Though public construction has increased over the past several years, cost-conscious, closely scrutinized owners (that's you) remain loathe to pay more. You're also less likely than private owners to pay early-completion bonuses and more likely to penalize late completion.

So although PUBLIC WORKS readers remain a huge market for the nation's 100,000 architecture/engineering firms, these firms are tweaking their pricing to maintain margins on public projects. Most significantly, they're offering fewer "basic" services and charging more for higher-level expertise.

Overall, billing rates rose 6% last year, according to the 22nd annual pricing survey of PSMJ Resources Inc., a management training and consulting firm that serves the companies you hire to conceptualize and design infrastructure. But at a median increase of 9%, billing rates for project engineers and architects were 3% higher than those for mid-level positions such as architect, senior engineer, and intern architect. And rates for job site inspectors fell 4%. (Click here for details.)

So what does this mean for you?

For one, you have to be more selective about the services you're willing to pay for. You may be writing requests for proposals that include services that were previously "bundled" but could be performed more cost-effectively in-house.

For another, the more engineering your staff provides, the more money you'll have to outsource expertise you can't afford to have in-house all year round.

And finally, you may want to adjust what you look for in potential employees. As you compete with the private sector for engineering talent, hire well-rounded generalists rather than more-expensive specialists. While you might not be able to offer them more money, you can offer them the opportunity to explore a wider range of engineering challenges.

How's that for spin?! Let me know what you think. And happy new year!

Stephanie Johnston
Editor in Chief
sjohnston@hanleywood.com