The Race to the Bottom: How Fee Competition Is Undermining Infrastructure Consulting in Africa

By AECTenderlink Research | June 2026

​Africa needs between $130 billion and $170 billion a year in infrastructure investment, yet only $68 billion to $108 billion of that is currently being met, leaving an annual financing gap of roughly $68–108 billion. Every dollar that does flow into roads, power, water, and rail projects depends on the quality of the engineering and consulting work behind it — design accuracy, supervision rigor, and technical judgment that determines whether a project is built right the first time, or rebuilt at public expense years later.

​But across the continent's consulting engineering sector, a quieter crisis has been building for over two decades: a race to the bottom on professional fees. Procurement systems built to reward the lowest bidder, combined with intense competition for a shrinking pool of well-paying assignments, have pushed consulting fees down to levels that industry bodies, academics, and engineers themselves say can no longer sustain the quality of work infrastructure projects require.

​This article examines what the evidence actually shows — how the race to the bottom happens, who it affects, and what it is doing to the quality, safety, and long-term cost of Africa's infrastructure.

​How Lowest-Price Procurement Became the Default

​Most publicly funded infrastructure consulting assignments in Africa — whether financed by national treasuries, the African Development Bank, the World Bank, or bilateral donors — are procured through a method called Quality and Cost-Based Selection, or QCBS. In theory, QCBS is designed to balance technical merit against price, giving evaluators a structured way to reward both competence and value for money.

​In practice, the price weighting in many QCBS evaluations is set so high that it functions almost identically to a pure lowest-price tender. Research into the South African consulting engineering industry — published in the Journal of Financial Management of Property and Construction — found that price and fees often contribute between 80% and 90% of total tender evaluation points, with the lowest fee submission earning the maximum financial score. Quality is assessed only at an initial qualifying stage; once a firm clears that bar, the contest becomes almost entirely about who will do the work for less.

​This single structural feature — quality as a gate, price as the decision — is the mechanical engine behind the race to the bottom. A firm that is technically excellent but prices realistically will consistently lose tenders to a firm that is technically adequate but prices aggressively. Over repeated tender cycles, this trains the entire market to discount.

​The World Bank's own Country Procurement Assessment Report on South Africa flagged a version of this problem directly, concluding that consultants in the country were "not selected and appointed in a systematic competitive manner" — a finding that pointed to weaknesses in how technical merit was actually being valued against price in practice.

​The Documented Decline in Fees

​This is not a matter of perception or anecdote. Industry bodies have tracked it directly.

​Consulting Engineers South Africa (CESA) has documented a sustained decline in professional fees since the early 2000s, driven by competitive tendering and the practice of discounting fees benchmarked against guideline rates published by the Engineering Council of South Africa (ECSA). CESA and affiliated researchers have explicitly stated that fees were being discounted to "unsustainably low levels," with consequences for the quality of professional services delivered.

​The regulatory backdrop made this worse rather than better. In 2016, South Africa's Competition Commission ruled that the built-environment fee guidelines used across the industry were non-competitive and effectively amounted to price-fixing. The Engineering Council of South Africa had sought an exemption from the Competition Act to preserve the guideline system; that application was rejected. Following the ruling, the fee scale was formally abolished — but the industry continued using the old guideline figures as a reference point purely to calculate discounts from, with clients now openly requesting reductions against a benchmark with no regulatory protection behind it at all.

​The result, according to industry commentary reported by Engineering News, is that tender prices in the consulting engineering sector have fallen to "all-time lows," with the situation reportedly worse in the private sector. Here, market pressure has led some clients to demand what industry figures characterised as "ridiculously low rates" — leaving consulting engineers in a structurally compromised position before a single drawing is produced.

​While this specific regulatory history is South African, the underlying procurement architecture — QCBS with heavy price weighting, competitive tendering as the default mode, and donor-funded projects subject to the same selection guidelines — operates similarly across much of Sub-Saharan Africa. This includes Kenya, Nigeria, Ghana, Tanzania, Rwanda, and other markets where AfDB- and World Bank-funded infrastructure work is concentrated.

​Does Low Fees Actually Mean Lower Quality? What the Research Shows

​This is the question that matters most, and it has been studied directly.

​A 2018 study published in the South African journal Acta Structilia examined the risk exposure of civil and structural engineering consultants working at discounted fees. It found that operating at reduced fee levels created genuine professional risk — consultants were forced to compress the time and resources allocated to quality assurance, design checking, and site supervision in order to remain commercially viable on underpriced assignments.

​A more recent thematic analysis published in the Journal of Financial Management of Property and Construction surveyed 28 experienced consulting engineers directly. Participants confirmed that competitive tendering had measurably reduced fee levels, and that this reduction had downstream effects on how firms delivered their services — including the depth of design development, the seniority of staff assigned to a project, and the time available for review before documents were issued for construction.

​It is worth noting that the academic literature is not unanimous. Some studies — including work by Hoxley (2000) and Lam (2012) — have questioned whether a direct causal link between fee level and output quality can be cleanly established, since quality is also affected by firm culture, staff competence, and project complexity independent of price.

​But the weight of recent industry-specific research, combined with the consistent testimony of practising engineers across multiple studies spanning more than a decade, points firmly in one direction: when fees are pushed below the level needed to properly resource a project, the parts of the job most easily cut — senior review time, independent checking, contingency planning, and site supervision hours — are exactly the parts that catch errors before they become expensive.

​FIDIC itself has taken an institutional position on this. Its policy statement on the quality of construction explicitly identifies professional fee levels as a factor bearing on the quality of project outcomes — a position consistent with the federation's founding principles of Quality, Integrity, and Sustainability, articulated when FIDIC was established in 1913 and reaffirmed by its African leadership as recently as the federation's 2025 Accra conference on closing the continent's infrastructure financing gap.

​Where the Damage Shows Up on African Projects

​Africa's own project performance data gives a sense of where underpriced consulting work eventually surfaces as cost.

• ​Design Defects: These are a documented and measurable problem in government-funded infrastructure in Kenya. A study of building projects in Isiolo County found that design errors at the interface between design and construction were a material driver of poor project quality outcomes — consistent with a broader pattern across the literature on construction defects in developing-country contexts.
• ​Poor Quality-at-Entry: More broadly, a review of why international development projects fail across Africa — based on an examination of 53 defunct African Development Bank-funded projects in Ghana and Mali — identified poor project Quality-at-Entry, weak project structure, and weak implementation capability as underlying causes of failure. Quality-at-Entry is substantially a function of the consulting and advisory work done at feasibility and design stage — precisely the stage where fee compression bites hardest, because it is the stage least visible to political stakeholders and most easily compressed under budget pressure.
• ​Cost Overruns: Academic research into infrastructure procurement in Sub-Saharan Africa has found that cost overruns and schedule delays are a widespread feature of project delivery, with effects ranging from productive inefficiency and contractual disputes to outright project abandonment. The African Development Bank's own analysis of road infrastructure costs across the continent has tracked overruns against initial estimates as a structural feature of project delivery, not an occasional anomaly. While the causes of any individual overrun are multi-factorial — financing delays, land acquisition disputes, currency depreciation, political interference — inaccurate or insufficiently developed designs at the front end, and inadequate construction supervision once works begin, are recurring, well-documented contributors throughout the literature on transportation infrastructure cost overruns globally and in Africa specifically.

​The mechanism connecting underpriced consulting to these outcomes is not mysterious:

• ​A feasibility study compressed to fit a discounted fee has less time for site investigation.
• ​A design developed under fee pressure has less time for independent checking.
• ​A site supervision contract priced at the bare minimum puts fewer engineering hours on site during the construction phase that matters most.

​None of these shortcuts are visible in the tender evaluation that selected the lowest-cost consultant. All of them become visible, expensively, during construction or — worse — after handover.

​The Human and Institutional Cost

​Beyond individual project outcomes, sustained fee compression carries a structural cost to the profession itself.

​CESA's 2025 Annual Review explicitly linked the erosion of professional opportunity in South Africa's consulting engineering sector to brain drain, describing the creation of opportunities for emerging engineers as essential to "curbing brain drain and securing the future of consulting engineering" in the country. When fee levels make it difficult for firms to invest in training, mentorship, and the retention of senior engineering judgment, the people who leave the profession — or leave the continent — are disproportionately the most capable, because they have the most external options.

​This creates a dangerous feedback loop that is rarely discussed openly:

​Low fees reduce the capacity of local firms to retain senior talent \rightarrow which reduces the depth of locally available engineering judgment \rightarrow which increases reliance on a shrinking pool of experienced practitioners spread across more projects than they can properly supervise \rightarrow which increases the likelihood of the kind of design and supervision gaps that show up later as defects, disputes, and cost overruns.

​The firms that survive a sustained race to the bottom are not necessarily the most capable. They are frequently the ones with the lowest overheads, the least investment in continuing professional development, and the greatest willingness to compress scope quietly rather than walk away from underpriced work. This is a selection pressure that operates directly against the interests of the infrastructure sector it is meant to serve.

​What a More Sustainable Procurement Model Looks Like

​The consulting engineering industry's own proposed remedies are instructive, because they come from practitioners who have lived through the consequences.

​Industry voices in South Africa have called for clients to stipulate minimum fee floors within tender documents — not to fix prices in a way that revives the price-fixing concerns the Competition Commission ruled against, but to establish a quality-protective baseline below which the lowest-price incentive is structurally capped.

​Looking internationally, qualifications-based selection (QBS) models — used in jurisdictions including the United States for federally funded design services — shortlist firms based purely on experience, technical capability, and track record before any cost discussion begins, with price negotiated only after the most qualified firm has been identified. Two-stage selection processes, which separate qualification from cost competition, are another model gaining attention as alternatives to procurement systems where price dominates from the outset.

​For development finance institutions specifically, several structural adjustments would meaningfully change the incentive landscape on African infrastructure consulting:

• ​Rebalancing QCBS weightings so that technical score genuinely competes with financial score — not as a token gate before a price-driven decision, but as a substantive factor throughout the evaluation.
• ​Setting realistic budget ceilings for consulting assignments at the design stage, informed by genuine time-and-resource costing rather than historical averages depressed by years of underbidding.
• ​Strengthening post-award monitoring of consultant performance against contracted scope, so that firms that win on price and then quietly under-deliver on supervision hours or design development face consequences that affect their eligibility for future work.
• ​Building minimum technical staffing and seniority requirements into terms of reference, so that price competition cannot be used to substitute junior staff time for the senior engineering judgment a project genuinely requires.

​None of these are radical proposals. They are largely already permitted under World Bank and AfDB procurement guidelines, which include Quality-Based Selection and Fixed-Budget Selection as available alternatives to QCBS. The barrier is rarely the rules — it is the institutional habit of defaulting to whichever selection method appears to save money fastest on paper, without accounting for the cost that resurfaces later as defects, disputes, and rework.

​Conclusion

​The race to the bottom in African infrastructure consulting is not an abstract economic phenomenon — it is a documented, traceable pattern with a clear procurement mechanism, a measurable fee decline, peer-reviewed research linking compressed fees to compressed quality assurance, and a continent-wide infrastructure deficit that ultimately bears the cost when designs are inadequately developed and supervision is inadequately resourced.

​Africa cannot close a $68–108 billion annual infrastructure financing gap by also hollowing out the engineering capacity needed to spend that money well. The continent's consulting engineers, contractors, and procurement institutions face a genuine choice: continue rewarding the lowest bid and absorb the downstream cost in defects, disputes, and rework — or rebuild procurement systems that price technical quality at something closer to its true value, and trust that doing so is itself the more cost-effective long-term strategy for a continent that cannot afford to keep rebuilding the same projects twice.

​This article draws on peer-reviewed research, industry body data, and African Development Bank and World Bank project documentation. It is intended for informational purposes for professionals in the African AEC sector and does not constitute financial, legal, or procurement advice.

​AECTenderlink tracks consulting and EPC tender opportunities across AfDB, World Bank, and national procurement portals in 54 African markets.