Engineering Inc. - May/June 2013 - (Page 44)

Business Insights Deltek-ACEC Study Shows Steadily Improving Financial Picture for Firms The 2012 Deltek Clarity Architecture & Engineering Study, undertaken in collaboration with ACEC, revealed that A/E firms overall are experiencing improved profitability even in a slow-growing economy. The study compares 2012 data on the four most important operating metrics for A/E firms: net labor multiplier, utilization rate, overhead rate and operating profit rate. More than 200 U.S. and Canadian A/E firms participated in this year’s study, the 34th edition. The net labor multiplier, a measure of markup on labor costs, has been relatively flat over the past three years among surveyed firms, fluctuating between 2.85 and 2.95. The utilization rate (also known as chargeability), which measures the percentage of total staff labor charged to projects, rose in 2012 from 58.3 percent to 59.9 percent and now is up more than 5 percentage points since bottoming out two years ago. Yet, it still has room for improvement—it was at 63 percent in 2004. The overhead rate dropped by more than 10 percentage points last year from its peak in 2011. Overhead is now at the lowest rate since the recession began. The key drivers here are increasing utilization, which decreases labor charged to overhead, and a continued focus on cost control. The overhead rate is calculated by dividing total overhead (before distributions) by total direct labor expense. After reaching a decade low in 2009 at 8.35 percent, operating profit rates continued to rise steadily to 10.13 percent last year. Profitability Performance Trends 2010 2011 2012 Net Labor Multiplier 2.85 2.95 2.91 Utilization Rate 54.5% 58.3% 59.9% Overhead Rate 165.0% 172.5% 161.6% Operating Profit Rate 9.10% 9.26% 10.13% surveyors to use in the daily running of their businesses. In addition, COPS has released two more products. Baseline 6-4: Note to Property Owners will help firms explain why a survey is being done and make it easier to request information that may help, such as maps and/or personal knowledge. Baseline 2-4: Site Specific Safety Analysis identifies health and safety issues and lists relevant procedures for project personnel to follow on a per-site/per-project basis. The analysis gives all personnel a place to communicate health and safety concerns and allows for documentation of proactive remediation. All of the COPSdeveloped products are available at Engineers Explain Complex Technical Issues in Judicial Proceedings Experts are vitally important to American jurisprudence. They not only review and evaluate complex technical issues, but explain them in simpler terms to juries/triers of fact. Hundreds of engineers have been trained over the last four years in the fine art of providing effective legal testimony through ACEC’s Expert Witness Program. Though many may think the training focuses on what to do when being crossexamined by the opposing attorney, Leverage Your Engineering Expertise the bulk of the information covers what occurs outside of the courtroom during discovery, depositions and writing reports. Become a Confident Engineering Expert Witness takes attendees stepby-step through the ramifications and expectations of serving as an E 11 PDH ! expert witness. The course is for engineers, architects and surveyors interested in gaining recognition as an expert witness or adding this to their client services. The next day-and-a-half course is June 20–21 in Chicago. For the complete course outline and to register, visit http:// June 20-21, 2013 • Chicago IL Become a Confident Engineering Expert Witness Developed exclusively for Professional Engineers, Architects and Surveyors • Build Professional Reputation • Expand Personal Opportunities • Enhance Service Value This unique 1-1/2 day intensive program will help you increase the value of your expert testimony— in and out of the courtroom ARN AND Source: 2012 Deltek Clarity A&E Study COPS Provides 7 Baselines For Business Practices Business management and safety risks are critical concerns for surveying firms. To address these issues, the Council of Professional Surveyors (COPS) created Seven Baselines of Business Practices. The seven baselines are (1) culture, (2) planning, (3) education, (4) contract documents, (5) policy and procedures, (6) communications and correspondence, and (7) technical tools and documents. Each includes worksheets and sample documents for 44 ENGINEERING INC. MAY / JUNE 2013 S CERTIFICATE OF COMPLETION The ACEC Institute for Business Management provides comprehensive and accessible business management education for engineering company principals and their staffs. Visit ACEC’s online educational events calendar at or bookstore at, or call 202-347-7474, ext. 338, for further information.

Table of Contents for the Digital Edition of Engineering Inc. - May/June 2013

Engineering Inc. - May/June 2013
From ACEC to You
Market Watch
Legislative Action
2013 Engineering Excellence Awards
Annual Convention Wrap-Up
Mobile Power
Guest Column
Business Insights
Members in the News
Mergers & Acquisitions

Engineering Inc. - May/June 2013