Practice Management Flashcards
Utilization rate
Utilization Rate is a ratio or percentage of the amount of billable hours versus total hours worked. For example, in an 80-hour two-week work period, a staff architect worked directly on active projects for 70 hours, the remaining 10 hours were used for professional development, software training, and some personal time off. 70÷80 = 81% utilization rate.
Non-billable hours may include preparation of proposals, training, staff meetings, vacation time, sick days, or professional development. Essentially, time that is not billable to a client or project is considered non-billable, or overhead time.
Office managers must be able to recognize when a staff member is underutilized and is available to be assigned to a new project. Always be sure that their skill, experience, and abilities align with the task required
Careful tracking of timesheets and communication with staff will provide insight as to the work load that staff has and point to staff that is available to take on more work
Professional development
Staff must be up to date with current practices, material sciences, and building technologies in order to provide the appropriate expertise and Standard of Care for projects
Development of knowledge and skill can be provided via Lunch & Learns, webinars, seminars, or reading of professional publications
In many cases, office staff may be on track for professional licensure which requires certain experience to be gained; a good practice will provide the candidates with opportunities to grow in and gain experience in the areas needed for licensure
Staff that does have professional licenses are required to obtain a minimum amount of continuing education credits (12 hrs) in order to maintain their license. These credits can be obtained through approved classes, presentations, seminars, or reading materials
Employee costs
Staff salaries are just one of the many costs of running a business
Healthcare
401k / retirement plan
Vacation & sick time off, holidays
Employee Training and professional development
Certification / licensing costs of employees
General management and human resource dedication for employees
Office perks (for example, field trips, celebrations)
Equipment, tools, supplies for employees (for example, IT, computers, printing, sketch supplies, business cards)
General Liability Insurance
General Liability Insurance - often referred to as business liability insurance and protects the business in case of injury sustained on firm property or damage to the property. It is the insurance used for claims in the course of normal business.
Professional Liability Insurance
Professional Liability Insurance - also referred to as Errors and Omissions insurance. It protects the professional firm in case of claims resulting from errors or omissions, or negligence that may have been in drawings, reports, or other design and professional documents. Such claims typically result in financial loss by a client in need of corrections during construction, project fallure, or lost opportunities due to project delay as a result of errors in the project documents or performance of the architect.
Worker’s Compensation Insurance
Worker’s Compensation Insurance - state-mandated insurance that employers purchase which provides pay replacement, medical care, disability, death, and rehabilitation coverage for employees injured or killed while on the job.
Automobile Insurance
Automobile Insurance - vehicles used for work must be properly insured; covers vehicle damage and personal injury when sustained during vehicle use.
Property Insurance
Property Insurance - insurance for damage to the physical building or contents of the building (can include computers, furniture, books, etc.)
Personal injury insurance
Personal injury insurance - often referred to as slander and libel insurance. This insurance offers coverage for libel and slander (types of defamation), false arrest or imprisonment, or malicious prosecution. For example, if someone brings a suit against the firm stating that they have been harmed due to slanderous statements made by the firm which hurt their reputation and has resulted in business losses, such as lost opportunity, this insurance coverage helps protect in such a suit. The same goes in the reverse, a design firm can pursue a suit against others if they have been harmed by libel or slander. Generally, it is difficult to prove that libel or slander has caused damage to a party.
Typical Insurances for an Architectural Firm
General Liability Insurance
Professional Liability Insurance
Worker’s Compensation Insurance
Automobile Insurance
Property Insurance
Personal injury insurance
Typical Insurances for Other Parties
- Property / Builder’s risk Insurance - used by Owner to provide coverage for work on-site, off-site or in-transit
- Loss of Use Insurance - used by Owner to cover financial losses due to delays caused by construction damage, accidents, fire, or other hazards
- Product & Completed Operations Insurance - used by Contractor for damage done to completed work after its construction
- Unemployment Insurance - A state required and run insurance program that acts to provide a certain amount of wages and continued health coverage to an employee that has been laid off or let go
Businesses are required to pay into, typically via taxes, the state reserve for unemployment insurance. - Health Insurance - may be offered by an employer as a benefit for the employees which provides medical coverage
Labor Laws
Labor Laws
1. Minimum wage - Sets a minimum wage for employees
2. Worker’s Compensation - see above in insurances section
Workplace Safety - Employers are required to provide a safe working environment for employees. OSHA (Occupational Safety and Health Administration) is the agency responsible for investigating and enforcing the safety law and conducting inspections to ensure safety.
4. Discrimination & Harassment - Employees are protected from various forms of discrimination at the workplace such as discrimination against race, color, religion, sex, age, pregnancy, or disability. Employers are not allowed to retaliate, such as firing, against an employee if an employee complains about job discrimination or harassment, or if the employee has assisted in a lawsuit concerning the company.
5. Medical and Family Leave - The Family and Medical Leave Act allows employees time of up to 12 weeks leave for the birth or adoption of a child or in the case of a serious medical condition of the employee or its family member. This act covers a portion of the employee’s income during the leave. The leave reserve is funded by deductions from all employee pay checks as well as payments made by the employer.
6. Government Contracts - Employers receiving government projects/ contracts are subject to certain benefits, wages, and safety standards. This typically applies to construction projects and often associated with the prevailing wage set by the government for construction workers. This can come into play on projects where construction budgets may require adjustment in consideration of the prevailing wage for the employees. In some instances, government projects limit the amount of profit that can be had from
7.Benefit Security -Emplovers who offer certain benefis such as pension or medical plans are required.
disclose certain aspects of the plans including financial updates in the plans or changes made to coverage.
Some employers may be required to purchase insurances for protection of certain benefits for employees.
8. Wrongful Termination - Although employment termination laws vary from state to state, employees have protections (such as job reinstatement or unemployment compensation) if they believe they have been wrongfully terminated. Some states have “employment-at-will” laws which allow employers to let an employee go for any or no reason as long as no laws are being violated.
9. Employee Polygraph Protection Act - Most employers are prohibited from using polygraph tests (lie detectors) on employees
10. Unions - Regulations are instituted that require union organizations to report on the financial aspects of the union as a measure of protecting the funds, requiring just labor relations practices within the union, and regulating standards for union officer election.
11. Poster Posting - In most cases, employers must post a poster/sign in a conspicuous location for employees containing a description of the labor laws, protections, and rights given to the employees.
Copyright Law
Copyright Law
1. Copyright of the instruments of service
Instruments of service are the drawings, specifications, studies, sketches, renders, surveys and any other materials used to represent the project and its construction
• Copyright to instruments of service is held by the architect
Owner is allowed to use the instruments of service for only the construction of the one building at that time, in that location, unless specifically allowed by the contract for multiple locations The topyright may be passed to Owner if requested by the Owner, stated so in the contract, and agreed to by the architect
- Copyright of the building itself
• Architect owns the right for the overall building form, layout, and design elements. The architect may bring suit to others copying the design of the building in regards to its form, aesthetics, and layout.
Standard of Care
Standard of Care
1. This is an important concept to remember in the practice of Architecture. Standard of Care is the basis pn which an architect’s work can be “judged.” The architect must perform services with skill and care that would also be provided by other architects in a similar location under similar circumstances. The basis is not perfection, but professionalism that is consistent with practice of the local architectural community.
In case of a lawsuit, the Standard of Care is often cited as the basis on which to judge whether or not there may have been negligence or the appropriate level of expected service has been provided
Health, Safety & Welfare
Health, Safety & Welfare
1. Understand that the ARE is not focused on just beautiful and smart design. The primary role of the architect and the services provided are to protect the health, safety, and welfare of the public.
2. Cannot undercut codes or ignore non-compliant construction. Even if a client is strongly requesting that a certain piece of work be accepted, but it does not comply with codes or life safety, an architect cannot allow this to happen. If without reasonable attempts to correct the situation, any unsafe work should be reported to the Authority having jurisdiction.
Professional Conduct
Professional Conduct
- An architect is: considered a professional who is qualified to practice in their field and represents this fact
- Knowledgeable of applicable codes and regulations
- Must accurately represent qualifications and experience
- Avoid working with a conflict of interest that can impact their judgement
- Must not infringe on copyright of other design professionals
- Must not accept a contract with a client if an existing contract or relationship with another design professional has not been properly terminated
AIA Code of Ethics and Professional Conduct
AIA Code of Ethics and Professional Conduct
1. Read the AlA Code of Ethics and Professional Conduct. This can be found on AlA website.
http://content.aia.org/sites/default/files/2020-05/2020_Code_of_Ethics.pdf
2. This code provides rules and obligations in ethics and appropriate conduct toward the Public, Client, Profession, Colleagues, and Environment
3. The architect is expected to act professionally and ethically throughout its practice
NCARB’s Model Rules of Conduct - Summarized
Objectives and Principles
NCARB’s Model Rules of Conduct - Summarized
1. Objectives and Principles
The Model Rules of Conduct are a set of rules that are offered to jurisdictions for establishing criteria for conduct of licensed architects and the appropriate discipline by suspension or revocation of license. The architect may be disciplined by the jurisdictional architectural board regardless of whether or not the architect has been convicted by a court of law.
Primary objective is the protection of the public rather than advancing interests of the profession The architect is expected to be in a leadership role on a project to protect the public; although serving the client, the architect’s first duty is the protection of the public This publication seeks to protect clients and other members of the construction industry from fraud, deceit, and misrepresentation by an architect Protect public from buildings that are not safe
Architects are regarded as the primary design professionals in building design and public
protection. Architects are expected to defend the interest and position of clients, but, if need be, stand firm on positions that may not necessarily be in the client’s favor, but are required to protect the health, safety, and welfare of the public.
It is expected that architects will work to ensure ethical conduct amongst themselves and their colleagues outside of the practice. The architects in charge of a firm are held responsible if the firm violates the model rules of conduct.
Licensing of future architects relies on the AXP supervisor ability to confirm that adequate experience has been gained. These rules also protect the AXP verification process.
NCARB’s Model Rules of Conduct - Summarized
The rules
The Rules
- Competence
• Architect must practice with reasonable care and competence. This competency is judged by the Standard of Care.
Architect must take into account all applicable laws and regulations. An architect can seek advice from knowledgeable professionals, such as attorneys, but must never knowingly violate such laws. - Architect must practice in areas in which the architect has sufficient knowledge and skill
- If an architect’s competence is impaired, the architect must not practice; a qualified professional (doctor) will assess the impairment. The licensing board does not have to wait until harm or damage has been caused to take action on suspected impairment.
NCARB’s Model Rules of Conduct - Summarized
Conflicts of interest
Conflicts of interest
Must not accept compensation from suppliers for endorsing their products in connection with a project
• Unless waived by all parties, architects must not practice on projects for which there may be potential conflict of interest such as financial interest in a project or a relationship / family ties with another party
• When acting as interpreter of building contract documents, the architect must serve impartially and with no conflict of interest
“
AXP supervisors must not enter into a relationship with the candidate that would interfere with the objective process of the AXP
NCARB’s Model Rules of Conduct - Summarized
Full disclosure
o Full disclosure
Do not make false or misleading statements
• When making public statements on architectural matters, the architect must disclose if there was compensation or other financial stake in the statement
• Do not misrepresent capabilities and experience
Must not misrepresent scope of involvement in a project
When an architect learns of a decision made by the architect’s employer or client that was against the architect’s advice, which violate applicable laws and regulations and may compromise the health, safety, and welfare of the public, the architect must refuse to accept the decision, report the matter to the building official. If the violating decision is being carried out anyway, the architect must stop services involved with the project.
.
Must not falsify or fail to disclose information requested by the licensing board
• Must not verify or sign documents associated with licensure containing false information or support in the licensure of unqualified candidates
• An architect knowing of qualifications of a licensure candidate must cooperate with the candidate, the board, and CARB during the licensure process
• The architect has the professional duty to report violation of laws governing architecture to the architectural board
NCARB’s Model Rules of Conduct - Summarized
Compliance with Laws
Compliance with Laws
Must not violate United States or jurisdictional laws or participate in deliberate fraud or disregard of the rights of others
• Must comply with laws when practicing in other jurisdictions
• Must not offer gifts or payments to officials with intent on influencing their position on a project. Do not bribe.
• Employers that have violated rights of employees will be disciplined. These violations may include harassment, discrimination, or unfair compensation.
NCARB’s Model Rules of Conduct - Summarized
Signing and Sealing Documents
Signing and Sealing Documents
Sign and seal only those documents that were prepared under the architect’s responsible control. The architect may sign documents in the case that the architect includes documents prepared by manufacturers, contractors, consultants, or other architects, etc., which the architect has reviewed and must include such information in the construction documents.
NCARB’s Legislative Guidelines and Model Law / Model Regulations - Summarized
Purpose
Purpose
Rather than publishing architectural practices as direct statutory language, NCARB published these as guidelines to individual states and registration boards for consideration of use in each state board as regulations that they can incorporate in whole or in part.
Making changes to statutes is a far lengthier and complex process, whereas, adopting regulations that uphold the existing statutes can be done in a simpler manner
NCARB’s Legislative Guidelines and Model Law / Model Regulations - Summarized
Legislative Guidelines
Legislative guidelines
Practice of architecture
Practice of architecture may include new construction, or alterations to existing buildings and sites and the diverse range of services involved such as pre-design & planning, drawings, and administration. An architect’s services may include the engineering required that is incidental to the practice of architecture.
A person not duly licensed or permitted to practice architecture, must not practice architecture
A person not registered as an architect must not lead others to believe that they are an architect, typically by using the title “architect”. Non-licensed persons in the practice of architecture can use titles such as “intern architect” or “architectural intern”.
Partnerships or corporations that offer both architectural and construction services must clearly disclose this combined offering, must have the licensed architect participate in all aspects of the project and state that the architect will not be terminated without consent of the client.
Regulation of Conduct
States must incorporate into law clear rules, definitions, and consequences for the conduct of architects. Consequences can include license suspension, revocation, or fine.
- Statutes must be clearly written giving authority to the architectural boards to implement and enforce such regulation
Qualifications for Registration
States must require a registration candidate to have a professional degree in a NAAB
(National Architectural Accrediting Board) accredited program. Alternatively, other education and experience requirements may be instituted to provide an equivalent level of qualification to education.
Candidates must be required to pass examinations
• Candidates to be of good moral character
Background checks: May consist of looking into whether or not the applicant has a felony record, has committed misconduct through AXP or examination processes, has violated any of the rules of conduct or practice
• Reciprocal registration is the process of becoming registered in other states than the initial state an architect is registered in. An architect may apply for registration in another jurisdiction if the architect:
Already is registered in another state
Has a NCARB Certificate
Makes application to the state and provides the information required by that state
Prior to receiving registration in another state, an architect may seek out new work in that state if the architect already has a license in another state, has an NCARB Certificate, notifies the board of the intent, and provides the state board with a statement that application for licensure will immediately be made if the architect receives the commission. This allows an architect to seek out potential work in other states without having to be licensed, however, as soon as the work is granted to such architect, the application for licensure must be made immediately; there must not be any practice of architecture without being licensed in the prospective state.
Firm Ownership
Where architecture firms are set up as a partnership, a limited liability partnership, a limited liability company (LLC), or a corporation, the following rules must in place for the ownership of the firm:
2/3 of the partners (if a partnership), managers (in an LLC), or directors (in the case of corporation board of directors, not stock holders) are registered architects or engineers
1/3 of the partners, managers, or directors are registered architects. (This allows non-design professionals to sit on corp. boards or partner in the firm, such as bankers, attorneys, advisors, accountants, etc.)
The person actually in charge of the architectural practice is a registered
The board may require the firm to file information about its organization with the state, including its ownership organization and managing officers. This would also allow the firm to practice under its firm name in other states without having to include the names of all partners and managers in its name; thus keeping the original name and reputation of the firm intact.
Structures Exempt from Registration Requirements
There are some structures that are not necessarily required to be designed by registered design professionals. NARB’s studies have shown that the majority of building officials concur that an architect must be used to design habitable and occupied structures and also to perform contract administration services. Even the most well-staffed and trained building departments are not always qualified to alone carry out the responsibility of protection of public health, safety and welfare; the registered design professional is needed.
Unless an architect is specifically required by the local jurisdiction, registration is not needed to design single and two-family homes and associated accessory structures
This exemption opens the doors for owners to design their own homes and for contractors/developers to design the homes they construct. This, however, does not offer protection for future owners of the dwellings.
An architect is not required to design farm buildings (barns, silos, sheds, etc). The occupancy of such buildings is limited to 10 people
The intent is to continue to allow farmers (and potentially other occupations) to continue their operations that they are accustomed to. Language in regulations may need to be adjusted by jurisdictions to limit size, height, or occupancy of such buildings. For example, a tall building close to property lines puts others at risk if it fails.
Unregistered persons can design features for buildings if these features do not affect structural or other safety measures of the building and if a permit is not required for such teature
Architect’s Involvement During Construction
An architect must be engaged in the minimum construction contract administration services; otherwise, if the owner proceeds with construction, it is considered that the owner is now engaged in the practice of architecture. (This gives legal standing allowing for enforcing and penalizing the owner). Minimum administration services include:
> Periodic site visits
> Shop drawing review
Reporting of code violations or deviation from contract documents to owner and building official or any other situation that the architect believes is a hazard to the public
• If a project architect is not engaged in these administration services, this fact must be reported to the building official
• State boards may waive the above requirements for particular project types
Regulating Unregistered Persons Practicing Architecture
Violating architectural registration law should be considered a crime, however, NCARB suggests the imposition of a civil fine (after a hearing). Violations include the practice of
architectural services, or aiding and abetting of such services by unregistered individuals If state laws allow certain submissions or designs to not be sealed by an architect, such documents must include a statement of that law providing the exemption. If a seal or applicable exemption is not included, any permit issued for the project is invalidated.
Practice by foreign architects
A registered architect outside of the US is allowed to practice architecture in affiliation with a local architect if the following conditions are met by the foreign architect:
Must show that he/she has a valid registration in good standing allowing for unlimited practice of architecture in his/her jurisdiction
»Must show that an agreement exists between NCARB and the architect’s registration jurisdiction
Must be affiliated with an architect registered in the state in which the project is taking place. Such US architect must take responsible control of all aspects of the project and submit a written statement to the state board identifying the foreign architect, his/her involvement, and the project.
The foreign architect must state its name, the local architect they are working in conjunction with, and the state in which the project is located
NCARB’s Legislative Guidelines and Model Law / Model Regulations - Summarized
Model Law
Model Law
Section 1 - Definitions
Good moral character - having a character that will allow the person to properly perform the duties of an architect to the client and public for the protection of health, safety, and welfare
Practice of architecture - As defined by NCARB Model Law. “Providing or offering to provide those services, hereinafter described, in connection with the design and construction, enlargement, or alteration of a building or group of buildings and the space within and the site surrounding such buildings, which have as their principal purpose human occupancy or habitation. The services referred to include pre-design, programming, planning, providing designs, drawings, specifications and other technical submissions, the administration of construction contracts, and the coordination of any elements of technical submissions prepared by others including, as appropriate and without limitation, consulting engineers and landscape architects; provided that the practice of architecture shall not include the practice of engineering as defined in (Statute Reference], but a registered architect may perform such engineering work as is incidental to the practice of architecture.”
Responsible control - As defined by NCARB Model Law. “That amount of control over and detailed professional knowledge of the content of technical submissions during their preparation as is ordinarily exercised by a registered architect applying the required professional standard of care, including but not limited to an architect’s integration of information from manufacturers, suppliers, installers, the architect’s consultants, owners, contractors, or other sources the architect reasonably trusts that is incidental to and intended to be incorporated into the architect’s technical submissions if the architect has coordinated and reviewed such information. Other review, or review and correction, of technical submissions after they have been prepared by others does not constitute the exercise of responsible control because the reviewer has neither control over nor detailed professional knowledge of the content of such submissions throughout their preparation.”
Section 2 - Fees
This section is used to describe the fees as set by the local statutes, such as application fees and registration renewal fees.
Section 3 - Registration Qualifications
• Registration applicant must provide the following:
Application
Fee associated with application
Evidence that education requirements have been met
Evidence that experience requirements have been met
Successful completion of examination
The state board can use NCARB’s procedures and certification that the education, experience, and examination requirements have been fulfilled as determined and accepted by NCARB
Applicants who hold an NCARB certificate and a valid registration in another state can be considered to satisfy requirements upon submission of application and applicable fees
Section 4 - Registration Renewal
Board must send registration renewal applicoolet on gistered architects at the
• Along with renevalapplication tect. Requrements for cottuin education credis for
applicable fee, the registration must be renewed.
approprate time period for enewat be renewed. on ofappliation and paying of
educatin completed by the architect. Requirements for continuing education is
• State boards must determine proces for einstaminatiof architects’ registrations that determined by state boards.
have not been renewed on time, including reexamination if needed
Section 5 - Certificate of Registration
Architets certficate must be conspicuously placed in their business or place of
employment
Replacement certificates (for lost or damaged certificates must be marked as
“duplicate”
Section 6 - Seal
• Seal must be of design as set by the state board
• Technical submissions required by public authorities or as required for construction must be sealed by the architect
• Signing and sealing of documents signifies that the architect had responsible control over the documents and has provided the professional standard of care
• An architect may only sign and seal documents if:
nitthey were prepared by the architect or by individuals under the architect’s responsible control
> The architect has reviewed the work by an architect in the same jurisdiction and has incorporated the work into his/her own submissions
> The architect has reviewed the work by an architect registered in another jurisdiction holding an NCARB Certificate and if the signing architect has reviewed and incorporated such work and the drawings are prototypical design (meant for multiple locations)
> Architect can seal work not required by law to be sealed if the architect has reviewed and incorporated the work
> If submissions are required to be sealed, building officials cannot accept unsealed documents, unless such documents are for projects not requiring a registered design professional and has such law exemption stated on the documents
An architect that has sealed (after reviewing) the work of an individual under the architect’s responsible control or the work of another architect must keep records demonstrating the standard of care taken in such review and incorporation of documents into the architect’s own work for a minimum of 5 years
Section 7 - Disciplinary Powers
The board has the right to discipline violation of rules by revoking, suspending, or annulling registration or institute payment of fines
Section 8 - Disciplinary Procedures
Charges against architect must be made in writing. At the discretion of the board, there must be a hearing where the accused can have a chance to defend himself/herself. If the board determines a violation was committed, it may order any of the charges listed.
The state secretary and clerk of the city or town in which the architect practices will be notified if a registration has been suspended, revoked, or annulled
• If a registration is revoked, application for reissuance can be made in a manner discretionary to the board
Section 9 - Registration Prima Facie Evidence
Architect’s registration must be considered “prima facie” (accepted as correct unless proven otherwise) in courts of the state the architect is registered in
Section 10 - Prohibition
No one can practice architecture unless licensed to do so
• Must not use the title of “architect”, “registered architect”, “Architectural Designer” or any other wordage that may cause others to believe the individual practices or offers to practice architecture if they are not registered
Retired architects may use the term “architect” to describe their profession as long as it is not in the context of offering architectural services
Must not aid or abet anyone not registered to practice architecture
Section 10A - Construction Contract Administration Services (CA) Required
• Owners who do not engage an architect in construction projects to provide CA, will be considered as unlawfully practicing architects. Minimum contract administration services are covered in the legislative guidelines section
An Owner can be considered as someone who holds a mortgage for the real property, holder of more than 10% equity in a property, a record owner of a property, the lessee of where the project is being taken place that has approval rights and a remaining term of not less than 10 years
An architect who sealed the technical submissions for a project, must also note on the submission if the architect was not employed to provide CA services. Within 30 days of construction start, the architect must file with the board and building official a notice stating the Owner, the project address and name, and name of the architect that was engaged for CA services (including him or herself). If no architect was engaged, the architect must state so.
The board may waive CA service requirements for a project or a project type if the board finds that the public is adequately protected in those cases
** Section 11 - Exceptions**
The following circumstances are not intended to be prevented by architectural law:
• Architecture and design for detached single and two-family residences, farm buildings, and building features as described in the legislative guidelines
• Submittals made by consultants, manufacturers, suppliers, owners, or contractors for project components
• Details or shop drawings required to be prepared by the contractor
• Management of construction contracts by contractors
Preparation of documents or CA by those under the responsible control of the architect Partnerships, Limited Liability Partnerships, Limited Liability Companies, Corporations and Professional Corporations may engage in architectural practice if the ownership structure and amount of owners/managers is as specified in the legislative guidelines (for example, 2/3 of owners to be licensed architects or engineers and at least 1/3 to be licensed architects). The individual responsible for the project must be licensed in the state the project is taking place.
A company offering architecture and construction services must have an architect involved in all aspects of the project, disclose to client that a registered architect is involved and obligated to participate on the project, the architect has responsible control over the project and will not be terminated without the client’s agreement, and that the architect’s services will comply with laws.
An architect with an NCARB Certificate can pursue architectural work (including competitions) in states that he/she is not yet registered in provided that the architect does not engage in architectural practice until he/she becomes properly registered in the state and properly notifies the state board and prospective clients of such intent
An architect who is licensed in another state can perform uncompensated (other than reimbursable expenses) professional services at the scene of an emergency (earthquake, flood, storm, etc.) if requested by a public officer or building inspector provided the situation was declared an emergency or major disaster by the US president, governor, or other authorized official.
Foreign architects may practice in US jurisdictions provided they are appropriately licensed in their nation, have an agreement between NCARB and their nation’s registration authority, and have a local architect in responsible charge. Foreign architects may not offer services without involvement of the local architect, and local architect must notify the state board of the involvement of the foreign architect and a description of the project.
• An individual under the responsible control of an architect maintaining good standing with NCARB, may use the title “intern architect” or “architectural intern”. This individual cannot practice architecture except as allowed under the responsible control of a registered architect.
Section 12 - Enforcement
The state board is responsible for enforcing the rules. If individuals refuse to obey a board’s decision, the board may engage the Attorney General or District Attorney for enforcement and a court hearing.
Section 13 - Penalties
Violations of the law can result in fines, imprisonment, or jail time
• State laws are typically written in a manner that provides governmental agencies, such as the state licensing boards, a way to develop regulations to support the statutes. These agencies may incorporate into their regulations the input from respected organizations, such as NCARB’s law guidelines and standards for education, experience, and testing. In the case of NCARB, the organization’s policies are made by individuals participating in the organization who are members of state and territorial boards.
NCARB’s Legislative Guidelines and Model Law / Model Regulations - Summarized
Model Regulations
Model Regulations
Purpose & Definitions
Regulations are used to interpret / support / implement the overarching statutes. The registration board is responsible for regulating the practice and registration of architects
- Severability: in the case that one or more aspects of law do not apply to a given circumstance, the remaining valid aspects of the law remain in effect
Education requirements and approved equivalents are provided by NCARB. Examination requirements are provided through NCARB’s Architect Registration Examination (ARE).
Experience requirements are provided through NCARB’s Architectural Experience Program (AXP)
- To protect the health, safety, and welfare of the public, NCARB has distinguished the following segments as crucial for architectural practice and continuing education (and examinations)
> Practice Management: This category focuses on areas related to the management of architectural practice and the details of running a business
> Project Management: This category focuses on areas related to the management of architectural projects through execution
> Programming and Analysis: This category focuses on areas related to the evaluation of project requirements, constraints, and opportunities
> Project Planning and Design: This category focuses on areas related to the preliminary design of sites and buildings
Project Development and Documentation: This category focuses on areas related to the integration and documentation of building systems, material selection, and material assemblies into a project
- Construction & Evaluation: This category focuses on areas related to construction contract administration and post-occupancy evaluation of projects
Educational activities that serve to provide for continuing education of architects must
provide at least 75% of the content devoted to Health, Safety, and Welfare subjects
General Provisions
-Public information:
A roster of registered architects must be available to the public. (Typically, the rosters are available on state board websites)
The jurisdiction can decide what other documents relating to an architect’s registration are to be made available to the public or kept private
• Communication with board members is permitted. Board members cannot discuss any specifics or potential decisions about an application for registration or a disciplinary matter, aside with assisting with procedures on proper submissions and navigating the process
The state board must maintain NCARB membership and keep up-to-date on NCARB’s policies. The board must also cooperate in establishing uniform standards for registration across the US
All forms and list of fees associated with registration and other processes must be made available to applicants
Registration and Examination
The state board may allow fee refunds for rejected applications. Refunds are not available for voluntary withdrawals after approval or if the applicant has taken an examination
Standards for Registration
- Applicant must demonstrate qualifications. Equivalent qualifications may also be shown by applicant that meet or exceed the minimum requirements Applicant must have good character in order to carry out his/her duties
- Meet education requirements
- Meet training / experience requirements
- Pass examinations
• Reciprocal registration can be granted to candidates who:
- Hold an NCARB certificate
- Hold a valid registration in another US or Canadian jurisdiction
- Files state’s application and pays applicable fee
• Candidates are considered eligible to begin examinations if they:
- Have a professional degree from a NAAB accredited institution, or Participating in the Integrated Path to Licensure Program (IPAL), or Have met the states minimum education and experience requirements
Depending on state procedure, either the state board or NCARB is responsible for reporting examination results to candidate
If violation of NCARB, state, or confidentiality agreements is suspected during examination process, the board must investigate and take appropriate action. For example, in the case of the examinations, the candidate agrees to not share any specifics about the exam or discuss specific exam material with others. In the past, candidates have violated this rule and gave out very specific questions and answers after taking an exam, which compromised many examination questions requiring NCARB to remove and revise such questions from circulation incurring large costs.
The state board may choose to allow appeal, review, or challenge of exam scores and specific questions
Test scores / results may be transferred to other state boards by the state or requested of CARB for purposes of NCARB certificate application or registration in another state When all state requirements have been satisfied, the board will issue a registration with the applicant’s name and registration number
• Each registration shall be valid for a period of time specifically set by the board. Renewal of registration may require:
Renewal fee
Continuing education requirements
• Continuing Education
- Typically, 12 continuing education hours are required for each calendar year of registration
- Continuing Education Hours (CEH) must be completed in Health, Safety, and Welfare subjects
- Excess hours cannot be used for future years of registration
Records of education hours completed must be maintained by the architect and can be audited by the board. The board may reject non-qualifying hours and allow the architect a period of time to complete the hours. Falsification of hours will lead to disciplinary action
Retired (emeritus status) architects, individuals called for military duty, serious medical conditions, or other hardship will be considered by the board for exemption from the hours
Retired or inactive members returning to practice must complete 12 CEH
-Registrations are not transferrable
-Emeritus Status (retired architect)
This status can be granted to individuals in good standing and if the architect applying for such status will no longer engage in practice of architecture, has been registered for 10 years, or is 65 years or older
Such status may also be granted to those that demonstrate that they physically or mentally are unable to practice
Professional Conduct
An architect engaging in the practice must be competent, meaning:
- Understands duty to protect Health, Safety, and Welfare of the public and can apply knowledge and skill of similarly practicing architects in good standing in the same locality
• Take into account state and building laws and regulations
- Architect is qualified by education, training, and experience to take on the specific project roles
• Must not engage in practice if board determines that competence is undermined by physical or mental impairments
• Must not have conflict of interest as stated in previous sections (compensation from multiple parties on the same project or product endorsements, financial interests, and must have impartial judgement when serving as interpreter of contract documents)
Full disclosure
- Architect must represent himself / herself accurately in qualifications
- Must not participate in and report decisions made by others that will adversely affect the safety of the public
- Must not make false statements
- Must not assist in registration application of unqualified individuals
- Must report other architects violating the law
Compliance with Laws
- Must not knowingly violate law
- Must not bribe building or government officials
- Workplace must not violate labor laws, fair labor standards, and must maintain a workplace free of discrimination
Professional Conduct
Offices practicing architecture must have a registered architect employed at the office
Architect must sign and seal documents that have been prepared by the architect, under the architect’s responsible control, or by reviewing the work of other architects
- Other than reasonable entertainment and hospitality, an architect must not make any gifts to prospective clients intending to influence their decision about a project the architect is interested in
- Architect with knowledge of a prospective candidate’s pursuit of registration must cooperate in the application and verification process without approving false information
• Architect’s Seal
- Architect must obtain a seal as specified by the board containing the architect’s name, registration number, and the words “registered architect” Seal must be used on each design drawing, on the cover and index pages of specifications, and cover pages on other technical documents
• Seals and signatures may be electronic
• Practice
- A company (corporation, LLC, or partnership) can only practice architecture when it receives a certificate of authorization from the state board
- The certificate of authorization is issued upon:
i. Completion of application including information of the registered architect directors, managers, and partners
ii. Submission of the company’s incorporation, registration, or charter
documents
ili. Payment of applicable fee
- The certificate of authorization can be revoked if it is shown that a firm leader or employee has violated the law while acting as agent of the company
- The practice of interior architecture is considered the design of new and existing buildings including additions and renovations. This practice involves spaces intended for human occupancy that must also meet code requirements such as construction type, building use, egress, etc. The practice of architecture does not include interior design services such as furnishings, furniture, decorations, paint, color schemes, wall or floor coverings, or window treatments.
Establishing a business
Establishing the Business
1. Define the target projects, clientele, and market that the business intends to pursue
High rises? High end residential? Affordable housing? Hospitality? Commercial? Developer?
Education? Several market sectors?
- Define the services that the practice will provide
Theoretical design? Full service? 3D physical modeling? Interior Design? Turn-key designs? - Business Development & Marketing
• What are the marketing strategies that the business will deploy? Will the firm work to target contractors, developers, homeowners?
• Networking at events such as tradeshows, professional organizations, presentations, etc. may also provide work for the office
Bringing in business and new projects is crucial to keep the firm in business
“Word of mouth” and repeat clients are often the most effective and successful strategies for new projects. It is the architecture firm’s best interest to provide good, quality, timely, service as agreed to. Building up a strong reputation is crucial - Establish the Firm Structure & Management
What are the goals for the business currently and in the future? Is there a goal to maximize tax advantages? Is the business anticipated to grow quickly or remain small? How many employees will there be? Is the business being started with a partner? Will the business eventually be transitioned to new owners
How the firm is registered and structured will influence how the firm may be run
Refer to NCARB Section #4 of this exam, Part A - Business Structures (p.36)
Choose projects carefully
Choose Projects Carefully
1. An architect must choose clients just as carefully as the clients choose the architect; prior history with clients or a client’s bad reputation can and should have an impact on decisions. Clients should be reasonably vetted before a decision to move forward in securing the project is made.
- The firm may even run a credit check on a client
- Quality of the client
Firm may contact previous firms the client has worked with to get an understanding of the
Architect may request proof from the client that the client has the ability to pay
2. Keep proper insurance. Some projects may just be too big for what the firm insurance coverage is for.
Sometimes a client or project circumstances require specific types of insurance, certain add-ons, or overall larger coverage; anything additional has to be accounted for in the fee charged to the client.
Not all projects may be appropriate to take on and not all clients are suitable for the firm
The firm must have the appropriate experience and ability to take on new projects and new project types
Tracking project fees
Tracking Project Fees & Progress
1. Track time against projects
Often done by keeping timesheets in which each employee enters the amount of time worked for a particular project or overhead hours
This data can help the firm understand the total effort required for a project, or particular areas of a project. Knowing the total time can assist in determining the effort required for future similar projects
The time spent can also be used to track whether or not a project is staying within the design budget and whether or not the timeline is on track
2. Watch for scope creep and changes in contract
Scope creep is completing work for a project that was not initially agreed upon or in excess to what is expected to be delivered by the architect
It is called scope creep, because often items are asked to be completed by a client that are just easier to accept than to renegotiate a contract for, or seem small enough to simply complete.
However, these tasks can add up and result in additional time spent on project, lost revenue and profit, and increased liability for a project
All scope changes to projects must be amended by contract and agreed to by the Client in writing. Scope changes can include changes in the initial information given about the project, changes in the building program, unforeseen site conditions, etc.
3. Keep track of all project expenses
Travel time and mileage
Prints
Legal services
Shipping and courier costs
4. Include direct expenses + overhead costs + profit in all projects
The budget for a project must be able to cover all direct expenses required to complete the work such as employee salaries and consultant fees
The project fee must also cover the overhead costs of running the office. This may include insurance costs, office supplies, utilities, software costs, marketing expenses, and building payments or rent
Profit must be included within design fees. In most cases, a business exists to thrive and be profitable; each contract or fee must be set up in a way to create profit for the firm
Accounts payable are the outstanding costs owed by the firm
Accounts receivable are the amounts that the firm has billed and is anticipating to receive payment on
When the amount of income is greater than the amount expended, that means that the firm has a profit. Profit allows the firm to reinvest in itself and its employees, to purchase new equipment and software, to offer perks, such as year-end bonuses, and to make the business viable and worth having
-Expenses that a firm may have include the following:
• Office-related items: Paying rent or mortgage for the office, utilities and phone bills, computers, software, maintaining the office, lawn service, repairs, company vehicle maintenance, office supplies, etc.
• Employee-related items: Paying employee salaries, benefits, professional development and license maintenance fees, fees associated with belonging to professional organizations, 401k plans
..
Professional items: paying consultant fees, attorneys, accounting, etc.
Insurances: workers compensation, general liability & property insurance, automobile insurance, professional liability insurance, etc.
Tax items: state and federal income taxes, payroll tax, etc.
Revenue minus expenses = profit (or loss)
- Cash Flow
An architectural firm, like most businesses, relies on a steady stream of cash in order to stay operational. This is often referred to as cash flow. The cash is required to keep pay roll (paying staff), pay for insurances, building utilities, software, and other business expenses
• If there is a delay in billing or clients are late on payments, this can put a cash flow strain on the business
• For example, the firm has been working for a while on a large project and is expecting a large payment to come in, but the payment is being delayed. The firm must continue to pay for utilities and staff salaries and is reaching into its cash reserves to make it happen. If payment does not come through soon, the firm managers may begin to worry about enough cash coming in to cover these expenses
Timely billings and payments are crucial to maintain healthy cash flow
Dispute resolution
Dispute Resolution
(between architect and owner): these same resolutions can also apply between owner and contractor
- Attempt to resolve disagreements without legal action by compromise or reaching an understanding
2. Mediation = if an agreement is not reached and legal action is taken, mediation is always the first and
least costly method of conflict resolution. An impartial third party is used to assist in negotiating a resolution. Mediation is NOT legally binding
3. Arbitration = typically the next preferred step if mediation does that achieve a resolution. Arbitration
consumes much less time and finances than litigation. An impartial arbitrators) provide a decision to the dispute. Arbitration IS legally binding
4. Litigation = most expensive, time consuming, and should be the last resort. Litigation makes the matter
public information and involves the typical process of courts and lawyers to settle the dispute
Risk and reward
Risk and Reward
- Each project inherently has its own risks and rewards
The selection of the projects that an architect works on must be carefully considered and assessed; is it worth the risk? What is the reward?
Risk
There is inherent risk in taking on a project overall. An architect is liable for the work he or she does on any project and is responsible for code compliance, health, safety and welfare of the pubic, and partially liable for building performance. (The contractor is also partially liable for building performance)
Consider that higher profile projects will be subject to more scrutiny
Consider the amount of exposure a project may have in public. For example, a high-rise office has a very large amount of exposure where there are significant numbers of employees and visitors that interact with that building. There are inherently more “encounters” with such a building by the public that can pose increased risk in life safety and magnitude of repercussions in case of any building component failure. On the other hand, a single-family home may have less individual “encounters” as the home may serve its initial owners and perhaps several other owners that it is passed onto through the life of the structure; there are far less “encounters” with this buildings type. With a home though, the occupants do spend their days and nights living in that space and the responsibility for health, safety and welfare is not diminished in any way Does the project align with the strengths and confidence in capabilities of the firm? A firm may reach a point where it would like to expand to other building types and market sectors; there are inherent risks in taking new projects types such as the learning curve involved and hiring staff to work on the project
Consider the opportunities that may have to be rejected due to taking on a particular project.
Unless clients are willing to wait, there may be some loss of other opportunities due to work load or conflict of interest with other potential clients, existing clients, or repeat clients by taking on a new project
Is there a risk to reputation and good standing by being associated with a particular project or client? Taking on a project should be carefully weighed if there are any potential harm to existing relationships, such as other clients, other design professionals and consultants, building officials and governmental agencies, contractors, and communities
Eliminate any conflict of interest when assessing which projects to take on Projects selected must be able to keep the firm profitable and financially stable. Though this not always apply if a project is done as pro-bono work or used as an “in” to a new market or clientele
3. Reward
• A high exposure or highly marketed project may give the firm more exposure in the design and construction industry, and in the local community
• A project may provide valuable experience in a particular building type or market sector, whether it is a new project type or further credibility in an existing type. A new project type may require a learning curve and additional resources to complete requiring sacrifice in profit, but allows you to take on that type of work
On the other hand, the firm may have systems and efficiencies in place for their typical projects allowing them to maximize their profit (which can potentially lead to being able to try other work)
Are there projects and/or clients that would simply be interesting and fun to work on? These types of projects can boost firm morale and creativity
• A project may align with overall objectives and goals for the future of a firm
4. Mitigating Risk
• Follow a well-written contract. Avoid scope creep; amend the contract if needed to include additional scope items. All parties much perform the duties agreed to.
Use AlA contracts or use attorney to write / review your contracts and review client’s contracts
Use professional help where appropriate:
Attorney: obtain legal advice on contracts, consult with when legal claims arise, and for general legal advice. Attorney can provide assistance in determining some of the legal risks posed with particular projects, clients, and scope of service.
Accountant: can assist in financial considerations for the business. This may include advice on firm financials such as tax liability, how to navigate the tax law for the best interest of the business and appropriate filing, can advise on ownership transfer, and assist in advising the business during financial hardships.
Attorneys and accountants can advise on how to properly structure the business in order to achieve long-term and short-term goals
• Establish a well-defined program and objective for the project. Attempt to gather as much detailed initial information as possible
• Use checklists to establish protocols for providing the correct services and all required deliverables for a project
• Use proven construction methods and details. Experimenting with unique systems and materials not previously used is a form of risk and potentially increases liability
• Communicate! Communicate effectively with the Owners, design team, contractor, and in-house staff. All decisions made must be clear. Do not assume information, always ask.
Clear definition of responsibility between consultants and office staff
Document all decisions, meetings, observations throughout projects. Maintain meeting minutes.
Maintain a tracking list of all notable events taking place during the project. This includes documenting all decisions made.
Careful consideration of last-minute changes and substitutions. Last minute and rushed changes are a common root cause for construction errors and failures. The architect must complete all due diligence in reviewing a proposed substitution and verifying its conformance with code, structural and life safety requirements.
Maintain proper insurances with sufficient coverage
Consult with insurances when taking on larger than usual projects and when considering new project types and service offerings
• Ensure indemnification clauses are used (party is held harmless from third party claims)
• Do not attempt to provide means and methods for construction. The architect’s role is to provide the design intent for the building, it is the contractor’s job to execute that design intent using the means, methods, and materials required to accomplish the task. The architect must not interfere in this role as this opens the architect to the liabilities of the contractor.
Do not attempt to correct safety concerns on site, but do mention safety concerns to contractor AND owner without taking responsibility for site safety
Negligence is a design professional’s failure to provide the standard of care or “due diligence” for its services. Architects are professionals who are entrusted to maintain the health, safety and welfare of the public
• Architect must not attempt to provide insurance advice, Owner and Contractor must seek advice from appropriate legal counsel and insurance advisors
Building and property owners
Building & Property Owners
1. Joint Tenancy: property is owned by two or more parties. Upon the death of a party, ownership is passed along to the others)
The decision making power in such ownership may be split amongst the various owners or decisions for a particular project may be delegated to a single owner
2. Tenancy in Common: Similar to joint tenancy, expect that when one of the owners die, their share of the property is passed on to their heirs
3. Partnership: is an individual entity in itself. When a partnership dissolves, the entity itself dissolves.
Similar to joint tenancy, decisions regarding a project may have input from multiple individuals
- Corporation: Leadership is comprised of a board of directors, but the corporation itself is a separate entity. Change in leadership does not necessarily constitute a change in the corporation entity itself
• Decisions and approvals regarding a project will likely need to be presented to the board of directors for voting and approval. Decisions that are being carried out must always consider that the stock holders of the company must be financially benefitted by the decisions of the board - Trustee: Someone who is entrusted to carry out a specific role in regards to physical or monetary property on behalf of the original party (trustor) for the benefit of the third party (beneficiary). This is often seen in inheritances of property or finances when a child reaches a certain legal age
The trustee is limited in decision making only as prescribed by the trustor, which can be extremely limited. Decisions regarding any projects to a property cannot be made by the beneficiary unless so allowed by the rules set by the trustor or until the beneficiary receives legal ownership of a property - Sole Proprietor: Owned and operated by a single individual with no legal distinction between the entity and the individual
Decision-making ability is typically unchallenged since the individual maintains the ability and right to make their own decisions
Types of property ownership
Types of Property Ownership
1. Absolute: The owners of a property own the property outright
Decisions regarding a project typically are not limited when the owner maintains true ownership of the property
2. Condominium: A building or complex comprised of individually owned units.
An owner of a condominium will likely have to adhere to the building complex rules and regulations regarding a project and any changes to the property. Modifications to shared spaces or building exterior is likely required to obtain approval from other building owners
3. Cooperative (Co-Op): Similar to condominium. Owners of individual units share ownership in the complex as a whole and are responsible for the complex’s maintenance and upkeep of common areas
• Like a condominium, a co-op ownership will likely have to adhere to set rules, guidelines, and approvals/decisions made by the co-op as a whole rather than final decisions resting with the individual unit owner
4. Lease: True ownership of a property rests with the property owner / landlord. The lessee typically enters a long-term lease agreement with the owner, which can last for decades (a little different than renting in which the contract term is typically one or two years)
Typically, someone with a leasehold has the power to make improvements and construction to the property, but decisions may be limited in that the property is reverted back to the owner once the lease contract expires
5. Sale and Leaseback: Owner of a property sells the property and immediately leases back the entire property or a portion of it. This is typically done to offload the debt associated with a company from its balance sheet to provide a more favorable financial outlook for the company
Depending on the agreement with the new owner of the property, the lease-holder may be obligated to get approval for all construction and improvement projects with the new owner
RFQs and RFPs
RFQ’s and RFP’s
1. RFQ’s and RFP’s are formal requests used by a variety of prospective clients to solicit information to begin a selection process of the architectural firm, developer, and/or contractor for a particular project
2. Requests for Qualifications (RFQ): The qualifications, staff experiences, past projects, and resources of a firm are submitted. An RFQ only contains the qualifications of a firm as requested demonstrating that the firm is qualified for a particular project
3. Requests for Proposals (RFP): Includes the RFQ plus an actual “idea” proposal for the project offering a potential solution that the architect sees best fit
The proposals are a way of gathering an architect’s ideas for how to accomplish a certain project RFP’s can be detailed and include specifics about a project including aesthetics, program, site, building type, construction methods, schedule, etc. and are used to assess a firm’s ability to best meet these requirements. Different projects may have different goals and priorities that are being sought out and it is the architect’s job to understand and address these concerns.
RFP’s can also be very open-ended where the client is not completely certain about what they want. An architect then provides the best ideas and approach to the project in hopes of being selected for the project.
It is important to answer the RFP and address any specific issues presented. Though it is important to answer the RFP specifics, the presented solutions must not provide intricate detail or set-in-stone decisions, but allow for flexibility in design as the project is further assessed and detailed.
4. Selection of the project team
Requests for proposals can be a team effort and include the entire project team such as developer, architect, and contractor
Selection may be simply based on lowest bid / fee
Selection can also be based on Best Value: consideration of both costs and qualifications, not just lowest fee
Or selection that is strictly based on qualifications and experience. Cost may not the leading factor if the quality and proper execution of the building design is most critical
Clarify project scope
Clarify Project Scope
Clarify what is to be included in the services provided
Anything outside of the listed services is an additional service and must be paid for by the client
Timeframes for services rendered must be included with the proposal, if appropriate
Understand the types of consultants required for the project
Design fee
Design Fee
1. Project budget vs. construction budget
- Construction budget is typically associated with a construction cost of a building only (the hard costs
- The total project budget must include professional design services, surveying, inspections and testing, legal fees, land costs, etc.
2. A client may or may not have a budget for professional design services. If client scope requests or project requirements exceed the client’s design budget, the following may be considered:
- Decline the project
- Lower profit margins (be careful with this as you don’t want to end up losing money and sacrificing firm economic health). Also this sets a bad precedent; that price would then always be expected for any future projects
- Reduce scope of the project
- Reduce scope of architectural services
Do not undercut your value, expertise, knowledge, and talent
- Billings
Firm may require a retainer (a portion of the fee) to be paid when the contract is executed prior to starting the project. This provides the firm with some working capital to begin the project, but also provides some confidence in the client’s ability and willingness to pay Progress billings are essential to maintaining healthy cash flow in the firm. Consistent progress billings, like the retainer, keep the architect in better position so that work being done does not get too far ahead of the payments being made
Progress billings on a regular basis also provide the client with the ability to see the design fees as the project progresses
Architectural fee structure
Architectural Fee Structures
1. Stipulated sum (lump sum / fixed fee contracts): Architect must determine the total effort required for a project and assign a monetary value to that. This can be done with a variety of different ways such an estimated amount of manhours required for the project multiplied by the associated hourly rates. Using past similar projects as a reference for the efforts required will provide valuable information.
Reimbursable expenses may be additional to the fixed fee given for basic design services.
2. Cost per square foot of building: cost of design services is given a dollar value for the square footage of a building. The value may be adjusted based on factors such as project complexity or total scope of services required
3. Cost per building unit: typically used for buildings with repetitive units such as hotels, apartment complexes, or hospitals where a cost per unit is multiplied by the total number of planned units
4. Percentage of construction cost: Architect may establish fee as a percentage of the cost of construction.
The percentage may be adjusted based on the size and complexity of the building. This fee structure is losing popularity due to the perception that an architect may be more inclined to raise construction costs rather than save on costs. From the architect’s standpoint, a low-cost project may require just as much work as an expensive project, therefore this fee type does not always provide for an agreeable arrangement.
5. Hourly Rates: These rates are typically determined by the direct cost of an employee to the firm including salary and benefits with a multiplier that covers overhead items and profit for the firm. For example, an architect is paid a salary that is equivalent to $36.00 per hour. The firm utilizes a multiplier of 3.3 which has been calculated as sufficient to cover expenses such as insurances, benefits, bills, and profit for the
firm. $36.00 X 3.3 = $119.00 as the hourly rate for that particular employee or job title
6. Cost Plus Fixed Fee: The fee is charged by the actual expenses the firm sustains for a project + a fee for firm profit. The expenses may include the associated staff costs, staff benefits, costs for printing, travel, shipping, office overhead, etc.
7. Multiple of Direct Salary Expense: A multiplier is used to multiply the direct salary of an employee. The multiplier covers employee benefits, overhead expenses, and profit for the office. This is similar to the example in the hourly rates, except that the client is shown this break down, whereas in the hourly rate system, that is the only number the client is presented
Multiple of Direct Personnel Expense: Similar to above, except that the break down includes a multiplier for the personal benefits of the employee (paid time off, benefits) and a multiplier for office overhead and profit
- Although the above are fee structures typically used, there may be various combinations of these for portions of the work performed. For example, schematic design is the most difficult to estimate a lump sum fee for since it may take many iterations for a design to be finalized; using an hourly rate may make sense for this portion of services
Concept of agency
Concept of Agency
1. The concept of agency describes the relationship of 3 parties; the principal, the agent, and the third party
- Principal = Owner
Agent = Architect
Third Party / Vendor = Contractor - An architect is an agent, or representative, of the owner (owner’s interests) during the construction process. The contractor as the “vendor” executes the contract and construction documents
The architect’s authority to bind the owner to decisions is relatively limited. The architect cannot make decisions for the owner unless specifically designated to do so. However, when reviewing and approving submittals, conducting site visits to determine conformance with contract documents, and certifying payment applications, the architect does act on the owner’s behalf and in the owner’s best interest
The architect does not necessarily have the authority to bind the owner to all decisions the architect may wish to make. This includes accepting non-conforming work and decisions that impact the schedule and cost of construction. The architect must always confer with owner when issues or conflicts arise during the course of the project
In the case where architect acts as the initial decision maker during a dispute between the owner and contractor, the architect must make a decision based solely on the contract documents and their intent, and must not be partial to either the owner or contractor
Types of design contracts
Types of Design Contracts
1. Architect as project manager (typical A101 contract)
Architect is the primary project design manager and brings in consultants as required for the design of the project
2. Multiple Prime Design Consultants
° Owner contracts separately with primary consultants (for example, façade designer, HVAC engineers, historic preservation specialists)
o If these consultants work under the client’s contract, then the architect does not deal with their contract, payments or liabilities, but the architect has less control over directing the consultant and influencing the outcome of the project.
Coordination and careful communication becomes a more complicated issue with multiple prime
consultants
3. Joint Venture
2 or more design firms coming together, typically for a specific project
Often when an international or out of state firm partners with a local firm for a specific project Tax liabilities are the responsibility of each member of the venture. A new business organization is not created, this is a contractual relationship only
Minimum components that form a contract
Minimum Components that Form a Contract
- The AlA-published contracts are the basis for the A.R.E. examination; however, AlA contracts will not always be used in practice
- The minimum conditions that should be included in a contract between the owner and architect for it to function properly:
Initial information = information that the project is based on and is relied upon to perform
design services
Responsibilities of the Architect = the services that will be provided and within what time frame
Responsibilities of the Owner = provide program, land survey, geotechnical report, or any other
piece of information about the existing property or building. Provide goals for the project.
Conditions of the Contract =
Indemnification = hold each other harmless (especially in third party suits)
Waiver of subrogation = ensures risk of loss is on insurance companies
Contract termination = there must always be a way out of a contract
Dispute resolution = mediation first, then arbitration or litigation
Cost for services provided and payment terms
AIA contracts
AIA Contracts
1. Types of contracts used for various services and project delivery methods
Refer to PjM Exam NCARB Section #3, Part A - AlA Contracts & Forms (p.48)
For the purposes of this exam, not all of the contract types and forms are required to be studied, however, the candidate should be familiar with their titles and have knowledge of their applicability
• Refer to PjM Exam NCARB Section #3, Part B - Owner-Architect Contracts (B Series) (p.49)
Refer to PjM Exam NCARB Section #3, Part C - Fundamental Concepts of the Contract (p.49)
• Refer to PjM Exam NCARB Section #3, Part E - B101-Standard Form of Agreement Between Owner and Architect (p.51)
Refer to PjM Exam, NCARB Section #3, Part F - C401-Standard Form of Agreement Between Architect and Consultant (p.55)
Construction Fee Types
Construction Fee Types
- Lump Sum (stipulated sum): The total cost is provided for a project
- Guaranteed Maximum Price (GMP): Typically used when all details for a project have not yet been determined or scope is not clearly defined. The contractor provides a maximum price for which the construction can be completed
Cost + fixed fee: The contractor charges the direct costs associated with a project + a fee to cover the overhead and profit of the contractor. Typically used when the scope of the project has not been finalized or contains complexities that are difficult to estimate (such as renovation projects with many hidden
Issues)
The owner may have the benefit of receiving cost savings if construction costs end up less than anticipated, but also risks paying for a higher than anticipated construction cost (unless capped by a GMP)
Project delivery Methods
Project Delivery Methods
1. Design - Bid - Build
Most common delivery method. Consists of clearly delineated phases of design, bidding, and then construction
Usually required for public projects
Clearly defined roles
Two separate contracts between Owner-Architect & Owner-Contractor
The architect is not contractually tied to the contractor. However, the architect does administer the contract and provides support to the contractor throughout construction and bidding such as through submittal review, substitution review, and answering requests for information
–characteristics– slower delivery time, potentially allows for slimmer profits for contractor, advesarial relationships, no input from contractor during design, design criteria is set by owner
2. Design - Build
Can be Contractor-led or architect-led
Owner does not have as much control over some aspects of design and quality of material which can lead to disputes
One contract between owner and design/construction team
Not a complete system of checks and balances like in Design-Bid-Build. Whether the team is contractor led or architect led, either of these may have more influence on project decisions
Owner may hire an advisor to assist with the process and quality control Allows for a fast track schedule
Likely will provide a guaranteed maximum price to complete the project. This is done prior to completion of design, however, at a point far enough along where the program of the building, its goals, and general systems and materials are agreed upon
At the outset of the project, the owner may hire a design professional to develop the project requirements for the project including program, scope drawings and specifications. These are then presented to potential design-builders to bid on and take over for construction documents and construction. This concept is known as “bridging”
3. Construction Manager as Advisor (CMa)
* Construction manager can be hired by the owner to assist owner in managing the project during construction
* The CM may also serve as advisor to the owner during design and provide insights to costs, availability, and constructability of the proposed design
Where the CM does not assume the construction risk (as discussed below), the AIA A232 contract is used - “General Conditions of the Contract for Construction, Construction Manager as Adviser Edition”
4. Construction Manager at Risk (CMr)
- Allows for a fast track schedule
- Can serve as advisor to the Owner during design phase
- Construction manager takes responsibility of construction cost and performance
- Involved throughout design process and can provide costs prior to drawing completion
- Typically provides a GMP (guaranteed maximum price) to complete the project
5. Integrated Project Delivery
* A concept that requires all parties to be involved in the design process as early as possible and everyone has input. This includes engineering and specialty consultants such as MEPs, lighting, acoustics, the contractor, key subcontractors, and vendors
The intent is that a project will be well-coordinated, well-designed, and come in at an efficient and economical cost due to all of the input from contractors, suppliers, vendors, and designers
Construction Manager as Constructor CMc
more risk for CMc
two methods for setting construction cost
speed of delivery
Business Structures
Business Structures
1. The way a business is structured allows the business and its owners certain actions, benefits, liabilities, business expansion opportunities, and how a business may transfer ownership
2. Sole Proprietorship: A single owner of the business. Although this may be the simplest structure, there is no differentiation between the owner and the business, all liability rests on the owner / individual; the personal property of the business owner is at risk in case of any lawsuits or debt collections. This is commonly seen in very small or single-person firms. Taxes of a sole proprietorship are assessed on the income of the business / owner
3. Partnership: The business is owned by two or more individuals. Typically, the partners offer a unique skillset in the business relationship that gives them an advantage in conducting the business together. For example, one partner may be good at the financial and business side and the other good at the design aspects. Unless this is set up as a limited liability partnership, the partners may be personally liable for any mishaps in the business or misconduct/malpractice of the other partners. Profits and losses are passed to the partners and taxed as personal tax
4. Limited Liability Partnerships: See partnership above. The partners have limited liability in the actions of other partners and the business. The business consists of the general partners who have ability to make decisions and limited partners, who are typically silent and act as investors
5. C-Corporations: A corporation is a separate legal entity from its owners that is taxed and held liable as an individual would be, which offers the most protection to personal liability. Corporations are more expensive to form and require significant efforts in record-keeping and accounting. Corporations are also
“double-taxed”, meaning the corporation is taxed when it makes a profit, and the shareholders (owners) are also taxed when dividends are paid out. In terms of ownership transfer, corporations provide for the simplest and longest life of a company since the company does not dissolve if an owner sells his/her shares or leaves the company. Corporations are also able to raise money rather easily by selling stock
6. S-Corporations: Are similar to C-corps in that ownership is easily transferred via stocks. In many cases, a benefit of S-corps is that the “double taxation” is limited to a certain amount; some profit and losses are passed through to the owner’s income and the corporation itself is not taxed (this varies greatly by state).
§ Corps are limited to 100 shareholders
7. Limited Liability Companies (LLC): Is considered the middle ground between a partnership and a corporation. The business becomes its own entity and the personal property of the business owners) is separated from business liability, losses, bankruptcy, or lawsuits. Unless there is an agreement in place for ownership transfer, if a managing member of an LLC leaves or is replaced, the organization would have to be dissolved and reformed (this can potentially limit ease of expansion of the firm). LLC’s don’t face corporate taxes, however, members in an LLC are considered self-employed (like sole proprietorship) and must pay taxes individually; profit or losses are assessed through as personal income. If there are multiple members, the taxes are paid according to share of ownership each “partner” has. All members or managers in an LLC can have authority to participate in the decision making and running of the business
8. Professional Limited Liability Company (PLLC): Similar to LLC expect that it is a specialized company used by certain licensed professionals
9. Joint Ventures: 2 or more design firms coming together, typically for a specific project; often when an international or out of state firm partners with a local firm for a specific project. Tax liabilities are the responsibility of each member of the venture (a new business organization is not created; this is a contractual relationship only). Careful considerations and precise contracts must be established to set how liability is shared and how profits are distributed
Evidence-Based Design
Evidence-Based Design
1. Basing design decisions and strategies on research conducted in the built environment. This can be feedback from user groups after using a building or data gathering of how various conditions relate to measureable aspects such as building performance or health or users. Examples of this can be found in hospitals and schools that have maximized daylight entering buildings and have found that patients felt better quicker and students performed better on tests
The findings and studies are used to establish design methods, criteria, and features for future projects
Office Organizational Structures
Office Organizational Structures
1.Architectural offices can be organized in a myriad of different ways. The organizational structure can be affected by the size of the firm, the business type, and the types of projects the firm does. A sample of common organizational structures is as follows:
2. Project Teams: A project is given to a single team that sees the project through from beginning to end.
Certain team members will be assigned various tasks from schematic design, to plan development, to detailing, to specifications, to contract administration. Typically, the teams are led by a senior architect or project manager
This structure can be hierarchical, where the interns and designers receive direction from the junior architect who receives direction from the senior architect who receives direction from a project manager or firm principal
3. Departmental: A project is given to various departments within the firm. The schematic design team may put together the concepts, then the project gets passed along to the design development and construction documents team that put together the working drawings, and finally the project passes on to the contract administration team that closes out the project. A benefit may be that the departments are very efficient in the tasks that they do. A negative can be that the design concept may not be well communicated and lost from what was intended by the initial schematics; the initial goals of the client may not be well known by the department working on the final aspects of the project
4. Specialties: There may be several aspects of an office that provide services as separate departments / individuals whether or not working in team or departmental structures. For example, specification writers may be an individual or group in an office that puts together the specifications for all the projects. The same may be true for interior designers, or construction cost estimators if the firm has these services in-house
Quality Control in an Architect’s Office
Quality Control in an Architect’s Office
1. Pre-design meetings: Gather as much information from the client as possible from the beginning.
Conduct initial meetings with the project/design team so that everyone is aware of project goals and objectives
- Progress meetings at the end of each design phase: These meetings can be used to ensure that the design intent and program are still being met, that the project is on track and on budget, and that there is an understanding of the work and details that has yet to be completed and decided on
- Third party reviews - a qualified individual from the office not engaged with the project can be asked to review the work. A fresh set of eyes can help identify errors or omissions in the documents
- Maintain and refer to checklists of items or tasks needed to be accomplished by the project
5.Communication in-house, with the client, and with consultants Hold regular meetings or conferences with outside consultants - Use standard templates, details, and notes when appropriate, including using CAD standards
National Ethics Council NEC
AIA Architect members are appointed to the National Ethics Council (NEC) by the AIA Board of Directors. The AIA Bylaws delegate to the NEC the authority to interpret and enforce the AIA Code of Ethics. Complaints submitted to the NEC are handled according to the NEC’s Rules of Procedure.
NEC decisions that result in a code violation and discipline may be appealed to AIA’s Board of Directors. In cases where termination is the recommended penalty, decisions are automatically appealed to the Board of Directors.
Filing a complaint nec (National Ethics Council)
Filing a complaint
A complaint may be filed with the NEC by an AIA member, chapter, or anyone directly aggrieved by the conduct of an AIA member. The NEC has the primary authority to determine whether a violation of the Code of Ethics has occurred and, if so, what penalty (including potential termination of membership) should be imposed. In doing so, it follows the process stated in the Rules of Procedure, which are designed to protect the rights of both the complaining party and the member who is the subject of the complaint. If the NEC finds that a violation has occurred, its decision may be appealed to the AIA’s Board of Directors.
The NEC does not independently investigate or prosecute cases against AIA members. It is the sole responsibility of the Complainant and Respondent to submit evidence, call upon and produce witnesses, and present their respective cases. The NEC’s deliberations and decisions are based solely on what the Complainant and Respondent present and submit as part of the case record.
Please note: Ethics complaint filings cannot be filed anonymously. The Complainant’s identity and all submissions will be forwarded to the Respondent in order for the Respondent to submit a Response.
Canons / ethical standards / rules of conduct
▪ Canons are broad principles of conduct.
▪ Ethical Standards (E.S.) are more specific goals toward
which Members should aspire in professional performance
and behavior.
▪ Rules of Conduct (Rule) are mandatory; violation of a Rule
is grounds for disciplinary action by the Institute. Rules of
Conduct, in some instances, implement more than one (1)
Canon or Ethical Standard.
Canon 1
General obligations
Rule In practicing architecture
1.101 Members shall demonstrate a
consistent pattern of reasonable
care and competence, and shall
apply the technical knowledge and
skill which is ordinarily applied by
architects of good standing
practicing in the same locality.
Commentary: By requiring a “consistent pattern”
of adherence to the common law standard of
competence, this rule allows for discipline of
Members who more than infrequently does not
achieve that standard. Isolated instances of
minor lapses would not provide the basis for
discipline.
Rule Members shall not engage in
1.401 harassment or discrimination in
their professional activities on the
basis of race, religion, national
origin, age, disability, caregiver
status, gender, gender identity,
or sexual orientation.
Commentary: Harassment may include, but is
not limited to, offensive jokes, slurs, epithets or
name calling, unwelcome physical contact, or
threats, intimidation, ridicule or mockery,
insults or put-downs, offensive objects or
pictures, and interference with work
performance. Petty slights, annoyances, and
isolated incidents (unless extremely serious) will
not rise to the level of violation of this Rule.
Rule Members shall not engage in
1.402 conduct involving wanton disregard
of the rights of others.
Commentary: Wanton disregard under this
rule includes conduct taken in disregard of (1)
a high degree of risk that the Complainant
would be adversely affected, and (2) that risk
would be apparent to a reasonable person.
“Reasonable person” is an objective standard
and considers someone who uses such
qualities as attention, knowledge, intelligence,
and judgement which a society requires of its
members to protect their own interests and
the interests of others. Wanton disregard
under this rule also includes engaging in
conduct that is severe or pervasive enough
that a reasonable person would consider it
harassing, hostile, or abusive. This includes,
but is not limited to, sexual misconduct,
bullying, intimidation, or retaliation.
Rule Members shall not knowingly
1.403 design spaces intended for execution.
Commentary: The purpose of Rule 1.403 is
not to address individual positions or opinions.
Rather, it is to codify how Members choose
to embrace the highest standards of
professionalism, integrity, and competence.
They are part of a community of regulated
professionals who, through their required
education, training, and practice, protect the health, safety, and welfare of those who come
into contact with their work
Rule Members shall not knowingly
1.404 design spaces intended for torture,
including indefinite or prolonged
solitary confinement.
Commentary: For the purpose of Rule 1.404,
solitary confinement shall be defined as the
confinement of prisoners for twenty-two (22)
hours or more per day without meaningful
human contact. Prolonged solitary confinement
shall be defined as solitary confinement, as
defined above, for a time period in excess of
fifteen (15) consecutive days.
Canon 2
Obligations to the public
Rule Members shall not, in the conduct
2.101 of their professional practice,
knowingly violate the law.
Commentary: The violation of any law, local,
state or federal, occurring in the conduct of a
Member’s professional practice, is made the
basis for discipline by this rule. This includes the
federal Copyright Act, which prohibits copying
1
architectural works without the permission of the
copyright owner. Allegations of violations of this
rule must be based on an independent finding of
a violation of the law by a court of competent
jurisdiction or an administrative or regulatory
body.
Rule Members shall neither offer nor
2.102 make any payment or gift to a public
official with the intent of influencing
the official’s judgment in connection
with an existing or prospective
project in which the Members are
interested.
Commentary: This rule does not prohibit
campaign contributions made in conformity
with applicable campaign financing laws.
Rule Members serving in a public
2.103 capacity shall not accept payments
or gifts which are intended to
influence their judgment.
Rule Members shall not engage in
2.104 conduct involving fraud.
Commentary: This rule addresses serious
misconduct whether or not related to a
Member’s professional practice. Proof of fraud
must be based on an independent finding of a
violation of the law or a finding of fraud by a
court of competent jurisdiction or an
administrative or regulatory body.
Rule If, in the course of their work on a
2.105 project, the Members become
aware of a decision taken by their
employer or client which violates
any law or regulation and which will,
in the Members’ judgment,
materially affect adversely the
safety to the public of the finished
project, the Members shall:
(a) advise their employer or client
against the decision,
(b) refuse to consent to the
decision, and
(c) report the decision to the local
building inspector or other
public official charged with the
enforcement of the applicable
laws and regulations, unless the
Members are able to cause the
matter to be satisfactorily
resolved by other means.
Commentary: This rule extends only to violations
of the building laws that threaten the public
safety. The obligation under this rule applies only
to the safety of the finished project, an obligation
coextensive with the usual undertaking of an
architect.
Rule Members shall not counsel or
2.106 assist a client in conduct that the
architect knows, or reasonably should
know, is fraudulent or illegal.
Rule Members making public statements
2.301 on architectural issues shall disclose
when they are being compensated
for making such statements or when
they have an economic interest in
the issue.
Rule When performing professional
2.401 services, Members shall make
reasonable efforts to inform their
clients of the potential
environmental impacts or
consequences the Members
reasonably believes may occur as a
result of work performed on behalf
of the clients.
Canon 3
Obligations to the client
Rule
3.101
In performing professional services, Members shall take into account applicable laws and regulations.
Members may rely on the advice of other qualified persons as to the intent and meaning of such regulations.
Rule
3.102
Members shall undertake to perform professional services only when they, together with those whom they may engage as consultants, are qualified by education, training, or experience in the specific technical areas involved.
Commentary: This rule is meant to ensure that Members not undertake projects that are beyond their professional capacity. Members venturing into areas that require expertise they do not possess may obtain that expertise by additional education, training, or through the retention of consultants with the necessary expertise.
Rule
3.103
Members shall not materially alter the scope or objectives of a project without the client’s consent.
Rule
3.201
Members shall not render professional services if the Member’s professional judgment could be affected by responsibilities to another project or person, or by the Member’s own interests, unless all those who rely on the Member’s judgment consent after full disclosure.
Commentary: This rule is intended to embrace the full range of situations that may present Members with a conflict between their interests or responsibilities and the interest of others.
Those who are entitled to disclosure may include a client, owner, employer, contractor, or others who rely on or are affected by the Members’ professional decisions. Members who cannot appropriately communicate about a conflict directly with an affected person must take steps to ensure that disclosure is made by other means.
Rule
3.202
When acting by agreement of the parties as the independent interpreter of building contract documents and the judge of contract performance, Members shall render decisions impartially.
Commentary: This rule applies when the Member, though paid by the owner and owing the owner loyalty, is nonetheless required to act with impartiality in fulfilling the architect’s professional responsibilities.
Rule
3.301
Members shall not intentionally or recklessly mislead existing or prospective clients about the results that can be achieved through the use of the Members’ services, nor shall the Members state that they can achieve results by means that violate applicable law or this Code.
Commentary: This rule is meant to preclude dishonest, reckless, or illegal representations by Members either in the course of soliciting a client or during performance.
Confidentiality:
Members should safeguard the trust placed in them by their clients.
Rule
3.401
Members shall not knowingly disclose information that would adversely affect their client or that they have been asked to maintain in confidence, except as otherwise allowed or required by this Code or applicable law.
Commentary: To encourage the full and open exchange of information necessary for a successful professional relationship, Members must recognize and respect the sensitive nature of confidential client communications. Because the law does not recognize an architect-client privilege, however, the rule permits Members to reveal a confidence when a failure to do so would be unlawful or contrary to another ethical duty imposed by this Code.
Canon 4
Obligations to the profession
Rule
4.101
Members having substantial information which leads to a reasonable belief that another
Member has committed a violation of this Code which raises a serious question as to that Member’s honesty, trustworthiness, or fitness as a Member, shall file a complaint with the National Ethics Council.
• aia-code-of-ethics-april-2024.pdf
Commentary: Often, only an architect can recognize that the behavior of another architect poses a serious question as to that other’s professional integrity. In those circumstances, the duty to the professional’s calling requires that a complaint be filed. In most jurisdictions, a complaint that invokes professional standards is protected from a libel or slander action if the complaint was made in good faith. If in doubt, Members should seek counsel before reporting on another under this rule.
Enforcement of Rule 4.101 refers to and supports enforcement of other Rules. A violation of Rule 4.101 cannot be established without proof of a pertinent violation of at least one (1) other Rule.
Rule
4.102
Members shall not sign or seal drawings, specifications, reports, or other professional work for which they do not have responsible control.
Commentary: Responsible control means the degree of knowledge and supervision ordinarily required by the professional standard of care.
With respect to the work of licensed consultants, Members may sign or seal such work if they have reviewed it, coordinated its preparation, or intend to be responsible for its adequacy.
Rule
Members speaking in their
4.103
professional capacity shall not knowingly make false statements of material fact.
Commentary: This rule applies to statements in all professional contexts, including applications for licensure and AlA membership.
Rule
4.201
Members shall not make misleading, deceptive, or false statements or claims about their professional qualifications, experience, or performance and shall accurately state the scope and nature of their responsibilities in connection with work for which they are claiming credit.
Commentary: This rule is meant to prevent Members from claiming or implying credit for work which they did not do, misleading others, and denying other participants in a project their proper share of credit.
Rule
Members shall make reasonable
4.202
efforts to ensure that those over whom they have supervisory authority conform their conduct to this Code.
Commentary: What constitutes “reasonable efforts” under this rule is a common sense matter. As it makes sense to ensure that those over whom the architect exercises supervision be made generally aware of the Code, it can also make sense to bring a particular provision to the attention of a particular employee when a situation is present which might give rise to violation.
Enforcement of Rule 4.202 refers to and supports enforcement of other Rules. A violation of Rule 4.202 cannot be established without proof of a pertinent violation of at least one (1) other Rule.
Canon 5
Obligations to colleagues
Rule
5.101
Members shall treat their colleagues and employees with mutual respect, and provide an equitable working environment.
Rule
Members who have agreed to
5.201
work with individuals engaged in an architectural internship program or an experience requirement for licensure shall reasonably assist in proper and timely documentation in accordance with that program.
Rule
Members shall recognize and
5.301
respect the professional contributions of their employees, employers, professional colleagues, and business associates.
Rule
5.302
Members leaving a firm shall not, without the permission of their employer or partner, take designs, drawings, data, reports, notes, or other materials relating to the firm’s work, whether or not performed by the Member.
Rule
5.303
Members shall not unreasonably withhold permission from a departing employee or partner to take copies of designs, drawings, data, reports, notes, or other materials relating to work performed by the employee or partner that are not confidential.
CANON VI
Obligations to the Environment
CANON VI
Obligations to the Environment
Members should recognize and acknowledge the professional responsibilities they have to promote sustainable design and development in the natural and built environments and to implement energy and resource conscious design.
Rule
6.501
Members shall consider with their clients the environmental effects of their project decisions.
RULES OF APPLICATION, ENFORCEMENT, AND AMENDMENT
Application
The Code of Ethics and Professional Conduct applies to the professional activities of all members of the AlA.
Enforcement
The Bylaws of the Institute state procedures for the enforcement of the Code of Ethics and Professional Conduct.
Such procedures provide that:
(1)
Enforcement of the Code is administered through a National Ethics Council, appointed by the AlA Board of Directors.
(2)
Formal charges are filed directly with the National Ethics Council by Members, components, or anyone directly aggrieved by the conduct of the Members.
(3)
Penalties that may be imposed by the National Ethics Council are:
(a) Admonition
(b) Censure
(c) Suspension of membership for a period of time
(d) Termination of membership.
(4) Appeal procedures are available.
(5)
All proceedings are confidential, as is the imposition of an admonishment; however, all other penalties shall be made public.
Enforcement of Rules 4.101 and 4.202 refer to and support enforcement of other Rules. A violation of Rules 4.101 or 4.202 cannot be established without proof of a pertinent violation of at least one (1) other Rule.
Suspension/Termination for Certain Crimes
Upon the National Ethics Council’s determination that a member has been charged or indicted with a felony or misdemeanor for violence or threats of violence, perjury or falsification, sexual offenses, or any offense involving violations of the civil rights of any person under the Constitution or laws of the U.S. or any state or any state or territory, such member shall automatically be suspended from membership.
Such suspension shall be automatically lifted if the felony or misdemeanor charges are dismissed, or the member is found not guilty of such charges.
The member’s suspension shall automatically convert to termination of membership, if such member is convicted of, pleads guilty or nolo contendere to or has been given probation before judgment for any felony,
misdemeanor, or any offense in any other state, territory, or country which would be a felony or misdemeanor if committed in any
U.S. state or territory and involves the conduct referenced.
In such cases, the member will be notified, and provided the opportunity to appeal the NEC’s actions under the processes described in Bylaws, Section 8.1; the AlA Rules of the Board; and the NEC’s Rules of Procedure.
Canons 1-6
Canon 1
General obligation
Canon 2
Obligation to the public
Canon 3
Obligation to the client
Canon 4
Obligation to the profession
Canon 5
Obligation to colleagues
Canon 6
Obligations to the environment
Which requirements apply to a professional architectural corporation
A certificate of authorization may be required in some states
Articles of incorporation must be filed with the states secretary Secretary of State
Stockholders, directors and officers must be licensed architects
Non compete clauses ( restrictive covenants in an arch firm)
can be part of an employee contract with an employer and limit what the employee may do if the employee leaves the firm. Such covenants may restrict for whom the employee works for a specific amount of time, whether or not the employee can set up a competing business, whether or not the employee can work for the firm’s clients, or restrictions on passing on confidential information.
Stopping moonlighting
By using an employment contract, the firm can spell out exactly what is and is not allowed by the employee, which may include a prohibition of moonlighting or taking jobs outside the firm.
The architect’s role as the owner’s agent is best described as
working for the owner in certain designated areas where the architect has been given the authority to act on the owner’s behalf
The multiple of direct personnel expense (DPE)
Multiple of direct personnel expense
The multiple of direct personnel expense (DPE) is a compensation method that adds an amount to the payroll cost of technical personnel to cover the architect’s overhead, profit, and indirect expenses. The DPE is calculated by multiplying the salaries and benefits of the designated personnel by a factor that represents the overhead and profit
What it is
The architect’s compensation is added to the payroll cost of technical personnel
When it’s used
Traditionally used for projects without a fixed construction budget or where the scope couldn’t be defined
How it’s used
The architect is paid for the amount of time required for their services on the project
What it includes
The architect’s compensation is added to the payroll cost of technical personnel to cover overhead, profit, and indirect expenses
Tort
A tort is a civil wrong that occurs when someone’s negligence causes an injury. If a plaintiff can prove these four elements, they may be able to receive compensation from the person or group responsible. This compensation can include medical treatment, rehabilitation, and other damages.
The four elements of a tort are:
• Duty: The accused had a legal obligation to act in a way that would not cause injury.
• Breach of duty: The accused did not meet the required standard of care.
• Causation: The accused’s breach of duty was the proximate cause of the injury.
• Damages: The plaintiff suffered actual harm or loss.
Monitoring architectural fees and percentage of project completion is done
Weekly
Net multiplier
The net multiplier expresses the ratio of net revenue to direct salary expense.
Net revenues $
Net multiplier = ——————————
Direct salary expense $
The net multiplier, then, expresses how many dollars of revenue come into the firm for each dollar paid to employees. Employees must generate more revenue than their direct salary expense for the firm to continue to operate, pay for all indirect expenses (e.g, rent, insurance, benefits), and remain profitable.
Net revenues
Net revenues are the total amount of revenue generated by the firm’s own forces. This excludes “pass-through” income such as consultant’s fees and reimbursable expenses.
Direct salary
Direct salary expense is the amount paid to the firm’s work-force, excluding the value of benefits such as insurance. Direct personnel expense includes the value of benefits.
