Consulting Engineers take action on declining oil prices - will benefit Alberta government and municipalities

EDMONTON, Feb. 6, 2015 /CNW/ - "The Consulting Engineers of Alberta (CEA) are responding to the current decline in oil prices by asking our members to hold the recommended 2014 rates" says Matt Brassard P.Eng., President Consulting Engineers of Alberta. "We are also proposing two additional solutions that will assist the province and municipalities in management of limited infrastructure funding."

"A great deal of the work our members do relates to public sector infrastructure such as roads, water treatment, schools and  a variety of other projects for the provincial government and municipalities. Annual revenues for consulting engineering services in Alberta amount to approximately $2 billion," adds Brassard.

Each year the CEA recommends a rate structure for the coming year. Only two short months ago CEA recommended a 3.3% rate increase on 2015 contracts.  However by holding the 2014 recommended rates on new contracts, consulting engineers could be reducing their revenues by about $70 million.  That is enough money to pave Highway 2 from Edmonton to Calgary and back to Red Deer again.

"We know the provincial government has to reduce expenditures to address the $7 billion shortfall in provincial revenues. We recommend, however, that special consideration be given to infrastructure. In past downturns when infrastructure spending was postponed, there was significant deterioration in existing infrastructure and major cost increases when funds eventually became available. Building infrastructure in a slow economy is far more cost-effective," adds Brassard. "At the same time, even if infrastructure spending is curtailed, planning and design should continue so that when funds are available projects will be shovel-ready and can start immediately."

"A second recommendation to the provincial government is implementation of Qualifications Based Selection (QBS) for procurement of consulting engineering services. QBS is a procurement process that puts primary focus on qualifications rather than price. It has been used throughout the United States since the 1970s and by the City of Calgary since the late 1970s. Reports show that QBS results in cost savings of approximately 5% over the lifecycle of an infrastructure project. Although this is a longer term solution, it can have a dramatic impact upon government infrastructure expenditures."

"We are pursuing these initiatives because we want to keep our knowledge-based profession secure. We don't have equipment and machines—we have people and historically we have found that during major economic downturns we have lost intellectual capacity and it can take years or even a generation to recover. We want consulting engineering to be attractive to young people so we do not lose a generation of engineers as we did during the National Energy Program," adds Brassard.

"We also believe that it is incumbent upon Albertans to recognize the financial difficulties facing our province—we want to be part of the solution. Today we are calling on all firms who do work for the public sector to consider the action we have taken. By working as a team we can get through these difficult financial times," concludes Brassard.

In Alberta he CEA represents 100 member-firms who employ over 10,000 professional engineers, technologists and support staff. They directly contribute over $2 billion annually to Alberta's economy and support more than $20 billion in construction and development. 

SOURCE Consulting Engineers of Alberta