The Federal Reserve, after 17 straight interest rate hikes since June 2004, decided not to raise rates for this cycle, citing increases in energy prices and a cooling of economic growth.
Just as the Fed has made the decision to take a stand and “stop the bleeding,” engineering firms have similarly been pushed to take a stand against an unfortunate trend in their industry: engineering expertise becoming a commodity, resulting in lower fees. Multiple firms in this year's CSE Giants survey lamented this phenomenon. But they aren't taking it lying down. In order to stay at the top of their profession, as well as keep from fading into the background of the building team picture, this year's respondents communicated two key tactics in battling the trend of commoditization: innovative design tools and energy expertise.
Jumping through hoops
The latter is something that owners are starting to demand, as the rising costs of and increasing uncertainty surrounding energy sources have become impossible to ignore. Add to that the fact that multiple entities, including the U.S. Dept. of Energy, IECC and ASHRAE, are pushing newer, tougher energy codes, and energy expertise, all of a sudden, becomes not only valuable, but a necessity.
These tougher requirements pose a challenge to engineers as owners are still hesitant to spend the extra money on more efficient equipment. In fact, the organizations noted above acknowledge this dilemma, noting that energy codes maximize energy efficiency only when “they are fully embraced by users and supported through education, implementation and enforcement.” And according to companies who participated in this year's Giants survey, it is virtually impossible to maximize energy efficiency, as many report they are having trouble complying with the new, more stringent energy codes while at the same time meeting historic demands for optimum comfort, ventilation and limited budgets.
“The energy code has forced electrical engineers to design to watts-per-sq.-ft. limits instead of foot-candle levels recommended by the Illuminating Engineering Society (IES),” explained GRW Engineer Inc.'s Vice President, William L. Maynard, P.E., LEED AP. “Lighting levels in buildings are going to be much lower—too low in my opinion.” Many clients, mainly federal agencies, he explained, require compliance with energy codes and IES recommendations for their own internally set foot-candle levels. As it is “impossible” to comply with both, his firm complies with the energy code. “There are not enough exceptions in the energy code to allow for special situations, like an explosion-proof aircraft corrosion control hangar that might legitimately need 100 foot-candles at the floor level.”
Nevertheless, the DOE states that while the revisions in the IECC and ASHRAE 90.1 include requirements that cannot be traded away, options and exceptions are provided to meet the needs of various building and space types and activities. However, Fishbeck, Thompson, Carr & Huber, Inc.'s chief mechanical engineer, George D. MacKellar, P.E., believes, “The justifiable drive to improve the energy efficiency of building systems, resulting in tighter energy code requirements, has increased the challenge to the engineer. In addition to meeting energy-efficiency goals, we must also meet the often-conflicting ventilation code requirements, the economic demands of owners in a competitive market and the higher expectations for comfortable working environments.”
Accordingly, although ASHRAE's codes are created to benefit the public by mitigating energy and capacity shortages and outages, many of this year's Giants agree that these tighter energy codes, although economically justified, are making their jobs more difficult. Fortunately, the tougher requirements are also increasing the demand for energy expertise.
Earth and sun
As energy savings was a major focus of the survey, we were very interested to hear what new energy-saving technologies engineers are designing into their projects. Two—geothermal and photovoltaic—received high marks. The former is nothing new; it's been around for quite some time, with most of its users located in Europe. However, because energy sources have become a controversial topic here in the U.S., the use of geothermal technology should only increase. According to Stephen J. Hudson, P.E., CIPE/CPD, president of James Posey & Assocs., his firm has been designing geothermal systems for the past 10 years. Many clients are educational institutions and have opted for these systems for their energy savings, which in some cases are estimated at 25% annually. They also contribute points toward LEED certification. “As M/E/P engineers, we also favor these systems because they eliminate the need for boilers or chillers and cooling towers, and, as they use no fossil fuels, they do not emit pollutants into the air,” said Hudson, adding that although geothermal systems have a higher up-front cost, his firm has witnessed paybacks within six to eight years, a period he feels will only be shortened by rising energy costs.
Michael Fischette of Concord Engineering Group is another proponent of geothermal. “Compared to traditional heating and air conditioning, the geothermal system saves an average of 30% in energy costs and reduces greenhouse emissions into the atmosphere,” he said. He sees geothermal systems as the “perfect solution where natural gas is not available.”
Moving from the earth to the sun, respondents noted that photovoltaic technology is another sustainable, utility-free technology that is quiet and virtually maintenance-free, and creates no pollution.
Lee VanOpdorp, P.E., an associate principal and manager of the corporate electrical department at KJWW Engineering, said, “The work being done with photovoltaic technology is the foundation for larger-scale implementation down the road. Generous grant money is helping us to learn how to best utilize this renewable energy source.” As such, he anticipates specifying the technology into more and more projects as photovoltaic life-cycle costs go down and electric utility rates go up.
Living in a 3-D world
Besides becoming “masters of energy,” this year's Giants are also trying to avoid the downward spiral toward commoditization by employing innovative software that allows them to perform their design work more efficiently.
While respondents listed several design software packages to accomplish this feat, a theme that ran throughout many of the responses was 3-D. TLC Engineer's COO Winston W. Gardner, P.E., noted that software packages like Autodesk Building Systems (ABS) and Architectural Desktop (ADT) allow users to create three-dimensional digital drawings using “intelligent” engineering objects that update automatically to reflect design changes. “All of the information in the building models is linked, so a revision made to one drawing automatically appears in all drawing files,” he said. “The result is faster exchange of data, greater productivity and better coordination between the engineers and architects.”
Which 3-D software is used when? Some companies use programs like ABS for the mechanical and electrical drawings, then ADT for structural drawings. “For the mechanical discipline, this means all ductwork, piping and equipment are drawn in 3-D; for electrical, the lighting and power are in 3-D; and for structural, everything is in 3-D,” Gardner said. “In addition to better coordination, this technology gives us the ability to generate elevations, isometrics and sections instantly. For presentation purposes, the 3-D objects can be shown with 'rendered' surfaces in a 3-D view.”
So what else does 3-D software do? According to Dennis M. King, FAIA, Harley Ellis Devereaux, it allows for greater exploration and understanding of design alternatives through animation software; creates base information for analytical processes like solar studies and energy modeling; allows for critical coordination of technical documents; and sets the stage for a range of new tools and processes currently being developed that are fundamentally changing the way design and construction is done.
Three-dimensional technology also helps develop productivity. “Because of ABS, recalculation was automatic,” explained Gardner. “To relocate ducts we simply dragged them to a new location, and all the fittings automatically went along. In the past, we did that by hand—with a lot of erasing and redrawing lines. ABS helped us improve productivity by roughly 50%.”
In addition, one of the benefits that stems from working in a 3-D environment is the ability to animate design. “Whether it's used to explore early conceptual work using simple volumes or to produce a fully rendered lifelike fly-through of one's finished project, this tool is ideal for both clients and design professionals to visualize design alternatives, foster collaboration and promote decision making,” noted King.
The technology doesn't stop there. Three-dimensional animation is also used in conjunction with computational fluid dynamics (CFD). John Farrell, P.E., the CTO of KTA Group, stated, “Through the medium of 3-D animation, CFD is able to provide a comprehensive understanding of airflow, heat transfer, temperature distribution, occupant comfort, indoor air quality, contamination concentrations, etc., of building design, especially in unusual HVAC designs.”
A few good designers
Avoiding commoditization is clearly a key goal of any engineering firm, but respondents were also vocal about another major challenge: recruitment. While last year's survey revealed that recruiting young engineering talent was a major issue for many firms, this year's respondents noted that recruiting and maintaining engineering talent at all levels is a major hurdle.
Survey respondents cited multiple reasons for this situation, but the most prominent answer was that it's a tight labor market and there is simply not an abundance of qualified, experienced designers. “There is a shortage of technical talent in our region, and our markets are very active,” said Reba Capers, vice president of development with Wink Companies. “We've responded to this with increased wages and benefits and have done everything we can to attract and retain our staff.”
Not only are recruiting issues challenging, they can also force firms to turn away work. “We obviously want to work on every project we possibly can, so our challenge is then saying no when we don't have the time or the staff in order to do the job right,” said Steven J. Yanke, P.E., principal, director of engineering with OWP/P Engineers, who adds that his firm's current needs are mostly at the senior level and that they've even gone as far as to employ a recruiter. “But I'd much rather use our hard earned money to pay our staff, rather than a recruiter.”
As such, firms have had to make themselves more attractive to prospective employees than the company next door. “The best talents always have choices,” said Monica Dugan, corporate director of human resources with SSOE, Inc., adding that her firm distinguishes itself by offering leading-edge total rewards, total compensation, total benefits, career development and career path programs. “We also strive to foster a culture of work-life balance, which can be difficult in our deadline-driven industry.”
Bill Gieseler, vice president of marketing with W.H. Linder and Assocs., said that his firm has had to increase pay to maintain and protect current staff from recruiting raids, and is also recruiting very aggressively in multiple sectors. In addition, he noted, “We are hiring entry level engineers in an attempt to 'grow our own' to deal with the shortage of experienced design talent.”
Clark-Nexsen has employed another tactic. As senior vice president/CFO Carl Cholewa explained, his firm has been experiencing recruiting issues for the last five to seven years. The company has looked into starting branch offices in areas where the qualified workforce was believed to be more available and found that while there may have been technical talent available, there was no real pool of talent in the building design area to be found. It has also shifted work to some of its branch offices that had the capacity to accommodate the additional load, but found that these offices also experienced similar recruiting problems.
In some cases, the problem revolves around a change in workload. “From an engineering standpoint, switching from conventional design-bid-build to design-build requires a different mind-set and approach to projects,” said Paul J. Lutkevich, P.E., technical resource center manager for M/E at Parsons Brinckerhoff.
Gary L. Skog, FAIA, principal, corporate marketing, with Harley Ellis Devereaux, admitted there are no easy answers to the recruiting issue. While he noted that the long-term outlook might be to see the issue as a supply and demand problem that will eventually work itself out, firms need to do what they can to battle the problem in the short term. “Many large firms are offering significant recruiting stipends for finding new employees, and most are willing to hire talented people as they become available, even if they do not have the work to support them immediately,” he said. “As a firm with multiple offices around the country, we also look at balancing our resources by relocating people, where possible, to faster growing offices with more workload.”
While the challenges of finding and holding onto design talent and maintaining and advancing the role of the engineer appear to be long-term, the Giants of the profession are still doing what they do best: looking for and implementing innovative solutions to solve the problem put in front of them.
Issues about which owners consult engineers
Source: CSE 2006 National Engineering Survey
Building system solutions to optimize energy efficiency
Suggesting building system/technology
Power quality and reliability
Suggesting specific M/E/P technology
Researching alternative products
Suggesting specific brands of products
Building systems integration solutions
Top software/design tools used by engineers
Source: CSE 2006 National Engineering Survey
Project management software
Document management software
Interoffice communications management software