computer costs; and general office supplies

External disbursements are recommended to be charged at cost plus 5-10%. This may include: non-rountine document reproduction.

It is recommended that the client and the engineering consultant review the projected expenses prior to the start of the project and agree on the applicable disbursements category and reimbursement method.