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ARE 5.0 Exams > PcM Exam > Flashcards

PcM Exam Flashcards

1
Q

Firm Principal

A

responsible for staffing and overseeing projects

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2
Q

Project Architect

A

manages multiple projects and teams; 10+ years of experience; reports to principal; interacts with clients directly

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3
Q

Designer/Architect

A

I,II,III based on experience; responsible for production work; architect is licensed, designer is not

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4
Q

Associate

A

provides production work; administrative tasks; recent grad; directly supervised by licensed architect

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5
Q

Utilization Rate

A

Rate at which an employee uses their time towards billable work
direct labor/total labor

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6
Q

Direct labor

A

hours directly billed to a project

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7
Q

Indirect Labor

A

hours that an employee works on something that can’t be billed to a project

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8
Q

Overhead Costs

A

work not directly billed to a project

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9
Q

Consultants

A

structural engineer, MEP engineer, Lighting designer, acoustical consultant

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10
Q

C401

A

Agreement between Consultant and Architect

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11
Q

What is a shared studio firm organization?

A

principals work individually or collaboratively to bring in projects and oversee them. Staff work freely among principals and across range of projects. Common in small to midsize firms that do a specific type of project

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12
Q

What is a Studio by Discipline firm organization?

A

ex urban planning or interiors. Allows for each studio to have their own methodologies that work for their specializations

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13
Q

What is a Studio by Project Type firm organization?

A

ex: healthcare or education. Good for firms trying to specialize in a specific area. Downside is that staff get pigeonholed into one area. Changes in economic market can lead to uneven work distribution.

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14
Q

What buildings are exempt from needing an architect?

A

Ag buildings and those under a certain size

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15
Q

Named-peril insurance policy

A

only covers specific losses

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16
Q

All-risk insurance policy

A

covers all risks except those specifically excluded

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17
Q

Claims-made policy

A

covers any claim even if it was made prior to start of policy

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18
Q

Occurrence- based policy

A

only covers errors made during policy holding

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19
Q

Policy limit

A

max that will be paid out for a claim

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20
Q

Certificate of Insurance (COI)

A

submitted to client before the project begins; insurance company issues this

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20
Q

Betterment

A

defense against claims of errors or omissions. Architect isn’t responsible for the full cost. Owner is still responsible for the initial cost, can only sue for the difference.

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20
Q

Wavier of Subrogation(A201)

A

Extended by the owner and contractor to each other as well as to the architect; agreement that each party’s insurer will not pursue subrogation

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20
Q

Professional Liability Insurance

A

Errors and Omissions or Malpractice Insurance; covers cost to defend against claims for errors and omissions; limits financial impact if the firm is found liable

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21
Q

Prior Acts Coverage

A

covers services provided before policy was in place

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21
Q

Tail Coverage

A

Extends coverage period after architect is no longer practicing

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21
Q

Commercial General Liability Insurance

A

Covers incidents that occur as a result of non-professional business operations; may also cover property damage by employees; occurance-based

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22
Q

Statue of Limitations & Repose

A

Limits time period someone can file a claim against you
Limitations = when the error was discovered
Repose = when the error was committed

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23
Q

Worker’s Compensation Insurance

A

required if you have employees; covers injuries caused by job

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24
Q

Umbrella Coverage

A

typically excludes professional liability claims; low cost extra insurance; provides coverage in excess of policy limits of firm’s other policies

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25
Q

Employees vs Independent Contractors

A

Employees have payroll deductions and ICs do not
Biggest differences:
Behavior control
Financial control
Relationship

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26
Q

Equal Employment Opportunity

A

Federal Law
Applies to employers with 15 or more employees

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27
Q

Fair Labor Standards Act

A

Applies to employers with over $500k in gross revenue
Establishes min wage
Requires overtime to be paid at 1.5x regular hourly wage

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28
Q

Family Medical Leave Act

A

allows for 12 weeks unpaid leave for things such as birth or adoption

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29
Q

3 tiers of AIA Code of Ethics

A

Canons- principles of conduct
Ethical Standards- goals
Rules of Conduct - mandatory

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30
Q

Spearin Gap

A

owner is responsible if architect follows standard of care and contractor follows contract documents but something still goes wrong

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31
Q

Standard of Care

A

shall apply the skill which is ordinarily applied by architects pf good standing practice in the same locality
insurance does not cover a higher standard of care

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32
Q

Efficiency based firm type

A

below market rate; quick turn around times, low complexity, repetition, standard solutions, wide staffing chart

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33
Q

Expertise based firm type

A

specialization, most complex issues, above-market rate, narrow staffing chart

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34
Q

Experience based firm type

A

Provide value for complex projects, medium complexity, market-rate, various project types, balanced staff chart

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35
Q

Parts of Business Plan

A

Purpose: Firm goals and qualifications, core competencies, and executive summary
Finance: how financially they can meet their goals
Operations: coordinate with Finance, how will you meet goals, explains staffing organization
Marketing

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36
Q

Profit Loss Statement

A

firm’s financial health over a period of time
revenue, indirect expenses, and direct labor
Revenue - Expenses = Profit

37
Q

Balance Sheet

A

Represents a firm’s finacial health at a specific moment
Starts with current assets
Liabilities : short term and long term
Assets - Liabilities = Equity

38
Q

Key Components of Profit Loss Statement

A

Utilization Rate
Net Multiplier
Overhead Rate
Break-even Rate
Profit-to-Earnings Per Employee
Aged Accounts Recievable
Net Revenue Per Employee

39
Q

Net Multiplier

A

Amount of revenue that must be generated for every dollar of direct labor to earn profit
Net Multiplier = Net Operating Revenue / Direct Labor
Other formulas:
BER/inverse profit
Billing rate/hourly rate

40
Q

Overhead Rate

A

Ratio of overhead costs to direct labor costs, used for profit planning and determining billing rates
Overhead Rate = Total Indirect Expenses / Direct Labor
Target: 1.3-1.5

41
Q

Break-Even Rate

A

Adds direct labor costs to overhead rate; Charging less than break even rate will result in financial losses
Break-Even Rate = Overhead Rate + 1.0
Target: 2.3-2.5
Profit = Net Multiplier - Break- Even Rate

42
Q

Profit-to-Earnings Ratio

A

How much NOR is retained as profit; expresses firm’s profit margin
Low ratio indicates: overhead is too high or fees are too low
Profit-to-Earnings Ratio = Net Profit / NOR
Target: 20% or higher

43
Q

Net Revenue Per Employee

A

Determines the firm’s targeted net profit in the next annual budget. Confirms profit given firm size
Net Revenue Per Employee = NOR/# of full time employees

44
Q

Aged Accounts Recieveable

A

Average time for clients to pay invoices. Accounts receivable = invoices submitted but not yet paid
Aged accounts Receivable = Average Annual Accounts/ [NOR/365]

45
Q

Current Ratio

A

ability to pay debt
Current Ratio = total assets/ total liability
Target: Greater than 1.5

46
Q

Quick Ratio

A

does not include furniture and equipement as assets due to not have liquidity
Quick Ratio = cash+accounts rec.+ WIP /Liabilities
Target: Greater than 1.0

47
Q

Debt-to-Equity Ratio

A

=total liabilities/ total equity
Target: less than 35%

48
Q

Return on Equity

A

=net profit/total equity
Target: Greater than 20%

49
Q

Profit Plan

A

Develops projections for each section of annual budget. Used to establish billable rates

50
Q

Billable Rates

A

=Hourly Rate * Net Multiplier
Total billings = Billing Rate * Utilization Rate * 200 working hours
Other formula:
Revenue/DL

51
Q

Annual Budget

A

Expanded PL Statement, Projected Profit vs Actual Profit

52
Q

Fee Structures: Percentage of Construction Costs

A

Cost of the work * predetermined percentage
Benefit: changes in scope are built into the fee

53
Q

Fee Structures: Hourly

A

Lowest Risk
Hours worked * billing rate of each employee working
Appropriate when scope of work is not clear

54
Q

Fee Structures: Cost-Per-Unit

A

ex: cost per sf
accounts for changes to project fee

55
Q

Fee Structures: Stipulated Sum

A

one total design cost
minimal flexibility for scope changes
consider for the following: determined scope, experienced client, experienced with project type
high risk for potential financial loss

56
Q

Three methods to determining a fee at Proposal

A

Top-down, Bottom-Up, and Staff Analysis

57
Q

Top-down

A

idea of what the fee should be
fee estimate + contingency - consultation fee = Net Fee
Break into phases, determine amount of work is reasonable for scope

58
Q

Bottom-Up

A

determines scope, breaks into phases, determines effort for each phase, add to get total fee, add contingency to account for variables

59
Q

Staff Analysis

A

determine how many weeks each phase will take, how many staff members will work at each phase, hours * hourly rater = fee

60
Q

B101 Basic Services

A

Structural, Mechanical, Electrical

61
Q

C401

A

Consultant must communicate through architect, consultant insurance coverage (coordinated with B101), Standard of Care (match B101), scope of services (match B101)

62
Q

What are the two categories of claims?

A

Breach of Contract and Negligence

63
Q

Breach of Contract

A

Architect does not meet contractual obligations to owner

64
Q

Negligence

A

Must meet four steps:
- Architect owes a duty to someone
- Duty was breached
- Breach causes something to happen
- Damage occurs as a result of the breach

65
Q

RFP

A

Request from a client for proposal to complete a scope of work

66
Q

RFQ

A

Request for the design team’s qualifications to provide the scope of work

67
Q

RFS

A

Request for ongoing services between owner and architect

68
Q

What sections of an RFP response can NOT be standardized?

A

Scope of work, schedule, and fee proposal

69
Q

Design-Bid-Build

A

Owner and architect contract with each other
Design goals, schedule, and budget are coordinated amongst the design team
Construction cost is determined at bidding
Owner contracts with the lowest qualified bidder
Primary driver: Cost
Secondary Driver: Risk

70
Q

Negotiated Select Team

A

A variation of Design-bid-Build
GC selected at the end of schematic design
GC and owner negotiate contract during design
Final construction cost determined after CDs
Primary driver: Quality
Secondary Driver: Cost

71
Q

Multiple Prime Contractors

A

Variation of Design-bid-build
Architect prepares separate packages
Owner has separate contracts with multiple contractors

72
Q

Fast-Track

A

Design phases overlap with construction, ex: getting permit for foundation before finishing CDs
Not really a delivery method but a process that can be applied to any delivery method

73
Q

Construction Management

A

Good for an owner if they want an idea about constuction costs at the beginning of a project
CM hired at the beginning
Owner, architect, and CM collaborate on goals, cost, and schedule

74
Q

Design- Build

A

single entity designs and builds project
defines roles and responsibilities clearly and early
Fixed fee for both design and construction
Fast track can be appropriate
Primary driver: risk
Secondary driver: cost
Construction cost determined before design

74
Q

Bridged Design-Build

A

design architect creates design concept
design-build team executes design
not ideal for complex projects
Primary driver: risk
Secondary driver: quality
Construction cost given after design

75
Q

Integrated Project Delivery

A

Owner, contractor, and architect work together as one firm
Entity established by a multi-party agreement
No bidding because entire team is selected at the beginning of the project

76
Q

C401

A

Architect/consultant agreement

77
Q

A101

A

Owner/contractor agreement, used in conjunction to A201

78
Q

Stages of Evidence-based design

A
  1. Question
  2. Research
  3. Hypothesis
  4. Design Phase
  5. Construction Phase
  6. Analyze Phase
  7. Share Results
  8. Refine Questions
79
Q

Sole Proprietorship

A

Simplest form
Does not require formal legal steps to form
Taxes reported on proprietor’s personal tax return
High legal risk- no separation of business and proprietor

80
Q

Partnership

A

Two or more partners
taxes reported on partner’s personal tax return
Partnership agreement

81
Q

General Partnership

A

Partners are liable for each other’s actions

82
Q

Limited Liability Partnership

A

Formal business entity
Liability protection
Partners are not liable for each other’s actions

83
Q

Corportation

A

Limited liability for shareholders, directors, and officers
Shareholders own stock
Directors make firm-wide policy decisions
Officers operate the corporation

84
Q

C-Corporation

A

can be publicly traded
Shareholder tend to be external
Taxed twice, at corporate level and on profit passed to shareholders
Uncommon for architecture firms

85
Q

S-Corporation

A

Shareholder are often firm employees
Shareholder agreement can prevent stock transfers to external shareholders
Taxes are passed through to shareholders

86
Q

Limited Liability Corporation (LLC)

A

Provides liability protection and simplified tax structure
Members own the corporation
Managers make policy decisions and operate the corporation
Members are not personally liable for claims against LLC
Less corporate formality than other types of corporations
Operating Agreement

87
Q

Indeminity

A

bringing in a third party to become liable to reimburse the defendant for all of the plaintiff’s damages
obligation arises out of contractual obligation

88
Q

Builder’s Risk Insurance

A

purchased by owner or contractor but both are listed as insured parties either way
Policy covers the actual construction work being performed at the site
no-fault property damages

89
Q

Horizontal Organization

A

Think assembly line, project passes through different departments on its way to completion
Advantage: each department gains high level of expertise for their phase of design
Disadvantage: design decisions can get lost

90
Q

Vertical Organization

A

Same group of people work on one project in it’s entirety

91
Q

Matrix Organization

A

Mix of both vertical and horizontal

92
Q

Cost plus fixed fee

A

Contractor selected at completion of CDs but scope is unpredictable
Contractor is paid labor and materials plus overhead plus fixed profit
Primary driver: scope

93
Q

CM-Adviser

A

Primary driver: risk
Secondary driver: quality
Acts as constructability and cost management consultant during design and construction. Can be used under any delivery method.

94
Q

CM-Agent

A

Primary driver: risk
Secondary driver: time
Construction cost determined at completion
Early consulting and may act on behalf of the owner in assembling and coordinating the construction trades. Provides services for a fixed fee.

95
Q

CM-Constructor

A

Primary driver: Time
Secondary driver: Risk + Cost
Construction cost determined after design
Agent which then turns into contractor at predetermined time, usually a guaranteed max price which puts the contractor at risk since estimating is done at design and must follow throughout construction

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