Why have Malaysian engineering consultancy fees stagnated since 1983?

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Malaysian Engineering Consultancy Fees Have Stagnated Due to Outdated Fee Scales and Procurement Practices Prioritising Lowest Cost

Engineering consultancy fees in Malaysia have seen minimal increases, less than 10 per cent, since 1983. This stagnation is primarily attributed to the Scale of Fees (SOF) for engineering consultancy services remaining largely unrevised since 1998, meaning it is 30 years out of date. Furthermore, current procurement practices, particularly traditional tendering processes, frequently favour the lowest bidder, leading to cost considerations dominating consultant selection.
Outdated Scale of Fees Undermines Fair Remuneration

The Scale of Fees (SOF) for engineering consultancy services has not undergone a comprehensive revision since 1998. This lack of update means that the fee structure is 30 years behind current industry realities. Respondents in a survey indicated that the workload required to meet modern client demands has increased approximately tenfold over the last 24 years, highlighting a significant disconnect between the work performed and the remuneration received.
Procurement Practices Consistently Prioritise Lowest Cost

Industry professionals overwhelmingly reported that cost is a dominant factor in selecting engineering consultants. A significant 88.97 per cent of respondents indicated that consultants are almost always chosen based on the lowest fee. This emphasis on cost is further exacerbated by traditional tendering processes, with 51.84 per cent of those surveyed expressing concerns that these methods favour the lowest bidder, potentially neglecting the actual complexity and associated risks of technical requirements.
Fee Stagnation Impacts Service Delivery and Professional Development

The persistent low fee levels are raising concerns about the future quality of service delivery, with 65.35 per cent of respondents fearing that current fees could eventually compromise service standards. Moreover, the stagnant fee structure has a direct impact on the engineering workforce. The entry-level engineer salary has seen little change for nearly two decades, with a standard starting salary below RM3,000 per month, making it difficult to cope with the rising cost of living. Companies reported that salary adjustments are frequently the first area affected by low fees, and over half of those surveyed had to reduce investment in upskilling their staff. The overwhelming majority, 96.71 per cent of respondents, agreed that significant changes are necessary for the long-term viability of the sector.

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Why have Malaysian engineering consultancy fees stagnated since 1983?

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