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Debate on Fee Discounting



Disclaimer: The views on this debate are not those of CESA Board, Council or Management. CESA encourages the spirit
of constructive engagement in a quest to find lasting solution for our beloved built environment.



I am perplexed by some of the statements emanating from members regarding fee discounting. I personally prefer
to refer to them as fee reductions because they go hand in hand with reduced services. In my discipline fortunately
it is not as chronic as with civil engineers. I would like to point out a few issues which I trust the younger members
should objectively consider (they are not figments of my imagination they are real and anyone who says otherwise
is doing nothing more than fibbing to himself) I have gone past my sunset years but they have a future to look
forward to.

Most civil engineering tenders attract fee reductions not uncommon of up to 80% of what we would term recommended
tariffs. If firms can support this sort of fee reduction only a few reasons apply:
Before the practice of reducing fees became standard practice (these comments apply to all disciplines the only
reason for using the civil engineering discipline as an example is that it comes more readily to mind)
Clients were being grossly overcharged (the difference between a 20% fee and a 100% fee is not trivial)
Clients were being provided with services that they did not need (paying for something that was not asked for
hence the reduced service provided now) alternately since fee reductions have become the norm:
Clients are being provided with a substandard service and although they expect an engineer to perform the work
in practice it is rarely even a technician who comes close to a project
There is no innovation and the same standard work is being rehashed over and over sometimes with the same
mistakes repeated ad nauseam
There is only one incentive and that is to increase the project cost, project savings if reflected in the fees will make
an already precarious situation untenable (so called value engineering is devoid of any value)
Many firms employ the most expensive REs they can find as the mark-up on the RE’s costs basically defines
whether a project breaks even or not
REs perform many (sometimes most) of the engineer’s tasks (site measurement, detailing, minutes, etc.) and
Clients are effectively paying for the engineer’s work twice or paying for a service they are not receiving from the
engineer but from someone who is employed by them (the RE is for all intents and purposes an employee of the
Client)
The number of disputes due to the failure on the part of engineers to administer contracts properly is increasing
notwithstanding that most of them never see the public domain as they are resolved by mediation, adjudication
or arbitration with
Clients unable to determine if a dispute arose as a result of the engineers’ blameworthiness/fault or not (a
large proportion of Clients are inadequately qualified to understand some of the nuances of contract law and
consultants get away scot free when they should be paying for the costs of remediation)

The list goes on, which for those who are looking forward to a future in the business of consulting engineering
should be a serious concern. I am sad to say that increasingly there seems to be little future in this profession
notwithstanding that I am extremely disappointed to see the direction in which it is heading after having proudly
dedicated the best part of 30 years to it. Consulting engineers should be the engineering Rolls Royce not just
people plodding along doing a job of work commensurate with the fee they are being paid. At this juncture I see our
business (that of Consulting Engineering) pretty much as an old building in decay. The odd cornice is falling off, paint
and plaster is peeling off and the walls are starting to crack and give, but the building still stands giving us a false
sense of security until one day it will all be too much and it will eventually crumble under its own weight. Desperate
times need desperate measures, please put the engineer back into engineering before it is too late to remedy the
status quo.

Michele Rivarola PrEng PrCPM BSc (Eng) EngPEUR FAArbSA
MAFSA MSAIMechE MSAIRAC MSAMA MCorrISA MSAFHE MASHRAE MNFPA MFPSA


Response from Stephan Vermaak
Mike, I’m not sure where you a residing, but I would certainly like to have a coffee sometime and have a chat if
you will. I cannot agree with you more, as we as consulting engineers have lost serious territory on a number of
aspects within our industry. I have about 25 years remaining in this ungracious industry where we are scavenging






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