2D / 2E: Professional Appointment Flashcards
Can you tell me some ways of calculating fees?
- In our profession there are three main fee calculation methods: lump sum, percentage and time charge.
- Retainers can also be used: we are payed a certain amount to work on an ‘as needed’ basis.
- Incentive fees can be used to incentivise certain results, such as getting planning permission.
- Pro bono: work for charity which is done free of charge, or at reduced rates.
What is a lump sum fee?
Fees are calculated in one ‘lump’ - a total fee is given for a clearly defined package of services. This can be revised with the client at a later date is necessary.
A lump sum fee is best used when the scope of works is clearly defined from the outset, but there is no set project cost.
Services must be clearly set out: time, project size, cost. The option to add variations are almost always set out in the contract.
This is the type of fee we most often use at Define.
What are the advantages and disadvantages of using a lump sum fee?
Advantages:
- exact payment amount known, giving certainty to both consultant and client
- Good cost control for the client
Disadvantages:
- Risk that if anything goes wrong, e.g. if time is wasted through fault of the consultant (without justification) the consultant will lose money.
- risk of scope creep, which leaves you out of pocket
What is a percentage fee?
It is a fee calculated by assigning your work a certain percentage of the total construction cost. Services, budget and nature of the work are all agreed at the outset.
It is best used for straightforward landscape design and construction project, when the construction cost is known.
What are the advantages and disadvantages of using a percentage fee?
Advantages:
- fee calculation at tender stage is less complex
- for the consultant, another benefit is that if the overall project budget is high, their fee will be too
- Good cost control for client
Disadvantages:
- the budget for landscape works may not accurately reflect the actual value of the works
- no flexibility
What is a time charge fee?
It is a fee charged based on all time reasonably spent on a project. It is best used when there is a good working relationship between the client and consultant and there is a high level of trust, and when the scope of works cannot be clearly foreseen and services do not relate directly to landscape construction costs. It is best practice to agree a ‘ceiling figure’ with the client, and to have regular progress and budget updates with them.
This is used on a few projects at Define, where the projects are complex and long-running and there are good working relationships with the clients… instead of variations on a lump sum fee, a time charge is often used with these clients to make things easier for both parties.
What are the advantages and disadvantages of using a time charge fee?
Advantages:
- more freedom for the consultant, and they are paid for all hours worked on the project, included for work not originally anticipated
- for the client, there is faster response to changes to the scope, and less paperwork (ie no variations)
- client only pays for time actually spent on the project
Disadvantages:
- less cost control for the client
- less certainty for the client
- consultant can take advantage of having less incentive to work efficiently (at Define, we have regular progress meetings and share updates to work regularly, to ensure trust is maintained and efficiency is maximised).
How would you charge for a public consultation?
If duration is known, it can be charged as a lump sum based on time spent preparing, travelling and participating. If further away, travel costs will increase the fee, although travel expenses may be charged separately.
If duration is not known, it can be charged on a time charge.
How would you produce a competitive fee?
It is a balance of how much you want to win the project, and how much financial sacrifice you are willing, or are able, to make.
It can be a benefit to lower rates with a new client, to ‘get a foot in the door’ and build a relationship which will provide future work. It can also be necessary when struggling for new work.
What are the methods of appointment available to landscape architects?
Direct appointment (private only) Competitive fee tendering Design Competition Framework (Public sector only) "Find a tender", previously OJEU prior to Brexit (Public sector only)
The vast majority of Define’s appointments are through direct appointment, due to good client relations, recommendations and a lot of repeat work for the same clients.
What would you consider when preparing a fee proposal?
I would ascertain what fee types is most appropriate depending on the nature of the project - the size, timeframes and client relationship.
Then I would check with the client for information such as the scope of the services required and the timescales involved. I would then check whether our team has the required time and skills required. I may also consider work stages, and whether fees can be tied in with work stages. I would also ensure that all exclusions are clearly set out.
What are the four types of competitive tendering procedures in the regulations for public procurement?
- Open procedure
- Restricted procedure
- competitive, two stage
- negotiated
What kind of professional appointment is most used at Define?
It is usually direct appointment, due to good client relations, recommendations and a lot of repeat work for the same clients.
The appointment is discussed and then considered, before negotiating fees.
What should a fee proposal contain?
Techical information: scope of services, design team information, initial design approach.
Fee proposal should then set out the work stages alongside a fee programme, and terms and conditions.
How are professional fees calculated on a competitive basis?
Hourly rate X hours required = fee.
Hourly rate includes all overheads and profit.
