The Competitive Geo-Engineering Paradox

It struck me as I listened to our speakers and audience throughout the day, at the recent Geo2018 Conference, that there are a lot of really great professionals in the industry, in particular, geoprofessionals. The second thing that I realized was how lucky we were to have such high calibre speakers at the event.  The third realization came when we had our expert panel discussion and questions from participants. It’s really difficult as an owner/developer to know when you have a true quality geoprofessional on board on your project!

As President of GeoSolv, and in working with ground improvement systems for many years, I have had the benefit of working closely with many geoprofessionals in the industry.  During that time, I have gotten familiar with the methods, expertise, engineering, and overall street smarts of those geoprofessionals who work in the consulting field.  Over time I have developed my own personal preference for folks I like to work with on projects.  With that being said, unless we are bringing a geotechnical consultant in for some additional investigations, help with QC work, or some other reason, GeoSolv is NOT paying for the geotechnical consultant on the job.  GeoSolv is purely the recipient of their geotechnical report, and some of our methods or techniques are often mentioned as a possible approach in the geotechnical report recommendations section.

On numerous occasions, GeoSolv has had the privilege of working with the consulting geoprofessional directly to find the most valuable solution to present to the owner who is experiencing challenging soil conditions.  On other occasions, we have the opportunity to join a P3 or design-build team (one that also has a key consulting geoprofessional on the team),  and we participate together to find the best approach. That is where actual progress is made and is one of the most rewarding parts of my job as a design-build geoprofessional.

So, let’s get down to brass tacks – who’s paying?  The owner or the developer is ultimately the one who pays for the consultant’s services.  When you are paying, you want real competition.

At Geo2018, Renato Pasqualoni professed the right way to conduct due diligence when purchasing a property – including how to do a proper environmental and geotechnical review of the subject site.  Based on that review, you then may decide to do a geotechnical investigation.  The developer or owner ultimately procures the geotechnical work, either directly or indirectly through a prime consultant. And who scopes the investigation?  It can be any number of folks, and often NOT a geoprofessional.  Regardless of which individual scopes the investigation, it’s likely that everything will be done to ensure that the scope remains tight so that it doesn’t cost too much.  How do you know what the scope of a geotechnical investigation should be?  Should cost be the only consideration without any attention paid to the potential risks on that particular site and related to that specific project?

Masoud Manzari answered that question, explaining that geotechnical risk is not that simple. Poor planning, inadequate underground design, and geotechnical risks can derail your project and cause overruns to balloon out of control.  On average only 0.2% to 0.4% of a low-rise building’s total cost is spent on a geotechnical investigation, and up to 2.5% for an infrastructure project.  Cost overruns are proven to be higher when less quantity and quality of geotechnical investigation is undertaken on a site.  Masoud also pointed at some compelling evidence, showing an inverse relationship between the amount spent on the geotechnical investigation as a function of the total project cost, and the dollar value of the cost overruns.  Basically, when you spend less on your investigation as a percentage of project cost, there is a very strong chance you will have more cost overruns as a result.  But will spending more on an investigation ultimately save you?  Not necessarily – the quality of the investigation, and hiring the right professional is the key!  Using a staged investigation approach and advanced testing methods such as CPT, DMT, PMT, and others in the right conditions, along with more standard methods, is going to save you in the long run and will help prevent construction extras.

So then, how do you know who to hire for your project?  Well, I don’t suggest taking the lowest cost consultant for starters.  In fact, I don’t recommend putting geotechnical engineering out to any sort of competitive bid at all.  That goes counter-intuitive to everything the construction industry wants, doesn’t it?  Competition is there to ensure that you get value in the work you put out to competitive bid.  Owners – how’s that working out for you?  The statistics show that construction claims are on the rise and certainly a good chunk of that can be blamed on the quality of consulting engineering work.  In some of the statistics that Masoud presented, it’s of particular interest that at least 50% of historical construction claims have to do with the underground of a project, and most of that is related directly to the geotechnical investigation!

Am I throwing the geotechnical consultant into a hole in the ground?  On the contrary, I would suggest that due in large part to extreme competition, consultants, and in particular geotechnical consultants, are getting less than a third the time and budget they need to do a proper investigation.  If there is no proper investigation or information to use, errors in judgement can occur.  “Changed soil conditions” – ever heard that term used?  That is the single biggest cause of geotechnical related construction claims.  The time cycle on geological processes are measured in decade or century increments so soil changes cannot really occur that frequently, can they?  Whether changing or not, bad soils require good solutions and good solutions require keen geoprofessionals.

At Geo2018, we learned from Jason Crowder and David Moses that leftover sites require an innovative geotechnical engineer and an innovative structural engineer to help find the right combination of underground solution and structural design that provides the best value for the project.  It is now less common for you to be able to put spread footings on good ground – that is just a fact.  Folks are building their buildings taller and the leftover sites are poorer.

While the extremely competitive environment along with the rapidly rising incidence of claims is a caustic environment for innovation, the importance of getting the right innovative professionals on your project has never been clearer.  Owners, as leftover sites become the norm for development, don’t get caught in the competitive bid paradox for your geotechnical engineering work.  Remember that, unlike any other engineering work on your project,  geotechnical engineering reports and recommends, it does not design the soils that are there.  Putting this investigative work out to a highly competitive bid will likely just get you lower quality information.  It’s too easy, however, to just point to the construction industry as being to blame for driving prices down to extreme lows and creating the competitive geo-engineering paradox.  The geoprofessionals themselves have to accept blame for participating.

Geotechnical engineers – don’t keep undercutting to a point where you devalue your profession.  As geoprofessionals. we all like to tell owners that using heavy competition in geotechnical engineering to get a low price is more likely to hurt, rather than help, your overall project budget.  Although owners may not typically agree, geoprofessionals are also aware that scoping geotechnical work with the view that every dollar you wisely spend up front has the potential to save you thousands of dollars later.  However, when you are taking work at a loss or break even, this is undercutting and it reinforces market behaviour.  Further, your engineering profession has rules that say you may not do this.

In conclusion, there is no such thing as Competitive Geo-Engineering – that is the paradox. Extremely competitive geo-engineering work will often result in a lack of information and very conservative designs downstream (i.e. structural).  Low bids have a high chance to be exactly that on a challenging soil site… low – low in quality and low reliability in a claim situation.   Wisely choose the right geoprofessional and involve them early and often on your project.

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