Consulting engineering – no sword makers, only tin smiths

June 30th, 2014, Published in Articles: Vector

 

I have developed a number of relationships with professionals and semi-professionals. There is my doctor, dentist. I have a plumber, an electrician, a garden service provider and so on.

I chose none of them on the basis of the lowest price. If I were to quibble with them about price, the doctor would cut his examination time, the plumber would do call-outs only when more lucrative work was complete and the electrician would send his apprentice to do the wiring.

The point is, good work requires that you pay a fair price because these professionals invested a lot of time and money in acquiring their trades.

Let us now turn to consulting engineers.

I have been a consulting engineer for 26 years, 20 years of which were spent in private practice. For many years, consulting engineers used to be members on a panel of consultants registered with the Department of Public Works (DPW). The DPW would dish out work to consulting engineering firms on a rotation basis – some jobs large, some small. One year, it could the provision of lighting to public ablution blocks at the beach, the next, the electrification of a township.

Then came the new government. It wanted the consulting engineering world transformed to black ownership – and very soon. Since there were not very many black engineers with experience in the country at the time, this could, in fact, not happen very quickly.

In line with its policy of transformation, the new government encouraged consulting engineers to applying black economic empowerment (BEE) to their businesses while, at the same time, requiring them to offer their fee proposals as tenders in competition.

Therefore, if you were not BEE compliant, your fee offer would have to be 25% less than that of a 50% black-owned firm to get the work.

Your business would clearly not survive under these conditions and you would either have to sell it or become more BEE compliant. The second option is clearly limited because of the shortage of black consulting engineers and because one cannot change one’s race.

Government had hoped that its intervention would transform the consulting engineering profession overnight but it did not. Its only achievement was to have all the smaller practices bought up by large, BEE-compliant firms whose owners are often basically accountants.

The larger consulting practices which were in the process of becoming BEE compliant (but too slowly) were faced with plunging profit margins and were inevitably bought out by international practices which can apply economies of scale to the work required and survive on slim margins like supermarkets. This, in turn, reduces even further the chances increasing the number of black consulting engineers – all of which is a shame.

This article was originally published in Engineering News and is reproduced here with permission.

Contact Lucas Bowles, regional director East and South Cape

 

 

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