The contract amount for public works projects is low
Is it a given that public works projects should be both affordable and high-quality?
Does awarding contracts to the lowest bidder reduce wasteful spending of tax dollars?
No, no, wait a minute! Even if you don't know the reality of the construction industry, that's just a terrible way of thinking!
Are the public's essential services a waste? Are there any good, affordable options?
If we don't start taking this seriously, there might not be any construction engineers left in this country.
Driven by that sense of urgency, as a civil engineer, I took a serious look at the structure behind the low salaries in this industry.
Design unit prices are not keeping pace with the market
I believe the sole reason why wages in the civil engineering industry aren’t rising is simply that the “prime contractor’s contract price” is low.
And there are three reasons for that.
First,The fact that design unit prices have not kept pace with the market.
Although design rates have been rising year after year, market rates have also been increasing, and we’ve been playing catch-up for the past few years. As a result, there’s a time lag, and ultimately, the two don’t match up.
Furthermore, when government agencies conduct surveys of market prices, they simultaneously carry out surveys of actual market conditions, and this is problematic.
Simply put, a “market survey” refers to the actual purchase price paid by major companies and others when they make bulk purchases. In other words, the price is already lower than the market rate at the time of design, and if a bid is awarded at the minimum threshold and a quote is obtained based on that, it can lead to a situation where an actual budget cannot be established.
(Although this issue is one of the factors hindering the adoption of a two-day weekend in the civil engineering industry, it is slightly off-topic for this discussion, so I’d like to address it another time.)
Second,The fact that designers tend to tinker with the step sizeThat's right. As I've often seen in other articles by the "God of Construction," there are cases where, driven by budget constraints, people use unrealistic machine settings or manipulate quantities using their own calculations rather than standard labor rates.
To begin with, the standard labor rates are set at surprisingly favorable levels, and the reality is that in actual construction sites—where various factors involving third parties and others come into play—it’s difficult to meet these rates without pushing the limits.
When considering safety and profits, this can lead to poor decision-making, which is one of the reasons why accidents involving hazardous work do not decrease.
It is essential to review direct labor costs and overhead expenses
The third reason why the prime contractor's bid price is low is that,The construction schedule is not appropriate, and as a result, the engineering expenses do not add up..
There’s no need to go into detail about the scheduled construction period, but since all we’re hearing are complaints about how unrealistic it is, it certainly can’t be called reasonable.
Although engineers are included in the labor rates as coordinators, the construction costs submitted by each subcontractor eat into that portion, so we have no choice but to cover the shortfall from site management fees, general administrative expenses, and other sources.
If you're not sure, try multiplying your monthly salary by the project duration and adding in head office expenses and other miscellaneous costs. If the project takes longer, it's bound to get pretty tough.
In other words, while revising the scheduled construction period, it will be essential to review both direct labor costs and overhead expenses.
Because public works contracts are low-priced, bid-rigging and dumping occur repeatedly.
If public works projects are priced too low, profit margins simply won't increase.
People who aren't familiar with the construction industry might hear or see figures in the hundreds of millions or tens of millions and think, "Is it really that profitable?" But in reality, those hundreds of millions or tens of millions are used to purchase materials and other supplies in advance.
If profit margins don't improve, we won't be able to win contracts for future projects, and small and micro construction companies that are working hard and doing their best won't be able to survive.
Consequently, unscrupulous and unqualified operators seeking to enter the market may take advantage of this situation to engage in rampant dumping; as a result of the resulting market contraction, there is even the possibility of collusion arising from cutthroat competition, or, conversely, collusion as a countermeasure.
However, no matter what the situation may be, since we’re engaging in even fiercer price competition on projects that are already low-cost, the strain is naturally being felt everywhere. Given that these engineers also serve as liaisons with subcontractors and materials manufacturers while managing the actual budget, it’s not hard to imagine the challenges they face.
Work-style reform is necessary, but to make matters worse…
While there’s no such thing as an easy job, when viewed in relative terms—given the construction industry’s demands in terms of knowledge, physical stamina, and mental resilience—work-style reforms are likely needed at each company.
However, I’d like you to wait and see how things play out on the ground a little longer before making a decision.
Honestly, with so many documents that make you wonder, “Is this really necessary?”—is it a bit unreasonable to expect us not to work overtime even though our workload hasn’t changed?
For example, unless consulting fees are paid, tasks such as surveying, design, and the preparation of revised drawings—particularly when changes are required due to discrepancies between the site conditions and the design—are all essentially the client’s responsibility.
That said, there are obviously benefits to having the contractor handle it, so as far as that point is concerned, I’m not too concerned about it.
So what I’m trying to say is that, given the current situation—where we’re already working the standard workload plus a bit extra—I’m worried that we might end up in a situation where the company bans overtime, we have to explore solutions like assigning two engineers to a project because the work won’t get done, and ultimately, the budget gets squeezed and salaries don’t go up.
Government agencies should look at “reality,” not “ideals”!
No matter how much pride or a sense of fulfillment there may be, young people won’t want to work in civil engineering under these circumstances.
Now that we have such a well-developed infrastructure, isn’t this the time to consider its importance not just in terms of “ideals,” but based on “reality”?
Of course, I understand that there are people in both the public and private sectors who are working very hard.
Still, when I look at the work-style reform initiatives and measures to attract young talent, I can’t help but get the impression that the attitude is, “Government agencies don’t want to change, so you folks on the front lines just have to figure it out yourselves.” I really hope I’m just misinterpreting things.
*How are things going at your workplace? I’d appreciate it if you could leave a comment.
