Engineering services debate back on the table
By Lynn Zerschling | Posted: Sunday, October 19, 2008
SIOUX CITY -- So far this year, the City Council has awarded $1 million in engineering consulting contracts for $11 million worth of projects.
Councilman Jim Rixner said that's too much to pay for consultants and that the city could save money by hiring more engineers of its own.
Mayor Mike Hobart said the city should turn more to local engineering firms when it needs to hire a consultant.
This is not the first time the city's practice of hiring engineering firms has erupted in controversy. The issue has been debated several times a year since 2001. Most of the debate centers on firms hired to oversee road construction and utility replacement projects overseen by the Public Works Department.
The current 10 projects with the $11 million price tag are under the auspices of Public Works.
The city has two engineers working full time and three vacancies it needs to fill -- a city engineer to replace Chris Payer, who was named public works director, a senior civil engineer and a civil engineer.
Payer said he would also like to have someone on staff to deal with stormwater management issues in light of an increasing number of federal environmental regulations.
Earlier this month, the council voted 3-2 to retain the firm of Howard R. Green to help staff the city's engineering division until the vacancies can be filled.
"First, we need to get to full staff," said Rixner. "Once those are hired, I would recommend hiring two more full-time engineers and probably one technical assistant to help them. Hiring these three people might cost between $250,000 to $275,000 (annually) for salaries and benefits. By my estimate, we could save more than twice that amount of money by doing in-house engineering work."
On larger construction projects, Rixner said, he believes the council still would need to retain firms with specific areas of engineering expertise. On projects of $9 million or less, he said, the city engineers could do the design work.
Hobart said he wants an independent group to evaluate the city's policies in hiring consulting engineers so it could review hiring local versus outside firms and weigh having the work done in house versus hiring consultants.
Hobart maintained Howard R. Green, based in Cedar Rapids, Iowa, could not be considered a "local" firm even though it has an office with two engineers in the King Transportation Center in Sioux City.
That's beside the point, as far as businessman Irving Jensen Jr. is concerned.
Jensen said that when he started in his family's construction business in 1956, the city employed five engineers. More than 50 years later, the city hasn't beefed up its staff.
"We're doing considerably more work than we did in 1956," Jensen said of the city. "We're rebuilding our infrastructure -- much of which is way over 100 years old. You can't accomplish this without engineers."
He should know. The Irving F. Jensen family of construction and construction-related companies, which merged with Bismarck, N.D.-based Knife River Corp. in October 2005, was once one of Siouxland's largest family-owned construction businesses.
"You need to go with the best firm, and that will turn out best for the taxpayers," Jensen said. "The right design can lower your overall construction costs. To say the firm has to be local, to me, that doesn't have anything to do with it. You have to hire the most competent firms."
As stewards of public money, city officials take a number of factors into account in awarding contracts.
In December, for example, city Councilman Brent Hoffman voted against hiring DeWild Grant Reckert & Associates of Sioux City for $685,000 to provide design and construction services for the Heights neighborhood road construction project. Hoffman objected because the contract was not put out to bid, although the council majority voted to hire the company.
And Rixner has an objection of his own when it comes to hiring consultants.
"The other issue I have raised consistently is, we have no negotiations with these design firms," he said. "Their prices are fixed."
According to Payer, the city expects to pay a consultant about 8 percent of the estimated project cost for engineering and design work and 8 percent for construction administration. That means fees of 16 percent when a firm is hired to do both.
"Sometimes it can be as high as 20 percent," depending on the contract details, Payer said.
That's the point, Rixner asserted. "We're held hostage to paying what we have to pay them. This (hiring city engineers) is perhaps the single most cost-savings effort we can undertake."
What we pay consultants
Type of Service 2006 2007 2008
Professional services $666,652 $735,610 $727,243
Soil engineering/tests $27,222 $1,283 $31,253
Civil engineering $61,150 $27,039 $480
Design & engineering $2,641,408 $3,462,449 $2,864,470
Technical services $45,885 $11,206
Environmental eng. $23,846
Architectural eng. $46,360
Structural eng. $30,185
Total $3,420,278 $4,318,626 $3,664,837*
* Only contracts overseen by Public Works Department through August 2008.
Councilman Jim Rixner said that's too much to pay for consultants and that the city could save money by hiring more engineers of its own.
Mayor Mike Hobart said the city should turn more to local engineering firms when it needs to hire a consultant.
This is not the first time the city's practice of hiring engineering firms has erupted in controversy. The issue has been debated several times a year since 2001. Most of the debate centers on firms hired to oversee road construction and utility replacement projects overseen by the Public Works Department.
The current 10 projects with the $11 million price tag are under the auspices of Public Works.
The city has two engineers working full time and three vacancies it needs to fill -- a city engineer to replace Chris Payer, who was named public works director, a senior civil engineer and a civil engineer.
Payer said he would also like to have someone on staff to deal with stormwater management issues in light of an increasing number of federal environmental regulations.
Earlier this month, the council voted 3-2 to retain the firm of Howard R. Green to help staff the city's engineering division until the vacancies can be filled.
"First, we need to get to full staff," said Rixner. "Once those are hired, I would recommend hiring two more full-time engineers and probably one technical assistant to help them. Hiring these three people might cost between $250,000 to $275,000 (annually) for salaries and benefits. By my estimate, we could save more than twice that amount of money by doing in-house engineering work."
On larger construction projects, Rixner said, he believes the council still would need to retain firms with specific areas of engineering expertise. On projects of $9 million or less, he said, the city engineers could do the design work.
Hobart said he wants an independent group to evaluate the city's policies in hiring consulting engineers so it could review hiring local versus outside firms and weigh having the work done in house versus hiring consultants.
Hobart maintained Howard R. Green, based in Cedar Rapids, Iowa, could not be considered a "local" firm even though it has an office with two engineers in the King Transportation Center in Sioux City.
That's beside the point, as far as businessman Irving Jensen Jr. is concerned.
Jensen said that when he started in his family's construction business in 1956, the city employed five engineers. More than 50 years later, the city hasn't beefed up its staff.
"We're doing considerably more work than we did in 1956," Jensen said of the city. "We're rebuilding our infrastructure -- much of which is way over 100 years old. You can't accomplish this without engineers."
He should know. The Irving F. Jensen family of construction and construction-related companies, which merged with Bismarck, N.D.-based Knife River Corp. in October 2005, was once one of Siouxland's largest family-owned construction businesses.
"You need to go with the best firm, and that will turn out best for the taxpayers," Jensen said. "The right design can lower your overall construction costs. To say the firm has to be local, to me, that doesn't have anything to do with it. You have to hire the most competent firms."
As stewards of public money, city officials take a number of factors into account in awarding contracts.
In December, for example, city Councilman Brent Hoffman voted against hiring DeWild Grant Reckert & Associates of Sioux City for $685,000 to provide design and construction services for the Heights neighborhood road construction project. Hoffman objected because the contract was not put out to bid, although the council majority voted to hire the company.
And Rixner has an objection of his own when it comes to hiring consultants.
"The other issue I have raised consistently is, we have no negotiations with these design firms," he said. "Their prices are fixed."
According to Payer, the city expects to pay a consultant about 8 percent of the estimated project cost for engineering and design work and 8 percent for construction administration. That means fees of 16 percent when a firm is hired to do both.
"Sometimes it can be as high as 20 percent," depending on the contract details, Payer said.
That's the point, Rixner asserted. "We're held hostage to paying what we have to pay them. This (hiring city engineers) is perhaps the single most cost-savings effort we can undertake."
What we pay consultants
Type of Service 2006 2007 2008
Professional services $666,652 $735,610 $727,243
Soil engineering/tests $27,222 $1,283 $31,253
Civil engineering $61,150 $27,039 $480
Design & engineering $2,641,408 $3,462,449 $2,864,470
Technical services $45,885 $11,206
Environmental eng. $23,846
Architectural eng. $46,360
Structural eng. $30,185
Total $3,420,278 $4,318,626 $3,664,837*
* Only contracts overseen by Public Works Department through August 2008.
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Where do they get these ideas wrote on Oct 19, 2008 11:22 PM:
According to the Mayor's definition of "local", he should not approve of any contracts with DGR, who are based in Rock Rapids...
Rixner as usual is off in left field being "penny wise - pound foolish" with our money. And like Mr. Ferris stated if the City can't fill the three current openings, what makes Rixner think the city can hire more engineers??? Maybe Bizcut can fill one of Rixner's new jobs.
Just listen to experience-- Mr. Jensen knows what he's talking about... "
T.D. wrote on Oct 19, 2008 5:25 PM:
insider wrote on Oct 19, 2008 2:35 PM:
GH Thompson wrote on Oct 19, 2008 1:53 PM:
engineer wrote on Oct 19, 2008 12:45 PM:
First they oppose Qualification Based Selection (QBS)of engineering firms. Irving Jensen is correct -- money well spent on quality designs saves money when it comes to construction. Selecting the lowest price firm does not equate to a cost savings for the project.
Hiring two more engineers and a technical assistant won't save the city a million dollars. If Rixner can find two engineers and a tech that can produce a million dollars worth of design work a year, I know several consulting firms who will pay them better than the city.
If the city is going to only hire local based firms, I guess that eliminates DGR, who probably employees the most sioux city residents of any engineering firm. That leaves you with 4 firms one is not on the city's prequalified list, one just lost a million dollar lawsuit over a design in south dakota, one does mostly structural work and one other (who I guess will get all the work)...so much for bidding.
Good luck to city staff... "