Industry organisation the South African Institution of Civil Engineering (Saice) calls for commitment to equitable tender pricing in the engineering sector to safeguard the quality and integrity of engineering projects across South Africa.
Fair compensation that reflects the true value of engineering services is needed in light of increasing pressures for some engineers to reduce their fees, the organisation says.
In some cases, when negotiating with clients, engineers are expected to lower their fees, despite aligning with the gazetted fees published by the Engineering Council of South Africa.
“This relentless push for reductions can often result in engineers compromising their rates to secure business.
“Design fees are an integral component of the final project costs, and adequate investment in the design phase can yield significant savings, enhance project feasibility and substantially mitigate risks,” Saice president Andrew Clothier asserts.
There are concerns about recent tender evaluations, which have shown a tendency to prioritise the cheapest options, but discussions are being held to find potential solutions to the current tender pricing conundrum, he adds.
The push to lower fees is detrimental to the financial health of engineering firms.
Further, offering significantly discounted rates can devalue the essential services engineers provide and undermine the profession’s reputation. The clients of engineering firms must understand the long-term benefits of investing in quality engineering services, and the risks associated with opting for the lowest bids, Saice states.
“We need to restore the credibility and value of engineering work while balancing the need to secure business and uphold professional integrity,” Clothier says.
Fee guidelines and industry-wide adherence to those guidelines must be reinforced to prevent price undercutting.
“Adhering to established fee guidelines is crucial for maintaining fair competition and the overall value of engineering services. This is not just about sustaining our businesses but about preserving the integrity and safety of projects.
“We advocate for fair tender practices to ensure engineering services are adequately valued,” says Saice CEO Sekadi Phayane-Shakhane.
Tender pricing has been a long-standing challenge in the contracting environment. It significantly impacts the industry’s dynamics and requires a collective industry response to address these persistent challenges.
“By collectively upholding fee standards, we enhance the overall value of our profession, uphold the highest standards of our profession and contribute to the successful development of our nation’s infrastructure.
“Saice is committed to supporting sustainable business models for engineering firms. Our goal is to develop strategies that balance competitive pricing with business sustainability, ensuring fair compensation for the invaluable services engineers provide.”
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