Billing for structural work 1

[AlpineEngineer]

A couple months ago I asked you guys what kind of hourly rates you were billing for structural work, most of you said you were working with fixed fee contracts due to the fact that you build up a database of spreadsheets, details, ect. that speed up the process a bit.

I am curious what kind of fixed fees (ballpark) you would charge for structural work. I am dealing with stick built homes, high end ($800k-1mill), 4000-6000sf, fairly complex, a lot of stick built roof system in the home. I am designing and stamping structural plans and details for all gravity systems, uplift, shear walls, diapghrams, AND I'm designing and drawing the foundation. We live in a very high wind area (135mph) which complicates the structure with the huge window walls these guys design, due to the high wind I am kicked out of IBC/IRC prescriptive designs. I do get some help from the WFCM for high wind but still most of the home is so complex its just got to be totally engineered.

I am just trying to get some feedback on what you guys what charge for such homes.
Thanks,

 

[whyun]

Depending on the complexity, fee range should be around 1.5% to 2.0% of the valuation for the type of structures you describe. I'm in a low wind, high seismic area.

 

[msquared48]

A dollar to a dollar and a quarter per square foot is not unheard of here.

Mike McCann
McCann Engineering

 

[Lion06]

I like whyun's estimate of 1.5% - 2% of the home cost a lot better. That is 16k - 20k compared to (at most) 8k for $1.25/square foot with 6000 square feet.
That being said, those two fees seem pretty drastically different to me. Would this include any CA or does CA not exist for residential structures?

 

[msquared48]

Structural EIT:

If I bid a 4000 to 6000 SF house in my area at the 1.5 to 2% figure, I would never get the bid, even for high end homes, especially if you consider the effects of outsourcing which is another topic for another day. Believe me, I have tried it - they do not call back. I think the max fee I have charged for full structural calcs and structural plans for a residence is 10K. More power to you though if you can get that in your area.

Mike McCann
McCann Engineering

 

[csd72]

It is usually only about 1% where I am on the east coast.

 

[whyun]

No matter how low your bid is, there WILL be someone who is willing to do the job for less. End products from these low bidders are likely to have many blind conservatism that ends up costing the owner/developer a lot more in material costs. Design may also have errors and omissions that end up costing a lot more than a little more design fee up front.

The key is to set the price that reflects the quality of work you can produce and to find the niche that fits your product.

General rule of thumb of design fee as percentage of construction cost: smaller the job, higher the percentage.

 

[Lion06]

msquared-
I didn't mean that to come across like I was thinking of doing this on my own. I was just noting the difference in estimates. I work for a consulting firm (mostly institutional work in steel, concrete, and occasionally masonry and wood).
Just for my own curiosity's sake I have to ask you a few questions. I can tell you are a knowledgable engineer, so I like to pick the brain of people like yourself.
How much time would you expect to spend designing a home for which you are "only" being paid...... let's just say 7k (seems like a more realistic number that you would get)?
If you have your own business and figure in overhead, that might only be two weeks worth of fees (possibly less).
Is there any CA involved on a project like this?

 

[msquared48]

StructuralEIT:

If I worked on that project at a 7K fee, I would expect 4 to 5 days of my time, but it would probably take 2 to 3 weeks to complete considering other project commitments, marketing, etc. I work alone and in a home office and have done so since 1986.

Pardon me though, but I am unfamiliar with your abbreviation of "CA"... To what are you referring? I could guess, but I would probably look stupid and date myself even more.

Mike McCann
McCann Engineering

 

[whyun]

construction administration

 

[msquared48]

If that is what you are talking about, teh I would have to say ... only if it is contracted for. In most of the residence design I have done, the project is too far for it to be practical for me to inspect on a regular basis. Most have local inspectors, either contracted or from the local building jurisdiction. This even applies to shop drawings, only if contracted for.

Mike McCann
McCann Engineering

 

[Lion06]

Yes, I was referencing construction administration.
Ok, so your 7k fee is for design only and you would spend 4 or 5 days, that's not bad at all.
Do you ever get asked to provide calcs to a building inspector? Do you spend a lot of time redoing calcs because the builder wants to use something different than what you spec?

 

[whyun]

I've not been in the residential market since the mid-90's but in any case it is prudent to list specific items as extra services in the contract. Some of these items may include all design changes after obtaining a permit(owner or contractor requested), construction admin services above and beyond what is specified in the contract, etc. Make sure to include an hourly rate for the extra services in the contract. They usually think twice before calling you to do additional work.

 

[msquared48]

Structural EIT:

Not to a building Inspector, but maybe a letter. Definetly calcs to the local plans checker.

Redoing calcs - yes, but, after the original calcs are finished, I consider that as extra services under the contract and bill for such. They pay when they pick up the calcs - no credit.

If the changes are requested before the original calc set is finished, I may or may not consider that as extra services, depending on the time involved and what design directio was given at the start of the project. I usually try to ask clients, to include contractors when available, what they like to use to avoid such problems. But, in a lot of cases, the contractor is not available ... yet. So there you go ... Extras, and the boat picture.

Mike McCann
McCann Engineering

 

[Lion06]

Is the bulk of your work residential or do you get into other areas as well?

 

[msquared48]

Until the mortgage problems of late, I would say that 40 to 50% was residential. I have seen it drop to under 10% now.

I am doing a mostly multi-family and commercial right now. A lot of wood or steel over PT. Keeps me real busy - I have tea med up with another local Civil Engineer who does development and surveying and has a lot of larger projects and contacts. Working well and helps with the survival rate here, if you know what I mean.

About 10% of my work has always been storm water detention.

Used to do structural Inspection reports for insurance companies, but that has died off.

Doing more condo conversions and Mobile Home finance/refi inspections. Both have increased as of late.

Mike McCann
McCann Engineering

 

[AlpineEngineer]

Thanks for all the feedback guys. It has been quite helpfull.