May you live in interesting times —€“ an old Chinese curse!

July 2013 » Columns » FIRM THOUGHTS
David F. Evans, P.E., P.L.S.

One of the key leaders of our firm always said, "This consulting business is simple: Find work, do work, bill for work, collect your bills." My reply was always, "It may be a simple business, but that does not make it easy."

Calling the last three or four years in the consulting engineering business interesting, puts you in the category with people who enjoy horror movies, root canals, colonoscopies, and airport security stations. What has made these years difficult rather than interesting is the lack of work to find. Without "find work," you don't need the rest of the simple equation.

If your firm was focused on land development engineering, you are probably now looking for other engineering work, looking for employment, or looking for unemployment checks! The housing market is getting better and the number of empty foreclosed houses is getting smaller, but if you went out of business because your housing/land developer clients disappeared when lending dried up, (hopefully after you were paid!) the housing market recovery is too slow and too late. The demise of the Savings and Loan institutions in 1980-1981 required that my firm terminate 75 percent of our staff. I fear many firms have terminated 100 percent during this prolonged housing/development debacle. This is not interesting times if you were part of, or the owner of, a land development engineering firm.

Of course when the worldwide economy goes into a tailspin and then stays there, most engineering disciplines are similarly affected. The reduced tax dollars, generated by a reduced economy, that flow into city and county treasuries mean reduced dollars for municipal works. The dollars they do receive go into maintaining government employees. Money for engineering consulting firms becomes limited or non-existent. The "find work" part of our simple business is not easy.

Transportation programs fell into the same struggling category. With fewer people going to work, in fewer cars, with better mileage, the gas tax dollars generated for transportation agencies declined big time. So they too faced the task of maintaining their engineering staff and trying to complete ongoing projects. Therefore, they put future projects for consulting engineering firms on the shelf. It seemed to me that even the billions of dollars in TARP funds allocated to "shovel ready" projects went mostly to maintenance work and not to new work for consultants to "find."

Interesting times? No, miserable times! If there is a bright spot in transportation work it is in large transit programs that have designated funding. Lucky for some firms, these programs are long-term, multi-year, and big-dollar efforts. But you can only go so long on one project, and new transit projects are as rare as Republicans in California. My comment to our staff at the end of a program was always, "It is like the doctor that loses a patient when he or she gets well... now what?

I get on a soap box for gas tax every chance I get. The gas tax for the federal government was established at the amazing rate of 18.4 cents a gallon in 1993. Now 20 years later, due to inflation, it has the value of about a dime. A dime! The price of a gallon of gas changes that much weekly! But since it is political suicide to support a tax rate increase, our brilliant leadership in the current administration advocates a safer plan: Raise the fuel efficiency requirement standards for cars and light trucks. They (he) states that the higher standards will be "comparable to lowering the price of gas by $1.00 by 2025." I have yet to understand how that affects the 230 million passenger vehicles now on the road. OK, I'll get off the gas tax soap box.

If there is one place to find work during difficult, interesting times, it is with water service providers and sewerage collection and treatment agencies that have customers who have little choice in consuming the agencies' products and services. If the agency/provider needs new facilities, it proposes an increase in the rate and says vote for the increase or don't drink the water or flush your toilet (sort of). So if you can find the agency/provider that needs design services, you have found a paying customer of your own.

However, getting into the water/sewer design consulting world is not all that easy. It has been dominated by the mega firms and they are not anxious for more competition. My firm tried every idea we could think of to become a player – hire a champion, start with small municipalities, take on small tasks, build a team, and build a reputation. Doing all these things over several years has led us to be a bit player, but still a player. So if you can lead your firm into the water/sewer business, you know there will always be a need. It's where the money is!

I told you this is a simple business.

David Evans, P.E., PLS, F.ASCE, is the founder (1976), Chairman Emeritus, and a member of the board of David Evans Enterprises, Inc., the holding company for David Evans and Associates (www.deainc.com), a multidisciplinary professional services firm headquartered in Portland, Ore. He can be contacted at david.evans@zweigwhite.com.

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