Chapter 27 - Owner-Designer Agreement

Question 1

A _____ is a bargain between two or more parties, each of whom agrees to exchange something one or more of the others desire to obtain

Answer 1

contractex: client wants an interior space designed and designer wants to get paid

Question 2

in the legal sense of a contract, there are two parts

Answer 2

1. an offer| 2. an acceptance

Question 3

All contracts should contain 11 items:

Answer 3

1. names, addresses, and date2. scope of work and designer’s responsibilities (this should contain the area and a description of services SD, DD, CD, etc.)3. Purchasing agreements (if any) esp if reselling furniture4. Method and amount of payment (and dates of payment as well as provisions for late payments)5. Reimbursable expenses (can include consultants if they’re under the architect for coordination and billing)6. Extra services (this helps the designer not provide extra work for free if it is already spelled out as an add service)7. Responsibilities of the client (ex: providing as-builts to the designer)8. Ownership of the documents (documents can only be used for the specific project and cannot be reuses without permission and adequate compensation)9. Provisions for arbitration (generally faster and less expensive than going to court if disputes arise but both parties must agree to it)10. Termination of the contract (gives the designer and the client right to quit the contract with adequate notice)11. Signatures

Question 4

To be legally valid, a contract must be signed by ______

Answer 4

the person accepting the offer (usually the client) however it’s still better if both sign it

Question 5

What is the standard AIA Owner Architect Agreement?

Answer 5

AIA Document B152| Standard Form of Agreement Between Owner and Architect for Architectural Interior Design Services

Question 6

If AIA documents are used for an interior design project, the word architect should be replaced by

Answer 6

interior designers

Question 7

Does that standard AIA B152 document include programming?

Answer 7

YES- even though many other contracts do not

Question 8

Main steps in the scope of services

Answer 8

Programming
SD
DD
CD
Bidding
CA

Question 9

Programming

Answer 9

• d esigners works with owner to develop the applicable requirements of the project- feasibility studies to see if it will work with the constraints of the owner’s budget and the building in which the project will be located- information and analysis are documented in a written program

Question 10

SD

Answer 10

• designer prepares diagrams showing the general functional relationships required by the project - prelim space plans showing partitions, furnishings- prepare studies to establish the design concept , including types and qualities of materials, finishes, and furniture (material and sample boards )- preliminary statement on project cost

Question 11

DD

Answer 11

• refine approved schematic design work so that the size, scope, and character of the project are generally fixed- drawings, color boards, samples, furniture selections, and other specifics of the job are presented to the client for approval or modification before CD’s begin- detailed plans showing partition and door locations, furniture and fixture layout, lighting design, sketches of special built-in cabinetry and furniture, other elevation or 3d drawings to describe the character of the design- another statement of probably project cost for approval should also be submitted

Question 12

CD

Answer 12

based on the approved DD documents, the designer is responsible for preparing the detailed drawings, specs, and other documents required to have the project constructed. AIA B152 calls for furniture purchasing to be in a separate set of documents

Question 13

Bidding

Answer 13

The designer should ASSIST the owner in the following (not do the following all alone):- preparing the bidding documents, necessary procurement forms, conditions of the contract, and forms of agreement between the owner and the contractor- filing documents required various governmental approvals

Question 14

After the necessary documentation is prepared, the designer assists the owner in ______

Answer 14

obtaining bids (or negotiated proposals), evaluating the bids, and preparing the contracts for interior construction and for FF&E

Question 15

In Canada, the word _____ is used to refer to bidding.

Answer 15

tender or tendering

Question 16

CA

Answer 16

• designer is the owner’s representative and can act on behalf of them- designer assists the owner in coordinating the schedules for delivery and install for various portions of the work but is NOT responsible for neglect or malfeasance of any of the contractors or suppliers with regard to meeting their schedules or fulfilling their contractural requirements- site visits to keep the owner informed and to guard against defects or deficiencies in the contractor’s work- designer NOT responsible for means, methods, techniques, sequences, or procedures of construction- during construction and install, designer determines the amounts owed to the contractors and suppliers based on observations at the project site and on evaluation of the contractors’ applications for payment- designer is considered the interpreter of requirements of the contract documents and is expected to be an impartial judge of performance by both the owner and the contractors - designer reviews the final state of construction and placement of all items and inspects for damage and function after the job is complete- designer’s responsibilities do NOT include: receipt, inspection, and acceptance of FF&E on behalf of the the owner; designer not authorized to stop the work or terminate the work on behalf of the owner. instead, the designer can recommend to the owner that nonconforming work should be stopped

Question 17

When the designer buys good or services for the owner, either as a reseller or as an agent, a ____ is used

Answer 17

purchase order

Question 18

____ form gives the receiving party all the necessary info to supply the goods or services and authorizes the purchase of the listed items

Answer 18

purchase order

Question 19

in addition to providing written authorization, purchase orders also:

Answer 19

are used as accounting devices to track the status of ordered goods and services AND to serve as a basis for billing the client

Question 20

What’s most helpful about listing out add services?

Answer 20

helps avoid disputes because it makes clear what the client should not expect unless other arrangements are made

Question 21

Under the AIA B152 document, must the owner provide full information regarding requirements of the project, including a budget that provides for contingencies as well as for the basic cost items?

Answer 21

yes

Question 22

Who’s responsibility is it to furnish any required laboratory tests, inspections, and reports as required by the contract documents?

Answer 22

the owner

Question 23

What’s included in the “project cost”?

Answer 23

• total or estimated cost to the owner of all components of the project including: - items designed or specified by the interior designer- labor- all materials, furniture, and equipment furnished by the owner if it was designed or selected by the desinger- reasonable allowance for the contractor’s overhead and profit- cost of managing or supervising construction and install

Question 24

What does construction cost not include?

Answer 24

• professional fees of the designer and consultants- financing costs- other costs that are the responsibility of the owner

Question 25

What is one of the most important clauses on cost in the AIA agreement?

Answer 25

the interior designer does not warrant that bids or negotiated costs will not vary from the owner’s budget or from any estimate prepared by the designer. the designer’s estimated cost or statements of probably project costs represent only his or her best judgement

Question 26

What does the AIA agreement say about fixed limits?

Answer 26

that no fixed limit of project cost shall be established as a condition of the agreement unless agreed to in writing by both parties. only if the two parties agree to a fixed limit, and the lowest bid or negotiated priced exceeds that limit, is the designer obligated to modify the drawings and specifications at no additional charge to reduce the project cost

Question 27

What happens if the lowest bid exceeds the project budget or fixed limit of project cost? The owner has four options:

Answer 27

1. the owner can give written approval of an increase in the budget2. the owner can authorize rebidding or renegotiating 3. the owner can abandon the project4. if there is a fixed limit on the project cost, the owner can have the designer modify the drawings and specs, without charge, to reduce the project cost

Question 28

broadly speaking, there are two methods for charging for interior design work

Answer 28

1. charges are based only on professional services| 2. charges that are based on the retail method of reselling furniture and fixtures

Question 29

what is the most common method for charging clients at interior design firms?

Answer 29

charging for services onlyfurniture and fixtures are purchased by the client or through the firm with the firm having no financial interest in the transaction

Question 30

The AIA document has five methods of determining fees based on professional services

Answer 30

1. Fixed fee2. Hourly rate3. Percentage of project cost4. Area fee5. Retail method

Question 31

Fixed fee and what’s tricky about it

Answer 31

a fixed sum of method for a specific set of services. $ is paid monthly according to the proportion of the basic phases of services- designer must accurately estimate all costs and allow for a profit (must account for salary, costs of the people doing the job, customary benefits to employees, taxes, and office overhead)

Question 32

How can a fixed fee be profitable?

Answer 32

• the scope of services must be carefully itemized in the contract along with services that are not included - methods and amounts of payment for add services must be included in the contract so the client knows what to expect if extra work is required.

Question 33

Hourly rate

Answer 33

client is charged for the actual amount of time that the professional spends on the project . hourly rate also must account for overhead and profithourly is favored by many designers but not all clients who sometimes will set a cap

Question 34

Percentage of project cost

Answer 34

professional fee is based on the total cost of the project. most appropriate for project shower the interior designer can accurately anticipate the amount of work required and has a good idea of the expected cost of the projectin many cases this method is ill-advised because an economical or low-cost project may require just as much work as an expensive project. and from the owner’s standpoint, the designer may be encouraged to increase the cost of the project in order to increase their fee

Question 35

Area fee

Answer 35

determined by multiplying the square footage by some fixed rategenerally used only in commercial contraction and then only for project types with which the interior designer has much experience. often used for tenant finish planning. designer will know what it takes to do the job and because tenants, building owners, and leasing agents do most of their neogtionations on a square-foot basis

Question 36

Retail method

Answer 36

designer produces his or her compensation by acting as a reseller of goods: buying everything at a trade discount and then selling to the client at retail pricethis method is often used by stores offering design services, but it also used by many residential and some commercial designers. generally , the retail method is discourage as a method of charging for professional service

Question 37

A ___________ is a review of a completed project after the client has occupied it for some time

Answer 37

post-occupancy evaluation (POE)

Question 38

When does a post-occupancy evaluation typically occur?

Answer 38

3 to 6 months after the client has occupied it

Question 39

Is a POE a standard interior design service?

Answer 39

no

Question 40

Why do POE’s normally happen?

Answer 40

the client pays for it because they are going to construct similar facilitythe designer does it and it’s an informal review . This is the most common