UNDERSTANDING FEES

It is natural for clients to initially want to know exactly how much our services are going to cost. The truth is that at the start, we don't know for sure. This is actually a good thing. There are so many variables in the process of designing a project that if we were to quote a firm price at the start, we would have to set it high to cover the unknowns. What we recommend instead is to work hourly at the beginning of the project when the process is most variable. Each client and project is unique. In some cases, the Architectural Program – the written description of the client wants – is complete and clear. Sometimes, we need to help the client with their Program. Our time spent on Schematic Design (the first of three design steps) can also vary. Occasionally, our initial (schematic) design may fit the client's needs and budget on the first try. Usually, it takes several tries because not only do we expect the schematic design to satisfy the client's program, but we also ask a contractor to give an early estimate based on square foot costs so that the budget is also met. Since so much of our work is striving for affordability, Schematic Design can hold many unknowns and challenges. Typically, Schematic Design is responsible for 15% of an architect's fee. For fairness, it is the part of our work we most think needs to be billed hourly.

This process of “design, then price” is repeated several times as we get closer and closer to construction. However, after the project passes the initial wicket of Schematic Design and Estimated Construction Cost, we can usually quote a fixed fee for the remainder of the project. We try to save fee during schematic design by simply using Gar's free hand sketches at 1/4” = 1’ scale. That way, schemes can be changed very quickly as opposed to entering them into our CAD (Computer Aided Design) program. At the start of Design Development (our second phase), we do start using CAD. Entering the scheme takes time because this is the start of creating the design in three dimensions for the eventual Contract (construction) Documents. The MAC based program we use (ARCHICAD) was the forerunner of the BIM (Building Information Management) system the Federal Government now requires for all their building projects. We have always liked it because once the design is entered, it allows perspective views to be generated inside or out from anywhere in the project. The AIA standard % for Design Development, is 20%. Because so much of the initial computer entry is reused in the final design phase, Contract Documents, we estimate the Design Development phase at 30% and reduce Contract Documents from the standard 40% to 30.

Besides setting up the building in a three dimension format, Design Development is where finishes and fixtures are selected and lighting and mechanical; systems evaluated so that at phase end, our general contractor can include their subs for a more accurate Estimate of Probable Construction Cost. The final design phase, Contract Documents, focuses on fine tuning finish and fixture selections and designing/drawing the many details that show the contractors how the house will go together so they can aggressively bid and then successfully build the project.

By now, severity five percent of Close Associates work is done. In Bidding, the last step (5% of our effort) before construction, the contractor submits their Guaranteed Maximum Price, leading to a contract of the same name with the client (now called the Owner). Complete Contract Documents allow the contractor to submit a lean maximum price while guaranteeing the Client/Owner that the construction costs will not increase unless the Owner wants to add to the project. Often there is also fine tuning after the prices are in to achieve maximum savings and value. We call this process value engineering.

Over all the years that Lisl Close practiced and over my forty years, the complete package of architectural services for design and construction of a house have averaged 12% of the construction cost. This has always been an AIA benchmark. Another standard is that remodelings and renovations for all sorts of projects fall within the 10 to 15% range. Why the difference? While much of a building may be reused, marrying a new design to it can be difficult for client and architect and there may be preservation issues to deal with. There may also be challenges waiting within the building’s fabric that only come to light once construction starts. We recommend contingencies of 2% of Estimated Construction Cost for new construction but 10% for renovations. If most of the existing building remains, there is less to design but the time during construction that architects call Observation can consume as much as 50% of the fee.

So, after working hourly through Schematics, we offer a switch to fixed fee. However, in practice, almost all of our clients stay hourly. With internet shopping, many become very involved in the fixture and finish selection, thereby saving some of our time. We work with our contractors to prepare only drawings and details that are pertinent to this unique project. In the end, our final fee is often less than what our fixed fee would have been.

Finally, just as there are usually surprises during construction, there may also be during the architectural planning. More and more, reviews by municipalities are picky and time consuming. Sometimes, neighborhood groups unexpectantly emerge with issues and new found influence. It is good to recognize that while we are all trying to make the finished project perfect, and it will be to the best of our ability, getting there may at times be messing and challenging. This is why we try hard at the beginning of the project to form a strong team, to anticipate problems, and to develop trust and fire drills for what happens when there are surprises.

We want your architectural experience to be rewarding, something you look back on with pride and good memories. We don't promise that we are perfect and that the project will be trouble free. We want to be realistic upfront and plan with you to minimize the challenges and plan for their resolution so that working with us was a great invest and fun.