Posted on

Consulting Engineering Time Tracking

Project Tracking

One of the very most important aspects of any Consulting Engineering business is carefully keeping track of your time. On “hourly” projects you need this information for billing; on “fixed fee” projects you don’t. However, if you don’t keep track of time or if you don’t eventually add it up, you won’t know the winners from the losers. Why is this important?

The type of project may require more time; knowing this would allow you to increase your fee on the next similar project or to pass-up the project.

Your project manager may be inefficient; knowing this allows you to give him more training, assign him to less complicated projects or to replace him with someone else.

The client may be too difficult or demanding; knowing this allows you to negotiate both scope and fee on the next project. It is surprising how less demanding a client can become when faced with the added costs. This problem can also be handled with “Assumptions & Exceptions” in your contract. I.e.: “We assume 4 meetings with you during design; add $XXX for each additional”. Also, remember that you just can’t make money working for some clients; if you can’t correct the problem, let your competitor deal with it.

The project owner/manager may be too difficult or demanding; the solution is the same as described above.

The scope may “creep”; knowing this, it may not be too late to bill. (But, don’t do so without discussing extra charges with the client, beforehand). In any case, it may be time to have a talk with your project manager, so this problem can be avoided in the future.

Manual Tracking

Have your secretary/clerical start a TIME SHEET for each “project” and each “non-project” category of time. List week ending dates on the left and a column for each employee across the top and transfer the “Time Card” information weekly. Close-out the month at the end of the week closest to the completion of the calendar month and add up the hours for the month and the hours to date. Try to bill, so that your client will have the bill by the 1st of the next month, to avoid waiting an extra month for payment.

Also, at the close of the month, each project manager should estimate the “% complete” of the project “phase” for each project that time was charged to during that month. The “Partner in Charge” of that project should verify the % complete. On “fixed fee” projects, monthly billing should be based on this %. Of course in “multi-discipline” firms, each trade is estimated and billed on its own % complete. Spread sheets, (like Excel), now make this process simpler and more accurate.

It is also important for you to compare the billing to the budget of hours, monthly. If a project has expended more hours than you can be billed, it is losing money. Try to find out why. Was there an increase in scope; maybe it is not too late to bill? Make sure that your project manager knows to bring scope changes to your attention, before doing the work. Whatever the reason, knowing about it allows you to account for it on the next similar project.

Off-the-shelf Accounting Software

The above described “manual” system works well for very small firms. But, once you are billing for three or more people it is time to consider getting Accounting Software. The most common “starter systems” are inexpensive. Review options with your accountant, before buying the software.

QuickBooks and Sage 50 (formerly Peach Tree) are two of the most popular accounting software systems. They are off-the shelf packages for only a few hundred dollars. Both are “single” entry systems; the programs do the double entry. Both can do “accrual method” and “cash method” reporting and have integrated accounts receivable, accounts payable, and general ledger functions. These are not as flexible as the more expensive systems and your bookkeeper can make changes to data that is not “tracked” and can cause heartburn for your accountant. If you trust your bookkeeper, you will find these systems to be a leap past manual billing.

Customizable Accounting Software

The previously described systems will serve the needs of most small firms; but, if your firm has special needs, you may want to consider a more customizable system. Examples of special needs are unique situations such as: progress billing, calculations, and special billing rate situations (i.e. for government work), or prevailing wage tracking.

As your firm grows, you may want to consider an industry software package with “all the bells and whistles”; more reports with more details. But, you may need a software consultant to set-it-up and customize the system and to provide on-going support. Also, you may need a full time bookkeeper to enter the data and to print reports. If someone actually reads these reports, interoperates them correctly and implements policies to make improvements, these systems can be worthwhile, especially for larger firms. Unless you have special needs, wait until you outgrow the inexpensive options. I found the “Ageing of Receivables” and the “Budgeted vs. Actual hours” reports to be the most useful.

Excerpted from The “Complete Guide” to CONSULTING ENGINEERING © 2015 John D. Gaskell. Used with permission of Professional Value Books, Inc. All rights reserved. See DISCLAIMER and order at http://www.TheEngineersResource.com. Use discount code “paperback” and save.

 

Posted on

Architectural project phases

The following explains how to divide your consulting engineering contracts and your time cards into “Project phases” to simplify your accounting. Being consistent in the allocation of time allows you to accurately compare “budgeted” time and “actual” time spent. For “architectural” clients, I recommend the following breakdown: (The % indicates both the effort and the associated fee.)

Study- (separate optional phase)

Design- (75%)

Bidding- (5%)

Shop Drawing review – (10%)

Construction Meetings, Field Observations & Reports- (10%)

Study Phase

For new buildings, a study is seldom needed. But for renovations and additions it is more likely to be required. It is an evaluation of existing conditions to determine how the renovations and/or addition will be accommodated by existing services & systems and often includes a written report.

Design Phase

Detailed site investigation.

Attendance at design meetings.

Conference memos of design meetings:

Document the decisions made at the initial design meeting, in a conference memo to the architect. Many of my clients told me that they had never before received a conference memo from a consultant. STAND-OUT, by providing “Superior Service”, to your clients.

Preparation of the drawings (plans):

This phase starts when the architect sends the CAD & BIM files of the building floor plans (shells) to you. As the design progresses, more and more information keeps getting added (and change) until the drawings are finally complete.

Preparation of the technical specifications:

This is a written document that details the requirements of each of the items shown on the drawings. You write this for your disciplines and it is incorporated into the Project Manual by the architect.

Approvals

Consulting engineers are also expected to get pre-approvals from utility companies and inspection authorities. Unfortunately, some engineers ignore or fail to document this important step. As an electrical consulting engineer, I was responsible for coordinating the electric service; telephone service; fire alarm service; and cable TV/Internet service for my projects.

Coordination Sheets:

These are a series of forms used to coordinate major systems and equipment with the other project consultants, vendors, and the architect. I believe that I was the first consulting engineer to ever use these and I believe that they circumvented many coordination problems on my projects.

Bidding Phase

Contact your Selected Bidder List to inform them that this project is out-to-bid. Although most architects will not allow sub-bids to be restricted to your list, the more “friendly” bidder the better.

On major projects, your project manager may be asked to attend a Pre-Bid Meeting. This is a meeting to explain the highlights of the project to the bidders and to field their questions.

Prepare the addenda for your Trade. Any changes, clarifications, or additions to the plans and specifications must be documented and issued to the bidders in the form of an addenda. It is usually not necessary for you or your project manager to attend the Bid Opening. But, attend, if requested.

Shop Drawing Review Phase

After a contract is awarded, the consultant reviews/approves Shop Drawings, detailing all equipment that the contractor proposes. The architect describes the procedure in the front end of his Project Manual.

I include telephone “questions” and meetings with contractors and venders (except, at the job site) in this phase category.

Clarification sketches or drawing revisions should also be included in this phase.

Construction Meetings, Field Observations & Reports Phase

Usually, site visits during construction, are required of consulting engineers. These are referred-to as “field observations”. Do not call them “supervision of construction” or “inspections”; that is not what you do and that term implies responsibility that is beyond your function.

In quoting your fee, limit your duties to a specific number of Field Observation visits plus (usually) one Punch List Observation, by your project manager. This limits unrealistic expectations by your client and allows room for negotiation before you start the project. In fact, if it turns out to be a problem project, it may be in your best interest to make some additional visits without compensation.

I recommend a Field Observation Form. Start your report by saying: “The following is the progress since our last report”.

At the completion of the construction phase prepare a “punch-list” detailing corrections to the work, if needed.

It is not unusual to get calls from the architect, sub-contractor or building owner/user weeks, months or even years later. It is bad public relations (PR) and unwise to ignore these calls. Be patient with the caller and try to offer a solution, if feasible. Instead of telling them to call the sub-contractor or vendor, offer to do it for them this time, but tell them to do it next time. If necessary, visit the site to analyze the problem along with the sub-contractor or his vendor.

 

Excerpted from The “Complete Guide” to CONSULTING ENGINEERING © 2015 John D. Gaskell. Used with permission of Professional Value Books, Inc. All rights reserved. Order at http://www.TheEngineersResource.com. Use discount code “paperback” and save.

Posted on

Private Client Project Phases

The following explains how to divide your consulting engineering contracts and your time cards into “Project phases” to simplify your accounting. Being consistent in the allocation of time allows you to accurately compare “budgeted” time and “actual” time spent. For “Private Clients”, I recommend the following breakdown (The % indicates both the effort and the associated fee.)

THE AIA METHOD OF ALLOCATING PHASES

Study- (Separate Optional Phase)

Preliminary – (0 – 15%)

Design Development – (15 – 30%)

Construction Documents – (30 – 70%)

Bidding Phase – (70 – 75%)

Construction Administration – (75 – 100%)

Study Phase

The scope of projects that you handle for private clients will primarily be in your specialty. The result of the study is a written report including: A description of the proposed project together with options; a cost estimate (including your fee); a time schedule including design, bidding, and construction; and usually an 8 ½ x 11 sketch showing the relative locations of the major elements. Present bound copies at a meeting with your client at his office. Don’t just plop the reports on the conference table and say “here it is”. Before the meeting, highlight the important parts (in your copy) and read or “paraphrase” these parts at the meeting.

Preliminary Design Phase

This usually includes 15% progress prints (Three copies, stamped “Progress Prints”), a preliminary cost estimate, and a preliminary project schedule. Present them at a meeting with your client, including typical catalog cuts of major equipment, if appropriate.

Design Development Phase

At this point a final project scope and a description of systems should be developed and presented as an outline specification. Usually include 30 % progress prints (Three copies, stamped “Progress Prints”), a design development cost estimate, and a design development project schedule. Present them at a meeting with your client.

Construction Documents Phase

This is the phase where you prepare the drawings/plans and specification for bidding and is the bulk of your work. Usually the preliminary drawings/plans are upgraded to become the design development drawings/plans and then upgraded again to become the construction documents.

The meetings for this phase are similar to the preliminary & design development meetings. Usually one or two plus a final are all that are needed.

Bring a copy of a “draft” of the Project Manual to the final review meeting. Again, before the meeting, highlight the important parts (in your copy) and read or “paraphrase” these parts at the meeting.

If feasible, include some “alternatives” in the bidding. Alternatives are things that can be added to or subtracted from the project to allow it to meet budget. This can avoid the trouble and expense and delay of “re-bidding”. Additive alternatives are usually best; contractors are more likely to offer a discount to increase the contract price. In my practice I found that adding work in certain areas (floors or wings of the building) worked best. Painting of raceways, heavy duty generator enclosures, and nicer lighting fixtures were other frequent options.

Also, at the final review meeting, provide a copy of your selected bidder list, and recommend that only these bidders be invited-to-bid. Usually a selected-bidder-list will not be allowed on government projects.

If your selected bidder list is approved, there is no need to publish an invitation for bids. Notify your selected bidders and verify their availability and willingness to bid. However, if bidding is open, include an invitation for bids in your project manual. Make sure that the owner places advertisements in the local newspaper (and/or government publications). Coordinate the dates and allow adequate time, especially during a holiday period.

Complete the approval process.

Bidding Phase

Arrange for printing of an adequate number of sets of drawings & project manuals. The cost of these should be reimbursed by the client. Get a deposit from the bidders, to assure that documents are returned. Electronic PDF copies on a CD are now common and are often provided at no charge to the bidders.

Have bids submitted directly to the client in a sealed envelope that is not to be opened until the bid opening date & time. For government clients, hold a “public” bid opening and tabulate the bids, including “alternatives”. Distribute copies of the tabulation, congratulate the low bidder and arrange a meeting for the contract signing.  For private clients, I recommend a “private” bid opening. After the bid opening, call the low bidder to congratulate him and arrange a meeting for the contract signing.

Construction Administration

The first meeting during the construction phase is called the “Pre-Construction Conference”. This is the meeting where the basic construction requirements and procedures, which you included in the Project Manual, are reviewed.

Schedule construction meetings on a day and time agreeable to the client, contractor, and your project manager’s schedule; usually weekly. In your project manual, you should have included an agenda for each of these meetings.

Make sure that the punch-list items are completed, including those of your consultants.

At the completion of the project, there is a lot of “Close-Out” paperwork to complete. It is tedious, but necessary. Don’t overlook it or neglect to follow through.

Learn the details of project phases for “Private Clients” in Jack’s new book.

 “Excerpted from The “Complete Guide” to CONSULTING ENGINEERING © 2015 John D. Gaskell. Used with permission of Professional Value Books, Inc. All rights reserved. Order from http://www.TheEngineersResource.com.” Use discount code “paperback” and save.