Last updated November 6, 2026
General information, not tax or legal advice. The rules depend on your country and your situation, so check anything with a tax or legal consequence with your accountant.
To write an engineering fee proposal, define the deliverables, estimate hours for each by grade, choose a fee basis, and write down what you've assumed and excluded. The client reads the total. Whether you make money on it depends on the assumptions, so they deserve as much care as the number.
What goes in an engineering fee proposal?
An engineering fee proposal states what you'll deliver, on what information, for what fee, under what terms. Each section is there because a dispute starts without it.
| Section | What it says | What goes wrong without it |
|---|---|---|
| Scope, by deliverable | Calculations, drawings, reports, inspections | "Structural design" means everything to a client |
| Exclusions | Geotechnical work, surveys, temporary works, other disciplines | You inherit the gaps between consultants |
| Information from others | Survey, architect's drawings, loads, by when | You wait, and the programme becomes your fault |
| Fee and basis | Amount, lump sum or time, and what it's fixed against | Nobody knows what happens when things change |
| Rates for extra work | Hourly rates by grade, valid to a date | Each extra becomes a negotiation |
| Expenses | Included, or charged at cost | Travel and printing queries on every invoice |
| Programme | Your dates, tied to receiving the information | Dates read as promises regardless of inputs |
| Payment stages | What triggers each invoice | You fund the job until the end |
| Insurance and liability | Professional indemnity cover, any cap on liability | The client's lawyer writes this part for you |
| Statutory roles | In the UK, whether you take CDM 2015 duties such as principal designer | An assumed role, unpriced |
| Terms | Your own, or a named form | Two sets of terms and no clear winner |
Standard forms save a lot of drafting. In the US, EJCDC publishes owner and engineer agreements, including E-500. Internationally, many consultants use FIDIC's White Book. Have a lawyer or your insurer look at anything amended.
Which fee basis should an engineer use?
The right fee basis depends on how well the scope is defined and who should carry the risk of it changing.
| Basis | Use when | Risk sits with | Watch out for |
|---|---|---|---|
| Lump sum | The scope is clear and you've done similar work | Engineer | Scope creep, unless assumptions are tight |
| Time charge with a cap | The scope will develop, but the client needs a limit | Shared | Say whether the cap can move, and when you'll warn them |
| Time charge, no cap | Investigations, expert work, unknown problems | Client | Clients want regular reports of hours |
| Percentage of construction cost | The client expects it and the cost is well known | Shared | Name the cost figure and when it's fixed |
| Unit rates | Repeated items, such as per inspection or per test | Shared | Quantities can drift, so estimate them |
The guide to lump sum vs hourly fees goes further into the first two. Mixed bases are common: a lump sum for design, and unit rates for site inspections.
How do you estimate the hours for an engineering fee?
Estimate the hours for an engineering fee deliverable by deliverable, split by grade, because a principal's hour and a technician's hour cost very different amounts. Here's an invented example: a structural engineer pricing a three-storey extension, at invented rates of €110 for a principal, €85 for a senior engineer and €60 for a technician.
| Deliverable | Principal h | Senior h | Technician h | Cost |
|---|---|---|---|---|
| Site visit and review of the existing structure | 4 | 8 | 0 | €1,120 |
| Scheme design and calculations | 6 | 30 | 12 | €3,930 |
| Detailed design, calculations and drawings | 6 | 44 | 40 | €6,800 |
| Building control submission and replies | 2 | 10 | 6 | €1,430 |
| Site inspections: 6 visits at 3 hours | 0 | 18 | 0 | €1,530 |
| Queries during construction | 0 | 12 | 4 | €1,260 |
| Total | 18 | 122 | 62 | €16,070 |
A 10% allowance for risk adds €1,607, making €17,677. Round it to a lump sum of €17,700, and split it where the work falls:
| Payment stage | Work it covers | Cost | Fee |
|---|---|---|---|
| A: on issue of scheme design | First two rows | €5,050 | €5,500 |
| B: on issue of detailed design to building control | Next two rows | €8,230 | €9,100 |
| C: monthly across site inspections | Last two rows | €2,790 | €3,100 |
| Total | €16,070 | €17,700 |
Your rates need to carry overheads and profit, and the guide to calculating a charge-out rate shows how. Past jobs are the best check on the hours. The method in writing a fee proposal from past hours works just as well for engineering.
What assumptions should an engineering fee proposal state?
An engineering fee proposal should state every assumption that, if wrong, would change your hours. Wording to adapt:
This fee assumes a steel frame on the existing foundations, subject to the trial pits being provided by others before scheme design starts. It includes six site inspections of up to three hours each and one round of revisions after each drawing issue. Further visits or revisions are charged at the rates in section 6, and we'll tell you before they arise. Geotechnical investigation, temporary works design, connection design by the fabricator and all building services are excluded. Our programme runs from the date we receive the architect's general arrangement drawings and the survey.
The two limits people forget are revisions and site visits, because both feel small when you're writing the proposal and neither is small when the job runs badly. Connection design and temporary works are worth naming too: if nobody says who does them, the question arrives on site.
When do you not give a price at the proposal stage?
You don't give a price at the proposal stage when a public client selects on qualifications first. Under the US Brooks Act, federal agencies select architecture and engineering firms on qualifications, and then negotiate compensation they determine is fair and reasonable with the most highly qualified firm. If that fails, they move to the next firm. The agency weighs the scope, complexity, professional nature and estimated value of the services.
Many states have their own versions for public work, so read the request carefully, since a submission may be expected to leave price out. Prepare your build-up anyway. You'll need it the moment negotiations start, and a table like the one above is what lets you explain a number you can defend.
Sending an engineering fee proposal from ERPFlow
ERPFlow has no estimating sheet, staff rates or project budgets, so the hours build-up stays in a spreadsheet. ERPFlow can handle the priced offer and everything after it:
- The offer. A quote with one line per payment stage, with tax set per line, goes out as a PDF in any of 19 languages, with the email recorded on it. The quote's notes print on the PDF, which suits a short list of assumptions. Keep the full scope in your own document and send it separately, because attachments on a quote are internal.
- Your rates. A service holds each hourly rate with its tax, ready for any time-charged extras.
- Acceptance. There's no e-signature or online acceptance. You mark the quote accepted by hand and can attach the signed proposal to it.
- Billing by stage. Choose Convert to invoice when a stage falls due. Each conversion is a fresh draft invoice of the whole quote, so remove the other stages' lines before issuing. The two documents stay linked, and the progress billing guide covers how to set the stages up.