Pricing engineering services

Technology has an incredible impact on the pricing and profitability of engineering services. Historically, pricing for engineering services has been based on labor-hours. However, some in the industry have experienced at least a tenfold increase in efficiency because of computer-aided design and the development of three-dimensional computer models. Consequently, the labor-hours spent on a project no longer adequately represent the value of the engineering services rendered. There is a need for engineers, designers, and consultants to revise old, and develop new, pricing strategies. The writers discuss current and foreseeable issues and constraints facing engineers today. On April 16, 2003, the ASCE San Francisco Younger Member Forum, (YMF) met to discuss the topic of pricing for engineering and consulting services. The presentation, discussion, and conclusions as well as a discussion of the current state of the marketplace and future technical developments in the industry are included in this paper. Pricing and contracting strategies are discussed and analyzed, and a call is made to industry, academics, and practitioners alike to address the pricing and perception problems outlined in this paper.