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UNIVERSITY OF ILLINOIS CEE ENGINEERING IN RESIDENCE PROGRAM

UNIVERSITY OF ILLINOIS CEE ENGINEERING IN RESIDENCE PROGRAM. “ Now I’m An Engineer - Do I Want To Be A Consultant?” Presented By: Paul D. Koch, P.E., BCEE April 20, 2012. PRESENTATION SUMMARY. Overview Of Consulting Engineering Key Elements Of A Consulting Practice

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UNIVERSITY OF ILLINOIS CEE ENGINEERING IN RESIDENCE PROGRAM

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  1. UNIVERSITY OF ILLINOISCEE ENGINEERINGIN RESIDENCE PROGRAM “Now I’m An Engineer - Do I Want To Be A Consultant?” Presented By: Paul D. Koch, P.E., BCEE April 20, 2012

  2. PRESENTATION SUMMARY • Overview Of Consulting Engineering • Key Elements Of A Consulting Practice • Terms, Tools, & Tips for You To Consider and Remember

  3. JOB OPPORTUNITIES • Government • Academia • Industry • Consulting

  4. CHOOSING CONSULTING AS A CAREER • Type Of Firm • Services Offered • Disciplines Covered • Size Of Firm • Small - Less Than 50 • Medium - 50 - 500 • Large - > 500

  5. CHOOSING CONSULTING AS A CAREER (continued) • Reputation & Position In Industry • People • Management/Ownership • Staff • Benefits and Location

  6. ORGANIZATION OF A CONSULTING FIRM • HRA • PES • SAIC

  7. HRAORGANIZATION CHART HRA BOARD OF DIRECTORS ADMINISTRATIVE SUPPORT PRESIDENT DIR. OF OPERATIONS VP/TREAS. & DIR. ELEC. ENG. VP/SEC. & DIR. MECH. ENG. DIR. OF ARCH. CONSTRUCTION FIELD REPS ELECTRICAL MECHANICAL ARCHITECTURAL CLERICAL, TECHNICIANS & CADOPERATORS

  8. PACIFIC ENVIRONMENTAL SERVICES, INC.ORGANIZATION CHART CORPORATE PLANNING PRESIDENT CONTROLLER/ ADMINISTRATION MARKETING TECHNICAL DIRECTORS WESTERN REGION MIDWEST REGION SOUTHEAST REGION MID-ATLANTIC REGION SOUTHWEST REGION AIR QUALITY MANAGER MANAGER MANAGER MANAGER MANAGER SOURCE TESTING MANAGER MANAGER MANAGER MANAGER MANAGER OCC. HEALTH & SAFETY MANAGER MANAGER MANAGER MANAGER MANAGER COMPUTER SYSTEMS MANAGER MANAGER MANAGER WATER MANAGER MANAGER WASTEWATER MANAGER MANAGER MANAGER HAZ WASTE/P2 MANAGER MANAGER MANAGER MANAGER

  9. SAIC CORPORATION Chairman and Chief Vice Chairman Executive Officer Vice Chairman President and Chief Operating Officer Vice Chairman SAIC Commercial Technology Science & Technology Segment Technology & Systems Segment Technology Services Company Real Time Systems Group Advanced Technology & Analysis Sector Advanced Technology Sector Aerospace & Defense Sector Science & Engineering Sector Communications, Info & Space Sector Space, Energy & Environment Sector Info & Technology Systems Sector Systems, Software & Telecommun. Sector Technology, Policy & Operations Sector Systems Technology & Integration Sector Environment 1 of 20 Pages Technology Research Group SAIC ORGANIZATION - FY92

  10. ‘ELEMENTS’ OF A CONSULTING PRACTICE • Business Plan or (Strategy) • Business Development • Marketing • Sales • Contracts • Project Management: • Produce a QualityProduct • Meet Budget and Schedule • Develop a ProfessionalStaff • Customer Follow-up • Review Deliverables and Customer Satisfaction • Pursue AdditionalWork

  11. Business Development Contract Business Execution Plan Customer Project Follow-up Mgmt. THE CYCLE OF SUCCESS

  12. BUSINESS PLAN • Define Services Offered • Identify Types Of Clients • Establish Geographic Area • Assess Competition • Develop Targets & Tracking Mechanisms • Agree It’s A “Living Plan”

  13. Business Development Contract Business Execution Plan Customer Project Follow-up Mgmt. THE CYCLE OF SUCCESS

  14. DEFINITION OFBUSINESS DEVELOPMENT (BD)“Creating the opportunity to bring the best solutions to customers.”

  15. BD CONCEPTS • Apply to All Career Choices • Consulting • Industry • Academia • Government • Required to Successfully Compete and Have the Opportunity To Execute Work

  16. FUNDAMENTAL BD BUILDING BLOCKS Relationships Communication • Listening • Response

  17. KEY COMPONENTS OF BUSINESS DEVELOPMENT • Marketing • Sales

  18. MARKETING:STRATEGIC EFFORT WITH FOLLOW-UP ACTIONS • What Services Do We Offer? • What Customers Will We Pursue? • What Geographic Area Will We Support? • What Tools Will We Use? • Brochures • Advertising • Internet • Conferences/ Publications • ‘Freebies’

  19. SALES:ACTION EFFORT TO EXECUTE A MARKETING STRATEGY • Additional Work From Existing Customers • New Work From New Customers • References • Networking • Cold Calls

  20. BUSINESS DEVELOPMENT STEPS • Identify/Obtain Clients • Define Needs/Projects • Prepare/Submit Proposals • Select Firm • Negotiate/Execute Contract

  21. “WHEN AND WHERE ARE YOU INVOLVED?”ALWAYS ANDEVERYWHERE!

  22. IDENTIFY/OBTAIN CLIENTS • Existing Clients • Firm’s Reputation • Personal Contacts - “Networking” • Advertising/Promotion/Conferences • Cold Calls

  23. ‘MAKING THE SALE’ • One-step Sale:Problem and Project Defined; Prepare Proposal and Select a Firm • Two-step Sale:Agree a Problem Exists; Define a Project; Prepare a Proposal and Select a Firm • Three-step Sale:Identify a Problem and Agree It Exists; Define a Project; Prepare a Proposal and Select a Firm

  24. WHEN DO YOU PREPARE A PROPOSAL? When you are Requested to do so by a potential customer – i.e., in response to a verbal or written: “Request for Proposal” – “RFP”

  25. HOW DO YOU GET AN RFP? • Proactive Customer Contact • Customer Mailing to ‘Key’ Firms • Commercial Publications – Engineering News Record (ENR), Dodge Reports • Government Publications – • Federal Business Opportunities—”FBO” • State Procurement Opportunities • ‘City Bulletin’

  26. WHAT KINDS OF PROPOSALS ARE THERE? • ‘Verbal’ Proposal - No! • Letter Proposal • ‘Comprehensive’ Proposal—Technical and Cost Proposals • SF 330 or Equivalent • Statement of Qualifications

  27. WHAT DO YOU DO WHEN YOU GET AN RFP? • Read ALL of It Thoroughly! • Give It to Other Key Staff to Review (Both Technical and Administrative) • Identify Incumbents • Make ‘Go, No-Go’ Decision • ‘Prime’ Contractor • ‘Sub’ Contractor

  28. HOW DO YOU DECIDE? • Who Is the Customer? Are We Known? • What Is the Scope of Work - ‘SOW’? • What Technical Skills and Level of Effort (LOE) Is Required? • What Are the Selection Criteria and Weights? • How ‘Big’ Is the Project?

  29. HOW DO YOU DECIDE? (continued) • Is It a ‘Set Aside’?—8(a); SBSA; SDVOSB; WOB/WOSB; HubZone • What Are the Location Factors? • What Is the Duration of the Assignment? • What Is the ‘Fine Print’? • When and Where Is the Proposal Due?

  30. WRITTEN PROPOSAL • Introduction • Scope of Services - Tasks • Project Schedule • Project Budget (Cost) • Qualifications of ‘Team’ • Prior Experience • Staff Resumes • Facilities

  31. WINNING PROPOSALS • Address ALL Requirements • Make Yours ‘Easy to Score’ • Discriminators not Platitudes • Factor-Benefit-Proof

  32. SELECTION PROCESS • Presentation or BAFO • Win--Negotiate Contract • Win or Lose--Get a Debrief • Lose--Protest (RARE!!!)

  33. THE CYCLE OF SUCCESS Business Development Contract Business Execution Plan Customer Project Follow-up Mgmt.

  34. CONTRACTS -ALWAYS HAVE ONE! • Forms • Elements • Type Of Contract = Basis Of Payment

  35. FORM OF CONTRACT • Verbal - Never! • Written - Always!

  36. CONTRACT ELEMENTS • Client • Consultant • Scope Of Work • Price • Schedule • Terms/Conditions - “Fine Print” • Authorization/Signatures

  37. TYPES OF CONTRACTS • Fixed Price/Lump Sum/% of Construction—Scope Well-Defined • ‘T&M’ or ‘T&E’—Scope Flexible • Cost-Plus-Fixed-Fee—Either Case • Cost-Plus-Award-Fee—Fee Based on Performance

  38. IMPORTANT TERMS • Labor Rates • Direct Labor Rate • Billing Rate • Overhead - Indirect Costs • G&A - General & Admin. Expense • Direct/Reimburseable Costs • Profit

  39. STANDARD SCHEDULE OF COMPENSATIONENGINEERING SERVICES CLASSIFICATION (DIRECT LABOR RATE) BILLING RATE Principal Engineer/Scientist I $50.00 $150.00 Supervisory Engineer/Scientist I $40.00 $120.00 Engineer/Scientist I $30.00 $ 90.00 Assistant Engineer/Scientist I $20.00 $ 60.00 Senior Support Services $10.00 $ 30.00

  40. EXAMPLE BILLING RATE CALCULATION

  41. OVERHEAD BREAKDOWN 0500 Indirect Labor/Selling/Admin./Incentive Comp 0515 Vacation/Holiday/Sick Leave 0535 Payroll Taxes 0540 Worker’s Comp/Group Insurance 0550 Employee Welfare/Training & Education 0560 Benefits Plans Administration 0565 Recruiting & Relocation 0570 Travel - Fares/Lodging & Subsistence/ Car Rental/Mileage/Tolls/Travel - Other 0595 Office Rent/Utilities/Janitorial & Maintenance 0607 Equipment Maintenance & Repair 0610 General Insurance 0615 Reproduction G&A BREADDOWN Accounting Costs Corporate Management Costs

  42. LUMP SUM/FIXED PRICE/% CONST. • Very Well Defined Scope • Complete Project For Fixed $ • FIRM ASSUMES RISK • Imagination Yields More Profit • Payment By % Complete Or Deliverable

  43. T&E OR T&M • Scope Of Work Less Well Defined • Compensation Based On Total Labor Costs And Expenses • Option: “Upset” Maximum Amount • FIRM AND CLIENT SHARE RISK • Payment Based On Schedule Of Compensation

  44. CPFF/CPAF • Well-Defined or Flexible Scope • Complete Project For An Estimated Total Cost Plus A Negotiated “Fee” (Profit) • FIRM AND CLIENT SHARE RISK • Total Profit (Fee) Is Fixed - “Costs” Can Increase for Payment • Payments Based Costs Incurred, Plus Portion of Fixed/Award Fee

  45. THE CYCLE OF SUCCESS Business Development Contract Business Execution Plan Customer Project Follow-up Mgmt.

  46. PROJECTMANAGEMENT • Team Concept • Project Work Plan • Tools/Techniques

  47. TEAM CONCEPT • Project Manager, Project Engineers and Subcontractors • Corporate Management—Legal, Accounting, SR Staff (QA/QC) • Support Staff

  48. PROJECT WORK PLAN • Discrete Tasks/Outputs • Defined Budget/Schedule • Staff Responsibility Identified • Subcontractor Management

  49. TOOLS/TECHNIQUES • Tracking: Scope, Cost, Schedule and Deliverables • QA/QC and Key Review Points: Internal and with Customer

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