[Equest-users] Energy Modeling Fees

[Wayne Seward]

Hi Pasha, John, and all;

 

Fees, what to charge, always an interesting question? 

 

I always start by answering two basic questions. 1)Do I understand what is
required to do the job and do I know exactly what it well take to complete
the job? 2) I have a relative idea of what is needed to complete the job and
I'm not really sure what it well take to complete it? And a third one that I
try not to forget is always the past history with the customer?  There are
basically two approaches that I take to pricing a project,
Time-and-Materials or Fixed price. Time-and-Materials I use when I have more
questions than answers, and Fixed price is used when I have a strong
understanding of what I need to do and then how long I believe it will take
me to accomplish it. So that is my starting point to every job.

 

This next is related to the type of job that I'm performing. This comes with
a larger number of variables, such as the building type. Residential,
Non-residential, non-res office space verses medical facilities, single
family residential or multi-family residential, etc. Also, new construction
or existing retrofit. Size and level of complexity also come into play and
the specific task that I'm being asked to complete. Next I look at the type
of modeling that I'm working on (Compliance documentation, supporting or
recommendations for design decisions, or High-level Performance Modeling &
Analysis).

 

 My fees start as low as $250 (clearly the easy job with the lowest risk of
failure) and as high as $9,000. I'm currently consider some work that I'm
think of asking $15,000 plus (highest risk of failure to date). Risk of
failure is always an important consideration on any job. The risk of failure
could be nothing more than  re-working the job on your dime or as
complicated as getting sued for everything that you hope to ever have. We
have to figure out what our comfort level is in this area before we can
figure out what kind of work we are willing to take on. For me the lowest
risk is Compliance Documentation, and clearly the highest level of risk is
doing High-Level Performance Modeling & Analysis.

 

The last factor that I consider, is what will the market bare? No matter
what we do, somebody will come in with a lower price and another will have a
higher price. I always try to understand what I think my efforts are worth
and if someone comes in with a lower price, then I have to decide if the
work is important enough for me to give something away. To me this has to be
a well thought out decision and not a decision that I make easily.  

 

Pricing a job can sometimes be as complicated as some of the work that we
do.

 

I recently saw a financial breakdown of a LEED project. The LEED Consultant
was paid $60,000 plus, and the Building Energy Analyst Modeler fees ranged
from $2,500 to $48,000 per LEED project. I need to find a couple of those
$48,000 jobs :=) 

 

If you notice I didn't specify my exact fees for any given thing. But I hope
that I've shed some light onto my approach to the problem. However, I would
be happy to work with any members of this group to develop a standard fee
basis. I'm sure we've all spent a lot of time and money getting to this
point and we continue spending money on continuing Ed & better tools. We
should all get a far wage for our level of experience and quality of work. I
don't have a problem losing work to someone that does a better job than I
do, but I do have a problem with losing work to someone with less experience
because they charge less for the same work.

 

I hope this makes since as it is now past midnight and I'm getting up in
five hours. If you see holes with my thinking, then please share some of
your approaches or ideas.

 

Thank you for your time.

 

Wayne Seward, CEA, LEED AP BD&C

Bear Technologys

7774 Calle Mejor, Carlsbad, CA 92009

Office: 760.635.2327 Fax: 760.683.6889

www.beartechnologys.com

wayne at beartechnologys.com

 

a Service-Connected Disabled-Veteran Owned Business

 

From: equest-users-bounces at lists.onebuilding.org
[mailto:equest-users-bounces at lists.onebuilding.org] On Behalf Of Pasha
Korber-Gonzalez
Sent: Monday, May 24, 2010 7:40 PM
To: John David Waller
Cc: equest-users at lists.onebuilding.org
Subject: Re: [Equest-users] Energy Modeling Fees

 

Hi John,

 

I am soooo glad that you asked about this.  I would be more than happy to
talk with you and the rest of our energy modeling community about how to
price energy models, how to calculate & justify fees for energy models, etc.

 

This is a VERY important discussion that needs to happen amongst this group
and amongst our colleagues regarding the true value of our services and the
value that clients are willing to pay for our services.

 

What do you want to know?  What do you want to discuss?  I usually start
with a couple of baseline factors that I use as targets when I put together
fees for the projects that I bid on;  $/sq ft, $/hour, but as everything is
with energy models..."it depends."

 

Let's talk about this...  we can talk online or feel free to email me
offline, or call me at 308-763-1593.

 

As a bottom line--I will offer that at a base fee to cover 40 hrs worth of
billable work for any type of energy model at an average cost estimate of
$100/hr which is a good average for most consulting companies billable
rates.  Based on this very rarely should any energy model fee come in under
$4000 just based on the amount of work that needs to be done on even simple
models.   Of course your overall price/cost/fees need to be based on a
specific scope of work for whatever the energy model will be used for.

If there are others out there that have experience with energy model fees
please comment.  My base rule of thumb is this;  "if you give your client a
low fee the first time around, they will expect it everytime."  Once you
charge low fees for your services you will not be able to raise them as your
customers will expect low fees everytime.  Not only do "low-ballers" hurt
themselves but they hurt all of us in the industry.   All of us as
simulators know the amount of time & skill that it takes to learn how to use
these programs and how to execute projects successfully using these
programs.  If we are sending out low fees for these services we are severly
undervaluing our own work and giving our clients the wrong impression.  As
the art of negotiation is something that we work on everyday, it's better to
always start with the fee that you want, and then tailor, customize,
negotiate to a fee that you & the client can accept.  Maybe they don't get
as much work as they wanted, maybe you get a bit more in your fee than the
client planned to pay.  Win-win for all...when it all works out right.  ;)

 

 

Pasha

 

 

On Thu, May 20, 2010 at 10:14 AM, John David Waller
<jwaller at email.arizona.edu> wrote:

Would anyone be willing to share what a 'fair market fee' for energy
modeling services might look like?

 

I realize that there are many variables involved in defining the cost of
such services, i.e. level of detail, stage in the design process, size of
the project, etc... I am an eQUEST pleeb, and seek only to determine
reasonable rates for this service and ones that won't scare any potential
clients away.

 

Thanks in advance.


John


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