NCSEA Summit: The Diversity Imperative

By Jordan Terry, SEAU Board Member

As the NCSEA delegate for the Structural Engineers Association of Utah, I had the privilege of attending the NCSEA Summit this year in Anaheim, CA to share ideas and learn from other Structural Engineering Associations throughout the country. 

A welcome surprise came when I registered for the conference and noticed that two of the most impactful mentors in my career would attend as keynote speakers (John Gavan and Dani Paxton).  Their message was regarding the imperative for leaders in our industry and organizations to develop a diverse talent.  Their discussion focused on the need to think differently about the way we develop, coach, and mentor our future leaders.

It’s natural for those in leadership to see themselves in people with a similar background.  Leaders often advocate for people who look, act, and have similar strengths as themselves.  After all, these are the qualities that got them into the leadership position in the first place.  The reverse is also true.  It can be tough to see a path to leadership when everyone above you on the org chart has similar life experiences that don’t look anything like your own.  In this way, our talent pipeline becomes somewhat of a self-reinforcing feedback loop. 

“If You Always Do What You’ve Always Done, You’ll Always Get What You’ve Always Got.” – Henry Ford

Diverse teams foster innovation and allow for better decision making by reducing the tendency towards “groupthink” and “inbred ideas”.  Tapping into a broader talent pool also provides a competitive advantage by discovering talent in a tight labor market.  Mark Cubin summed it up best when he posted on X, “Good businesses look where others don't, to find the employees that will put your business in the best possible position to succeed.”

Here in Utah, organizations such as the ACE Mentor Program and NOMA Utah’s Project Pipeline have done excellent work in introducing and attracting young students into the AEC industry, which is an important part of building our talent pipeline.  The next segment of the talent pipeline requires attention to what the SE3 committee identified as the career advancement gap.  Once we’ve recruited a young, hungry, diverse talent group to the AEC industry, the onus is on firm leaders to provide the coaching and encouragement to support our people throughout the arc of their careers.  To create a team of the most talented structural engineers, we must be intentional about looking outside our own biases to identify future leaders whose life experiences don’t mirror our own, encourage them, inspire them, and equip them with the tools to lead.

“People who make major strides are rarely freaks of nature. They're usually freaks of nurture” – Adam Grant (Hidden Potential).

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Follow up to the SEAU Conference Program on Ethics and Professional Practices

By Jonathan (JR) Richards, Professional Practice and Ethics Committee

Hopefully, our ethics program discussion and panel presentation were helpful to you. As mentioned, I encourage the membership to review SEAU’s Code of Ethics and the NCEES Model Rules of Professional Conduct. Both resources can be found on the respective websites; www.seau.org/codeofethics and https://ncees.org/about/publications.

Unfortunately, when presenting the program, I ran out of time to discuss much of the professional practice issues we deal with. It is my opinion that ethics and professional practices go hand in hand. For this reason and as follow up to the abbreviated presentation, I offer a few tips on improving your practice, limiting your exposure, and becoming more profitable.

CONTRACTS

• Obtain signed proposals or contracts on all your projects. Most of our architectural clients typically prepare an AIA standard agreement, master agreement and letter of assignment on projects. However, with private clients or small projects, this is not always the case. For these projects it is suggested that you initiate a brief standard services agreement that clearly states your specific scope of work, fee or hourly rates, and terms and conditions. Note what is excluded in your scope of work. Also, try to include a limit of liability clause with an amount appropriate with the design you are undertaking. Obtaining contracts safeguards your exposure on projects and is good information that an attorney can use in your defense. If the scope changes, prepare a written design change order documenting the additional scope and additional fee.
• Review your E&O carriers’ publications on contract guidelines before you sign a contract for services. DPIC has an excellent publication: “DPIC’s Contract Guide”. This document addresses adverse contract language that we should avoid using and ways we deal with them.
• Do not sign contracts that include “defend’ in the hold harmless of the client portion of the contract. This language is quite common in contracts with public entities and private owners. The cost of defending our clients is typically not covered by our insurance carrier.
• Be careful when agreeing to releasing ownership of drawings. Oftentimes the electronic file drawings are forwarded to the contractor for his use in preparing shop drawings. If there is an error in your drawings it is carried forward in the shop drawings. Also, private developers may elect to re-use your drawings for another project, sometimes without your knowledge. They may also have a stronger position to beat you down on your fee to site adapt the design.

FEES FOR SERVICES

• Avoid basing your fee on “fear of losing a project”. From personal experience when starting my own firm, the day I started saying no to low fees was when my firm became profitable. Even though we lost some projects to other competitors with much lower of fees.
• Start with the DFCM’s Fee Schedule when evaluating your fee on a project. This information can be found at https://dfcm.utah.gov (search A/E Fee Schedule). The percentage of construction fees in this schedule have been well established not only with the state, but as a standard in the industry for many years. If everyone follows these guidelines on all projects, not just DFCM projects, we will all benefit. We, as a profession, should band together on not lowering the bar on fees. If proposed fees are more consistent and equal amongst the competing firms, every firm will become more profitable in the future.
• Never base your fee solely on “what it will take to complete the work”. There are many other considerations that come into play such as your potential liability, your expertise, your value to the client, and indirect costs associated with doing business. Personally, I consider what it will take to do the work, then compare it to the size and complexity of the project, percentage of construction cost, and the liability I am accepting.
• Consider re-use fees on buildings that are repeated. You need to consider the liability you are taking on. For example: I recently defended a firm that made a mistake on project where their fee was based solely on the design of one building. However, the building was repeated and constructed eight times and their mistake was carried over for all the buildings. Now this firm must bear the cost of their mistake eight-fold and this resulted in a significant claim with their insurance carrier.
• Do not fall into the “shell game” when establishing a fee. Often our clients ask us to provide a fee based on the shell cost, not total building cost. The problem is that we are taking on the liability of the complete building. Sometimes their estimated construction cost is unrealistically low, thus we base our fee on a lower amount. It is suggested that you base your fee on the total building cost and perform your own estimated cost of construction to check against what the client has provided.
• Consider basing your fee on the cost of the structure. It is common practice for Mechanical and Electrical Engineers to base their fee on the cost of the system, not building cost. These fees typically range from 3% to 4% of the cost of the respective system.
• Increase your fee for projects that are primarily structural. This applies to parking structures, seismic upgrades, etc., where very little architectural, mechanical and electrical systems are required. The industry standard years ago was to increase the standard fee by 50% or higher.
• When competing (bidding) for a project, ask your client where your fee landed compared to your competition. It may not be appropriate to ask for the specific fees, but general feedback is helpful in many ways. If your fee was considerably lower than your competitor, you may be short selling your services, or had a misunderstanding of the scope of work.  If your competitor is considerably lower, they may have done the same. If this happens, be open to having a discussion with your competitor, but only after the project has been awarded. Having conversations with our fellow colleagues is one approach to raising the bar and counteracting the growing trend of lower fees.

COMPANY POLICIES & PROCEDURES

• Establish standard practice policies. Having written policies on how to handle shop drawing submittals, RFI’s, phone logs, establishing design loads, and many other concepts are very helpful to the young engineers in your firm. Having established policies keeps everyone in the firm on the same page. This also eliminates oversights that may lead to potential problems.
• Test and de-bug structural programs before implementing in design. When performing plan review services, we see projects where a firm has used a new and sophisticated design software that has produced incorrect results. This is quite common with post-tension programs, and 3D analysis and design. It is obvious that the engineer assumed that the results from using the “black box” program are correct. All new programs should be thoroughly tested, and the intricacies explored prior to using the program on a project. Statics checks should also be performed on analysis programs.
• Spend time and money on technical development.  Time is money in our business, but in order to grow technically you need to spend the time to research and develop technical proficiency.  Budgeting expenditures for new software, technical publications, and seminars are also good practices.
• Spend time mentoring the younger engineers. A well-structured management with oversight and mentoring of the younger engineers is essential to developing a quality, well-trained staff.
• Perform Quality Assurance reviews on your projects. Having a fresh set of eyes review an outgoing project is a safeguard against potential errors and omissions in design.

Hopefully this information is useful to you, and will help you to increase your firm’s profitability while safeguarding your practice from potential liability claims. Please feel free to contact me at [email protected] if you have any questions or need clarification on ethics and preferred practices issues.

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