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Thread: Engineering Services

  1. #1
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    Engineering Services

    We have recently experienced local public entities attempting to reduce professional services (engineering) to a commodity. IE purchasing departments making rules and regulations to "spread the work around" to less qualified firms because "it isn't fair" that the experienced firms provide quality designs and, as a result, continue to earn work. Specifically, we are being told to lower our rates to compete what others are charging for crap designs. The public entities are trying to get us to race to the bottom but provide the same level of service. We are a consulting boutique with institutional knowledge of facilities and owners, not some fly by night engineering outfit. To put it another way. You get different pairs of jeans shopping at Walmart compared with Macy's.

    In some cases its gotten to the point where our services are being line item'ed (wrote an email for 12 minutes, reviewed drawings for 45 minutes, drove to/from meeting for 18 minutes, meeting for 48 minutes, worked on drawing E-007 for 2 hours) and detailed time sheets are being requested for lump sum projects.

    I'm curious if this this something others are seeing in their localities because it seems absolutely absurd to me. Public officials are supposed to be stewards of public monies and infrastructure. Purchasing departments are getting out of control and exerting too much pressure on their consultants. Something has got to give and its going to be the quality of the work.

    /end rant

  2. #2
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    I would increase my cost and provide less line items than before. It's the only way they learn.

  3. #3
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    Quote Originally Posted by Designer69 View Post
    I would increase my cost and provide less line items than before. It's the only way they learn.
    If only it were that easy. You can't always spit in the eye of your customer to prove a point. At some point they will stop asking you to do work for them. That said, there are many muni's we don't work for specifically because they have a reputation for paying peanuts and have a habit of burning your margins with nonsense.

  4. #4
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    It's happening everywhere, and not just with munis. We are seeing in it industrials now too. Purchasing people are getting "certification" and three letter acronyms added to their business cards now, part of which implies that they are adept at saving money for their employer. That often comes with a general disregard for what production, engineering or maintenance wants. I've seen some real disasters as a result.

    I was just part of one proposal for an industrial plant that is using control systems from one mfr, but just added to the plant and gave the $2 million project to a totally different mfr. So now the maintenance and engineering depts have to learn, support and maintain two control systems that are nothing like each other, and the new mfr has only one distributor who is 250 miles from the plant. They saved $100k on the initial purchase, the ownership costs for the next 10 years could run them 10x that much. But that PA likely got a pat on the back for a job well done from the CFO, who is an ex-PA.
    __________________________________________________ ____________________________
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  5. #5
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    Quote Originally Posted by Jraef View Post
    It's happening everywhere, and not just with munis. We are seeing in it industrials now too. Purchasing people are getting "certification" and three letter acronyms added to their business cards now, part of which implies that they are adept at saving money for their employer. That often comes with a general disregard for what production, engineering or maintenance wants. I've seen some real disasters as a result.

    I was just part of one proposal for an industrial plant that is using control systems from one mfr, but just added to the plant and gave the $2 million project to a totally different mfr. So now the maintenance and engineering depts have to learn, support and maintain two control systems that are nothing like each other, and the new mfr has only one distributor who is 250 miles from the plant. They saved $100k on the initial purchase, the ownership costs for the next 10 years could run them 10x that much. But that PA likely got a pat on the back for a job well done from the CFO, who is an ex-PA.
    In my early days as a plant engineer, it was a constant battle with our purchasing agents. It was my job to prevent exactly what you describe. I suspect these days many industrials no longer have a real engineer on staff and the manager who eliminated the position got a nice bonus for reducing costs.

    After a while, one of them finally got it and we developed a good relationship. Of course, it wasn’t long after he moved on to greener pastures.

  6. #6
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    Quote Originally Posted by Jraef View Post
    It's happening everywhere, and not just with munis. We are seeing in it industrials now too. Purchasing people are getting "certification" and three letter acronyms added to their business cards now, part of which implies that they are adept at saving money for their employer. That often comes with a general disregard for what production, engineering or maintenance wants. I've seen some real disasters as a result.

    I was just part of one proposal for an industrial plant that is using control systems from one mfr, but just added to the plant and gave the $2 million project to a totally different mfr. So now the maintenance and engineering depts have to learn, support and maintain two control systems that are nothing like each other, and the new mfr has only one distributor who is 250 miles from the plant. They saved $100k on the initial purchase, the ownership costs for the next 10 years could run them 10x that much. But that PA likely got a pat on the back for a job well done from the CFO, who is an ex-PA.
    Penny wise, pound foolish. Something all purchasing departments should strive for.


    Something similar happened, only with the software package. Maintenance and operations was heavily involved in the selection, had visited demo centers across the state for all the major players in SCADA software. Months of work from many high pay grades to select the SCADA software. After the bid was accepted, the owner's purchasing wanted rights to the source code of the SCADA software and unlimited licensing within the muni. The basis of design software provider refused, as they should. There was only one vendor willing to sign the agreement.

    The whole project, including example SCADA screens and faceplates, was specifically designed for SCADA software A but instead must now be done with SCADA software B. In the end, maintenance and operations are not getting what they wanted in the slightest and the engineering team wasted hundreds of hours on both the front and backend of the design evaluating software packages and arguing with purchasing/lawyers. Not to mention the project was delayed for months while the plant had literally 0 spare parts for the old hardware.

    But hey, on the face of it, the PA and the department looks like a hero to the commissioner, who also has no clue what it is they are buying. It's completely backwards. What a monumental waste of tax payer money it is becoming.

  7. #7
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    Quote Originally Posted by retirede View Post
    In my early days as a plant engineer, it was a constant battle with our purchasing agents. It was my job to prevent exactly what you describe. I suspect these days many industrials no longer have a real engineer on staff and the manager who eliminated the position got a nice bonus for reducing costs.

    After a while, one of them finally got it and we developed a good relationship. Of course, it wasn’t long after he moved on to greener pastures.
    Many of the plants in the area do not have appropriate engineering representation and are held hostage by their purchasing departments. A few years ago one muni lost their primary advocate for capital improvements that knew how to stand up to purchasing and get things done at the same time. Once they were gone, things went amok, replacements were deferred and the plant suffered, maintenance costs accelerated. I'm sure the story is the same in many other places.

  8. #8
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    Not much different than a lot of places. A lot of places have saved a lot of money by cutting out some of the gold plating that used to be so common with engineering firms. One has to make design choices that reflect the amount of money the end user actually has. That is very difficult for some people to do after a long time of buying gold plated stuff where silver plate would do just as well.
    Bob

  9. #9
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    Quote Originally Posted by petersonra View Post
    Not much different than a lot of places. A lot of places have saved a lot of money by cutting out some of the gold plating that used to be so common with engineering firms. One has to make design choices that reflect the amount of money the end user actually has. That is very difficult for some people to do after a long time of buying gold plated stuff where silver plate would do just as well.
    we design within the budget set forth by the customer. they have to go to the commissioners to request funds and explain why the improvement is necessary. asking for more money at the end of a design is a big no-no in this world.

    btw, our grounding designs would probably drive you crazy, that is one item we do not skimp on! but grounding is a very small part of any typical work we do. everything is concrete encased except yard lighting and PA. all exposed is RGS or aluminum. that said, the environments we build in can be quite nasty. all major gear main-tie-main.

    we understand it costs more, but for good reason. the owner has to maintain all of this stuff while keeping the plant running. how can you maintain gear if you can't turn it off and keep the plant running at the same time? class 1 reliability is a requirement.

  10. #10
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    it used to be engineering, legal, accounting were considered professional services for governmental entities and did not ALLOW cost to be considered
    that all changed over the last few years with a few court decisions

    it could always be considered in private work

    https://www.cs.cmu.edu/~bmclaren/ethics/cases/foundational/60-2.html

    it is unethical by engineering ethics
    but the $$$ calls the shots
    if ALL engineers refused to submit when cost is a factor, or filed a complaint against those that did, this might go away
    but greed is powerful

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