CHOP 3.9 - ARCHITECTURAL DESIGN SERVICES AND FEES

Question 1

Construction Cost

Answer 1

The construction cost is the total cost of the work to the client to construct all elements of the project designed or specified by, or on behalf of, or as a result of coordination with the architect.

Construction cost excludes the compensation of the architect and consultants, land cost, land development charges and other professional fees.

Question 2

Fee

Answer 2

The amount of compensation paid to the architect for the provision of specific services. Reimbursable expenses or disbursements are not included.

Question 3

Fixed Fee OR Lump Sum OR Stipulated Price

Answer 3

One stated sum of money for the performance or provision of specific services.

Question 4

Percentage Fee

Answer 4

A method of compensation which links the fee for architectural services to a percentage of the construction cost of the project. The percentage will vary depending on the type of building, the construction value, and the type of construction contract.

Question 5

Per Diem

Answer 5

Allowance or payment for each day.

Question 6

Service

Answer 6

Work performed for, or the doing of work on behalf of, an employer or client; benefit conferred, or exertion made, on behalf of someone; work comprised in whole or in part of labor, advice or supervision.

Question 7

The Architects Basic Services

Answer 7

By regulation, as self-governing professionals, architects are required to provide an appropriate level of services. Being self-regulated means that only the architect may determine the expected quality of professional services delivered.

The architect is required to provide an appropriate level of professional services, and consequently fees must be adequate to ensure that this level is achieved.

An architect can be held to account for the work they do regardless of the fee. Professional duty requires attention whether an architect is working for a reasonable fee or for no money at all.

Question 8

Basic And Additional Services

Answer 8

Typically, architectural services are focused on the design and delivery of a building.

These steps constitute the most commonly understood activities:

1) schematic design;
2) design development;
3) construction documents;
4) bidding and negotiation;
5) construction phase (contract administration).

Question 9

Identification Of Services

Answer 9

The success of a project depends on the proper identification of services. At the outset, the architect – together with the client – must determine the professional services required for the project. Once this is done, the architect can prepare a proposal of fees, scope and schedule, and negotiate an agreement with the client.

Question 10

Methods Of Compensation

Answer 10

Both parties – architect and client – will benefit if the architect receives adequate compensation for the professional services provided. Compensation is usually by one of the following methods:

1) percentage (of the construction cost);
2) time basis (per diem or hourly rates);
3) lump sum (or fixed fee); or
4) any combination of the above.

Question 11

When calculating the distribution of the fee over the traditional five phases of a project, the following breakdown is typical:

Answer 11

1) Schematic Design = 12.5%
2) Design Development = 12.5%
3) Construction Documents = 50%
4) Bidding and Negotiation = 2.5%
5) Construction Phase = 22.5%
(Contract Administration)

Question 12

It is not uncommon for the phased breakdown of fees on projects using BIM to resemble the following:

Answer 12

1) Schematic Design = 20-25%
2) Design Development = 20-25%
3) Construction Documents = 25-35%
4) Bidding and Negotiation = 2.5%
5) Construction Phase = 22.5%
(Contract Administration)

Question 13

The three usual methods of compensation use the following methods of fee calculation.

Answer 13

1) Percentage of the construction Cost
2) Time Basis (Per Diem and Hourly Rate)
3) Lump Sum or Fixed Fee

Question 14

Percentage of the construction Cost

Answer 14

Percentage fees are, to a certain extent, contingent on the size and type of project as well as the scope of services required. For example, the schedules generally recommend:

1) lower percentages for simple buildings or buildings with a higher construction cost.

2) higher percentages for buildings which are more complex or have a lower construction cost.

Question 15

Time Basis Per Diem

Answer 15

A per diem or hourly rate is often the most appropriate method for establishing a fee, when, in the early stages of a project, final project scope and the full complement of services have not been determined.

Per diem or hourly rates are usually determined by the following:

1) a multiplier of direct personnel expense (payroll cost + payroll burden x a multiplier);

2) existing market conditions.

Question 16

Lump Sum or Fixed Fee

Answer 16

To use the fixed fee basis, both the client and the architect must thoroughly understand and agree on all tasks required and on the project schedule. The method also requires calculating all costs and making a comparison with the two other methods of compensation.

With clear parameters, including a well-defined scope of services and construction estimate and project quality, the fixed fee can be a satisfactory approach for both the client and the architect. However, when unknown factors or an ill-defined project are involved, the fixed fee method can cause strained relationships and lead to substantial losses for the architect.

Question 17

Request for Proposals

Answer 17

In seeking competitive submissions from architects, clients frequently use requests for qualifications (RFQs, especially on larger, complex projects such as public-private partnerships) or requests for proposals (RFPs) as a method of selecting architects.

The architect must clarify and understand thoroughly the client and project requirements and the level of professional services required before providing a fee proposal.

Question 18

Request For Qualification (RFQ)

Answer 18

Requests for Qualifications (RFQs) are commonly used as a tool invite interested parties to submit a qualification statement that is used by the requester to evaluate and shortlist potential contractors, subcontractors, architects, and consultants for a construction project.

Question 19

Request For Proposal (RFP)

Answer 19

A request for proposal (RFP) is a project announcement posted publicly by an organization indicating that bids for contractors to complete the project are sought. The RFP defines the project, for the company that issues it as well as the companies that respond to it.

Question 20

Client-Architect Agreements

Answer 20

Regardless of the type of project, the architect should prepare and execute a written agreement with the client after identifying the full scope of services and negotiating a fee. Written agreements are a requirement in several jurisdictions.