THE South African Institution of Civil Engineering (SAICE) has called for a renewed commitment to equitable tender pricing in the engineering sector to safeguard the quality and integrity of engineering projects across South Africa. In light of increasing pressures for some engineers to reduce their fees, SAICE emphasises the need for fair compensation that reflects the true value of engineering services.
SAICE CEO, Sekadi Phayane-Shakhane, underscored the critical challenges faced by some engineers when negotiating with clients. “In some cases, engineers are expected to lower their fees, even after adjustments have been made to align with the gazetted fees published by the Engineering Council of South Africa,” Phayane-Shakhane explained. “This relentless push for reductions can often result in engineers compromising their rates to secure business.”
SAICE 2024 president Andrew Clothier stressed that this practice is detrimental to the financial health of engineering firms and also raises significant ethical concerns. “Offering significantly discounted rates can undermine the profession’s reputation and devalue the essential services engineers provide. It is imperative that we restore the credibility and value of engineering work while balancing the need to secure business and upholding professional integrity.”
SAICE has observed that the issue of tender pricing has been a long-standing challenge in the contracting environment, significantly impacting the industry’s dynamics and calls for a collective industry response to address these persistent challenges. To tackle this issue, Phayane-Shakhane said that collaboration with key industry stakeholders is critical. “By working together, we can advocate for fair tender practices and ensure that engineering services are adequately valued,” she stated.
Further discussions to this end are being explored to find potential solutions to the current tender pricing conundrum. Clothier highlighted that there are concerns about recent tender evaluations, which have shown a tendency to prioritise the cheapest options. “We must emphasise the importance of viewing design fees as an integral component of the final project cost. Adequate investment in the design phase can yield significant savings, enhance project feasibility, and substantially mitigate risks,” he added.
SAICE highlighted the importance of reinforcing fee guidelines and ensuring industry-wide adherence 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,” Phayane-Shakhane added.
She called for a united front within the engineering community to uphold these standards. “We must continue to educate our clients about the long-term benefits of investing in quality engineering services and the risks associated with opting for the lowest bids. By collectively upholding fee standards, we enhance the overall value and perception of our profession.”
In conclusion, Clothier and Phayane-Shakhane reiterated SAICE’s commitment 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 our engineers provide. Together, we can uphold the highest standards of our profession and contribute to the successful development of our nation’s infrastructure.”
