Practice Management Flashcards

Question

NCARB's Legislative Guidelines and Model Law / Model Regulations - Summarized **Legislative Guidelines**

Answer 1

**Legislative guidelines** **Practice of architecture** Practice of architecture may include new construction, or alterations to existing buildings and sites and the diverse range of services involved such as pre-design & planning, drawings, and administration. An architect's services may include the engineering required that is incidental to the practice of architecture. A person not duly licensed or permitted to practice architecture, must not practice architecture A person not registered as an architect must not lead others to believe that they are an architect, typically by using the title "architect". Non-licensed persons in the practice of architecture can use titles such as "intern architect" or "architectural intern". Partnerships or corporations that offer both architectural and construction services must clearly disclose this combined offering, must have the licensed architect participate in all aspects of the project and state that the architect will not be terminated without consent of the client. **Regulation of Conduct** States must incorporate into law clear rules, definitions, and consequences for the conduct of architects. Consequences can include license suspension, revocation, or fine. - Statutes must be clearly written giving authority to the architectural boards to implement and enforce such regulation **Qualifications for Registration** States must require a registration candidate to have a professional degree in a NAAB (National Architectural Accrediting Board) accredited program. Alternatively, other education and experience requirements may be instituted to provide an equivalent level of qualification to education. Candidates must be required to pass examinations • Candidates to be of good moral character Background checks: May consist of looking into whether or not the applicant has a felony record, has committed misconduct through AXP or examination processes, has violated any of the rules of conduct or practice • Reciprocal registration is the process of becoming registered in other states than the initial state an architect is registered in. An architect may apply for registration in another jurisdiction if the architect: Already is registered in another state Has a NCARB Certificate Makes application to the state and provides the information required by that state Prior to receiving registration in another state, an architect may seek out new work in that state if the architect already has a license in another state, has an NCARB Certificate, notifies the board of the intent, and provides the state board with a statement that application for licensure will immediately be made if the architect receives the commission. This allows an architect to seek out potential work in other states without having to be licensed, however, as soon as the work is granted to such architect, the application for licensure must be made immediately; there must not be any practice of architecture without being licensed in the prospective state. **Firm Ownership** Where architecture firms are set up as a partnership, a limited liability partnership, a limited liability company (LLC), or a corporation, the following rules must in place for the ownership of the firm: 2/3 of the partners (if a partnership), managers (in an LLC), or directors (in the case of corporation board of directors, not stock holders) are registered architects or engineers 1/3 of the partners, managers, or directors are registered architects. (This allows non-design professionals to sit on corp. boards or partner in the firm, such as bankers, attorneys, advisors, accountants, etc.) The person actually in charge of the architectural practice is a registered The board may require the firm to file information about its organization with the state, including its ownership organization and managing officers. This would also allow the firm to practice under its firm name in other states without having to include the names of all partners and managers in its name; thus keeping the original name and reputation of the firm intact. **Structures Exempt from Registration Requirements** There are some structures that are not necessarily required to be designed by registered design professionals. NARB's studies have shown that the majority of building officials concur that an architect must be used to design habitable and occupied structures and also to perform contract administration services. Even the most well-staffed and trained building departments are not always qualified to alone carry out the responsibility of protection of public health, safety and welfare; the registered design professional is needed. Unless an architect is specifically required by the local jurisdiction, registration is not needed to design single and two-family homes and associated accessory structures This exemption opens the doors for owners to design their own homes and for contractors/developers to design the homes they construct. This, however, does not offer protection for future owners of the dwellings. An architect is not required to design farm buildings (barns, silos, sheds, etc). The occupancy of such buildings is limited to 10 people The intent is to continue to allow farmers (and potentially other occupations) to continue their operations that they are accustomed to. Language in regulations may need to be adjusted by jurisdictions to limit size, height, or occupancy of such buildings. For example, a tall building close to property lines puts others at risk if it fails. Unregistered persons can design features for buildings if these features do not affect structural or other safety measures of the building and if a permit is not required for such teature **Architect's Involvement During Construction** An architect must be engaged in the minimum construction contract administration services; otherwise, if the owner proceeds with construction, it is considered that the owner is now engaged in the practice of architecture. (This gives legal standing allowing for enforcing and penalizing the owner). Minimum administration services include: > Periodic site visits > Shop drawing review Reporting of code violations or deviation from contract documents to owner and building official or any other situation that the architect believes is a hazard to the public • If a project architect is not engaged in these administration services, this fact must be reported to the building official • State boards may waive the above requirements for particular project types **Regulating Unregistered Persons Practicing Architecture** Violating architectural registration law should be considered a crime, however, NCARB suggests the imposition of a civil fine (after a hearing). Violations include the practice of architectural services, or aiding and abetting of such services by unregistered individuals If state laws allow certain submissions or designs to not be sealed by an architect, such documents must include a statement of that law providing the exemption. If a seal or applicable exemption is not included, any permit issued for the project is invalidated. **Practice by foreign architects** A registered architect outside of the US is allowed to practice architecture in affiliation with a local architect if the following conditions are met by the foreign architect: Must show that he/she has a valid registration in good standing allowing for unlimited practice of architecture in his/her jurisdiction »Must show that an agreement exists between NCARB and the architect's registration jurisdiction Must be affiliated with an architect registered in the state in which the project is taking place. Such US architect must take responsible control of all aspects of the project and submit a written statement to the state board identifying the foreign architect, his/her involvement, and the project. The foreign architect must state its name, the local architect they are working in conjunction with, and the state in which the project is located

Answer 2

**Model Law** **Section 1 - Definitions** Good moral character - having a character that will allow the person to properly perform the duties of an architect to the client and public for the protection of health, safety, and welfare Practice of architecture - As defined by NCARB Model Law. "Providing or offering to provide those services, hereinafter described, in connection with the design and construction, enlargement, or alteration of a building or group of buildings and the space within and the site surrounding such buildings, which have as their principal purpose human occupancy or habitation. The services referred to include pre-design, programming, planning, providing designs, drawings, specifications and other technical submissions, the administration of construction contracts, and the coordination of any elements of technical submissions prepared by others including, as appropriate and without limitation, consulting engineers and landscape architects; provided that the practice of architecture shall not include the practice of engineering as defined in (Statute Reference], but a registered architect may perform such engineering work as is incidental to the practice of architecture." Responsible control - As defined by NCARB Model Law. "That amount of control over and detailed professional knowledge of the content of technical submissions during their preparation as is ordinarily exercised by a registered architect applying the required professional standard of care, including but not limited to an architect's integration of information from manufacturers, suppliers, installers, the architect's consultants, owners, contractors, or other sources the architect reasonably trusts that is incidental to and intended to be incorporated into the architect's technical submissions if the architect has coordinated and reviewed such information. Other review, or review and correction, of technical submissions after they have been prepared by others does not constitute the exercise of responsible control because the reviewer has neither control over nor detailed professional knowledge of the content of such submissions throughout their preparation." **Section 2 - Fees** This section is used to describe the fees as set by the local statutes, such as application fees and registration renewal fees. **Section 3 - Registration Qualifications** • Registration applicant must provide the following: Application Fee associated with application Evidence that education requirements have been met Evidence that experience requirements have been met Successful completion of examination The state board can use NCARB's procedures and certification that the education, experience, and examination requirements have been fulfilled as determined and accepted by NCARB Applicants who hold an NCARB certificate and a valid registration in another state can be considered to satisfy requirements upon submission of application and applicable fees **Section 4 - Registration Renewal** Board must send registration renewal applicoolet on gistered architects at the • Along with renevalapplication tect. Requrements for cottuin education credis for applicable fee, the registration must be renewed. approprate time period for enewat be renewed. on ofappliation and paying of educatin completed by the architect. Requirements for continuing education is • State boards must determine proces for einstaminatiof architects' registrations that determined by state boards. have not been renewed on time, including reexamination if needed **Section 5 - Certificate of Registration** Architets certficate must be conspicuously placed in their business or place of employment Replacement certificates (for lost or damaged certificates must be marked as "duplicate" **Section 6 - Seal** • Seal must be of design as set by the state board • Technical submissions required by public authorities or as required for construction must be sealed by the architect • Signing and sealing of documents signifies that the architect had responsible control over the documents and has provided the professional standard of care • An architect may only sign and seal documents if: nitthey were prepared by the architect or by individuals under the architect's responsible control > The architect has reviewed the work by an architect in the same jurisdiction and has incorporated the work into his/her own submissions > The architect has reviewed the work by an architect registered in another jurisdiction holding an NCARB Certificate and if the signing architect has reviewed and incorporated such work and the drawings are prototypical design (meant for multiple locations) > Architect can seal work not required by law to be sealed if the architect has reviewed and incorporated the work > If submissions are required to be sealed, building officials cannot accept unsealed documents, unless such documents are for projects not requiring a registered design professional and has such law exemption stated on the documents An architect that has sealed (after reviewing) the work of an individual under the architect's responsible control or the work of another architect must keep records demonstrating the standard of care taken in such review and incorporation of documents into the architect's own work for a minimum of 5 years **Section 7 - Disciplinary Powers** The board has the right to discipline violation of rules by revoking, suspending, or annulling registration or institute payment of fines **Section 8 - Disciplinary Procedures** Charges against architect must be made in writing. At the discretion of the board, there must be a hearing where the accused can have a chance to defend himself/herself. If the board determines a violation was committed, it may order any of the charges listed. The state secretary and clerk of the city or town in which the architect practices will be notified if a registration has been suspended, revoked, or annulled • If a registration is revoked, application for reissuance can be made in a manner discretionary to the board **Section 9 - Registration Prima Facie Evidence** Architect's registration must be considered "prima facie" (accepted as correct unless proven otherwise) in courts of the state the architect is registered in **Section 10 - Prohibition** No one can practice architecture unless licensed to do so • Must not use the title of "architect", "registered architect", "Architectural Designer" or any other wordage that may cause others to believe the individual practices or offers to practice architecture if they are not registered Retired architects may use the term "architect" to describe their profession as long as it is not in the context of offering architectural services Must not aid or abet anyone not registered to practice architecture **Section 10A - Construction Contract Administration Services (CA) Required** • Owners who do not engage an architect in construction projects to provide CA, will be considered as unlawfully practicing architects. Minimum contract administration services are covered in the legislative guidelines section An Owner can be considered as someone who holds a mortgage for the real property, holder of more than 10% equity in a property, a record owner of a property, the lessee of where the project is being taken place that has approval rights and a remaining term of not less than 10 years An architect who sealed the technical submissions for a project, must also note on the submission if the architect was not employed to provide CA services. Within 30 days of construction start, the architect must file with the board and building official a notice stating the Owner, the project address and name, and name of the architect that was engaged for CA services (including him or herself). If no architect was engaged, the architect must state so. The board may waive CA service requirements for a project or a project type if the board finds that the public is adequately protected in those cases ** Section 11 - Exceptions** The following circumstances are not intended to be prevented by architectural law: • Architecture and design for detached single and two-family residences, farm buildings, and building features as described in the legislative guidelines • Submittals made by consultants, manufacturers, suppliers, owners, or contractors for project components • Details or shop drawings required to be prepared by the contractor • Management of construction contracts by contractors Preparation of documents or CA by those under the responsible control of the architect Partnerships, Limited Liability Partnerships, Limited Liability Companies, Corporations and Professional Corporations may engage in architectural practice if the ownership structure and amount of owners/managers is as specified in the legislative guidelines (for example, 2/3 of owners to be licensed architects or engineers and at least 1/3 to be licensed architects). The individual responsible for the project must be licensed in the state the project is taking place. A company offering architecture and construction services must have an architect involved in all aspects of the project, disclose to client that a registered architect is involved and obligated to participate on the project, the architect has responsible control over the project and will not be terminated without the client's agreement, and that the architect's services will comply with laws. An architect with an NCARB Certificate can pursue architectural work (including competitions) in states that he/she is not yet registered in provided that the architect does not engage in architectural practice until he/she becomes properly registered in the state and properly notifies the state board and prospective clients of such intent An architect who is licensed in another state can perform uncompensated (other than reimbursable expenses) professional services at the scene of an emergency (earthquake, flood, storm, etc.) if requested by a public officer or building inspector provided the situation was declared an emergency or major disaster by the US president, governor, or other authorized official. Foreign architects may practice in US jurisdictions provided they are appropriately licensed in their nation, have an agreement between NCARB and their nation's registration authority, and have a local architect in responsible charge. Foreign architects may not offer services without involvement of the local architect, and local architect must notify the state board of the involvement of the foreign architect and a description of the project. • An individual under the responsible control of an architect maintaining good standing with NCARB, may use the title "intern architect" or "architectural intern". This individual cannot practice architecture except as allowed under the responsible control of a registered architect. **Section 12 - Enforcement** The state board is responsible for enforcing the rules. If individuals refuse to obey a board's decision, the board may engage the Attorney General or District Attorney for enforcement and a court hearing. **Section 13 - Penalties** Violations of the law can result in fines, imprisonment, or jail time • State laws are typically written in a manner that provides governmental agencies, such as the state licensing boards, a way to develop regulations to support the statutes. These agencies may incorporate into their regulations the input from respected organizations, such as NCARB's law guidelines and standards for education, experience, and testing. In the case of NCARB, the organization's policies are made by individuals participating in the organization who are members of state and territorial boards.

Answer 3

**Model Regulations** **Purpose & Definitions** Regulations are used to interpret / support / implement the overarching statutes. The registration board is responsible for regulating the practice and registration of architects **- Severability:** in the case that one or more aspects of law do not apply to a given circumstance, the remaining valid aspects of the law remain in effect Education requirements and approved equivalents are provided by NCARB. Examination requirements are provided through NCARB's Architect Registration Examination (ARE). Experience requirements are provided through NCARB's Architectural Experience Program (AXP) - To protect the health, safety, and welfare of the public, NCARB has distinguished the following segments as crucial for architectural practice and continuing education (and examinations) > **Practice Management:** This category focuses on areas related to the management of architectural practice and the details of running a business **> Project Management:** This category focuses on areas related to the management of architectural projects through execution **> Programming and Analysis:** This category focuses on areas related to the evaluation of project requirements, constraints, and opportunities **> Project Planning and Design:** This category focuses on areas related to the preliminary design of sites and buildings Project Development and Documentation: This category focuses on areas related to the integration and documentation of building systems, material selection, and material assemblies into a project **- Construction & Evaluation:** This category focuses on areas related to construction contract administration and post-occupancy evaluation of projects Educational activities that serve to provide for continuing education of architects must provide at least 75% of the content devoted to Health, Safety, and Welfare subjects **General Provisions** -Public information: A roster of registered architects must be available to the public. (Typically, the rosters are available on state board websites) The jurisdiction can decide what other documents relating to an architect's registration are to be made available to the public or kept private • Communication with board members is permitted. Board members cannot discuss any specifics or potential decisions about an application for registration or a disciplinary matter, aside with assisting with procedures on proper submissions and navigating the process The state board must maintain NCARB membership and keep up-to-date on NCARB's policies. The board must also cooperate in establishing uniform standards for registration across the US All forms and list of fees associated with registration and other processes must be made available to applicants **Registration and Examination** The state board may allow fee refunds for rejected applications. Refunds are not available for voluntary withdrawals after approval or if the applicant has taken an examination Standards for Registration - Applicant must demonstrate qualifications. Equivalent qualifications may also be shown by applicant that meet or exceed the minimum requirements Applicant must have good character in order to carry out his/her duties - Meet education requirements - Meet training / experience requirements - Pass examinations • Reciprocal registration can be granted to candidates who: - Hold an NCARB certificate - Hold a valid registration in another US or Canadian jurisdiction - Files state's application and pays applicable fee • Candidates are considered eligible to begin examinations if they: - Have a professional degree from a NAAB accredited institution, or Participating in the Integrated Path to Licensure Program (IPAL), or Have met the states minimum education and experience requirements Depending on state procedure, either the state board or NCARB is responsible for reporting examination results to candidate If violation of NCARB, state, or confidentiality agreements is suspected during examination process, the board must investigate and take appropriate action. For example, in the case of the examinations, the candidate agrees to not share any specifics about the exam or discuss specific exam material with others. In the past, candidates have violated this rule and gave out very specific questions and answers after taking an exam, which compromised many examination questions requiring NCARB to remove and revise such questions from circulation incurring large costs. The state board may choose to allow appeal, review, or challenge of exam scores and specific questions Test scores / results may be transferred to other state boards by the state or requested of CARB for purposes of NCARB certificate application or registration in another state When all state requirements have been satisfied, the board will issue a registration with the applicant's name and registration number • Each registration shall be valid for a period of time specifically set by the board. Renewal of registration may require: Renewal fee Continuing education requirements • Continuing Education - Typically, 12 continuing education hours are required for each calendar year of registration - Continuing Education Hours (CEH) must be completed in Health, Safety, and Welfare subjects - Excess hours cannot be used for future years of registration Records of education hours completed must be maintained by the architect and can be audited by the board. The board may reject non-qualifying hours and allow the architect a period of time to complete the hours. Falsification of hours will lead to disciplinary action Retired (emeritus status) architects, individuals called for military duty, serious medical conditions, or other hardship will be considered by the board for exemption from the hours Retired or inactive members returning to practice must complete 12 CEH -Registrations are not transferrable -Emeritus Status (retired architect) This status can be granted to individuals in good standing and if the architect applying for such status will no longer engage in practice of architecture, has been registered for 10 years, or is 65 years or older Such status may also be granted to those that demonstrate that they physically or mentally are unable to practice **Professional Conduct** An architect engaging in the practice must be competent, meaning: - Understands duty to protect Health, Safety, and Welfare of the public and can apply knowledge and skill of similarly practicing architects in good standing in the same locality • Take into account state and building laws and regulations - Architect is qualified by education, training, and experience to take on the specific project roles • Must not engage in practice if board determines that competence is undermined by physical or mental impairments • Must not have conflict of interest as stated in previous sections (compensation from multiple parties on the same project or product endorsements, financial interests, and must have impartial judgement when serving as interpreter of contract documents) Full disclosure - Architect must represent himself / herself accurately in qualifications - Must not participate in and report decisions made by others that will adversely affect the safety of the public - Must not make false statements - Must not assist in registration application of unqualified individuals - Must report other architects violating the law Compliance with Laws - Must not knowingly violate law - Must not bribe building or government officials - Workplace must not violate labor laws, fair labor standards, and must maintain a workplace free of discrimination Professional Conduct Offices practicing architecture must have a registered architect employed at the office Architect must sign and seal documents that have been prepared by the architect, under the architect's responsible control, or by reviewing the work of other architects - Other than reasonable entertainment and hospitality, an architect must not make any gifts to prospective clients intending to influence their decision about a project the architect is interested in - Architect with knowledge of a prospective candidate's pursuit of registration must cooperate in the application and verification process without approving false information • Architect's Seal - Architect must obtain a seal as specified by the board containing the architect's name, registration number, and the words "registered architect" Seal must be used on each design drawing, on the cover and index pages of specifications, and cover pages on other technical documents • Seals and signatures may be electronic • Practice - A company (corporation, LLC, or partnership) can only practice architecture when it receives a certificate of authorization from the state board - The certificate of authorization is issued upon: i. Completion of application including information of the registered architect directors, managers, and partners ii. Submission of the company's incorporation, registration, or charter documents ili. Payment of applicable fee - The certificate of authorization can be revoked if it is shown that a firm leader or employee has violated the law while acting as agent of the company - The practice of interior architecture is considered the design of new and existing buildings including additions and renovations. This practice involves spaces intended for human occupancy that must also meet code requirements such as construction type, building use, egress, etc. The practice of architecture does not include interior design services such as furnishings, furniture, decorations, paint, color schemes, wall or floor coverings, or window treatments.

Answer 4

Establishing the Business 1. Define the target projects, clientele, and market that the business intends to pursue High rises? High end residential? Affordable housing? Hospitality? Commercial? Developer? Education? Several market sectors? 2. Define the services that the practice will provide Theoretical design? Full service? 3D physical modeling? Interior Design? Turn-key designs? 3. Business Development & Marketing • What are the marketing strategies that the business will deploy? Will the firm work to target contractors, developers, homeowners? • Networking at events such as tradeshows, professional organizations, presentations, etc. may also provide work for the office Bringing in business and new projects is crucial to keep the firm in business "Word of mouth" and repeat clients are often the most effective and successful strategies for new projects. It is the architecture firm's best interest to provide good, quality, timely, service as agreed to. Building up a strong reputation is crucial 4. Establish the Firm Structure & Management What are the goals for the business currently and in the future? Is there a goal to maximize tax advantages? Is the business anticipated to grow quickly or remain small? How many employees will there be? Is the business being started with a partner? Will the business eventually be transitioned to new owners How the firm is registered and structured will influence how the firm may be run Refer to NCARB Section #4 of this exam, Part A - Business Structures (p.36)

Answer 5

Choose Projects Carefully 1. An architect must choose clients just as carefully as the clients choose the architect; prior history with clients or a client's bad reputation can and should have an impact on decisions. Clients should be reasonably vetted before a decision to move forward in securing the project is made. - The firm may even run a credit check on a client - Quality of the client Firm may contact previous firms the client has worked with to get an understanding of the Architect may request proof from the client that the client has the ability to pay 2. Keep proper insurance. Some projects may just be too big for what the firm insurance coverage is for. Sometimes a client or project circumstances require specific types of insurance, certain add-ons, or overall larger coverage; anything additional has to be accounted for in the fee charged to the client. Not all projects may be appropriate to take on and not all clients are suitable for the firm The firm must have the appropriate experience and ability to take on new projects and new project types

Answer 6

**Tracking Project Fees & Progress** 1. Track time against projects Often done by keeping timesheets in which each employee enters the amount of time worked for a particular project or overhead hours This data can help the firm understand the total effort required for a project, or particular areas of a project. Knowing the total time can assist in determining the effort required for future similar projects The time spent can also be used to track whether or not a project is staying within the design budget and whether or not the timeline is on track 2. Watch for scope creep and changes in contract Scope creep is completing work for a project that was not initially agreed upon or in excess to what is expected to be delivered by the architect It is called scope creep, because often items are asked to be completed by a client that are just easier to accept than to renegotiate a contract for, or seem small enough to simply complete. However, these tasks can add up and result in additional time spent on project, lost revenue and profit, and increased liability for a project All scope changes to projects must be amended by contract and agreed to by the Client in writing. Scope changes can include changes in the initial information given about the project, changes in the building program, unforeseen site conditions, etc. 3. Keep track of all project expenses Travel time and mileage Prints Legal services Shipping and courier costs 4. Include direct expenses + overhead costs + profit in all projects The budget for a project must be able to cover all direct expenses required to complete the work such as employee salaries and consultant fees The project fee must also cover the overhead costs of running the office. This may include insurance costs, office supplies, utilities, software costs, marketing expenses, and building payments or rent Profit must be included within design fees. In most cases, a business exists to thrive and be profitable; each contract or fee must be set up in a way to create profit for the firm Accounts payable are the outstanding costs owed by the firm Accounts receivable are the amounts that the firm has billed and is anticipating to receive payment on When the amount of income is greater than the amount expended, that means that the firm has a profit. Profit allows the firm to reinvest in itself and its employees, to purchase new equipment and software, to offer perks, such as year-end bonuses, and to make the business viable and worth having -Expenses that a firm may have include the following: • Office-related items: Paying rent or mortgage for the office, utilities and phone bills, computers, software, maintaining the office, lawn service, repairs, company vehicle maintenance, office supplies, etc. • Employee-related items: Paying employee salaries, benefits, professional development and license maintenance fees, fees associated with belonging to professional organizations, 401k plans .. Professional items: paying consultant fees, attorneys, accounting, etc. Insurances: workers compensation, general liability & property insurance, automobile insurance, professional liability insurance, etc. Tax items: state and federal income taxes, payroll tax, etc. Revenue minus expenses = profit (or loss) 2. Cash Flow An architectural firm, like most businesses, relies on a steady stream of cash in order to stay operational. This is often referred to as cash flow. The cash is required to keep pay roll (paying staff), pay for insurances, building utilities, software, and other business expenses • If there is a delay in billing or clients are late on payments, this can put a cash flow strain on the business • For example, the firm has been working for a while on a large project and is expecting a large payment to come in, but the payment is being delayed. The firm must continue to pay for utilities and staff salaries and is reaching into its cash reserves to make it happen. If payment does not come through soon, the firm managers may begin to worry about enough cash coming in to cover these expenses Timely billings and payments are crucial to maintain healthy cash flow

Answer 7

Dispute Resolution (between architect and owner): these same resolutions can also apply between owner and contractor 1. Attempt to resolve disagreements without legal action by compromise or reaching an understanding **2. Mediation =** if an agreement is not reached and legal action is taken, mediation is always the first and least costly method of conflict resolution. An impartial third party is used to assist in negotiating a resolution. Mediation is NOT legally binding **3. Arbitration =** typically the next preferred step if mediation does that achieve a resolution. Arbitration consumes much less time and finances than litigation. An impartial arbitrators) provide a decision to the dispute. Arbitration IS legally binding **4. Litigation =** most expensive, time consuming, and should be the last resort. Litigation makes the matter public information and involves the typical process of courts and lawyers to settle the dispute

Answer 8

**Risk and Reward** 1. Each project inherently has its own risks and rewards The selection of the projects that an architect works on must be carefully considered and assessed; is it worth the risk? What is the reward? Risk There is inherent risk in taking on a project overall. An architect is liable for the work he or she does on any project and is responsible for code compliance, health, safety and welfare of the pubic, and partially liable for building performance. (The contractor is also partially liable for building performance) Consider that higher profile projects will be subject to more scrutiny Consider the amount of exposure a project may have in public. For example, a high-rise office has a very large amount of exposure where there are significant numbers of employees and visitors that interact with that building. There are inherently more "encounters" with such a building by the public that can pose increased risk in life safety and magnitude of repercussions in case of any building component failure. On the other hand, a single-family home may have less individual "encounters" as the home may serve its initial owners and perhaps several other owners that it is passed onto through the life of the structure; there are far less "encounters" with this buildings type. With a home though, the occupants do spend their days and nights living in that space and the responsibility for health, safety and welfare is not diminished in any way Does the project align with the strengths and confidence in capabilities of the firm? A firm may reach a point where it would like to expand to other building types and market sectors; there are inherent risks in taking new projects types such as the learning curve involved and hiring staff to work on the project Consider the opportunities that may have to be rejected due to taking on a particular project. Unless clients are willing to wait, there may be some loss of other opportunities due to work load or conflict of interest with other potential clients, existing clients, or repeat clients by taking on a new project Is there a risk to reputation and good standing by being associated with a particular project or client? Taking on a project should be carefully weighed if there are any potential harm to existing relationships, such as other clients, other design professionals and consultants, building officials and governmental agencies, contractors, and communities Eliminate any conflict of interest when assessing which projects to take on Projects selected must be able to keep the firm profitable and financially stable. Though this not always apply if a project is done as pro-bono work or used as an "in" to a new market or clientele 3. Reward • A high exposure or highly marketed project may give the firm more exposure in the design and construction industry, and in the local community • A project may provide valuable experience in a particular building type or market sector, whether it is a new project type or further credibility in an existing type. A new project type may require a learning curve and additional resources to complete requiring sacrifice in profit, but allows you to take on that type of work On the other hand, the firm may have systems and efficiencies in place for their typical projects allowing them to maximize their profit (which can potentially lead to being able to try other work) Are there projects and/or clients that would simply be interesting and fun to work on? These types of projects can boost firm morale and creativity • A project may align with overall objectives and goals for the future of a firm 4. Mitigating Risk • Follow a well-written contract. Avoid scope creep; amend the contract if needed to include additional scope items. All parties much perform the duties agreed to. Use AlA contracts or use attorney to write / review your contracts and review client's contracts Use professional help where appropriate: Attorney: obtain legal advice on contracts, consult with when legal claims arise, and for general legal advice. Attorney can provide assistance in determining some of the legal risks posed with particular projects, clients, and scope of service. Accountant: can assist in financial considerations for the business. This may include advice on firm financials such as tax liability, how to navigate the tax law for the best interest of the business and appropriate filing, can advise on ownership transfer, and assist in advising the business during financial hardships. Attorneys and accountants can advise on how to properly structure the business in order to achieve long-term and short-term goals • Establish a well-defined program and objective for the project. Attempt to gather as much detailed initial information as possible • Use checklists to establish protocols for providing the correct services and all required deliverables for a project • Use proven construction methods and details. Experimenting with unique systems and materials not previously used is a form of risk and potentially increases liability • Communicate! Communicate effectively with the Owners, design team, contractor, and in-house staff. All decisions made must be clear. Do not assume information, always ask. Clear definition of responsibility between consultants and office staff Document all decisions, meetings, observations throughout projects. Maintain meeting minutes. Maintain a tracking list of all notable events taking place during the project. This includes documenting all decisions made. Careful consideration of last-minute changes and substitutions. Last minute and rushed changes are a common root cause for construction errors and failures. The architect must complete all due diligence in reviewing a proposed substitution and verifying its conformance with code, structural and life safety requirements. Maintain proper insurances with sufficient coverage Consult with insurances when taking on larger than usual projects and when considering new project types and service offerings • Ensure indemnification clauses are used (party is held harmless from third party claims) • Do not attempt to provide means and methods for construction. The architect's role is to provide the design intent for the building, it is the contractor's job to execute that design intent using the means, methods, and materials required to accomplish the task. The architect must not interfere in this role as this opens the architect to the liabilities of the contractor. Do not attempt to correct safety concerns on site, but do mention safety concerns to contractor AND owner without taking responsibility for site safety Negligence is a design professional's failure to provide the standard of care or "due diligence" for its services. Architects are professionals who are entrusted to maintain the health, safety and welfare of the public • Architect must not attempt to provide insurance advice, Owner and Contractor must seek advice from appropriate legal counsel and insurance advisors

Answer 9

Building & Property Owners 1. Joint Tenancy: property is owned by two or more parties. Upon the death of a party, ownership is passed along to the others) The decision making power in such ownership may be split amongst the various owners or decisions for a particular project may be delegated to a single owner 2. Tenancy in Common: Similar to joint tenancy, expect that when one of the owners die, their share of the property is passed on to their heirs 3. Partnership: is an individual entity in itself. When a partnership dissolves, the entity itself dissolves. Similar to joint tenancy, decisions regarding a project may have input from multiple individuals 4. Corporation: Leadership is comprised of a board of directors, but the corporation itself is a separate entity. Change in leadership does not necessarily constitute a change in the corporation entity itself • Decisions and approvals regarding a project will likely need to be presented to the board of directors for voting and approval. Decisions that are being carried out must always consider that the stock holders of the company must be financially benefitted by the decisions of the board 5. Trustee: Someone who is entrusted to carry out a specific role in regards to physical or monetary property on behalf of the original party (trustor) for the benefit of the third party (beneficiary). This is often seen in inheritances of property or finances when a child reaches a certain legal age The trustee is limited in decision making only as prescribed by the trustor, which can be extremely limited. Decisions regarding any projects to a property cannot be made by the beneficiary unless so allowed by the rules set by the trustor or until the beneficiary receives legal ownership of a property 6. Sole Proprietor: Owned and operated by a single individual with no legal distinction between the entity and the individual Decision-making ability is typically unchallenged since the individual maintains the ability and right to make their own decisions

Answer 10

Types of Property Ownership **1. Absolute:** The owners of a property own the property outright Decisions regarding a project typically are not limited when the owner maintains true ownership of the property **2. Condominium:** A building or complex comprised of individually owned units. An owner of a condominium will likely have to adhere to the building complex rules and regulations regarding a project and any changes to the property. Modifications to shared spaces or building exterior is likely required to obtain approval from other building owners **3. Cooperative (Co-Op):** Similar to condominium. Owners of individual units share ownership in the complex as a whole and are responsible for the complex's maintenance and upkeep of common areas • Like a condominium, a co-op ownership will likely have to adhere to set rules, guidelines, and approvals/decisions made by the co-op as a whole rather than final decisions resting with the individual unit owner **4. Lease:** True ownership of a property rests with the property owner / landlord. The lessee typically enters a long-term lease agreement with the owner, which can last for decades (a little different than renting in which the contract term is typically one or two years) Typically, someone with a leasehold has the power to make improvements and construction to the property, but decisions may be limited in that the property is reverted back to the owner once the lease contract expires **5. Sale and Leaseback:** Owner of a property sells the property and immediately leases back the entire property or a portion of it. This is typically done to offload the debt associated with a company from its balance sheet to provide a more favorable financial outlook for the company Depending on the agreement with the new owner of the property, the lease-holder may be obligated to get approval for all construction and improvement projects with the new owner

Answer 11

RFQ's and RFP's 1. RFQ's and RFP's are formal requests used by a variety of prospective clients to solicit information to begin a selection process of the architectural firm, developer, and/or contractor for a particular project 2. Requests for Qualifications (RFQ): The qualifications, staff experiences, past projects, and resources of a firm are submitted. An RFQ only contains the qualifications of a firm as requested demonstrating that the firm is qualified for a particular project 3. Requests for Proposals (RFP): Includes the RFQ plus an actual "idea" proposal for the project offering a potential solution that the architect sees best fit The proposals are a way of gathering an architect's ideas for how to accomplish a certain project RFP's can be detailed and include specifics about a project including aesthetics, program, site, building type, construction methods, schedule, etc. and are used to assess a firm's ability to best meet these requirements. Different projects may have different goals and priorities that are being sought out and it is the architect's job to understand and address these concerns. RFP's can also be very open-ended where the client is not completely certain about what they want. An architect then provides the best ideas and approach to the project in hopes of being selected for the project. It is important to answer the RFP and address any specific issues presented. Though it is important to answer the RFP specifics, the presented solutions must not provide intricate detail or set-in-stone decisions, but allow for flexibility in design as the project is further assessed and detailed. 4. Selection of the project team Requests for proposals can be a team effort and include the entire project team such as developer, architect, and contractor Selection may be simply based on lowest bid / fee Selection can also be based on Best Value: consideration of both costs and qualifications, not just lowest fee Or selection that is strictly based on qualifications and experience. Cost may not the leading factor if the quality and proper execution of the building design is most critical

Answer 12

Clarify Project Scope Clarify what is to be included in the services provided Anything outside of the listed services is an additional service and must be paid for by the client Timeframes for services rendered must be included with the proposal, if appropriate Understand the types of consultants required for the project

Answer 13

Design Fee 1. Project budget vs. construction budget - Construction budget is typically associated with a construction cost of a building only (the hard costs - The total project budget must include professional design services, surveying, inspections and testing, legal fees, land costs, etc. 2. A client may or may not have a budget for professional design services. If client scope requests or project requirements exceed the client's design budget, the following may be considered: - Decline the project - Lower profit margins (be careful with this as you don't want to end up losing money and sacrificing firm economic health). Also this sets a bad precedent; that price would then always be expected for any future projects - Reduce scope of the project - Reduce scope of architectural services Do not undercut your value, expertise, knowledge, and talent 3. Billings Firm may require a retainer (a portion of the fee) to be paid when the contract is executed prior to starting the project. This provides the firm with some working capital to begin the project, but also provides some confidence in the client's ability and willingness to pay Progress billings are essential to maintaining healthy cash flow in the firm. Consistent progress billings, like the retainer, keep the architect in better position so that work being done does not get too far ahead of the payments being made Progress billings on a regular basis also provide the client with the ability to see the design fees as the project progresses

Answer 14

Architectural Fee Structures **1. Stipulated sum (lump sum / fixed fee contracts):** Architect must determine the total effort required for a project and assign a monetary value to that. This can be done with a variety of different ways such an estimated amount of manhours required for the project multiplied by the associated hourly rates. Using past similar projects as a reference for the efforts required will provide valuable information. Reimbursable expenses may be additional to the fixed fee given for basic design services. **2. Cost per square foot of building:** cost of design services is given a dollar value for the square footage of a building. The value may be adjusted based on factors such as project complexity or total scope of services required **3. Cost per building unit:** typically used for buildings with repetitive units such as hotels, apartment complexes, or hospitals where a cost per unit is multiplied by the total number of planned units **4. Percentage of construction cost:** Architect may establish fee as a percentage of the cost of construction. The percentage may be adjusted based on the size and complexity of the building. This fee structure is losing popularity due to the perception that an architect may be more inclined to raise construction costs rather than save on costs. From the architect's standpoint, a low-cost project may require just as much work as an expensive project, therefore this fee type does not always provide for an agreeable arrangement. **5. Hourly Rates:** These rates are typically determined by the direct cost of an employee to the firm including salary and benefits with a multiplier that covers overhead items and profit for the firm. For example, an architect is paid a salary that is equivalent to $36.00 per hour. The firm utilizes a multiplier of 3.3 which has been calculated as sufficient to cover expenses such as insurances, benefits, bills, and profit for the firm. $36.00 X 3.3 = $119.00 as the hourly rate for that particular employee or job title **6. Cost Plus Fixed Fee:** The fee is charged by the actual expenses the firm sustains for a project + a fee for firm profit. The expenses may include the associated staff costs, staff benefits, costs for printing, travel, shipping, office overhead, etc. **7. Multiple of Direct Salary Expense:** A multiplier is used to multiply the direct salary of an employee. The multiplier covers employee benefits, overhead expenses, and profit for the office. This is similar to the example in the hourly rates, except that the client is shown this break down, whereas in the hourly rate system, that is the only number the client is presented Multiple of Direct Personnel Expense: Similar to above, except that the break down includes a multiplier for the personal benefits of the employee (paid time off, benefits) and a multiplier for office overhead and profit 9. Although the above are fee structures typically used, there may be various combinations of these for portions of the work performed. For example, schematic design is the most difficult to estimate a lump sum fee for since it may take many iterations for a design to be finalized; using an hourly rate may make sense for this portion of services

Answer 15

Concept of Agency 1. The concept of agency describes the relationship of 3 parties; the principal, the agent, and the third party 2. Principal = Owner Agent = Architect Third Party / Vendor = Contractor 3. An architect is an agent, or representative, of the owner (owner's interests) during the construction process. The contractor as the "vendor" executes the contract and construction documents The architect's authority to bind the owner to decisions is relatively limited. The architect cannot make decisions for the owner unless specifically designated to do so. However, when reviewing and approving submittals, conducting site visits to determine conformance with contract documents, and certifying payment applications, the architect does act on the owner's behalf and in the owner's best interest The architect does not necessarily have the authority to bind the owner to all decisions the architect may wish to make. This includes accepting non-conforming work and decisions that impact the schedule and cost of construction. The architect must always confer with owner when issues or conflicts arise during the course of the project In the case where architect acts as the initial decision maker during a dispute between the owner and contractor, the architect must make a decision based solely on the contract documents and their intent, and must not be partial to either the owner or contractor

Answer 16

Types of Design Contracts 1. Architect as project manager (typical A101 contract) Architect is the primary project design manager and brings in consultants as required for the design of the project 2. Multiple Prime Design Consultants ° Owner contracts separately with primary consultants (for example, façade designer, HVAC engineers, historic preservation specialists) o If these consultants work under the client's contract, then the architect does not deal with their contract, payments or liabilities, but the architect has less control over directing the consultant and influencing the outcome of the project. Coordination and careful communication becomes a more complicated issue with multiple prime consultants 3. Joint Venture 2 or more design firms coming together, typically for a specific project Often when an international or out of state firm partners with a local firm for a specific project Tax liabilities are the responsibility of each member of the venture. A new business organization is not created, this is a contractual relationship only

Answer 17

Minimum Components that Form a Contract 1. The AlA-published contracts are the basis for the A.R.E. examination; however, AlA contracts will not always be used in practice 2. The minimum conditions that should be included in a contract between the owner and architect for it to function properly: Initial information = information that the project is based on and is relied upon to perform design services Responsibilities of the Architect = the services that will be provided and within what time frame Responsibilities of the Owner = provide program, land survey, geotechnical report, or any other piece of information about the existing property or building. Provide goals for the project. Conditions of the Contract = Indemnification = hold each other harmless (especially in third party suits) Waiver of subrogation = ensures risk of loss is on insurance companies Contract termination = there must always be a way out of a contract Dispute resolution = mediation first, then arbitration or litigation Cost for services provided and payment terms

Answer 18

AIA Contracts 1. Types of contracts used for various services and project delivery methods Refer to PjM Exam NCARB Section #3, Part A - AlA Contracts & Forms (p.48) For the purposes of this exam, not all of the contract types and forms are required to be studied, however, the candidate should be familiar with their titles and have knowledge of their applicability • Refer to PjM Exam NCARB Section #3, Part B - Owner-Architect Contracts (B Series) (p.49) Refer to PjM Exam NCARB Section #3, Part C - Fundamental Concepts of the Contract (p.49) • Refer to PjM Exam NCARB Section #3, Part E - B101-Standard Form of Agreement Between Owner and Architect (p.51) Refer to PjM Exam, NCARB Section #3, Part F - C401-Standard Form of Agreement Between Architect and Consultant (p.55)

Answer 19

Construction Fee Types 1. Lump Sum (stipulated sum): The total cost is provided for a project 2. Guaranteed Maximum Price (GMP): Typically used when all details for a project have not yet been determined or scope is not clearly defined. The contractor provides a maximum price for which the construction can be completed Cost + fixed fee: The contractor charges the direct costs associated with a project + a fee to cover the overhead and profit of the contractor. Typically used when the scope of the project has not been finalized or contains complexities that are difficult to estimate (such as renovation projects with many hidden Issues) The owner may have the benefit of receiving cost savings if construction costs end up less than anticipated, but also risks paying for a higher than anticipated construction cost (unless capped by a GMP)

Answer 20

Project Delivery Methods **1. Design - Bid - Build** Most common delivery method. Consists of clearly delineated phases of design, bidding, and then construction Usually required for public projects Clearly defined roles Two separate contracts between Owner-Architect & Owner-Contractor The architect is not contractually tied to the contractor. However, the architect does administer the contract and provides support to the contractor throughout construction and bidding such as through submittal review, substitution review, and answering requests for information --characteristics-- slower delivery time, potentially allows for slimmer profits for contractor, advesarial relationships, no input from contractor during design, design criteria is set by owner **2. Design - Build** Can be Contractor-led or architect-led Owner does not have as much control over some aspects of design and quality of material which can lead to disputes One contract between owner and design/construction team Not a complete system of checks and balances like in Design-Bid-Build. Whether the team is contractor led or architect led, either of these may have more influence on project decisions Owner may hire an advisor to assist with the process and quality control Allows for a fast track schedule Likely will provide a guaranteed maximum price to complete the project. This is done prior to completion of design, however, at a point far enough along where the program of the building, its goals, and general systems and materials are agreed upon At the outset of the project, the owner may hire a design professional to develop the project requirements for the project including program, scope drawings and specifications. These are then presented to potential design-builders to bid on and take over for construction documents and construction. This concept is known as "bridging" **3. Construction Manager as Advisor (CMa)** * Construction manager can be hired by the owner to assist owner in managing the project during construction * The CM may also serve as advisor to the owner during design and provide insights to costs, availability, and constructability of the proposed design Where the CM does not assume the construction risk (as discussed below), the AIA A232 contract is used - "General Conditions of the Contract for Construction, Construction Manager as Adviser Edition" **4. Construction Manager at Risk (CMr)** - Allows for a fast track schedule - Can serve as advisor to the Owner during design phase - Construction manager takes responsibility of construction cost and performance - Involved throughout design process and can provide costs prior to drawing completion - Typically provides a GMP (guaranteed maximum price) to complete the project **5. Integrated Project Delivery** * A concept that requires all parties to be involved in the design process as early as possible and everyone has input. This includes engineering and specialty consultants such as MEPs, lighting, acoustics, the contractor, key subcontractors, and vendors The intent is that a project will be well-coordinated, well-designed, and come in at an efficient and economical cost due to all of the input from contractors, suppliers, vendors, and designers **Construction Manager as Constructor CMc** more risk for CMc two methods for setting construction cost speed of delivery

Answer 21

**Business Structures** 1. The way a business is structured allows the business and its owners certain actions, benefits, liabilities, business expansion opportunities, and how a business may transfer ownership **2. Sole Proprietorship:** A single owner of the business. Although this may be the simplest structure, there is no differentiation between the owner and the business, all liability rests on the owner / individual; the personal property of the business owner is at risk in case of any lawsuits or debt collections. This is commonly seen in very small or single-person firms. Taxes of a sole proprietorship are assessed on the income of the business / owner **3. Partnership:** The business is owned by two or more individuals. Typically, the partners offer a unique skillset in the business relationship that gives them an advantage in conducting the business together. For example, one partner may be good at the financial and business side and the other good at the design aspects. Unless this is set up as a limited liability partnership, the partners may be personally liable for any mishaps in the business or misconduct/malpractice of the other partners. Profits and losses are passed to the partners and taxed as personal tax **4. Limited Liability Partnerships:** See partnership above. The partners have limited liability in the actions of other partners and the business. The business consists of the general partners who have ability to make decisions and limited partners, who are typically silent and act as investors **5. C-Corporations:** A corporation is a separate legal entity from its owners that is taxed and held liable as an individual would be, which offers the most protection to personal liability. Corporations are more expensive to form and require significant efforts in record-keeping and accounting. Corporations are also "double-taxed", meaning the corporation is taxed when it makes a profit, and the shareholders (owners) are also taxed when dividends are paid out. In terms of ownership transfer, corporations provide for the simplest and longest life of a company since the company does not dissolve if an owner sells his/her shares or leaves the company. Corporations are also able to raise money rather easily by selling stock **6. S-Corporations:** Are similar to C-corps in that ownership is easily transferred via stocks. In many cases, a benefit of S-corps is that the "double taxation" is limited to a certain amount; some profit and losses are passed through to the owner's income and the corporation itself is not taxed (this varies greatly by state). § Corps are limited to 100 shareholders **7. Limited Liability Companies (LLC):** Is considered the middle ground between a partnership and a corporation. The business becomes its own entity and the personal property of the business owners) is separated from business liability, losses, bankruptcy, or lawsuits. Unless there is an agreement in place for ownership transfer, if a managing member of an LLC leaves or is replaced, the organization would have to be dissolved and reformed (this can potentially limit ease of expansion of the firm). LLC's don't face corporate taxes, however, members in an LLC are considered self-employed (like sole proprietorship) and must pay taxes individually; profit or losses are assessed through as personal income. If there are multiple members, the taxes are paid according to share of ownership each "partner" has. All members or managers in an LLC can have authority to participate in the decision making and running of the business **8. Professional Limited Liability Company (PLLC):** Similar to LLC expect that it is a specialized company used by certain licensed professionals **9. Joint Ventures:** 2 or more design firms coming together, typically for a specific project; often when an international or out of state firm partners with a local firm for a specific project. Tax liabilities are the responsibility of each member of the venture (a new business organization is not created; this is a contractual relationship only). Careful considerations and precise contracts must be established to set how liability is shared and how profits are distributed

Answer 22

Evidence-Based Design 1. Basing design decisions and strategies on research conducted in the built environment. This can be feedback from user groups after using a building or data gathering of how various conditions relate to measureable aspects such as building performance or health or users. Examples of this can be found in hospitals and schools that have maximized daylight entering buildings and have found that patients felt better quicker and students performed better on tests The findings and studies are used to establish design methods, criteria, and features for future projects

Answer 23

Office Organizational Structures 1.Architectural offices can be organized in a myriad of different ways. The organizational structure can be affected by the size of the firm, the business type, and the types of projects the firm does. A sample of common organizational structures is as follows: **2. Project Teams:** A project is given to a single team that sees the project through from beginning to end. Certain team members will be assigned various tasks from schematic design, to plan development, to detailing, to specifications, to contract administration. Typically, the teams are led by a senior architect or project manager This structure can be hierarchical, where the interns and designers receive direction from the junior architect who receives direction from the senior architect who receives direction from a project manager or firm principal **3. Departmental:** A project is given to various departments within the firm. The schematic design team may put together the concepts, then the project gets passed along to the design development and construction documents team that put together the working drawings, and finally the project passes on to the contract administration team that closes out the project. A benefit may be that the departments are very efficient in the tasks that they do. A negative can be that the design concept may not be well communicated and lost from what was intended by the initial schematics; the initial goals of the client may not be well known by the department working on the final aspects of the project **4. Specialties:** There may be several aspects of an office that provide services as separate departments / individuals whether or not working in team or departmental structures. For example, specification writers may be an individual or group in an office that puts together the specifications for all the projects. The same may be true for interior designers, or construction cost estimators if the firm has these services in-house

Answer 24

Quality Control in an Architect's Office 1. Pre-design meetings: Gather as much information from the client as possible from the beginning. Conduct initial meetings with the project/design team so that everyone is aware of project goals and objectives 2. Progress meetings at the end of each design phase: These meetings can be used to ensure that the design intent and program are still being met, that the project is on track and on budget, and that there is an understanding of the work and details that has yet to be completed and decided on 3. Third party reviews - a qualified individual from the office not engaged with the project can be asked to review the work. A fresh set of eyes can help identify errors or omissions in the documents 4. Maintain and refer to checklists of items or tasks needed to be accomplished by the project 5.Communication in-house, with the client, and with consultants Hold regular meetings or conferences with outside consultants 7. Use standard templates, details, and notes when appropriate, including using CAD standards

Answer 25

AIA Architect members are appointed to the National Ethics Council (NEC) by the AIA Board of Directors. The AIA Bylaws delegate to the NEC the authority to interpret and enforce the AIA Code of Ethics. Complaints submitted to the NEC are handled according to the NEC’s Rules of Procedure. NEC decisions that result in a code violation and discipline may be appealed to AIA’s Board of Directors. In cases where termination is the recommended penalty, decisions are automatically appealed to the Board of Directors.

Answer 26

Filing a complaint A complaint may be filed with the NEC by an AIA member, chapter, or anyone directly aggrieved by the conduct of an AIA member. The NEC has the primary authority to determine whether a violation of the Code of Ethics has occurred and, if so, what penalty (including potential termination of membership) should be imposed. In doing so, it follows the process stated in the Rules of Procedure, which are designed to protect the rights of both the complaining party and the member who is the subject of the complaint. If the NEC finds that a violation has occurred, its decision may be appealed to the AIA’s Board of Directors. The NEC does not independently investigate or prosecute cases against AIA members. It is the sole responsibility of the Complainant and Respondent to submit evidence, call upon and produce witnesses, and present their respective cases. The NEC’s deliberations and decisions are based solely on what the Complainant and Respondent present and submit as part of the case record. Please note: Ethics complaint filings cannot be filed anonymously. The Complainant's identity and all submissions will be forwarded to the Respondent in order for the Respondent to submit a Response.

Answer 27

▪ Canons are broad principles of conduct. ▪ Ethical Standards (E.S.) are more specific goals toward which Members should aspire in professional performance and behavior. ▪ Rules of Conduct (Rule) are mandatory; violation of a Rule is grounds for disciplinary action by the Institute. Rules of Conduct, in some instances, implement more than one (1) Canon or Ethical Standard.

Answer 28

**Rule In practicing architecture** 1.101 Members shall demonstrate a consistent pattern of reasonable care and competence, and shall apply the technical knowledge and skill which is ordinarily applied by architects of good standing practicing in the same locality. Commentary: By requiring a “consistent pattern” of adherence to the common law standard of competence, this rule allows for discipline of Members who more than infrequently does not achieve that standard. Isolated instances of minor lapses would not provide the basis for discipline. **Rule Members shall not engage in** 1.401 harassment or discrimination in their professional activities on the basis of race, religion, national origin, age, disability, caregiver status, gender, gender identity, or sexual orientation. Commentary: Harassment may include, but is not limited to, offensive jokes, slurs, epithets or name calling, unwelcome physical contact, or threats, intimidation, ridicule or mockery, insults or put-downs, offensive objects or pictures, and interference with work performance. Petty slights, annoyances, and isolated incidents (unless extremely serious) will not rise to the level of violation of this Rule. **Rule Members shall not engage in** 1.402 conduct involving wanton disregard of the rights of others. Commentary: Wanton disregard under this rule includes conduct taken in disregard of (1) a high degree of risk that the Complainant would be adversely affected, and (2) that risk would be apparent to a reasonable person. “Reasonable person” is an objective standard and considers someone who uses such qualities as attention, knowledge, intelligence, and judgement which a society requires of its members to protect their own interests and the interests of others. Wanton disregard under this rule also includes engaging in conduct that is severe or pervasive enough that a reasonable person would consider it harassing, hostile, or abusive. This includes, but is not limited to, sexual misconduct, bullying, intimidation, or retaliation. **Rule Members shall not knowingly** 1.403 design spaces intended for execution. Commentary: The purpose of Rule 1.403 is not to address individual positions or opinions. Rather, it is to codify how Members choose to embrace the highest standards of professionalism, integrity, and competence. They are part of a community of regulated professionals who, through their required education, training, and practice, protect the health, safety, and welfare of those who come into contact with their work **Rule Members shall not knowingly** 1.404 design spaces intended for torture, including indefinite or prolonged solitary confinement. Commentary: For the purpose of Rule 1.404, solitary confinement shall be defined as the confinement of prisoners for twenty-two (22) hours or more per day without meaningful human contact. Prolonged solitary confinement shall be defined as solitary confinement, as defined above, for a time period in excess of fifteen (15) consecutive days.

Answer 29

**Rule Members shall not, in the conduct** 2.101 of their professional practice, knowingly violate the law. Commentary: The violation of any law, local, state or federal, occurring in the conduct of a Member’s professional practice, is made the basis for discipline by this rule. This includes the federal Copyright Act, which prohibits copying 1 architectural works without the permission of the copyright owner. Allegations of violations of this rule must be based on an independent finding of a violation of the law by a court of competent jurisdiction or an administrative or regulatory body. **Rule Members shall neither offer nor** 2.102 make any payment or gift to a public official with the intent of influencing the official’s judgment in connection with an existing or prospective project in which the Members are interested. Commentary: This rule does not prohibit campaign contributions made in conformity with applicable campaign financing laws. **Rule Members serving in a public** 2.103 capacity shall not accept payments or gifts which are intended to influence their judgment. Rule Members shall not engage in 2.104 conduct involving fraud. Commentary: This rule addresses serious misconduct whether or not related to a Member’s professional practice. Proof of fraud must be based on an independent finding of a violation of the law or a finding of fraud by a court of competent jurisdiction or an administrative or regulatory body. **Rule If, in the course of their work on a** 2.105 project, the Members become aware of a decision taken by their employer or client which violates any law or regulation and which will, in the Members’ judgment, materially affect adversely the safety to the public of the finished project, the Members shall: (a) advise their employer or client against the decision, (b) refuse to consent to the decision, and (c) report the decision to the local building inspector or other public official charged with the enforcement of the applicable laws and regulations, unless the Members are able to cause the matter to be satisfactorily resolved by other means. Commentary: This rule extends only to violations of the building laws that threaten the public safety. The obligation under this rule applies only to the safety of the finished project, an obligation coextensive with the usual undertaking of an architect. **Rule Members shall not counsel or** 2.106 assist a client in conduct that the architect knows, or reasonably should know, is fraudulent or illegal. **Rule Members making public statements** 2.301 on architectural issues shall disclose when they are being compensated for making such statements or when they have an economic interest in the issue. **Rule When performing professional** 2.401 services, Members shall make reasonable efforts to inform their clients of the potential environmental impacts or consequences the Members reasonably believes may occur as a result of work performed on behalf of the clients.

Answer 30

Rule 3.101 In performing professional services, Members shall take into account applicable laws and regulations. Members may rely on the advice of other qualified persons as to the intent and meaning of such regulations. Rule 3.102 Members shall undertake to perform professional services only when they, together with those whom they may engage as consultants, are qualified by education, training, or experience in the specific technical areas involved. Commentary: This rule is meant to ensure that Members not undertake projects that are beyond their professional capacity. Members venturing into areas that require expertise they do not possess may obtain that expertise by additional education, training, or through the retention of consultants with the necessary expertise. Rule 3.103 Members shall not materially alter the scope or objectives of a project without the client's consent. Rule 3.201 Members shall not render professional services if the Member's professional judgment could be affected by responsibilities to another project or person, or by the Member's own interests, unless all those who rely on the Member's judgment consent after full disclosure. Commentary: This rule is intended to embrace the full range of situations that may present Members with a conflict between their interests or responsibilities and the interest of others. Those who are entitled to disclosure may include a client, owner, employer, contractor, or others who rely on or are affected by the Members' professional decisions. Members who cannot appropriately communicate about a conflict directly with an affected person must take steps to ensure that disclosure is made by other means. Rule 3.202 When acting by agreement of the parties as the independent interpreter of building contract documents and the judge of contract performance, Members shall render decisions impartially. Commentary: This rule applies when the Member, though paid by the owner and owing the owner loyalty, is nonetheless required to act with impartiality in fulfilling the architect's professional responsibilities. Rule 3.301 Members shall not intentionally or recklessly mislead existing or prospective clients about the results that can be achieved through the use of the Members' services, nor shall the Members state that they can achieve results by means that violate applicable law or this Code. Commentary: This rule is meant to preclude dishonest, reckless, or illegal representations by Members either in the course of soliciting a client or during performance. Confidentiality: Members should safeguard the trust placed in them by their clients. Rule 3.401 Members shall not knowingly disclose information that would adversely affect their client or that they have been asked to maintain in confidence, except as otherwise allowed or required by this Code or applicable law. Commentary: To encourage the full and open exchange of information necessary for a successful professional relationship, Members must recognize and respect the sensitive nature of confidential client communications. Because the law does not recognize an architect-client privilege, however, the rule permits Members to reveal a confidence when a failure to do so would be unlawful or contrary to another ethical duty imposed by this Code.

Answer 31

Rule 4.101 Members having substantial information which leads to a reasonable belief that another Member has committed a violation of this Code which raises a serious question as to that Member's honesty, trustworthiness, or fitness as a Member, shall file a complaint with the National Ethics Council. • aia-code-of-ethics-april-2024.pdf Commentary: Often, only an architect can recognize that the behavior of another architect poses a serious question as to that other's professional integrity. In those circumstances, the duty to the professional's calling requires that a complaint be filed. In most jurisdictions, a complaint that invokes professional standards is protected from a libel or slander action if the complaint was made in good faith. If in doubt, Members should seek counsel before reporting on another under this rule. Enforcement of Rule 4.101 refers to and supports enforcement of other Rules. A violation of Rule 4.101 cannot be established without proof of a pertinent violation of at least one (1) other Rule. Rule 4.102 Members shall not sign or seal drawings, specifications, reports, or other professional work for which they do not have responsible control. Commentary: Responsible control means the degree of knowledge and supervision ordinarily required by the professional standard of care. With respect to the work of licensed consultants, Members may sign or seal such work if they have reviewed it, coordinated its preparation, or intend to be responsible for its adequacy. Rule Members speaking in their 4.103 professional capacity shall not knowingly make false statements of material fact. Commentary: This rule applies to statements in all professional contexts, including applications for licensure and AlA membership. Rule 4.201 Members shall not make misleading, deceptive, or false statements or claims about their professional qualifications, experience, or performance and shall accurately state the scope and nature of their responsibilities in connection with work for which they are claiming credit. Commentary: This rule is meant to prevent Members from claiming or implying credit for work which they did not do, misleading others, and denying other participants in a project their proper share of credit. Rule Members shall make reasonable 4.202 efforts to ensure that those over whom they have supervisory authority conform their conduct to this Code. Commentary: What constitutes "reasonable efforts" under this rule is a common sense matter. As it makes sense to ensure that those over whom the architect exercises supervision be made generally aware of the Code, it can also make sense to bring a particular provision to the attention of a particular employee when a situation is present which might give rise to violation. Enforcement of Rule 4.202 refers to and supports enforcement of other Rules. A violation of Rule 4.202 cannot be established without proof of a pertinent violation of at least one (1) other Rule.

Answer 32

Rule 5.101 Members shall treat their colleagues and employees with mutual respect, and provide an equitable working environment. Rule Members who have agreed to 5.201 work with individuals engaged in an architectural internship program or an experience requirement for licensure shall reasonably assist in proper and timely documentation in accordance with that program. Rule Members shall recognize and 5.301 respect the professional contributions of their employees, employers, professional colleagues, and business associates. Rule 5.302 Members leaving a firm shall not, without the permission of their employer or partner, take designs, drawings, data, reports, notes, or other materials relating to the firm's work, whether or not performed by the Member. Rule 5.303 Members shall not unreasonably withhold permission from a departing employee or partner to take copies of designs, drawings, data, reports, notes, or other materials relating to work performed by the employee or partner that are not confidential.

Answer 33

CANON VI **Obligations to the Environment** Members should recognize and acknowledge the professional responsibilities they have to promote sustainable design and development in the natural and built environments and to implement energy and resource conscious design. Rule 6.501 Members shall consider with their clients the environmental effects of their project decisions.

Answer 34

Application The Code of Ethics and Professional Conduct applies to the professional activities of all members of the AlA. Enforcement The Bylaws of the Institute state procedures for the enforcement of the Code of Ethics and Professional Conduct. Such procedures provide that: (1) Enforcement of the Code is administered through a National Ethics Council, appointed by the AlA Board of Directors. (2) Formal charges are filed directly with the National Ethics Council by Members, components, or anyone directly aggrieved by the conduct of the Members. (3) Penalties that may be imposed by the National Ethics Council are: (a) Admonition (b) Censure (c) Suspension of membership for a period of time (d) Termination of membership. (4) Appeal procedures are available. (5) All proceedings are confidential, as is the imposition of an admonishment; however, all other penalties shall be made public. Enforcement of Rules 4.101 and 4.202 refer to and support enforcement of other Rules. A violation of Rules 4.101 or 4.202 cannot be established without proof of a pertinent violation of at least one (1) other Rule. Suspension/Termination for Certain Crimes Upon the National Ethics Council's determination that a member has been charged or indicted with a felony or misdemeanor for violence or threats of violence, perjury or falsification, sexual offenses, or any offense involving violations of the civil rights of any person under the Constitution or laws of the U.S. or any state or any state or territory, such member shall automatically be suspended from membership. Such suspension shall be automatically lifted if the felony or misdemeanor charges are dismissed, or the member is found not guilty of such charges. The member's suspension shall automatically convert to termination of membership, if such member is convicted of, pleads guilty or nolo contendere to or has been given probation before judgment for any felony, misdemeanor, or any offense in any other state, territory, or country which would be a felony or misdemeanor if committed in any U.S. state or territory and involves the conduct referenced. In such cases, the member will be notified, and provided the opportunity to appeal the NEC's actions under the processes described in Bylaws, Section 8.1; the AlA Rules of the Board; and the NEC's Rules of Procedure.

Answer 35

Canon 1 General obligation Canon 2 Obligation to the public Canon 3 Obligation to the client Canon 4 Obligation to the profession Canon 5 Obligation to colleagues Canon 6 Obligations to the environment

Answer 36

A certificate of authorization may be required in some states Articles of incorporation must be filed with the states secretary Secretary of State Stockholders, directors and officers must be licensed architects

Answer 37

can be part of an employee contract with an employer and limit what the employee may do if the employee leaves the firm. Such covenants may restrict for whom the employee works for a specific amount of time, whether or not the employee can set up a competing business, whether or not the employee can work for the firm's clients, or restrictions on passing on confidential information.

Answer 38

By using an employment contract, the firm can spell out exactly what is and is not allowed by the employee, which may include a prohibition of moonlighting or taking jobs outside the firm.

Answer 39

working for the owner in certain designated areas where the architect has been given the authority to act on the owner's behalf

Answer 40

**Multiple of direct personnel expense** The multiple of direct personnel expense (DPE) is a compensation method that adds an amount to the payroll cost of technical personnel to cover the architect's overhead, profit, and indirect expenses. The DPE is calculated by multiplying the salaries and benefits of the designated personnel by a factor that represents the overhead and profit **What it is** The architect's compensation is added to the payroll cost of technical personnel **When it's used** Traditionally used for projects without a fixed construction budget or where the scope couldn't be defined **How it's used** The architect is paid for the amount of time required for their services on the project **What it includes** The architect's compensation is added to the payroll cost of technical personnel to cover overhead, profit, and indirect expenses

Answer 41

A tort is a civil wrong that occurs when someone's negligence causes an injury. If a plaintiff can prove these four elements, they may be able to receive compensation from the person or group responsible. This compensation can include medical treatment, rehabilitation, and other damages. **The four elements of a tort are:** • Duty: The accused had a legal obligation to act in a way that would not cause injury. • Breach of duty: The accused did not meet the required standard of care. • Causation: The accused's breach of duty was the proximate cause of the injury. • Damages: The plaintiff suffered actual harm or loss.

Answer 42

The net multiplier expresses the ratio of net revenue to direct salary expense. Net revenues $ Net multiplier = —————————— Direct salary expense $ The net multiplier, then, expresses how many dollars of revenue come into the firm for each dollar paid to employees. Employees must generate more revenue than their direct salary expense for the firm to continue to operate, pay for all indirect expenses (e.g, rent, insurance, benefits), and remain profitable.

Answer 43

Net revenues are the total amount of revenue generated by the firm's own forces. This excludes "pass-through" income such as consultant's fees and reimbursable expenses.

Answer 44

Direct salary expense is the amount paid to the firm's work-force, excluding the value of benefits such as insurance. Direct personnel expense includes the value of benefits.

Answer 45

Direct personnel expense numbers is the cost of paying employees plus the cost of mandatory and discretionary expenses and benefits including taxes, health insurance, and similar employee-related costs.

Answer 46

The time analysis report shows how each employee is dividing his or her time between work, vacation time, sick leave, and other non-chargeable time. It is not as critical as the aged accounts receivable report for the overall financial health of the firm.

Answer 47

The overhead rate is the ratio of total firm overhead divided by total direct labor. It should not exceed a certain value (typically 1.3 to 1.5 of total direct labor), but it is not as critical as the aged accounts receivable report.

Answer 48

The aged accounts receivable report shows the status of all the invoices for all jobs in the firm and the time between the invoice date and the payment date. Getting paid in a timely manner is critical for cash flow and the overall financial health of the firm. Invoices that have not been paid within a certain time, generally 60 days, need the attention of the principals.

Answer 49

Salary of employees Cost of benefits, such as insurance and vacation time Overhead of the architects office Taxes

Answer 50

The quick ratio, also known as the acid test ratio, is a liquidity metric that measures a company's ability to pay its short-term obligations with its most liquid assets: Assets The quick ratio includes cash, cash equivalents, marketable securities, and accounts receivable. It excludes inventory and prepaid expenses because they are less liquid and may not be easily converted to cash. Formula The quick ratio is calculated by dividing a company's most liquid assets by its total current liabilities:

Answer 51

Including an indemnification clause in the agreements

Answer 52

The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables. Should be between 1.0 and 1.5. Higher than 1.5 and company can invest As a general rule, a current ratio below 1.00 could indicate that a company might struggle to meet its short-term obligations, whereas ratios of above 1.00 might indicate a company is able to pay its current debts as they come due. If a company's current ratio is less than one, it may have more bills to pay than easily accessible resources to pay those bills. What Does a Current Ratio of 1.5 Mean? A current ratio of 1.5 would indicate that the company has $1.50 of current assets for every $1 of current liabilities. For example, suppose a company’s current assets consist of $50,000 in cash plus $100,000 in accounts receivable. Its current liabilities, meanwhile, consist of $100,000 in accounts payable. In this scenario, the company would have a current ratio of 1.5, calculated by dividing its current assets ($150,000) by its current liabilities ($100,000).

Answer 53

This delivery option, sometimes called design-assist, has evolved from design- bid-build in which there are separate contracts for design and construction. At the beginning of the project, the Owner selects an architect and a contractor with whom fees are negotiated. The three prime players, owner, architect and contractor, work together cooperatively from very early on in the design process. Process: The negotiated select team process typically involves three phases. First, the owner selects an architect to design the project and a contractor to build it, each under separate contract. Design and documentation are completed by the architect with input from the contractor, who often provides scheduling, cost estimating, phasing and systems evaluation. Second, when the design is complete, the final JAMES HUNDT ARCHITECTURE, P.C. Page 1 construction cost is negotiated through bids from subcontractors, and third, the contractor builds the project. Use: This method is common among private-sector projects and those owners, architects and contractors who work together regularly. Its principal advantages are: a cooperative team approach to the process, the availability of construction expertise during the design phase, a reduction in the inherent adversarial relationships between the design and construction professionals and less potential for litigation. The primary disadvantages of using a negotiated selected team are related to its relative informality: Without competitive bidding from the general contractor, owners may question whether they have an economical construction price.

Answer 54

Essential to the success of this approach is the selection of the right contractor for the project. Although the owner contracts directly with the contractor, the architect typically assists the owner with the contractor selection process. Each contractor is asked to submit a Statement of Qualifications for the owner's review. This document provides the owner with detailed information about the contractor and their previous experience. • providing technical information during design; • providing constructability input to the architect; • estimating and negotiating cost of construction; • carrying out materials and systems analyses during design; • coordinating early purchase of long-lead items; • obtaining entitlements related to construction, such as building and encroachment permits; • preparing shop drawings and other documents necessary to accomplish the work; • providing the methods and means of construction; • job-site safety; • coordinating the bids and work of subcontractors and prime or trades contractors; • establishing and maintaining the construction schedule; • fulfilling the requirements of the construction documents; • guaranteeing the quality of construction; • correcting deficiencies covered by the guarantee. The architect assists the owner in reviewing the proposals and interviewing the firms, and in selecting one firm as their first choice. If desired, fees and other costs could be negotiated with the selected firm. Once an agreement is reached between owner and contractor, the appropriate contractual documents would be drawn up, again with the architect's assistance.

Answer 55

The Guaranteed Maximum Price, or GMP as it is commonly known, is the agreed upon maximum total cost for the construction of the project. This is sometimes called an upset price. Costs beyond the predetermined maximum are borne by the contractor. If the actual costs are below the maximum, the contractor shares with or returns to the owner the savings, according to the terms of their contract. The GMP usually includes a contractor's contingency. The size of the contingency will depend upon at which point in the process the contractor provides the GMP. Although the GMP can be provided as early as at 30% completion of the design, it is usually provided at or near the end of the design process in order to keep the contingency as low as possible, thereby maximizing the owner's dollar-to-benefit ratio. Of course, the contractor provides updated cost estimates at various points during the design process to help keep the project within budget. Once the GMP has been agreed to, it can only be increased by change orders due to owner-initiated scope changes, selection of higher cost subcontractors by the owner or discovery of unknown site conditions.

Answer 56

Towards the end of the design process, discussions will take place regarding the selection of subcontractors for bidding on subcontracted work. Usually, the contractor will present a preliminary list of qualified subcontractors for review by the owner and architect. Either party is free to suggest additional names or to ask that names be removed from the list. Although local contractors or parishioners are always encouraged to participate in the bidding process, the contractor will usually want to pre-qualify unknown subcontractors to make certain that they are capable of providing work whose quality will be consistent with the rest of the project. Once the list has been agreed upon, the pre-selected subcontractors will be invited to bid on the project. When the bids have been received by the contractor, they will be opened with the owner and architect present, if so desired. Although the contractor and the architect may make recommendations, final selection of subcontractors will be the owner's responsibility. However, should the owner select a subcontractor whose bid is higher than the subcontractor recommended by the contractor, the Guaranteed Maximum Price may have to be adjusted accordingly.

Answer 57

PARTNERSHIP • An unincorporated association of two or more entities for the purpose of operating a business with the intent of making a profit • Liability and Taxes—all partners are not a separate legal entity, partners’ personal and professional taxes are filed under personal identity, Information Return is reported to delineate revenue for the firm from the individual ⎯ Partnership files a separate return called an Information Return, which contains each partner’s reportable profit or loss ⎯ The Partnership does not pay federal income tax ⎯ Partners transfer that information to a personal return • Agreements ⎯ Financial contributions agreement—how much capital each person puts into the business ⎯ Responsibility / authority delineation—who is responsible for what ⎯ Fiduciary clauses—ensure each person is acting in the firm’s and each other’s best interests ⎯ Balance / layout of liabilities to partners—who is taking risk for certain business practices ⎯ Organization and management—how is business going to be done ⎯ Balance of profit and loss—what percentage of profit and loss goes to whom and how ⎯ Controls for transfer of business interest—upon death, retirement, termination, etc. ⎯ New partner protocols—how to bring in new partners ⎯ Dispute resolution provisions ⎯ Termination procedures • Uniform Partnership Act ⎯ Model statutes for partnership establishment provided by most states ⎯ Establishes legal requirements for partnerships ⎯ Responds to balance of profit and loss • Balance of risk—incoming partners are responsible for debts incurred after becoming a partner only, capital contributed upon becoming a partner is subject to claims, departing partners remain liable for all claims incurred while they were partners • A partnership is technically dissolved and reformed when the group changes—it is a different identifiable legal entity • Registration requirements—establishing or reinstating partnership after any changes ⎯ Most states require that all partners are registered architects in that jurisdiction ⎯ Multi-disciplinary groups must be identified by discipline (architect or engineer)

Answer 58

LIMITED LIABILITY CORPORATION (LLC) • A complex hybrid of corporations and partnerships • The partners are the members of the LLC, and the employees are employed be the LLC • Taxes—LLC is a separate entity from its members, classified as a partnership for tax purposes, suitable for passing losses to personal income while limiting liability, some states restrict the ability to use an LLC for professionals • Ownership / Control—LLCs do not have to be actively managed by the members, managers get limited liability for actions on behalf of LLCs, detailed Operation Agreements (grant authority to members or managers to do business on behalf of the LLC) should be used as a best practice • Liability—members have limited liability, licensed professionals generally cannot avoid liability because of the different types of insurance • Changes in ownership—memberships may be transferred with permission from other members, states often set limitations on transfers, protocols should be outlined in the operating agreement, a new company is NOT created when memberships are transferred, Buy / Sell Agreements are often used to delineate terms of a transfer

Answer 59

CORPORATION • Separate legal entities owned by shareholders that can conduct necessary business operations including bringing suit and being sued • More stable than a sole proprietor or partnership • Directors are employees of the corporation—directors and employees draw salary from the corporation • Taxes—receives a tax ID and files as its own separate entity, salaries are deducted and the remaining is taxed at the corporate tax rate, individuals are paid a salary and taxed individually on it, limited double taxation (generally) • S Elections—shareholders are treated similarly to partners and are taxed on their share of corporate income regardless of distribution, S Corp itself is only subject to income tax in special circumstances, may be used to mitigate some elements of double taxation in a C Corp, many firms use an S Corp since professional corporations have a higher tax rate • Establishment requirements—Articles of Incorporation must be filed, federal tax number must be obtained, legal requirements regulate board of directors, shareholder meetings, etc. • Some states have separate general and professional corporation statutes ⎯ General Corporation—for general business subject to general laws ⎯ Professional Corporation—statute may restrict professionals from establishing general corporation, usually must be owned by professionals licensed in that jurisdiction, specifically provide professional services subject to statute • A corporation doing business out of state must register in the other state as a foreign corporation • Ownership and control—oral or written agreements between the corporation and individual, compensation or division of control may not be proportional to shares or percentage, management is usually determined by highest shareholders (possibly not the owner) • Liability—personal assets are not accessible to satisfy business debts (if the corporation fails a business arrangement, only its assets are accessible), professionals remain liable for E&O, some states hold all owners of a corporation jointly liable, and some states protect professionals’ assets behind the corporate veil • Ownership change—shares of the corporation can be bought and sold, Buy / Sell agreements facilitate transition, provides the departing owner their severance pay • Buy / Sell Agreement—common agreement for share control, requires the departing shareholder to sell their shares back to the corporation, requires that the shares be kept within the organization, states may mandate that all shareholders be licensed

Answer 60

FIRM ROLES: FIRM STRUCTURES • Hierarchical—leader at the top, senior, and junior members • Non-structured / collaborative—general team members work on projects together, taking on whatever role is necessary • Horizontal—hierarchical levels are limited to lead designers or project managers who work with a team of production workers, with no ladder of communication to slow down process ROLES • Intern (levels 1 – 3) ⎯ Develops designs or technical solutions under the supervision of an architect ⎯ Typically communicates with internal teams • Unlicensed design staff ⎯ Unlicensed, professional level performance ⎯ Predominantly independent with method and technique ⎯ Receives technical guidance on complex projects from more senior team members ⎯ Typically communicates with project manager and team when necessary • Architect (levels 1 – 3) ⎯ Licensed professional ⎯ Predominantly independent with method and technique ⎯ Receives technical guidance on complex projects from more senior team members ⎯ Typically communicates with project manager and team when necessary • Project manager ⎯ Full responsibility for all aspects of a project ⎯ Coordinates project, administrative and technical, for productivity and cost ⎯ Primary client point of contact ⎯ May also prepare proposals and contracts • Senior project designers ⎯ Coordinates project design efforts ⎯ Responsible for planning and creative concepts ⎯ Presentation and design drawings with details ⎯ Requires a number of years of experience detailing and providing design support ⎯ Senior project designers are usually a client point of contact • Director of Pre-Design, Design, Operations ⎯ Responsible for firm-wide standards with supervision ⎯ Client point of contact ⎯ Monitors project development and presentations ⎯ Provides technical support and design direction support • Senior leaders ⎯ Chief operating officer—responsible for day to day operations and financials, business background ⎯ Managing principal—responsible for realization of client expectations and firm goals ⎯ CEO / President—chief analytical responsible for profitability, growth morale, etc.

Answer 61

INSURANCE PROFESSIONAL LIABILITY INSURANCE (E&O) • Protects against lawsuits for negligence in the performance for architectural services • Value—it’s your choice, but it’s risky to forgo ⎯ Very costly for professional liability ⎯ Adversely, damages are potentially very high as well • Cons—deductibles, limits of liability on coverage, some claims may be excluded entirely • Licensed / Admitted companies ⎯ State fund backed guarantee for some companies ⎯ Larger firms may not qualify due to higher risk involved ⎯ Claims drawn from a state fund ⎯ In the event that a firm goes insolvent during a claim, the fund satisfies the claim • Claims Made Policy ⎯ Applies to professional liability policies frequently ⎯ Policy must be in effect at the time that the claim is made ⎯ Coverage terminates when policy terminates ⎯ Does not protect against claims for previous work, or after the coverage term has ended • Occurrence Policy ⎯ Applies to general liability policies ⎯ If the policy was in force at the time of a claim, then the claim is covered ⎯ Former employees—if the firm retains coverage then so do former employees, if the firm drops coverage or dissolves, former employees are at risk, this only applies to work rendered while under employment • Retirement policies—extensions are available, cost may be included in the firm’s premiums • Prior Acts—coverage is available upon establishment of a new policy

Answer 62

COVERAGE • Exclusions—specifically limit coverage included in a policy • Endorsements—expand coverage in a policy (all policies are negotiable) • Policy limits—typical E&O coverage has a $250,000 minimum and a $15 million maximum (can be customized to go higher) • Split limits—a policy has one limit per claim and a separate limit per policy year • Deductibles—paid on a per claim basis, higher deductible means lower premium • Insurability issues—indemnification (owners may ask for too much protection from their own negligence), insurance companies only insure the architect for its own negligence, policies exclude warranties and guarantees on the part of the architect (architects never warrant, guarantee, or insure) ⎯ States may limit the use of indemnification or “hold harmless” clauses • Inter-professional relationships ⎯ AHPP exemplifies this with the architect-consultant relationship ⎯ Both parties should review each other’s policies for proper indemnifications ⎯ The primary design professional is the main contractually obligated party and therefore must assume the most risk • Joint ventures—like a partnership with a more limited scope or purpose, best practice is to ensure that both polices properly include or exclude coverage • Project Professional Liability Insurance—covers design professional and consultants, lasts for the duration of the project and a set time after construction, covers only one project, generally used for projects that require coverage above and beyond the norm • Expanded project delivery approaches—applicable due to variability in our profession’s numerous delivery approaches (most coverage is under basic policy coverage, but there may be gaps) • Claims—examples: ⎯ Compensation requested is not aligned with performance evaluated ⎯ Alert of a potential problem—insurance might have requirements for how to react to claims of the risk of a claim ⎯ Instructions for claims will be included as part of the agreement • Consent of Insured for Settlement—most policies require the insured’s consent to settle a claim, mutual liability when settling a claim ⎯ Insured is liable for costs of claim if the result exceeds an offered settlement ⎯ Carrier is liable for claims above what the insured requested to settle for

Answer 63

COMMERCIAL GENERAL LIABILITY • General liability coverage ⎯ Coverage of third-party legal liability ⎯ Does not cover professional liability (E&O), automobile, or worker’s compensation ⎯ Per Claim limits o Office lease disputes o General contract breaches o Delinquent purchase orders o Equipment rental disputes ⎯ Annual Aggregate limits o Libel o Slander o Defamation of character o False arrest o Anything a firm does that is not part of a licensed professional’s charge • Business automobile liability—used for automobiles purchased for business use or personal vehicles if used for business, protects owners of firm against claims arising from such use • Coordination of liability—professional, general, automobile, etc., work with an insurance professional with a fiduciary agreement to ensure you’ve covered everything with no redundancies • Excess liability (umbrella policy)—usually broader than other smaller policies it is designed to supplement, provides higher liability to underlying policy coverages

Answer 64

INSURANCE EXTRAS • Employment practices liability insurance—protects the insured against harassment, wrongful termination, discrimination, etc. assuming sound business practices agreed to are followed • Architect’s property insurance—protects office building or leasehold, including building improvements (signage, interior fit-outs, furniture) • Professional office contents insurance ⎯ Office contents may be referred to as Valuable Paper and Records ⎯ Contents can be covered, but only for the cost of labor and materials to produce them ⎯ Does not cover preparation costs for research or expertise ⎯ Can be purchased • Business interruption—covers lost revenues or fixed expenses lost as a result of certain occurrences (fire, flood, storm, etc.) • Fidelity Bonds and Loss of Money and Securities ⎯ Covers dishonest or malicious acts of employees for associate ⎯ Acts covered—burglary, theft, destruction ⎯ Items covered—checks, cash, certified payables and receivables

Answer 65

EMPLOYER RELATED INSURANCE • Worker’s Compensation—required by statute to protect against work related injuries (medical, lost wages, death benefits) ⎯ Provided regardless of employer or employee negligence ⎯ Employees are precluded from suing the employer for injuries covered ⎯ Higher premiums for employee classes that provide more risky services (construction administration, etc.) • Health insurance—not required and often not valued accurately ⎯ Indemnity plans—rare and usually in rural locations, same level of benefits for all providers, up front deductible do and coinsurance for services ⎯ Preferred Provider Organization (PPO)—similar cost sharing with some copayments or coinsurance, larger network of providers, can go out of network at a higher level of cost sharing ⎯ Health Maintenance Organization (HMO)—limits services to providers in network (except in emergencies), primary care physicians are required to access other care, required referrals, lower patient cost sharing amount ⎯ Point of Service (POS)—must see primary care physician for referral to other care, fewer restrictions on referrals, also known as “open access” ⎯ Health Reimbursement Account (HRA) o Combined employer funded reimbursement account o Comes with high deductible health plan o Unused funds roll over year to year o Funds forfeited after plan termination ⎯ Health Savings Account (HSA) o High and minimum deductible required o Maximum cap to out of pocket expenses o Funds accrue tax fee o Annual cap on contributions with no limit for total accrued o Employers may contribute and retains no right to that money if terminated o After termination, money may remain or be applied to a retirement account • Dental insurance ⎯ Usually takes the following formats—indemnity plan, HMO, PPO ⎯ Typical inclusions—preventative care, some patient cost sharing for non-routine procedures • Vision care—typically a flat dollar amount to include annual exam, glasses or contacts ever year or two • Flexible spending accounts ⎯ Employee pre-tax contributions to reimburse medical expenses ⎯ Employer managed ⎯ Exempt from FICA, federal, and most state tax ⎯ Features dependent care expenses by federal law • Income replacement and protection ⎯ Life insurance—to be used as income protection for spouse and family in the event of death ⎯ Disability benefits—protects against non-work related injury or illness (not always required) ⎯ Business overhead expense—protects business related expenses for if an owner has total disability

Answer 66

NOTEWORTHY CONTRACTS • A101: Standard Form of Agreement (owner / contractor) • A201: General Conditions of the Contract for Construction (owner / contractor) • A701: Instruction to Bidders (owner / contractor) • B101: Standard Form of Agreement (owner / architect) • C401: Standard Form of Agreement (architect / consultant) • G Series: standard forms for construction

Answer 67

CONTRACT TERMS • Indemnification ⎯ Series of hold harmless provisions ⎯ Used to assign appropriate risk to responsible parties ⎯ Covers cost of damages from one party to another (Hold Harmless Clause) • Limitation of Liability ⎯ Assigns caps to the amount of risk a contracting party is responsible for ⎯ Consequential damages are included (for example, owner’s lost revenues) ⎯ May take the form of a maximum of fees, agreed amounts, insurance based amounts, etc. • Intellectual Property ⎯ Protects the design professional’s liability regarding use of work ⎯ Usually states the instruments of service (drawings, specifications, etc.) may not be used elsewhere ⎯ Design professional typically retains ownership • Additional Services ⎯ Outlined in contract to provide clarity as to what the architect is required to do and what will be an Additional Service or Additional Cost ⎯ Custom to every project (may or may not include full scope of services) ⎯ Protects against scope creep—uncontrolled growth of the project parameters from lack of proper definition of documentation • Owner’s Budget ⎯ Contractual provisions define the owner’s budget as a consideration to the project ⎯ Determines the architect’s obligation to meet the budget contractually • Changes to the Work ⎯ The Work = the project ⎯ Communication methods prescribed in the standard forms ⎯ Standard forms for construction are the industry standard ⎯ Changes are dealt with differently during design and construction—balance communications with owner and contractor during construction

Answer 68

ARCHITECT’S CONTRACTED SERVICES • Service for Traditional Projects ⎯ Traditional projects means a program has been prepared by the client (this is determined in a separate contract) ⎯ Services: o Schematic Design o Design Development o Construction Documents o Bidding and Negotiation o Construction Administration ⎯ Additional Services: o Pre-design o Programming o Equipment planning o Market research coordination o Design beyond the agreed number of iterations o Extra design time per client changes after contracted deadlines o Renderings, models, etc. • Architects are traditionally the Master Builder of the project, orchestrating all trades in design and construction ⎯ Architect’s main role is now as the protector of the health, safety, and welfare of the public ⎯ Shift to Master Designer—architect has a distinctly different role in each phase, heavily calibrated to mitigate the appropriate amount of risk for each level of involvement

Answer 69

PHASES: PRE-DESIGN PHASE (ADDITIONAL SERVICE) • Programming • Site and Building Analysis • Project Cost and Feasibility • Planning and Zoning Regulations • Tasks—understand scope and its limitations, analyze goals of the project against parameters, verify owner’s expectations are to be met, ensure owner understands limitations, etc. • Responsibilities—programming, assist owner in defining project goals, limitations set forth by jurisdictional regulations and client restrictions • Milestone—set of documents outlining the goals of the project agreed to by all parties (owner / architect) SCHEMATIC DESIGN PHASE • Responding to project parameters and goals; high level planning and massing • Pursue multiple design options to find a solution • Tasks—preliminary grading and civil engineering, MEP/S systems planned, architectural floor plans developed • Responsibilities—generate design options, ensure options are compliant, basic MEP/S narratives or preliminary plans, coordinate large or systemic moves to ensure a feasible path forward, obtain approval for one option • Milestones—preliminary budget and client approval of one option to proceed into design development ENTITLEMENTS • Sometimes a jurisdictional requirement, not a contractual phase • Early design review from planning and zoning to ensure compliance • Tasks—ensuring the project massing and exterior aesthetic meets requirements, designing overall typology and exterior condition to suit owner’s goals • Doing our due diligence to make sure the large systems and look of the building are in compliance with jurisdictional requirements • Responsibilities—coordinate jurisdictional requirements, ensure client expectations are aligned with limitations • Milestones—planning documents to include code analysis, site plans, floor plans, elevations DESIGN DEVELOPMENT • Further development of the selected schematic design options • Tasks—moderately detailed coordination of MEP/S systems, accurate portrayal of building for future cost estimate, major materials and systems selected • Responsibilities—push the project forward, encourage coordination for the purpose of selection of systems, keep the owner informed of challenges with each major element studied • Milestones—updated drawings showing more detail, outline of specifications, updated cost estimate CONSTRUCTION DOCUMENTS • Completion of the development of documents for construction • Tasks—full construction detailing, all systems coordinated to avoid clashes in the field • Responsibilities—ensure final selections on systems are made, coordinate systems into drawing sets, client final review, present drawings to jurisdictional authority for approvals • Milestones—final construction documents set, final specifications, client approval, jurisdictional approvals BIDDING + NEGOTIATION • Architect acts as advisor to the client on coordinating and selecting a contractor • Tasks—assist client in preparing the bid package, assist client in reviewing bids and selection procedures • Responsibilities—prepare drawings and specification for inclusion in the bid package, advise client on selection of contractor • Milestone—provide drawings and specification for bidding CONSTRUCTION ADMINISTRATION • Architect observes performance of the Work • Contractor and architect communicate via contractual methods • Work is completed and paid in stages measured by trade percentages • Tasks—observe construction, approve payments to the contractor, review submittals for design intent, coordinate changes via AIA standard forms, architect and contractor keep owner informed (OAC meeting) • Responsibilities—primary responsibility is to the client; ensure the Work meets the standards set forth in the drawings and specifications, may reject non-conforming work, close-out of the project upon completion and final payments • Milestones—submittals reviewed for design intent, changes coordinated and drawings reissued, Work evaluated and deemed conforming to the contract documents (final inspection for quality and design intent and review)

Answer 70

CONSTRUCTION MANAGEMENT: AGENT • Usually utilized for complex projects • Clients who do not have the resources or desire to assume the coordination of project development hire a third party to assume management • Sometimes the construction manager may act as contractor—“at risk” • Pros—scheduling may be more expedited, cost estimating may occur sooner, supervises the project (reducing owner’s management requirements), provides owner cost control, scheduling, and coordination • Cons—added cost, estimated cost remains unknown until bidding, multiple prime contractors mean more administration required, CM agent is not a significant influence on the outcome of the project

Answer 71

CONSTRUCTION MANAGEMENT: AT RISK • Contractor position goes away, and the CM takes on the role (and risk) of the contractor • Multiple prime contractors are brought in under the CM’s general contracting responsibilities • Pros—cost is guaranteed sooner with a Guaranteed Maximum Price (GMP), reduces owner management requirements, acts as the quality control entity potentially saving on change orders, architect continues to protect the owner’s interests, fast-track is more viable • Cons—conflict of interest (CM is not always serving the owner’s interests, GMP), added cost

Answer 72

DESIGN-BUILD • Method of project development where a client hires an architect-contractor firm to design and build the project under one contract • Pros—typically the fastest method, early cost and construction scheduling, mitigates conflict between architect and contractor • Cons—costs are not competitive with no bid process, architect is no longer in a contractual position to protect owner’s interests, Design-Build entity may be committed before documentation is done, commitment renders a potential conflict of interest (best interest of the owner is secondary to the operations of the Design-Build entity)

Answer 73

INTEGRATED PROJECT DELIVERY • Owner, contractor, and architect combine to align the business interests of all • Pros—reduced involvement from lawyers for disputes, equal buy-in from all parties ensures best intent, communication is collaborative often relocating teams to work together, Building Information Models (BIM) are more easily realized • Cons—not applicable to all project types or firm structures, increased risk as all teams must rely on each other, architecture firm’s finances take on a different structure than a typical office (money takes on a more complicated flow, which takes additional expertise and more qualified accountants)

Answer 74

REVENUE PROJECTION • Project payments from existing projects and proposals • Choose which projects to pursue based on how much money you need to make versus how much is projected • Staffing expense ⎯ Rate = how much staff members get paid ⎯ Indirect expense = rate + payroll burden of 150% ⎯ Billing rate = indirect expense + profit goal o Profit goal of 15% = indirect expense / .85 o Profit goal of 25% = indirect expense / .75 ⎯ Staffing multiplier = billing rate / rate

Answer 75

STAFFING PLAN • Methods ⎯ By work load—procuring more members to meet the work load ⎯ By staff load—accepting projects based on current staff’s capabilities • Assume 2080 hours / year • Production staff member has the most chargeable hours; administration staff has the least • Direct salary expense = chargeable hours x hourly rate • Billable revenue = direct salary expense x staffing multiplier • Indirect salary = non-chargeable hours x hourly rate • Overhead rate = overhead (indirect salary, payroll burden, rent, etc.) / direct salary expense • DSE break even multiplier = (DSE + overhead) / DSE • Direct personnel expense = (DSE + payroll burden + overhead without burden) / DSE • Suggested planning process (per AHPP) 1. Establish profit plan (how much do we need to make) 2. Restate profit plan to reflect efficiency (how efficient does our staff need to be) 3. Calculate net multipliers 4. Set minimum billing rates 5. Set project profit goals 6. Use actual net multiplier earned to monitor performance > This is the industry standard

Answer 76

FINANCIAL MANAGEMENT SYSTEMS • Revenues—money earned from projects measured by the contract sums of all services (including non-architectural) plus any additional services (including ad revenue) • Direct project expenses—salaries, consultant fees, other costs incurred, reimbursable or otherwise • Indirect expenses—non-project support, payroll burden, administrative work, IT maintenance • Reimbursable expenses—transportation, printing, postage, overtime, renderings, photography, architect’s consultant expenses, project liability insurance, etc. (add markup of 10% - 20%) • Profit = revenues – expenses

Answer 77

ACCOUNTING METHODS • Cash method ⎯ Black and red comparison of real time performance ⎯ Does not consider invoices set until paid ⎯ Costs may be incurred prior to payment (you have to pay employees and consultants even if the client is behind on their payments) ⎯ Net cash revenue = total revenues – expenses dispersed • Accrual method ⎯ Accounts for these factors as incurred ⎯ Cash on hand at the moment not reflective of firm state ⎯ Advanced payments (insurance) are spread over time

Answer 78

MAJOR FINANCIAL PLANNING FACTORS • Profitability ⎯ Firm—operations, capital, and growth ⎯ Producers—reward (salary bonuses, benefits) ⎯ Owners—establishing the company and taking the risk • Project cash cycle ⎯ Cash on hand can be considered a liquid asset ⎯ Liquidity—ability to reduce assets to cash relatively quickly ⎯ Solvency—ensuring enough cash is on hand to pay for obligations ⎯ Solvency bottom line—percentage hardline firm will not dip below • Solvency and accrual method ⎯ Receive a line of credit if you’ve gone below your solvency bottom line

Answer 79

MANAGING CASH AND FINANCIAL STRENGTH • Cash flow projections—the “analytical” component for understanding cash flow and financial strength ⎯ Forecast billings ⎯ Forecast amounts and timing of collections ⎯ Forecast other revenues ⎯ Forecast cash disbursements ⎯ Combine collections and disbursements to calculate net monthly cash amount • Cash flow controls—the “active” component of managing your finances (techniques to employ to actually control cash flow) ⎯ Accurate book-keeping ⎯ Bill promptly, correctly, and clearly ⎯ Active pursuit of payment ⎯ Accounts receivable / payable ⎯ Periodic cash budgets to monitor flow • Working capital = current assets – current liabilities • Receivables ⎯ Invoice and collections—depends on firm timeline (typical is two months after invoice) ⎯ Average collection period = accounts receivable / average revenue per day • Revenues per employee—ratio of net revenue to gross revenue per capita • Firm-wide profit = profit / net revenue • Indirect expense factor = total indirect expense / DSE ⎯ Your balance for profitability; how much you have to bill to break even • Indirect salary expense—paid time off, holidays, sick days, down time, volunteer time, marketing, education, administration, etc. • Time utilization ratio (amount of time put into ISE) = direct chargeable hours / total hours • Payroll utilization ratio = DSE / total salary expense

Answer 80

RISK: STANDARD OF CARE • Origins in law • The degree of prudence and care taken by a professional entity, measured by the usual and customary performance of similarly qualified professionals under similar circumstances • Basis of legal judgement • Action bias—permeates all actions internally (firm) and externally (client) • Indemnification—when one party is at fault, if that fault has a financial or real property ramification for the other party in the contract, the person at fault will pay for (make whole) the debt owed to the party that suffered the loss RISK EXPOSURES • Factors outside of our control ⎯ Clients must provide resources on time ⎯ Consultants may make mistakes ⎯ Contractors may produce poor work ⎯ Natural occurrences may delay the project ⎯ Local politics may delay the project • Good practice entails managing risk to embrace and mitigate CONTRACTS • The Owner is the primary contract holder • Who is required to serve whom legally and contractually:

Answer 81

AGREEMENTS • Standard AIA forms • Signature is the designation of agreement • Legally binding • When disputes arise, contracts address them accordingly • Agreement types ⎯ Written contract—most formal and easiest to uphold in court ⎯ Implied contract—relates to repeat work under familiar circumstances ⎯ Verbal contract—least formal and most difficult to uphold in court > Agreements = Risk

Answer 82

RISK MANAGEMENT METHODS • Retain—to take on risks ⎯ Anything that falls into the architect’s court of responsibility ⎯ Architectural drawings meet code ⎯ Life safety requirements ⎯ Not ADA requirements o The client is legally obligated to meet ADA requirements o The architect is only ethically obligated to meet ADA requirements o Architect may be responsible through indemnification • Reduce ⎯ Active reduction of risk o Stronger quality assurance/quality control processes o More observation during construction (architects do not contractually oversee or inspect construction—we observe to ensure that work meets design intent) o Specialty consultants o Talent retention o Professional development ⎯ Contractual reduction of risk o May be able to share the limit of liability o Consequential damages clauses o Indemnification (non-consultant) o Delivery method • Transfer through indemnification—attempt to compartmentalize responsibility to other parties • Avoid if there are too many unknowns or it is too risky

Answer 83

BRANDING + BEST PRACTICES • Firms must be incubated and grown to graduate from a start-up to an established firm and then on to a mega firm • Firm incubation tactics ⎯ Slow growth ⎯ Clean break from a larger firm • Target markets ⎯ Expertise is valuable—define what types of projects you want to do and pursue ⎯ Having one exclusive specialty is risky—develop expertise in at least two markets to mitigate the rise and fall of markets ⎯ Brand new firms should embrace diversity • Common markets—residential, institutional, educational, civic, industrial, etc. • Target projects ⎯ Select projects as strategically as possible ⎯ Consider client, complexity, expertise, exposure, and reliability of stakeholders ⎯ License qualifies architects for many types of projects

Answer 84

AMERICANS WITH DISABILITIES ACT • Written by the U.S. Department of Justice to ensure fair and impartial administration of justice for all Americans • Purpose—to prohibit discriminatory designs and promote equal opportunity for disabled persons to access state and local government facilities, public facilities, commercial accommodations, and transportation (not private spaces) • Mandates ⎯ Access—fair and safe access to sites, buildings, and applicable building components from the moment of arrival to departure ⎯ Safety—equivalent qualitative life safety measures for emergency operations for all occupants • Role in architectural practice ⎯ It is the architect’s role in society to protect the health, safety, and welfare of the public ⎯ Architects should be protectors of the disabled—ADA is the specific division for protection of disabled persons • Reviewing for compliance ⎯ Local building departments do not review for compliance ⎯ Some secondary agencies might review for accessibility ⎯ Client may request a third-party review ⎯ If no other review is requested, accessibility is up to the architect

Answer 85

DISPUTES • Most disputes occur after changes as a result of poor communication • During construction the stakes are higher—address issues immediately to prevent them from escalating or growing more expensive • Suggestions from the AHPP ⎯ Inform the client ⎯ Clarify expectations—understand the client’s desired path forward ⎯ Analyze options ⎯ Present options ⎯ Document decisions ⎯ Update the client • When dealing with conflict, never admit liability to a claim—admission of fault is usually against your insurance policy • Contract conflict pathways ⎯ Third party mediator resolves the conflict (non-binding) ⎯ Arbitration (default option)—binding resolution from a third-party mediator ⎯ Litigation—binding resolution determined by court of law • Initial decision maker (person contractually defined to make the initial decision in a dispute)—usually the architect but may be a third party at extra cost • Non-binding agreements mean the decisions are fiduciary in nature (not biased or self-interested) • The resolution should align with court expectations

Answer 86

THE ARCHITECTURAL PRACTICE: NATIONAL ARCHITECTURAL ACCREDITING BOARD (NAAB) • Accredits universities NATIONAL COUNCIL OF ARCHITECTURAL REGISTRATION BOARDS (NCARB) • Licensing component • Education for prospective licensed professionals • Oversees development and administration of the ARE • Communicates your progress / passed exams to the state jurisdictions, who administer licenses STATE JURISDICTION • Issues licenses • Regulates practice of architects AMERICAN INSTITUTE OF ARCHITECTS (AIA) • Membership based professional organization • Provides support and resources for members • Licensed: John Smith, AIA • Unlicensed: Katie Wood, Associate AIA

Answer 87

REGULATIONS: • We are licensed by the state, but we must also follow federal laws. 1. Federal—provides state with regulation requirements for federal programs and initiatives 2. State—can adopt federal guidelines and adapt them for more localized geopolitical concerns (Florida for hurricanes, California for earthquakes) 3. Local—can adopt state guidelines; responds to legislation regulating planning and design • Federal has the least design influence, and local has the most • We are required to adhere to the most stringent requirement (follow the strictest code)

Answer 88

INTERNATIONAL BUILDING CODE (IBC) • Written by the International Code Council (ICC) • States may adopt and / or modify • Covers architecture and structures

Answer 89

LOCAL REGULATIONS • What powers belong to what jurisdictions (local departments) • General plan—applies to all areas not included in a specific plan ⎯ Housing ⎯ Economic development ⎯ Environmental design ⎯ Historic preservation • Specific plan—not required by all jurisdictions ⎯ Relates to local character ⎯ May have detailed zoning and design requirements, including aesthetic requirements • Local departments ⎯ Planning and Zoning ⎯ Building Department—reviewing agency responsible for particular design requirements, life safety, and conformance to building code o Broad—square footage, construction type, fire suppression systems (deferred approvals often allowed), exit path lengths, dead end corridors o Specific—door sizes and hardware, stair slopes, handrail heights ⎯ Fire Authority—fire prevention, fire suppression, and life safety o Site access for fire apparatus, building access for fire fighters, fire separations between occupancies, locations of fire equipment, combustibles, elevators, and stairs o At the regional or county level ⎯ Public Works—water, environmental agencies, etc. ⎯ Municipal (public safety)—police, etc. • Review process ⎯ Traditional (Entitlements System) o Schematic Plans (placement on site, size, parking, etc.) are submitted to the Planning and Zoning Department for review o Approved Schematic Plans move into the Design Development phase, then the Construction Documents phase o Construction Documents are sent to the Building Department and Fire Authority for review o Building Department distributes approved Construction Documents to Public Works, water, police, environmental, etc. ⎯ Non-Traditional (for smaller or fast-tracked projects) o Schematic Plans and Construction Documents are submitted to the Planning and Zoning Department, the Building Department, and the Fire Authority for review o Building Department distributes approved Construction Documents to Public Works, water, police, environmental, etc. • At the Planning and Zoning review (primarily), you can ask for an interpretation of the code or for a variance to deviate from it

Answer 90

OTHER AGENCIES • Federal—Environmental Protection Agency (EPA), US Army Corps of Engineers, US Department of Fish and Wildlife • State / Local—state regulations agencies (such as Alabama’s Division of Construction Management), regional regulatory boards, local economic development agencies • Regulations management—federal agencies may allow the state to review on their behalf if they adopt the IBC, and state agencies may allow local agencies to review on their behalf • Regulations conflicts—adhere to the most stringent requirement • State law binds us to applicable codes, as do AIA contracts (legal agreement)

Answer 91

ETHICS: BASED ON AN INDUSTRY-WIDE STANDARD OF CARE • Standard of Care—in practicing architecture, members shall demonstrate a consistent pattern of reasonable care and competence, and shall apply the technical knowledge and skill which is ordinarily applied by architects of good standing practicing in the same locality. An architect’s primary duty is to protect the public’s health, safety, and welfare. • Responsible Control—members shall not sign or seal documents for which they have not had Responsible Control • AIA National Ethics Council—AIA based group committed to ensuring the design and construction industry performs honorably ⎯ Based on functional groups (more detailed) ⎯ Benchmarks for professional conduct ⎯ Three-tier structure from broad principles to specific examples 1. Canon—pillars of what we should know 2. Ethical Standards—subsections 3. Rules—specific about how we should behave • NCARB Ethics Guidelines—guidelines for professionals and governing jurisdictions to follow in practice or prepare legislation ⎯ Based on objectives (more broad) ⎯ Suggestions for personal conduct in general ethical arenas ⎯ Model law and model regulation for state legislatures ENFORCEMENT • By the National Ethics Council (appointed by the AIA Board of Directors) • Possible actions: ⎯ Admonition—slap on the wrist ⎯ Censure—public notice declaring you broke a rule ⎯ Suspension or termination of membership WHY MEMBERSHIP? • Levels the playing field ⎯ Clear expectations for conduct ⎯ Mutual understanding and agreed upon conduct for business transactions ⎯ They are the industry standard you should be associated with • Professional resources ⎯ Events ⎯ Networking ⎯ Community participation ⎯ Access to contracts, documents, and guidelines • Marketing ⎯ Firm listings ⎯ Publications / exposure ⎯ Visibility in community ⎯ Network / contacts

Answer 92

A102 Project costs Direct costs associated with the construction project, including labor, materials, equipment, subcontractor profit, and expenses. General conditions Costs associated with the construction project that cannot be directly attributed to labor, materials, or equipment. Contractor markup Often charged as a percentage of the total project cost that accounts for the general contractor’s profit and overhead. Contingency Often a percentage of the GMP that provides the contractor with a financial buffer to account for unforeseen and unknown conditions. Allowances An amount set aside for known unknowns related to materials, labor, and other project costs. For example, bathroom tile isn’t specified in the construction set so the contract adds in an allowance that provides a unit cost to account for that line item. GMP contracts are commonly established between a project owner and a general contractor — a relationship known as the prime contract. However, these types of agreements are also utilized by subcontractors and contractors, especially on projects that demand a specialized level of expertise in a particular trade. To determine the maximum price for the project, general contractors will do the following: Create an initial cost estimate for the entire project Reach out to preferred specialty contractors to bid out specific portions of the work Determine costs for any work that the GC will self-perform on the project, which may vary according to the general contractor’s specialty Make adjustments for general conditions, contingency, allowances, overhead, and profit Submit GMP to the owner and begin negotiations GMP contracts are often harder to negotiate than cost-plus or time and materials contracts because the contractor assumes more financial risk. A GMP agreement is often utilized on larger and more complex projects using project delivery methods like design-build (DB) and construction-manager-at-risk (CMAR). In design-build projects, the Guaranteed Maximum Price for the project may shift as the design changes with contractor input. Before construction begins, a final GMP is determined and listed in the construction contract. A GMP contract is an example of an open book contract in which all of the contractor’s costs are transparent to the client. This includes costs for labor, materials, equipment, and other direct costs, as well as indirect costs like markup for overhead and profit. This type of contract promotes the transparency needed for project owners to reimburse costs and know that contractors are not running up the cost to hit the maximum price. Because GMP agreements and open book contracts require a high degree of trust, they are most frequently used between owners and contractors that already have an established relationship, good communication, and a history of long-term cooperation. If the project runs over budget, the contractor is responsible for covering the additional costs. However, if the overage is due to the project owner's requested changes to scope, design development outside the scope of work, or unforeseen site conditions, the owner will typically be responsible for paying the additional costs.

Answer 93

A time and materials (T&M) contract is a construction agreement where the project owner pays the contractor for all material and labor costs on a project as well as contractor markup. Unlike lump sum contracts, a T&M contract is based on the actual time spent and materials used on a project rather than a fixed fee. This type of construction agreement is often used in cases where the scope of work or project duration is uncertain — or where changes are likely to occur during the project. With projects that have unknowns, T&M contracts provide greater flexibility and transparency for both the owner and the contractor. T&M contracts do not provide an unlimited budget for a project. While T&M contracts are based on the actual time and materials used for a project, the client and contractor usually establish an estimate for the project based on the known scope of work when the project commences. Sometimes, the contract will include a maximum limit (a “not-to-exceed” clause) on the amount that the client is willing to pay for the project. This clause limits the client’s financial liability, provides clarity on the overall project cost, and serves as a guideline for the contractor to manage costs, ensuring that the project is completed within the client's specific budget. **What’s covered in a T&M contract?** Materials Costs Materials costs associated with the construction project, including the actual cost of materials (including freight), taxes, and a specified markup — typically between 10% and 30%. Labor Costs Labor costs associated with the construction project. Usually defined as a fixed hourly or daily rate, also called loaded labor rate, which includes base wages, overhead, indirect costs, and a profit markup. T&M contracts are commonly established between a project owner and general contractor when a project’s scope of work is not well defined or when the project duration is unknown. This contract type can also be used between general contractors and specialty contractors depending on the project parameters and goals. Using the known scope of work, the contractor will do the following: Determine loaded labor rates, which include wages, overhead and administrative costs, and profit markup. Identify and price the materials that will be required for the project, including freight as well as the contractor’s markup. Provide an estimate of labor hours and materials needed to complete the work. T&M contracts are often easier to negotiate as the financial risks are minimized for the contractor Flexibility Owners can often adjust the scope and direction of the project as it progresses without having to renegotiate the entire contract. Easily compare bids The simple pricing structure — just labor rates and material costs — allows owners to easily compare between bids.

Answer 94

A modified accrual basis report is a financial report that uses a combination of cash-basis and accrual-basis accounting to recognize revenues and expenditures: **Revenues** Recognized when they are measurable and available to finance current expenditures. Measurable means the cash flow can be reasonably estimated, and available means the revenue can be used to pay current period obligations. **Expenditures** Recognized when obligations are created, except for amounts payable from future fiscal year appropriations. Expenditures are always measurable when they are incurred. Modified accrual accounting is used by governmental type funds to recognize and report financial activities. It's not often used by public companies because it doesn't comply with the Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Here are some other things to know about modified accrual accounting: Short-term assets, like inventory and accounts receivable, are recorded using cash-basis accounting on the income statement and are not included on the balance sheet. Long-term assets, like long-term debt and fixed assets, can also be recorded using modified accrual accounting. To switch from accrual-basis to cash-basis accounting or vice versa, you need to file Form 3115 with the IRS during the taxable year you want to make the change.

Answer 95

An accrual basis report is a financial report that shows income when it is earned and expenses when they are incurred, regardless of when cash is received or paid. This method of accounting is also known as the full accrual basis of accounting. Accrual basis accounting provides a more accurate picture of a company's financial health and operations than cash basis accounting. It does this by recognizing non-cash events, such as receiving products or services on credit. Here are some examples of how accrual basis accounting works: Revenue If a company sells a product to a customer in December 2022, but the customer doesn't pay until January 2023, the company would recognize the revenue in December 2022. Expenses If an expense occurs and the company hasn't paid for it yet, a liability account is recorded. Bad debt A business would deduct bad debt expenses in the year they are written off.

Answer 96

Cash basis reporting is an accounting method that recognizes income when it's received and expenses when they're paid: Income: Reported when cash is received, or when an amount is credited to an account without restriction Expenses: Recorded when cash is paid out to vendors Cash basis reporting is often used by small businesses and individuals because it's easy to understand and follow. However, it can provide a misleading picture of a business's longer-term profitability. This is because cash basis reporting doesn't consider: income that has been invoiced but not received and future expenses. To switch from accrual-basis to cash-basis accounting, or vice versa, you need to file Form 3115 with the IRS during the taxable year you want to make the change. Some entities are prohibited from using the cash basis method, including: A corporation with average annual gross receipts exceeding $25 million for the past three years A partnership with a corporation as a partner, and with the partnership having average annual gross receipts exceeding $25 million A tax shelter

Answer 97

Prior to 1960, the Common Law of Privity prevented contractors or any third party from suing the architect even if personal injury or financial loss resulted from the architect's negligence. The law of privity meant simply—If There is No Contract, There is No Duty or Right to Sue.

Answer 98

Safety, Welfare, Health, Human Dignity

Answer 99

equal pay act fair labor standards act Overtime, minimum wage, child labor the occupational safety and health act of 1970 OSHA HIPAA Health insurance portability and accountability act above 50 employees family leave

Answer 100

The civil rights act of 1991 americans with disabilities act

Answer 101

A) advise client against the decision B) refuse to consent to the decision C) Report to the local building inspector or other public official charged with enforcement

Answer 102

location of firm budget type of projects being pursued

Answer 103

owner is personally liable for debts and losses if sued, assets and income can be seized establishing credit depends heavily on personal credit when owner stops practicing, entity is dissolved

Answer 104

canons, ethical standards, rules of conduct

Answer 105

**Prevention Cost** staff training and education **Appraisal Cost** reviewing and checking drawings before delivery **Internal Failure Cost** project delivery or process, uncoordinated consultant drawings **External Costs** costs incurred after delivery of a service to client

Answer 106

75% - 85% for technical firm is 65%

Answer 107

size of the firm level of risk tax structure ease and cost of setup

Answer 108

**Series (A101)** A - Owner/Contractor Agreements B - Owner/Architect Agreements C - Other Agreements. D - Miscellaneous Documents E - Exhibits G - Contract Administration and Project Management Forms **Types (A101)** 1. prime agreements 2. conditions and scopes 3. bonds / qualifications 4. sub-agreements 5. guides 6. Reserved 7. Bid / Construction 8. Architect's office **Delivery (A101)** 0, 1, 2. Conventional (design-bia-build) 3. Construction Manager as Adviser, or Construction Manager as Constructor 4. Design-build 5. Interiors 6. International 7. Program Management 8. Reserved 9. Integrated Project Delivery

Answer 109

Client pays for material and labor, architect for premiums

Answer 110

a statute of limitations is triggered when the defect is discovered a statute of repose begins on the date of substantial completion A statute of repose is a law that limits legal rights by barring claims after a specific amount of time has passed, regardless of whether the cause of action has occurred. Statutes of repose are similar to statutes of limitations, which also limit the time to file a lawsuit, but there are some key differences: When the time period begins A statute of repose begins to run from a specific event or action, such as the delivery of a product or the completion of a construction project. A statute of limitations usually begins to run when an injury or damage occurs. When equitable principles apply Equitable principles like fraudulent concealment or equitable tolling generally do not apply to statutes of repose. When both statutes apply Both statutes of repose and statutes of limitations can apply to the same claim.

Answer 111

civil engineering services, post occupancy evaluation, fast-track design services, coordination of owners consultants (

Answer 112

**Design-Bid-Build:** Cost (Primary) and Risk (Secondary) slower delivery time, potentially allows for slimmer profits for contractor, advesarial relationships, no input from contractor during design, design criteria is set by owner **Design-Build (Standard):** Risk (Primary) and Cost (Secondary) **CM-Adviser:** Risk (Primary) and Quality (Secondary) **CM-Agent:** Risk (Primary) and Time (Secondary) **CM-Constructor:** Time (Primary) and Cost and Risk (Secondary) more risk for CMc two methods for setting construction cost speed of delivery 2 separate contracts

Answer 113

bidding requirements (option b and d) contract information, including the owner contractor agreement, bonds, etc.. general and supplementary conditions of the contract specifications

Answer 114

owner has a minimum of 3 contractual relationships cma can reject work cma shares some construction admin work with arch

Answer 115

before the owner contractor agreement is executed, but usually with a set time

Answer 116

architect can be held liable for omissions and errors made by consultants architect hired

Answer 117

1 a legal duty must be established between parties 2 architect must breach that duty 3 it must be proven that breach of duty caused damage

Answer 118

fascilitating the distribution of bidding documents to prospective bidders assist the owner is obtaining competitive bids organizing and conducting the opening of competitive bids participating in negotiations with prospective contractors

Answer 119

**overhead rate =** total indirect expenses / total direct labor A typical healthy overhead rate should be between 1.3 to 1.5 **break even rate =** overhead rate + 1.0 **Net Multiplier =** net operating revenue / total direct labor or billable rate / hourly rate **Planned Net Multiplier =** billing rate / hourly salary

Answer 120

The Architectural Billings Index (ABI) is a monthly survey that measures the change in the number of design services provided to clients by architecture firms. The ABI is a leading economic indicator that can help predict nonresidential construction spending and market trends. The ABI score is calculated based on the proportion of firms that reported an increase, decrease, or no change in billings from the previous month: **50:** No change from the previous month **Above 50:** An increase in billings from the previous month **Below 50:** A decline in billings from the previous month The ABI can be used by construction and engineering firms to make decisions about planning, resource allocation, and market strategies. It can also be used by design and construction firms to determine business-cycle shifts.

Answer 121

ability to convert assets into cash, is considered healthy when its quick ration has a value **greater than 1.0** **The quick ratio is measured:** (total cash + accounts receivable + revenue earned, not billed) / total liabilities

Answer 122

required insurance that covers fire, vandalism, theft, floods, earthquakes, etc..

Answer 123

utilization rates, profit to earnings ratio, net multiplier, overhead rate

Answer 124

quick ratio, current ratio, leverage and return on equity, liquidity The balance sheet shows all the assets and liabilities of a firm and gives an overall view of the financial health of the firm including its net worth. It can be used to evaluate the firms financial condition at any time

Answer 125

modified accrual basis

Answer 126

process planning, design audits, kickoff charrettes, re-staffing

Answer 127

Design-Bid-Build: Cost (Primary) and Risk (Secondary) Design-Build (Standard): Risk (Primary) and Cost (Secondary) CM-Adviser: Risk (Primary) and Quality (Secondary) CM-Agent: Risk (Primary) and Time (Secondary) CM-Constructor: Time (Primary) and Cost and Risk (Secondary)

Answer 128

owner contractor agreement general conditions of the contract supplementary conditions of the contract drawings specs addenda issued prior to the execution of contract any other documents listed modifications issued after execution of contract - change orders, change directive, minor change

Answer 129

owners approval of preliminary design

Answer 130

starts with beginning of work (as defined by the contract) ends with the date of substantial completion. Measured in calendar days

Answer 131

occurrence type covers incidents when the policy is in effect, regardless of when a claim is made claims made type require insurance policy to be in effect at the time of the incident as well as when the claim is made

Answer 132

stockholders, directors, officers

Answer 133

anticipated date of substantial completion anticipated date of commencement of construction duration of design phases

Answer 134

A certificate of authorization may be required in some states Articles of incorporation must be filed with the states Secretary of State Stockholders, directors, officers must be licensed in the state in which they practice

Answer 135

Non compete clause - employee may not be able to set up a competing firm in same area after leaving

Answer 136

The provisions for copyright are in agreement B101 standard form of agreement Drawings specs etc… are automatically considered to have copyright **but** the best way to ensure copyright is to have a copyright notice on each printed item and register them with the US copyright office The architectural works copyright protection act gives the architect the right to the building form, spaces, specs etc…

Answer 137

On Fast-track projects, the design, construction documents and specifications are incomplete, so setting the final cost presents problems. To deal with this difficulty, owners typically use a cost-reimbursable contract with the builder (a construction manager or a general contractor). The contract may include a cost estimate with no guarantee or there may be a Guaranteed Maximum Price (GMP). However, even with a GMP, there can be argument over the scope of work covered by the GMP since the design was incomplete when the contract was executed.

Answer 138

Allows parties to consolidate arbitration conducted under the agreement The America Invents Act (AIA) joinder provision, 35 U.S.C. § 299, limits the ability to join multiple defendants in a patent infringement lawsuit. The provision requires that the following conditions be met in order to join multiple defendants: The right to relief must be asserted against the parties jointly, severally, or in the alternative The right to relief must arise out of the same transaction or occurrence The right to relief must relate to infringement of the same accused product or process Questions of fact common to all defendants must arise The joinder provisions included in the ATA documents were substantially revised in 2017. Similar language is in all AIA documents that requite arbitration, such as AIA Document A201, Sec. 15.4.4, and AIA Document B101, Sec. 8.3.4. While previous versions placed strict limitations on consolidation and joinder, the documents now allow either party to consolidate an arbitration (if certain criteria are met) and to include by joinder a third party.

Answer 139

Architect should not give advice on

Answer 140

5. A project alliance is a legal structure often associated with integrated project delivery (IPD). In IPD, the architect and contractor are not contractually bound to each other (as they are in design-build); each has a separate contract with the owner. The architect is responsible for coordinating the team of design professionals and consultants best suited for the project, while the contractor maintains responsibility for hiring and coordinating the efforts of subcontractors and those involved with construction of the building. There are a variety of legal structures and contracts that may be used to establish the relationships among the project participants. • A project alliance allows for the payment of direct costs incurred by team members but ties additional compensation to performance; the payment of profit, overhead, and bonuses depends on the successful completion of the project's goals. This is intended to encourage team members to work together for a successful outcome to the project so that all may benefit. Participants waive their liability to one another. Mechanisms for dispute resolution are not part of the contract because all parties agree to comply with decisions that the team makes by consensus. • A single purpose entity is an independent corporate structure that is newly formed specifically for a project. All implications of starting a new business (eg., taxes, insurance, corporate structure, legal status, licensing) must be fully considered. As with a project alliance, the payment of direct costs is included in the base agreement, but additional compensation depends on successful completion of the project goals. Disputes that cannot be resolved internally through negotiation may be resolved through mediation, arbitration, or litigation. • A relational contract is used to limit the parties' liabil-ity, but liability is not waived. In the absence of team consensus, the owner is charged with making final decisions. Compensation for direct costs, profit, and overhead is included in the agreement, but payment of additional compensation or bonuses depends on the project results. Disputes that cannot be resolved through negotiation among the parties may be resolved through mediation, arbitration, or litigation. Of these three structures, the relational contract is the most similar to the traditional design-build model of project delivery. One way to form an IPD relationship is to use the model contracts offered by the AIA that are specifically written for IPD projects. These documents define the responsibilities of each party and offer guidance in specifying requirements for confidentiality agreements, compensa-tion, dispute resolution, insurance, and the like. • AIA Document A195, Standard Form of Agreement Between Owner and Contractor for Integrated Project Delivery • AIA Document A295, General Conditions of the Contract for Integrated Project Delivery • AIA Document B195, Standard Form of Agreement Between Owner and Architect for Integrated Project Delivery • AIA Document C196, Standard Form of Agreement Between Single Purpose Entity and Owner for Integrated Project Delivery •AIA Document C197, Standard Form of Agreement Between Single Purpose Entity and Non-Owner Member for Integrated Project Delivery The AIA publication Integrated Project Delivery: A Guide is an excellent resource for understanding this approach to design and construction phase services. The document is available for download from the ATA website at aia.org (search for it by title).

Answer 141

The ConsensusDOCS standard contract documents are contract forms developed by a consortium of construction industry organizations including the Associated General Contractors of American, the Associated Builders and Contractors, the Mechanical Contractors Association of America, the Construction Specifications Institute, and nearly 40 other trade groups. ConsensusDOCS are a family of model contract documents developed primarily to compete with the standard family of AlA contract documents and to end a perceived architect bias in the AIA documents. The stated purpose was to take a balanced approach to defining the rights, obligations, and risks of the various parties involved in a construction project and to reduce the number of and severity of disputes

Answer 142

Architect. A project designed and constructed using AIA Document E204, Sustainable Projects Exhibit, must use the following process. The owner establishes a sustainable objective, which is the owner's reason for incorporating sustainable measures on the project (e.g., to achieve a sustainability certification). A sustainability workshop is held to confirm the objec-tives, establish goals, discuss sustainability measures, and review feasibility and budget. The architect prepares a sustainability plan, a contract document that defines the details of implementing the sustainability goals and objectives. If the owner wants the project to have some type of sustainability certification (c,g, LEED), the architect must provide the owner with copies of the necessary paperwork for registering the project with the appropriate certifying authority.

Answer 143

For design build usually Owner hired architect to develop a ,ore detailed set of owner requirements than otherwise would be developed by the owners alone

Answer 144

A squatters' session is an intense, multi-day group meeting with the architects, client, and users of the building being programmed and designed. The session takes place in or near the client's facility so the client and users are available for interaction and decision-making. The all-day meetings allow the architect to establish the parameters of the programming and design issues, interview the users of the facility, explore ideas, ask questions, record information, and allow the client to participate actively in the process. The use of squatters is described in the book Problem Seek-ing, an Architectural Programming Primer by William M. Pena and Steven A. Parshall.

Answer 145

Design-assist contracting is a project management method that includes specialty subcontractors or trades early in the design and construction document phases to assist with the development of complex or unique portions of the building. It is based on the assumption that some trades, subcontractors, or product suppliers are more knowledgeable about their portion of the work than the architect or the general contractor. For example, it could be used to help the architect design a unique and innovative exterior cladding system.

Answer 146

Both ratios assess a company's ability to meet its short-term liabilities using its current assets, but the quick ratio focuses on highly liquid assets that can be quickly converted to cash, while the current ratio includes all current assets. • Current Ratio: (Current Assets) / (Current Liabilities) • • Quick Ratio: (Cash + Cash Equivalents + Accounts Receivable) / (Current Liabilities) &