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The paper reports on the first results of the Productivity Simulation Initiative (PSI) project of Cadence Design Systems GmbH. The project addresses the problem of fine-grained modeling and simulation of dynamic engineering design processes in order to attempt to assess and to enhance their productivity. The application domain of PSI is Semiconductor and Electronic Systems design. PSI uses multi-agent approach and models design processes as collaborative orchestrated activities of designers' teams. Rational collaboration and team formation is arranged through enhanced Contract Net negotiations. The paper outlines the modeling approach, reports on the methodology, and the rapid prototyping tool used for PSI Simulation Prototype implementation.