Finances and Contracts Flashcards
What is a Teaming Agreement?
This form of agreement is employed to structure the relationships among the architect and other key design professionals and consultants in connection with pursuing a particular project or client. Unlike architect-consultant or joint venture agreements, teaming agreements address matters in connection with the pursuit of projects not yet obtained by the architect.
What is a Consultant Agreement?
This form of agreement is typically used by an architect to retain the services of design professionals and other consultants for a project in which the architect cannot provide all of the required services.
What is a Joint Venture Agreement?
This form of agreement creates and structures the relationships between an architect and another design professional or other party who wish to combine forces to provide services to their client.
What is the Design-Build Agreement?
This form of agreement sets for the relationship between a designer and a builder for projects in which the client wants a single point of responsibility with a single party for all design and construction services necessary for the client’s project.
What is the Integrated Project Delivery Agreement?
This form of agreement is a new approach to the project delivery which, in a single agreement, creates and structures the contractual relationships among the client, designer, and contractor who jointly share in the success or failure of the project.
What is privity?
Lack of privity protects an architect from claims made by a subcontractor. Privity of contract is the relationship between the parties of the contract and generally protects parties without privity of contract from filing suits.
What is the revenue factor (total payroll)?
This is the measure of the amount of fee revenue generated for each dollar or payroll spent. It is the best measurement o the productivity available to the architecture firm.
direct labor (average) multiplier (net revenue divided by direct salaries) multiplied by the utilization rate (direct salaries divided by total salaries) Don't forget to convert percentages into decimals.
The gold standard for the revenue factor is 1.98.
What is utilization rate?
This is the percentage derived from dividing direct salaries by total salaries.
What is the net multiplier?
This is the ratio of the net operating revenue (NOR) to the total direct labor. The measure of the return on every dollar of direct labor. The total direct labor should be in the range of 28 to 32 percent of the net operating revenue.
What is the break-even rate?
This measures the total cost of operations for every dollar spent on direct labor.
This formula is the overhead rate plus 1.00 (represents the unit of cost for an hour of salary)
