Familiarity and fees top survey

A survey of staff engineers and managers of medium-size municipalities in Michigan found that in seeking a consulting engineer, municipalities most often emphasize how familiar the firm is with issues affecting the project, the firm’s qualifications and experience and — perhaps more often than not – the firm’s fees. Ironically, the least weight is given to three factors that most engineering firms emphasize heavily: references, firm size and the firm’s financial strength. Moreover, smaller communities place less weight on technical qualifications and more on low fees.

The goal of the survey, conducted in 1994 in Michigan cities, villages and townships, was to find out which factors played a part in a community’s selection of engineering firms.

An overwhelming response, and one that will disappoint many engineering and planning firms (and perhaps should worry elected officials), is that municipalities do not often hire consultants on a competitive basis. Thirty percent of respondents reported no competitive selections during the past two years, and an additional 39 percent reported five or fewer selections.

The single most important factor in selecting a consulting firm is the firm’s understanding of the community’s objectives with the project or service. Fifty-six percent of respondents cited this as very important, far more than any of 12 other factors.

The next two most important factors were the technical aspects of the proposal itself and the firm’s qualifications. Forty-three percent of respondents said that technical approach was very important, while 38 percent cited qualifications as very important. Fees were very important in the selection process to 27 percent of respondents.

Interestingly, responses regarding qualifications, technical approach and fees varied based on the size of the community. The larger the community, the more weight respondents gave to the technical aspects of the proposal and the firm’s technical qualifications. The smaller the community, the more weight was given to fees.

There are a number of reasons for these results. Larger municipalities have more engineers and bigger budgets so they can spend more time studying technical aspects of a proposal and evaluating the qualifications of its authors. They also have the luxury of placing emphasis on cost-effective work rather than just low-cost work.

In contrast, small communities are sometimes unable to make a thorough analysis of products and tend to choose by price.

In fact, their counterparts in larger cities probably place more weight on fees than they admit. Fees were cited as “very important” or “somewhat important” by 60 percent of all respondents. And 58 percent of all respondents — regardless of whether they said fees were important in the selection process — said that winning firms had the lowest (21 percent) or one of the lowest (37 percent) fees. An additional 26 percent said the fees of the firm selected were in the middle. In other words, only 16 percent of winning firms’ fees were above the middle a clear indication that fees are extremely important in the selection process.

For any first-time firm selected by a community, the most important factors were understanding of local needs, technical merit of the proposal and low fees. These factors outweighed Both the firm’s technical qualifications andts reputation.

Government officials expect to be visited by competing firms during the selection process. Ninety-five percent of winning firms had made one or more pre-selection visits, compared with 87 percent for runners-up. The point is not that by calling on their prospective clients, a firm gains advantage over their competitors. It is that municipalities grant only one contract in 20 to firms that had not visited them during the bidding contest. Presumably, these firms were known to officials from prior assignments.

Among surveyed communities, a firm’s financial strength is largely irrelevant (only 6 percent said very important). So are its printed materials (10 percent said very important), comments of references listed in proposal (14 percent) and even the proposed project manager’s familiarity with the community (17 percent).