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How Much Do GIS Consultants Charge in 2011?

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Thursday, April 28th 2011
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Summary:

In 2001 Directions Magazine ran Bill Huber’s article, “What do GIS consultants charge?” This year we invited Atanas Entchev to update that article. He is the principal of Entchev GIS Architects, a New Jersey GIS consulting firm. The results of his data collection and his observations will be of interest to anyone consulting in and around GIS in these challenging economic times.

 

I have been in GIS consulting since 1994, and running my own business since 2005. The issue of pricing is always front-and-center. How much should I charge? Am I leaving money on the table? Did I lose that last job on price?
 
The pricing information is out there, but it’s often hard to find, it is fragmented, and inconsistent metrics make it hard to make comparisons. If only someone would summarize it all…
 
History
In 2001 Directions Magazine ran Bill Huber’s article, “What do GIS consultants charge?” which filled a huge void. But the GIS market (and the economy) has changed significantly in the last 10 years. The rate of inflation change (25%, according to the U.S. Inflation Calculator) is but one change factor. Bill’s article needed updating. When Directions invited me to write the sequel, I jumped on the opportunity.
 
The methodology
In the course of my daily business I had been keeping up-to-date with GIS consulting pricing in the northeast U.S. For this article I had to take a broader look at the market, both U.S .and international.
 
I pursued several data-gathering avenues. One avenue was to gather publicly available GIS pricing data, such as the  U.S. government GSA schedule and the New Jersey state contract for GIS services. I also solicited input from the GIS community through a survey/questionnaire I developed myself and posted on my blog.
 
The data
The publicly available data were overwhelming. I had previously summarized the data from the New Jersey state contract for GIS services, so I decided to reuse those data. The GSA schedule, however, proved to be enormous. I looked at several price sheets  (pdfs: 1, 2, 3) and decided to use the GSA as a background against which to compare my survey data.
 
I received 23 survey responses (10 years ago Bill Huber got 24). Most respondents remained anonymous. All but two are from North America (one each from Europe and Oceania). Most are private businesses (plus one non-profit and two academics). Many provide services to government, but private entities and non-profits were also listed as clients.
 
Most respondents provided hourly billing rates. Some offered a range. A few provided just daily rates (more common for training than in other service areas).
 
The analysis
I needed to use a common metric, so first I converted all numbers to an hourly rate. I took some liberties, such as selecting the median of a range as its representation, and assuming an eight-hour billing day (unless otherwise specified). Having thus “normalized” the data, I summarized the billing rate for the four categories of GIS tasks I had specified in my survey. The results are presented in the following two tables:
 
Billing rates, summary of all respondents (click for larger view)
 
Figure 1
 
 
Billing rates, summary of private entities (click for larger view)
 
Figure 2
 
Commentary
  • A few interesting (to me, at least) observations:
  • While private entities charge more (as expected), they do not charge that much more than non-profits and academic institutions.
  • The lowest prices in all categories (except data conversion) came from private entities.
  • The survey results jive nicely with the GSA schedules and the New Jersey GIS state contract pricing.
  • The only notable exception is the data conversion numbers – higher on average in the survey than in other data sources.
  • I am surprised that training does not command higher rates.
  • Applying the 25% rate of inflation change to the 2001 prices gets us very close to the numbers in the above tables.
Comments from survey respondents
  • “Tough economy has started fierce price wars.”
  • “Consulting jobs in West Texas are rare. I usually quote by the job.”
  • “I think you should have also asked how many years you have been in business. While I put my hourly rate down, 80% of my business is project-based fees as opposed to hourly.”
  • “I charge different rates on a sliding scale depending on the client; e.g. charge less for non-profits and more for private clients.”
  • “I live in a rural community and realize my rates are very low. I have lower rates when I have on-site services with a set hourly commitment.”
  • “I also work for a flat project fee. My clients are all non-profits, so I tend to think I charge less than say private company contractors.”
  • “I have to spend a lot of 'business development' time to get work. I charge $150 per hour.”
  • “These rates are for our NYC staff, most of our other locations have lower rates.”
  • “Many projects not on hourly basis but fixed price.”
  • “We also charge a flat fee for plotting maps- $35 (does not include labor for setting up map files or data for presentation).”
Acknowledgements
Thanks to all who responded to the survey (and to Directions for publicizing it). A few respondents pointed out some survey flaws. I appreciate that, and will incorporate your suggestions should Directions invite me to update this article 10 years from now.

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