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ARE - Practice Management Flashcards

1
Q

What are the levels of a coorporation?

A

stakeholders
directors
officers

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2
Q

Decribe Design Negotiate Build project delivery

A

Similar to design bid build except instead of multiple bidders, the owner selects the contractor and negotiates the cost with just the contractor

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3
Q

What is Gross Floor Area

A

Area measured to the exterior face of the building

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4
Q

Where should transformers be located?

A

Between the municipal service and the building switch gear

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5
Q

Who pays for the permits for constructing the building?

A

The contractor

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6
Q

Who Pays for the permits for using the building?

A

The Owner

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7
Q

How long should an architect keep project files?

A

15 years, or past the statute of repose

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8
Q

Which types of insurance are required by the AIA B101

A

1 - General Liability
2 - Professional Liability
3 - Workers compensation Insurance
4 - Automobile Liability
5 - Employers Liability

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9
Q

What does General Liability Insurance cover?

A

The Physical Office Space

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10
Q

What Does Professional Liability Insurance cover?

A

Errors and Omissions

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11
Q

What does Workers Compensation Insurance Cover?

A

Medical Care and Lost Wages for employee injury or illness

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12
Q

What does Automobile Liability Insurance cover?

A

Company vehicles and personal cars used for business purposes

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13
Q

What does Employers’ Liability Insurance cover?

A

Covers employers if they get sued for causing a workplace injury - court costs, settlements, and legal fees

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14
Q

What is Standard of Care?

A

The expected quality of service provided by the architect. Often decides if the architect is at fault for an error or omission

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15
Q

What are the two types of Specification Formats and how are they different?

A

MasterFormat - Classifies by material

Uniformat - Classifies by system

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16
Q

What does Employment Practice Liability Insurance cover?

A

Protects from wrongful termination

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17
Q

What does intellectual Property Insurance cover?

A

Covers claims based on copyright/intellectual property infringement

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18
Q

Name 5 items the owner is responsible for

A

1 - pre-existing site conditions
2 - paying the contractor
3 - paying owners consultants
4 - change orders
5 - with or without cause hiring and firing of the architect

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19
Q

What is the insurance aggregate limit?

A

total coverage amount

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20
Q

what is the insurance premium?

A

Monthly/Yearly bill

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21
Q

What is an insurance deductible?

A

Maximum paid by the insured before insurance kicking in and paying the coverage

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22
Q

What is an insurance claim?

A

A filed event that the insured expects the insurance company to cover the cost of

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23
Q

What is “Tail Insurance”

A

Covers the projects completed by the architect after the riterement of the architect up to the period of repose/ statute of limitations

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24
Q

What is the process for filing an ethical complain against an architect?

A

1 - File a complaint with the AIA within a year of the alleged violation
2 - advisory board and chair will be chosen
3 - pre-hearing, hearing, start, claim, defense, end judgement

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25
Who files the most common ethics complaints against architects?
Home owners and other architects
26
Do architects have a fiduciary duty to the client?
No
27
What is a retainer?
a regular service fixed fee
28
Is the architect an agent of the owner?
No, the architect cannot claim to speak for the owner
29
Which consultants are contracted to the architect?
MEP, lighting, landscape architect, cost estimator, code consultant, structural engineer, civil engineer (utilities, land contouring, and land improvements with relation to the building)
30
Which consultants are contracted to the owner?
Zoning, traffic, site, geotechnical. surveyor, civil engineer (permitting and documenting the existing conditions of the site)
31
What is the contractor responsible for?
1 - "perfection" in construction 2 - Nothing outside of the contract 3 - paying and coordinating sub-contractors 4 - Providing the owner with operation manuals 5 - Some design of specific systems (curtain wall details, concrete formwork, steel fabrication shop drawings)
32
What is the architect responsible for?
1 - Project being on time and on budget 2 - Instruments of Service 3 - Standard of care and protecting the health, safety, and well being of the public 4 - coordination and administration of project team and processes 5 - adherence to applicable codes
33
What does the Federal Labor Standards Act regulate?
minimum wage, overtime pay, child labor
34
What does the Davis Beacon Act regulate
Contractors working on federal construction projects must pay workers no less than typical prevailing wages
35
What is a Mechanics Lien?
A claim placed against the owners property due to unpaid debts. If owner doesn't pay architect or contractor, or if contractor does not pay sub contractors
36
What Does OSHA stand for?
Occupational Safety and Health Administration
37
3 Common types of small business taxes
1 - Income Tax (Federal and State) 2 - Self-Employment Tax 3 - Personal Property Tax
38
What is the Post Occupancy Evaluation?
Surveys used to determine how well a building is performing, usually a year after being occupied
39
What does Contractual Liability Insurance cover?`
Covers architects responsibility when they are held liable based on the contracts they have signed
40
What is subrogation?
process by which the insurance company assumes agency for an insured party in order to sue another party
41
Does the AIA A201 support subrogation?
No, it requires a waiver of subrogation by all relevant parties - owner, contractor, subcontractors, consultants, and architect
42
What is the Utilization Rate?
AKA billable/chargeable rate The direct salary expense/base salary = utilization rate percentage How much of the firms expenses are billable expenses directly to a client.
43
What is the Revenue Factor?
Utilization Rate x Direct Salary Expense Ratio
44
Design Fees - Value Pricing
Based on Quality
45
Design Fees - Effort Pricing
Based on Time Spent (ARE Exam default)
46
Design Fees - % Cost Pricing
Based on percentage of total construction costs
47
Design Fee - Fixed Price Fee
Fixed price fee typically derived by estimates of the other three models
48
AIA A701
Instructions to Bidders
48
Risky terms in contract language
Warranty Guarantee Indemnify/Imdemnification Highest Standard of Care As required/as necessary Hold Harmless Anything that passes liability to the architect
49
AIA C401
Architect-Consultant Agreement
50
AIA A305
Contractor's Qualification Statement
51
AIA G701
Change Order
52
AIA G702
Application and Certificate of Payment
53
AIA G704
Certificate of Substantial Completion
54
What is Net Profit?
Profit before tax and distributions to firm owners, but after paying wages/bills
55
What is Net Billing?
Billing that only covers fees for architects labor
56
What is Profit-to-Earning Ratio?
Net Profit / Net Operating Revenue
57
What is Prospect/Suspect?
Projects with >51% chance of generating revenue are prospects Projects with <50% chance of generating revenue are suspect
58
Consequential Damages
Estimated cost of lost owner profit due to project delays
59
Liquidated Damages
Per day penalty for a delayed construction project agreed upon at the beginning.
60
Direct Damages
Actual Cost of fixing unacceptable work
61
Gross Revenue
All of the money a firm collects in fees
62
Net Operating Revenue
After Gross Operating Revenue, amount remaining after consultants are paid
63
Profits Before Taxes
After Gross Revenue and Net Operating Revenue, amount remaining after employees and rent are paid
64
Current Earnings
After Gross Operating Revenue, Net Operating Revenue, and Profits Before Taxes, what is remaining for the owners and reinvestment into the business
65
Base Salary
Total Annual Compensation Base Salary in $/Year = Hourly Rate * 40hrs/week*52weeks/year
66
Indirect Salary
Salary from non-billable hours
66
Direct Salary
Salary derived from billable hours
67
Assets
All of the things a company owns, that is cash or can be converted to cash
68
Liabilities
What a company owes
69
Equity
The Net Worth of the business
70
Profit
How much the firm makes in a month/year
71
Solvency
current assets/current liabilities
72
Liquidity
Immediate assets/current liabilities
73
Leverage
liabilites/equity
74
Return on Equity
profit/equity
75
Overhead Rate
rate above salaries spent on other expenses If salaries are $100 and a conference is $150, Overhead rate is 1.5
76
Break Even Rate
Amount needed to charge the client to cover salaries and other expenses. If salaries are $100, and a conference is $150, break even is $250
77
Net-Multiplier
Amount charged to client/amount paid to employee. Client charged $300 Employee paid $100 Net Multiplier = 3.0
78
Profit-to-Earnings Ratio
If Profit is $50 Client is charged $300 50/300=%17
79
AIA A201
General Conditions of the Contract for Construction https://import.cdn.thinkific.com/158927/RKuXvwmjTzCBAsgoCzf3_AIA%20A201-2017.pdf
80
Cash Based Accounting
Accounting based on the actual cash on hand
81
Accrual Basis Accounting
Accounting based on the payments and incomes in the new future
82
Net Revenue Per Employee
Revenue divided by number of employees
83
Aged Accounts Receivable
Number of Days waiting between when an invoice is sent to when payment is received
84
Surety Bond
A type of insurance policy that the owner requires the contractor to pay for that will pay to complete the project if the contractor walks off the job. Covers Bid Bonds and Performance Bonds
85
Bid Bond
Covers the difference in a bid price if a winning low bid walks away from a project and a higher cost bidder needs to be selected
86
Performance Bond
Pays the owner an amount needed to complete the project if a contractor is unable to complete the project once it has begun
87
Balance
Assets-Liabilities
88
Contractor License Bond
A type of surety bond that Protects against a contractor breaking construction laws
89
Warranty Timeframe
A contractors warranty is typically for one year but can be extended
90
Net Operating Revenue
All money taken in from clients -paid to consultants-paid to reimbursables
91
Who pays for the bid bond
The owner requires the bidders to purchase their own bid bonds
92
Chargeable Rate
What the client pays the firm for an hour of time
93
Billable Revenue
Payment from the client for billable hours
94
Direct Salary Expense Multiplier
Multiplier applied to salary to charge to the client to cover additional expenses (typically between 3.0 and 4.0)
95
What Building typology carries the most risk?
Condos, typically the client is a board of many inexperienced people with high expectations
96
Schedule Performance Index
Earned value/planned value How much work did you plan on putting in against how much work did you actually put in Target is 1.0 Above means you put in too much work for what you are getting paid below means you might not be giving the quality needed to make the project successful
97
Municipal Bonds
Loans made by investors to a government
98
Revenue Bonds
municiple bonds issued to a financial facilities for revenue producing public enterprises - stadiums or toll roads
99
Corporate Bonds
bonds issues by private companies to raise money for investments
100
Tort Claim
Claim made due to injury
101
Expertise Firm Structure
Exceptional talent, deep knowledge
102
Experienced Firm Structures
Specific Program areas, routine but complex
103
Efficiency Firm Structures
Inexpensive, repeatable, routine, lots of junior staff
104
Strategic Alliance
Temporary sharing of technologies, resources, and risk to complete a project
105
Overlay District
Additional zoning requirements for a defined area. For example, an area prone to flooding requiring additional water retention regardless of the building type.
106
Planned Utility Development (PUD)
A Change in the zoning allowances for a specific plot as approved by the local government
107

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