# pricing options...



## Art (Jan 26, 2009)

how do most of you guys price your work?

the 3 methods are:

T&amp;M or cost plus

% of construction costs

negotiated fixed fee/lump sum

I've been trying to do mostly fixed fee...

if we do T&amp;M the margin is small, and the headaches associated with clients scrutinizing invoices causes problems with the client at times...

not to mention the waste of time tracking hours, rather than engineering the work...

although the safest, ie, less risk...

fixed fee limits his exposure, shifts some to the engineer, and if it works out, all are happy...

but if you are not careful, you can get smoked..

I don't like % of cost becuase it may lead to the impression that you will not do your best to get the client the lowest construction cost...

I'm curious to hear how others approach this sensitive topic...


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## Flyer_PE (Jan 26, 2009)

^ We do a mix of T&amp;M and fixed price scopes. Which one we go with on any particular scope is based on client preference and our experience level with the client. We have at one client for which we will only work T&amp;M because they are masters at scope creep. They fall under the category of fool me once.....


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## chaosiscash (Jan 27, 2009)

We also do T&amp;M and fixed price. Just depends on the client/job. Some of our work is staff aug, so that is always T&amp;M. We don't usually make as much money on T&amp;M, but having "agents" out in the field usually can lead to those same clients throwing fully projects back over the fence to us, which we work fixed price and make more money on.

The only time I know we've worked on a % of construction costs agreement is when we have done design/build jobs, and then our contract is generally with the construction company, and not the end user.


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## Wolverine (Jan 27, 2009)

For the un-initiated (public sector)...

Do you ever use a hybrid? Say "Time &amp; Material, not more than $X fixed cost"?

It seems to make sense to prefer fixed cost for the potential profit margin but, as implied, only on a familiar design where you minimize the risk of getting burned. I hate mission creep.

The more I think about my question, the more I think I can answer it myself. Why go T&amp;M (for less margin) with a fixed price cap, when Fixed Price will work; all the benefit favors the customer at greater risk to the engineering firm. Nevermind.


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## Flyer_PE (Jan 27, 2009)

^ We actually do quite a bit of "T&amp;M not to exceed". It keeps the required scope changes to a minimum while allowing us some flexibility in dealing with the inevitable mission creep. I do primarily analysis work and I haven't done one yet where the client didn't want at least a couple of extra "what if" scenarios looked at.


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