By Grayson Silver
There are many variables that affect architectural fees, most of which include building type and services to be provided. As an example, renovation/addition projects are typically more complex and time consuming then new construction, custom buildings or homes can require more detailing for specialized construction methods or product research, or projects with an undefined scope or budget may require up front feasibility studies, site analysis, and programming. An architect must weigh each projects fee structure compared to the scope of work, design intent, and the owner’s expectations.
METHODS OF COMPENSATION
Architectural fees are a matter for negotiation. There are no set design fees but there are different methods for establishing compensation that make up the Basic Services fee. Basic Services are the services and responsibilities the Architect is to provide as described in the Client-Architect Agreement but do not include additional services or reimbursable expenses. The most commonly used payment structures include:
- Time Basis
- Stipulated Sum
- Percentage Basis
- Combination Basis
Time Basis fees are calculated by multiplying the labor rate (including wages, benefits, overhead and profit) for designated personnel by the hours of service provided. This fee structure is suitable for the following:
- Small projects
- Projects where the scope of work is not well defined
- Preliminary design phase
- Construction phase services
- Additional services
- For projects expected to exceed several months, the Client and Architect should agree upon a time period for adjustment of the labor rates to account for increases in labor costs and overhead.
Stipulated Sum is a fixed price negotiated with the Client. To accurately calculate a stipulated sum fee the scope of work, and services to be provided, must be well defined prior to establishing the fixed fee. Under this compensation method if the parameters of the project, or the scope of services increases or decreases, the stipulated sum fee should be adjusted.
Percentage of the cost of the work fees are calculated by multiplying the actual or estimated cost of the work (construction cost) by the percentage fee rate agreed between the Client and Architect. When calculating the Architect’s Basic Services fee on a Percentage Basis it is important to clearly define the Cost of Construction.
The percentage will vary by firm, complexity of the project, and services provided but generally, for full architectural services, the fees range from 10% to 12.5% for new construction and up to 15% for remodels and additions.
As with Stipulated Sum contracts, the Percentage Basis method is suitable for projects with clearly defined programs and services to be provided.
The Combination Basis is a combination of the Time Basis and either the Stipulated Sum or the Percentage Basis methods. Frequently, under this method, the Time Basis is used for the design phase and sometimes the construction administration phase, while the Stipulated Sum or Percentage Basis are used for the construction documents phase.
There are several reasons that justify the use of the Time Basis method for the design phase. The program, which serves as the basis for making most design decisions, may not be clearly defined or fully developed. Authorities with jurisdiction over the design of the project, such as homeowner associations or planning department design committees, do not always have clearly defined guidelines and may require several iterations of possibilities. Some clients are not as readily available or able to make prompt decisions and require more guidance and meetings throughout the design phase.
Once the design is established the scope of work is well defined and the construction documents could then be compensated on a Stipulated Sum or Percentage Basis.
The construction administration phase of the project is often compensated using the Time Basis method. The Architect may provide many different services during the construction phase and the Time Basis method gives the Client the flexibility to use the Architect’s services and oversight of the work at the Client’s discretion. This also protects the Architect from contractors that do not perform to the expected level of competence, which can place additional time demands on the Architect.
Caution! If compensating construction phase services on a Time Basis method it is important that the Architect provide complete, accurate and well-coordinated construction documents. Otherwise, the Client may be paying for work that should have been included as part of the Construction Documents phase compensation.
In addition to the Basic Services fee the architect incurs out-of-pocket expenses, in the interest of the project, and on behalf of the Client. These expenses typically include but are not limited to:
- Cost of reproductions
- Transportation, lodging and meal expenses in connection with out of town travel authorized in advance by the Client
- Long distance communications
- Postage, courier service and shipping expenses.
- Renderings and models
- Fees paid for securing approvals from authorities having jurisdiction over the project
- Overtime services authorized in advance by the Client
To help the Client plan for the financial requirements of the project the Architect should provide a payment schedule. When using Stipulated Sum or Percentage Basis fee methods the following guideline of fee distribution ranges can be used to break down the total fee into portions of phases of services:
- Schematic Design 10 – 15%
- Design Development 15 – 20%
- Construction Documents 40 – 45%
- Bidding / Negotiation 2 – 5%
- Construction Phase Services 25 – 30%
THINGS TO CONSIDER WHEN COMPARING FEES
Not all firms provide the same services, or even the same level of services, as part of their Basic Services fee. Therefore, it is important, in order to compare “apples to apples,” to obtain an itemized proposal that clearly identifies the services and responsibilities of the Architect. The proposal should clarify whether the following services are included or not:
• Does the fee include normal structural engineering services? Special foundation design necessitated by soil conditions may be an Additional Service.
• Does the fee include normal mechanical engineering services? Some Architects will leave this to the contractor to provide as a design-build item.
• Where required by code, does the fee include energy calculations?
• Does the fee include power and lighting design? Some Architects will leave this to an electrical engineer, lighting designer or interior designer.
• Does the fee include the selection of all interior finishes and fixtures including flooring, wall finishes, tile, paints and stains, cabinets and cabinet hardware, millwork, doors and door hardware, appliances, plumbing fixtures, bathroom accessories, countertops, lighting fixtures and devices. Often these materials and fixtures are selected by an interior designer, or the Client in a few cases, and are not part of the Architect’s Basic Services fee.
• Does the fee include bidding and contractor selection services?
• Does the fee include contract administration (construction phase) services? If so, which construction administration services will be provided? These services may include attending regular field meetings with the contractor, preparing progress reports, monitoring the progress of the work for compliance with the contract documents, review and processing the contractor’s applications for payment, responding to requests for information, interpretation of contract documents, review of shop drawings, review of product data/samples, review and processing of change orders, client consultations, punch-list walkthroughs at end of project, substantial completion report and certification.
• Surveys, soils investigation reports, geologic studies, special site studies, special testing/inspections and landscape architecture services are typically not provided by the Architect and should be supplied by the Client at the Client’s expense.
FINAL THOUGHT REGARDING FEES
Architectural fees represent a very small percentage of the overall cost of a project and should not be the primary criteria for selecting an Architect. The best Architect for most projects is the one that has the best balance of design ability, technical competence, professional service and cost. A Client will realize the greatest savings by selecting an Architect that can design an efficient structure that meets the program requirements, and produces a good set of construction documents that contain the information required to build it efficiently. Inefficiencies in the construction of the project will cost a Client several times what he/she may have saved in design fees. Inadequate construction documents and services will leave a Client vulnerable to construction change orders and delays in construction.
Anyone seeking additional information about architectural fee structures in the Tampa Bay area can feel free to contact the office of Architect Larry LaDelfa @ 727-821-5779 or @ firstname.lastname@example.org.
Please feel free to visit our website, www.architectlarryladelfa.com or download our eBrochure below.