1 Fee Calculations Flashcards
What is a key quote for calculating fee proposals?
‘What you can measure you can manage’ - Andrew Sobell
What are the types of fee invitation? (6)
- One to one negotiation
- Competitive interview
- Open ideas competition
- Open projects competition
- Invited Competition
- Tailor-made competitions
What is one to one negotiations? (5)
- Direct personal contact for a fee proposal
- Usually from past / repeat work
- From a recommendation
- Offered after an initial interview / site visit
- Usually no brief is defined - architect to define
What is a competitive interview? (4)
- Expressions of interest for a project requested by client
- Client shortlists practices
- Broad project brief from client
- Commitment to build from the client
What is an open ideas competition? (4)
- Ran to generate design ideas
- Open to anyone to enter
- Broad brief from the client
- No commitment to build form the client
What is an open project competition? (4)
- Designed to find a single design solution
- Often two stage competition
- Open competition for all architects
- Client provides a detail project brief
- Commitment to build from the client
What is an invited competition? (4)
- To find a single design solution
- Restricted to selected architects
- Client provides detailed project brief
- Commitment to build from the client
What is a tailor made competition? (3)
- Flexible procedure to clients needs
- Often a design competition
- Usually has competitive interview stages
What should an architect remember when responding to requests for a fee proposal? (4)
- Architect must reply (in the interest of professionalism - ARB code)
- Must reply regardless of interest in project
- Can set a preliminary time charge basis for brief creation
- Can carry out briefing services, feasibility studies or decline invitation
What were the RIBA fee scales? (4)
- Mandatory fee scales abolished in 1982
- Recommended fee scales abolished in 1992
- Indicative fee scales abolished in 2003
- Legislation as a result of the Competitions Act 1998
What is important to remember about fees? (Quote)
‘Important to remember that the fee is the cost to the client of buying the architect service) (Philips, 2009)
How much time should directors / partners spend on fee proposals? (2)
- Average director / partner spends 20-30% of time on non-fee earning work
- RIBA Business Benchmark
What are the types of fee calculation methods? (6)
- Empirical calculations
- Partial services
- Calculated lump sums
- Construction value percentage
- Time charges
- Value added / betterment fee
What are empirical calculations?
- Resource allocation + profit margin and added value for the project
What are partial services?
- Only taking a project up to a certain work stage and then hand over
What are calculated lump sums? (3)
- Lump sum calculation based on predicted resourcing and project
- Can result in higher risks
- Must take into account client changes
What are construction value percentage fee calculations? (3)
- Fee based on pre estimate of project construction value
- Reassessed at the start of each work stage
- Early stages are often lump sum charges until more cost certainty
What are time charges?
- An agreed hourly rate charge for service that are billed to the client
What are value added / betterment fees?
- Fee proposal / bonus / additional fee based on quantifiable value that the architect add to the project
What are the key things to remember when calculating a fee proposal? (6)
- Invested interest in the project
- Staff commitment / willingness to work overtime
- Management and skill delegation within the team
- Employee development / cost per hour of staff and how that relates to staff skill, learning and salary
- Business opportunities and expansion potential
- Opportunities to access different sectors
Where are there opportunities to save money on fee proposals? (3)
- Degree of design repetition
- Information form past projects
- Standardisation of office documents, drawings and specifications
What are the key risks of fee calculation? (4)
- Not all fees encourage the development of the profession
- Need to understand details and aspirations of the client
- Changes in law designed to protect consumer
- Increase in liability and risk for the architect
What are the specifics that should be considered when calculating a fee proposal? (2)
- Any work to existing buildings
2. Likelihood that the project becomes labour intensive
What balances should be considered when calculating a fee? (3)
- Between offering a good service and still maintaining a good reputation for the work you are doing
- Identify the risks to the client, helps them to see the value in the service of an architect
- Balance of Company aspirations and long term business goals
