Practice and Management: Architects Fee Bidding Exercise

Practice and Management 2015 Architects Fee Estimation and Competitive Bidding

Studios

ARC Studios

Matthew Austin Matthew Chamberlain Georgia Roberts

Studios

Contents 1.0 1.1

Company Profile Employees

01

2.0

Building Cost Estimate

03

2.1 2.2 2.3 2.4 2.5 2.6 2.7

Room Booklet Elemental Analysis HCE Tender Price Indices SPON’s Construction Estimate Precedent Cost Estimate Regional Variations Final Cost Estimate

04 05 06 07 08

3.0

Fee Estimation

11

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8

Fee Scale Analytical Method Indirect/Direct Cost Time Charge Calculation Employee Specific Figures Stage 01 Stage 02 Stage 03 Final Project Fees

12 13 15 16

4.0

Tender Fee

25

4.1 4.2 4.3

4.4 4.5

Final Tender Fee Considerations Lump Sum Fee to Stage 03 Percentage of The Building Contract to Stage 03 Letter Considerations for the

Standard Form of Agreement

26 27

5.0

Reflection

33

5.1

Bibliography

35

02

09 10

17 19 21 23

28 29 31

Studios

Company Profile ARC Studios is focused on delivering carefully considered, sustainable and innovative designs that provide real value to the client. We approach all our projects with the desire to create great spaces and design buildings that reflect the contemporay life.

Matthew Austin, Georgia Roberts and Matthew Chamberlain established the practice in 2015 after winning the competition for, ‘Young Architect of the Year Award’. ARC’s offices are based in Nottingham, UK. We are currently working on multiple projects across the country, including the design of a new country house in Nottinghamshire.

01

Staff Senior Director Matthew Austin, RIBA Matthew graduated from the University of Nottingham in 2010, before establishing Austin Studios in 2012. The following year he founded ARC Studios and was joined by fellow architects Matthew Chamberlain and Georgia Roberts in the practice. He has worked on a number of residential projects, gaining particular acclaim for his work in aiding residential regeneration in London.

Principle Architect Matthew Chamberlain, RIBA After graduating from the University of Nottingham in 2010, Matthew left to work in New York for three years, before returning to England to join ARC Studios in 2013. His work in New York led him to develop a keen interest in urban architecture, and the process of designing and shaping cities, something he hopes to further as he continues his career.

Principle Architect Georgia Roberts, RIBA After graduating in 2010 from the University of Nottingham, Georgia spent three years working in London, gaining a variety of experience on a number of projects. She returned to Nottingham in 2013, joining ARC Studios, seeking an opportunity to work within a growing firm and aid their vision for the future.

She has also gained high praise amongst the architecture profession for her continued experimental works on concrete, as well as her recently published book, entilted, ‘Living with Concrete’.

Part 2 Undergraduate Jessica Owens Jessica graduated from the University of Bath in 2014, obtaining a ‘First Class’ Honours Degree and joined ARC Studios later that year. She is now working towards her Part III qualification with a keen interest in the development of Nottingham both as a city and the surrounding area.

02

Building Cost Estimate Residential Country House Through an analysis of SPON’s and Hutchins construction manuals, a carefully considered estimate of figures will be established for the scheme. Comparitive investigations of related precedents will be used alongisde this estimate in order to obtain a more critical and accurate assessment.

Indicative Ground Floor Plan

Dining Room

Living Room

Playroom

Wine Cellar

Garage

Kitchen

Boot Room

Home Cinema

Arrival Court

Indicative First Floor Plan

ensuite Bedroom 2

ensuite

ensuite

ensuite

Bedroom 1

03

Bedroom 3

Master Bedroom

Room booklet Residential Country House

1

Arrival Court

6m × 6m [36m2]

2

Garage

6m × 6m [36m2]

3

Boat Room

4

Entrance Hall

5m × 4m [20m2]

5

Kitchen

4m × 7m [28m2]

6

Dining Room

4m × 5m [20m2]

7

Wine Cellar

3m × 3m [9m2]

8

Playroom

4m × 7m [28m2]

9

Home Cinema

4m × 5m [20m2]

10

Living Room

5m × 5m [25m2]

11.1 11.2

Master bedroom Ensuite

7m × 4m [28m2] 2m × 3m [6m2]

11.1 11.2

Bedroom 1 Ensuite

5m × 5m [25m2] 2m × 3m [6m2]

11.1 11.2

Bedroom 2 Ensuite

5m × 5m [25m2] 2m × 3m [6m2]

11.1 11.2

Bedroom 3 Ensuite

4m × 4m [16m2] 2m × 3m [6m2]

Total

3m × 2m [6m2]

346m2

04

Element Analysis Hutchin’s Construction Estimate TABLE 1.0 Elemental Analysis (2007 Prices)

DETATCHED HOUSING

Ite

2001 Prices Cost (£)

Nottingham Studio

Element

Cost / m2

Percentage of Cost

SUBSTRUCTURE

82.78

5.97

SUPERSTRUCTURE

511.72

36.92

Frame

24.85

1.79

Upper Floors

30.02

2.17

Roof

145.89

10.52

Stairs

18.18

1.31

External Walls

92.4

6.67

Windows and External Doors

123.69

8.92

Internal Walls and Partitions

27.92

2.01

Internal Doors

48.78

3.52

INTERNAL FINISHES

111.31

8.03

FITTINGS AND FURNISHINGS

83.1

6

SERVICES

220.65

15.92

Sanitary Appliances

20.76

1.5

Services Equipment

0

0

Disposal Installations

16.18

1.17

Water Installations

5.62

0.41

Heat Sources

12.36

0.89

Space Heating and Air Treatment

75.56

5.45

Ventilating Systems

0

0

Electrical Installations

52.2

3,77

Gas Instalations

0

0

Lift and Conveyor Installations

4.63

0.33

Protective Installations

0

0

Communication Installations

0.52

0.04

Special Installations

25.34

1.83

Builder’s work in connection

6.08

0.44

Builder’s profit and attendence

1.39

0.1

£1,009.57

72.83%

Ite

2001 Prices Cost (£)

Nottingham Studio

Element

Cost / m2

Percentage of Cost

EXTERNAL WORKS

253.43

18.28

Site Works

148.18

10.69

Drainage

39.44

2.85

External Services

58.27

4.2

BUILDING SUB-TOTAL

05

Minor Building Works

7.54

0.54

PRELIMINARIES

123.14

8.88

FACILITY CONSTRUCTION COST

£1,386.14

100%

Element Analysis Tender Prices Indices TABLE 1.1 Alterations in tender prices since 2000

Year

First Quater

Second Quarter

Third Quarter

Fourth Quarter

Annual Average

2000

480

482

496

498

489

2001

498

499

516

515

507

2002

516

522

553

554

536

2003

555

560

578

577

568

2004

579

586

617

618

600

2005

621

623

660

660

641

2006

664

670

694

699

682

2007

703

707

730

730

718

2008

733

742

781

780

759

2009

773

770

771

778

773

2010

780

793

797

798

792

2011

807

818

824

827

819

2012

833

834

832

842

835

2013

857

856

857

857

857

2014

859

859

875 (P)

876 (F)

867

2015

878

881

899

900

890

2016

903

906

927

929

916

P = Provisional F = Forecast Thereafter Updated from SPONS 2015*

BREAKDOWN TOTAL FLOOR AREA

346m2

FACILITY CONSTRUCTION COST / m2

£1,386

BLACK BOOK BUILDING COST

£479,604

ADJUSTING 2007 PRICES TO 2015 PRICES BUILDING COST CONVERSION

1.26

Using Building Price Indices(819/718)

(2007 - 2015)

ADJUSTED BUILDING FACILITY COST /m2 ADJUSTED BUILDING COST

£1,718 £594,428

06

Element Analysis SPON’S Construction Estimate TABLE 1.2 Elemental Analysis (2007 Prices)

Element

Low

High

Average

Detail

SUBSTRUCTURE SUPERSTRUCTURE Frame Upper Floors Roof Stairs External Walls Windows and External Doors

145 714.44 10 52 150 25 70

190 939.72 15 68 200 30 91

167.5 827.08 12.50 60.00 175.00 27.50 80.50

Strip/trench fill foundation with ground bearing capacity (foundations up to 1.5m deep)

213.85

300

256.93

Internal Walls and Partitions

46

55

50.50

Internal Doors

147.59

180.72

164.16

INTERNAL FINISHES

98.85

135.25

117.05

-

Timber Frame Softwood floor, joisted floor plasterboard ceiling Natural Slate covering timber roof trusses Timber construction, softwood Cavity wall facing brick outer skin, insulation, plasterboard on stud inner skin, emulsion Softwood standard windows painted double glazed Softwood stud, 100x38mm at 600mm centres with head and sole plates 12.5mm plasterboard, tape and fill joints, emulsion finish Standard door, cellular core, softwood, softwood architrave aluminum ironmongering, single leaf, hardboard face, gloss paint finish One mist and two coats emulsion finish (wall finish) hardwood t&g strip flooring, polished including fillets, with hardwood skirting stained finish (flooring) emulsion paint (ceiling)

FITTINGS AND FURNISHES SERVICES Sanitary Appliances Services Equipment Disposal Installations

207

264

235.50

248.64 15 0 5.98

326.56 25 0 15

287.60 20 0 10.49

Kitchen including medium standard units, worktops, stainless steel sink and taps including utility area, white goods not included Affordable Housing Precedent Affordable Housing Precedent

Water Installations

41

58

49.5

Affordable Housing Precedent

Heat Source

N/A

N/A

N/A

N/A

Space Heating and air treatment

55

77

66

Affordable Housing Precedent

Ventilating Systems

0

0

0

-

Electrical Installations

74

100

87

Affordable Housing Precedent

Communication Installations

6.1

6.1

6.1

Affordable Housing Precedent

Special Installations

37.56

37.56

37.56

Affordable Housing Precedent

Builders work in connection

9

9

9

Affordable Housing Precedent

Builders profit and attendance

5

5

5

Affordable Housing Precedent

1413.93

1855.53

1634.73

Low

High

Average

Detail

EXTERNAL WORKS

167.96

188.47

178.22

-

Site Works

109.63

110.72

110.18

Gravel Driveway and Preparation Works

Drainage

22.70

32

27.35

Single Stack Drainage System

BUILDING SUB TOTAL

External Services

35.63

45.75

40.69

-

Minor Building Works

0

0

0

-

PRELIMINARIES

114.63

114.63

114.63

-

FACILITY CONSTRUCTION COST

1696.52

2158.63

1927.58

*N.B. In using SPON’s to form our construciton estimate we tried to select costing for the elements most appropriate to our scheme for a masonry load bearing construction.

07

Precedents TABLE 1.3 Precedent Analysis

Building

Architect

Year

Building Cost

Area

Cost m2

House at Alibag (1)

Malik Architecture

2009

£569,400

1070m2

£532

House Unimog (2)

Fabian Evers Architecture and Wezel Architektur

2012

£127,300

120m

£1,060

Family House (3)

Sigurd Larsen

2014

£95,000

80m2

£1,188

Private House Suha (4)

Architektura d.o.o.

2012

£337,000

210m

£1,605

AVERAGE COST/m

2

2

£1,284.33

2

*N.B. We chose to calculate the average cost/m2. However, we chose to emit, ‘House Alibag’, constructed in India, from our calculation, as labour and construction rates are much cheaper.

1

2

3

4

*N.B. Due to the often confidential nature of private residence construction it is difficult to find suitable precedents for comparison. Those we did find were all foreign builds and, therefore, varied in cost according to differing economic conditions than the UK.

08

Regional Variations TABLE 1.4 Regional Variation

Region

Adjustments to Measured Works Section

Inner London

-2%

Outer London

+6%

East Anglia

-2%

EAST MIDLANDS

-10%

Northern

-16%

Northern Ireland

-45%

North West

-16%

Scotland

-11%

South East

0%

South West

-6%

Wales

-12%

West Midlands

-10%

Yorkshire and Humberside

-10%

Diagram 1.0 Map of UK

East Midlands

Inner London +6% Outer London -2%

09

Final Cost Estimation TABLE 1.5 Weighted Outcome

Costing

Weighting 2

Hutchin’s (£/m )

£1,718

0.3

SPON’S (£/m )

£1,928

0.6

Average Precedent Estimate (£/m2)

£1,284

0.1

Weighted Average

£1,801

1.0

East Midlands

-10%

-

£1,621

-

2

Final Estimation (£/m ) 2

*In order to adjust for current prices, the building price index from SPON’S, with the most adjusted forecast for 2015, has been used. As SPON’s was the most accurate in terms of costing, owing to be the most recent publication and containing more specific information regarding to the type of construction, we chose to give it a larger weighting than the others. Equally, the precedent figure was given the lowest weighting due to the differences in location and therefore economic factors.

TOTAL BUILDING COST (1621 × 346)

£560,866

10

Fee Estimation There are two methods used in fee calculation. The first is referred to as, ‘Fee Scale’, which is a standard method using values taken from percentage graphs supplied by the RIBA but no longer mandatory or even recommended.

The second, known as the, ‘Analytical Method’, is a detailed comprehensive method that determines estimates based on careful analysis of practice’s overheads and time costs.

11

Fee Scale Class 5 Residential Houses and flats for individual clients

Graph 1.0 Indicative percentage fee scales: New Works

12 11 10 09 08 07

Class 5 Class 4

06

Class 3 Class 2

05

Class 1

04 03 0

20

50

100

200

500

£000

1

2

5

10

20

£m

BREAKDOWN ESTIMATED FEE PERCENTAGE

7.6%

*N.B The estimated fee total is for all architectural stages of work. Therefore the quoted price will only be a percentage of this as the work is only to completion of design development part way through Stage 03. The payment could be monthly or by completion of stages. For the purposes of this exercise we have assumed a payment by stage completion. In order to determine the appropriate fee quoted to the client using this method, we need to establish the total percentage cost for each completed stage, typically 10-15% for Outline Proposals and 15-20% for Scheme Design (as suggested by the RIBA).

OUR % FEES FOR STAGE C & D

35%

*N.B Assuming this is a one-off client for a private residence commission we feel appropriate to charge 35% as it would be unlikely to see repeat business benefited from offering the first project at a more competitive rate. Taking external competition factors to be low in weighting with a high availability of work and a steady stream of work within the office allowing a higher profit margin to be sought.

OUR FEE PROPOSAL

£14,762

12

Analytical Method Indirect/Direct Costs *N.B Comparison prices are from an eight man practice at 2001 prices. We assumed a serviced office based in the Lace Market, Nottingham. Choosing a serviced office covers much of the typical overheads into one monthly fee whilst also allowing flexibility for a small practice such as ours with the ability to easily upgrade or downgrade according to demand.

TABLE 2.0 General Office Running Costs

Item

2001 Prices Cost (£)

Nottingham Studio

Rent

15,500

6,000

Business rates

4,000

Inlcuded

Electricity

1,000

Included

Gas

1,500

Included

Water Rates

150

Included

Office Maintence - Including Security

3,000

Included

Telephone

4,500

Included

£29,650

£6,000

Item

2001 Prices Cost (£)

Nottingham Studio

Computer Equipment

6,000

3,000

Software Updates

1,200

2,000

Internet / Email account excluding calls

240

360

TOTAL

TABLE 2.1 Computer System Running Costs

TOTAL

£7,440

£5,360

TABLE 2.2 Banks, Insurance and Legal fees

Item

2001 Prices Cost (£)

Nottingham Studio

Proffesional Indemnity Insurence

5,125

2250

1,025

Included

£6,150

£2,250

Insurance [Office / Third party] TOTAL

13

TABLE 2.3 Miscellaneous

Item

2001 Prices Cost (£)

Nottingham Studio

Advertising

1,000

750

Printing Costs

25,000

15,000

Parking

350

1,920

£26,350

£17,670

Item

2001 Prices Cost (£)

Nottingham Studio

Photocopier [Rent and Inc]

1,000

1,000

Office Refreshments

600

Included

Stationary

2,300

400

Sundries

1,250

400

Magazines / Technical literature

1,000

1000

£6,150

£2,800

Item

2001 Prices Cost (£)

Nottingham Studio

Salary staff cost

150,000

114,731

£150,000

£114,731

Item

2001 Prices Cost (£)

Nottingham Studio

General Office Running cost

29,650

6,000

Computer Systems running cost

7,440

5,360

Bank / Insurance / Legal fees

6,150

2,250

Miscellaneous Costs

26,350

2,800

General Office Consumables

6,150

17,670

Salary’s

150,000

128,136

Total

225,780

162,206

TOTAL (Less Salaries)

£75,780

£34,080

TOTAL

TABLE 2.4 General Office Consumable

TOTAL

TABLE 2.5 Salaries

TOTAL

TABLE 2.6 Office Running Cost Total

14

Analytical Method Time Charge Calculation TABLE 2.7 Basic Salaries

Staff Name

Position

Salary P.A

Matthew Austin

Senior Director

£35,000

Georgia Roberts

Principle Architect

£28,000

Matthew Chamberlain

Principle Architect

£28,000

Jessica Owens

Part 2 Assistant

£23,000

Calculating Costs [per employee / day] Practice Wide Figures - All Projects

TOTAL COST PER MAN YEAR

AVG. COST PER MAN YEAR

TOTAL OFFICE RUNNING COST / NO. OF STAFF 162,216 / 4 £40,554 TOTAL COST PER MAN YEAR / NO. OF WORKING DAYS PER YEAR 40,554 / (260 - (28+8)) £181.05

*N.B For calculations, working days/year are based upon eight Bank Holidays and 28 days holiday per person

Employee Specific Figures - All Projects

15

OFFICE RUNNING COSTS PER

TOTAL RUNNING COSTS – TOTAL SALARIES / PRODUCTIVE STAFF MEMBERS

EMPLOYEE PER YEAR (LESS SALARIES)

34,080 / 4 £8,520

Employee Specific Figures TABLE 2.8 Office Running Cost Total

Position

Assumed Salary

Partner

£35,000£1,386.14

Architect

£28,000

Architect

Assistant Part II

FACILITY CONSTRUCTION COST

TOTAL

National Insurance Contribution (10.4%)

Pension Contribution (2%)

Total Cost to Employer

£3,640

£700

£39,340

£560

£31,472

£28,000

£2912100%

£2,912

£560

£31,472

£23000

£2,392

£460

£25,852

£114,000

£11,856

£2,280

£128,136

*N.B For calculations, Category D assumed for National Insurance contributions and an Employer matched Pension scheme of 2%

TABLE 2.9 Employee Specific Cost per Day

Calculation

Position

Holiday Allowance

Senior Director

30

39,340+8,520 260 - (30+8)

£216

Principle Architect

28

31,472+8,520 260 - (28+8)

£179

Principle Architect

28

31,472+8,520 260 - (28+8)

£179

Part 2 Assistant

28

25,852+8,520 260 - (28+8)

£153

Cost to employer + Office Running Costs per employee per year Working days in a year - (Holiday + Bank Holidays)

Employee Specific Costs per day

BREAKDOWN PARTNER COST PER DAY

£216

ARCHITECT COST PER DAY

£179

ASSISTANT COST PER DAY

£153

16

Stage 01 PREPERATION AND BRIEF Stage 01 merges the residual tasks from the former Stage A - Proposal - with the Stage B - Design Brief tasks that relate to carrying out preparation, activities and briefing in tandem.

(RIBA Plan of Work 2013)

17

TABLE 3.0 Architectural Drawings TRAVEL TO SITE [YES / NO]

ORIGINAL TIME ALLOWANCE (DAYS)

Director

Architect

Part 2

As Exisiting site plan

NO

0.5

As existing site section

NO

0.5

TOTAL

0

0

0

1

TABLE 3.1 Additional Workstage requirements TRAVEL TO SITE [YES / NO]

ORIGINAL TIME ALLOWANCE (DAYS)

Director

Architect

Part 2 0.5

Office Programming

NO

0.5

0.5

Client meeting on site (1)

NO

1

1

Site apprasial including photographic study

YES

1

Site Feasibilty Study

YES

1

Consultation with surveyors

NO

0.25

Quantity Surveyors meeting

NO

0.25

Miscellaneous Project Time

NO

2

1

2

3.5

5

TOTAL

1

2.5

18

Stage 02 CONCEPT DESIGN Stage 02 correlates exactly to the former Stage C - Concept (RIBA Plan of Work 2013)

19

TABLE 3.2 Architectural Drawings TRAVEL TO SITE [YES / NO]

ORIGINAL TIME ALLOWANCE (DAYS)

Director

Architect

Part 2

As proposed site

NO

0.5

As proposed ground floor plan

NO

0.5

As proposed first floor plan

NO

0.5

As proposed roof plan

NO

0.5

As proposed elevation A

NO

0.5

As proposed elevation B

NO

0.5

As proposed elevation C

NO

0.5

As proposed elevation D

NO

0.5

As proposed Section A-A

NO

1

0.5

3D model views 1

NO

1

1

3D model views 2

NO

2

1

4

6.5

TOTAL

0

0

TABLE 3.3 Additional Workstage requirements TRAVEL TO SITE [YES / NO]

ORIGINAL TIME ALLOWANCE (DAYS)

Director

Architect

Part 2

Office programming meeting

NO

0.25

0.25

0.25

Scheme Redesign

NO

2

3

1

Client meeting (2) on site

YES

1

1

Client meeting (3) at office

NO

0.25

0.25

Consultation with QS

NO

0.25

Consultation with planning authority

NO

0.5

Miscellaneous Project time

NO

TOTAL

1

1 4.5

1 6.25

1.25

20

Stage 03 DEVELOPED DESIGN MAPS Stage 03 maps broadly to the former stage D and part of Stage E (RIBA Plan of Work 2013)

21

TABLE 3.4 Architectural Drawings TRAVEL TO SITE [YES / NO]

ORIGINAL TIME ALLOWANCE (DAYS)

Director

Architect

Part 2

As proposed site

NO

0.25

As proposed ground floor plan

NO

0.25

As proposed first floor plan

NO

0.25

As proposed roof plan

NO

0.25

As proposed elevation A

NO

0.25

As proposed elevation B

NO

0.25

As proposed elevation C

NO

0.25

As proposed elevation D

NO

0.25

As proposed Section A-A

NO

0.25

3D model views 1

NO

1

1

3D model views 2

NO

1

1

Landscaping Scheme

NO

1

External finishing board 1

NO

0.25

0.5

0.5

External Finishing board 2

NO

0.25

0.5

0.5

0

0.5

4

5.25

TOTAL

TABLE 3.5 Additional Workstage requirements TRAVEL TO SITE [YES / NO]

ORIGINAL TIME ALLOWANCE (DAYS)

Director

Architect

Part 2

Office programming meeting 3

NO

0.25

0.25

0.25

Scheme Redesign

NO

1

2

1

Client meeting (2) on site

YES

0.5

0.5

Client meeting (3) at office

NO

0.25

0.25

Consultation with QS

NO

Consultation with planning authority (PA)

NO

1

Consultation with PA fire officer (FO)

NO

0.5

Consultation with structural engineer

NO

0.5

Meeting with structural engineer

NO

0.25

Consultation with PA building control officer

NO

0.25

Consultation with service providers

NO

0.25

Administration work for planning

NO

0.5

Planning application submission to PA

NO

0.25

CDM administration

NO

Miscellaneous Project time

NO

2

1

1

4

8.25

TOTAL

0.5

0.25 1.25

22

Final cost TIME BASED

23

TABLE 3.6

Stage

Senior Director Time (Days)

Principle Architect Time (Days)

Part 2 Time (Days)

Journeys To Site

01

3.5

5

3.5

2

02

4.5

10.25

7.75

1

03

4.5

12.25

6.5

1

TOTAL

12.5

25.5

16.75

4

TABLE 3.7

Position

Total Days on Project (Days)

Cost per Day

Fee

Senior Director

12.5

£216

£2,700

Principle Architect

25.5

£179

£4,565

Part 2 Assistant

16.75

£153

£2,563 £9,828

TOTAL

TIME BASED FEES

JOURNEY TO SITE COST

£9,828

Total No. of Journeys x Distance (miles) x Cost/mile

4 x 21.2 x 0.45

£38.16

*N.B For calculations, Distance = round trip to Bingham at 10.6 miles each way at standard mileage rate of 0.45p/mile

FEES

£9,828 + £38.16 £9,866.16

24

Tender Fee DEVELOPED DESIGN MAPS

25

Tender Fee CONSIDERATIONS AFFECTING FINAL TENDER FEE BID

[REGIONAL FACTOR] Whilst original costing figures applied to London and the South East, with the proposal being situated in the East Midlands, the implication this had on cost had to be considered when calculating the construction costs. This therefore impacts the fee when using the fee scale method to calculate. However, the analytical method is not subject to the same adjustment, although with the office running costs, such as rent, being cheaper in the East Midlands than they may be elsewhere in the country, this does have an indirect impact on the tender fee.

[THE CLIENT] The situation of the client had to be considered, in particular the potential for repeat business. As it is private client, who is most likely making a one-off build (ie. they are unlikely to want to build another home in the future), we did not have to consider attracting their business again in the future. Therefore, whilst it was important to ensure a suitably competitive figure to gain their business for this project, it does not need to be targeted at attracting their business again in the future.

[THE COMPANY] ARC Studios is a relatively new company, still trying to establish themselves within the profession and therefore have to be wary of overcharging, as this could lead to poor professional reputation.

[THE BUILDING] The construction of the building itself is relatively simple, using load bearing masonry. Similarly, the design itself is not especially complex, as, although it is quite a large area, the rooms themselves are simply those found in a standard house.

Therefore, it is unlikely that specialist advice would have to be sourced and is therefore not something we would be charged for, as sub-contractors are an additional charge to the client.

[THE ECONOMIC CLIMATE] Whilst the 2008 recession caused a downturn in construction, the building industry is now recovering. Therefore, whilst in a more fruitful position than 7 years ago, this still has to be considered, as there is still a sense of instability within the profession.

[THE COMPETITION] In this instance, the client has come directly to ARC Studios to request we design their house and, therefore, there is no direct competition whom we are competing with, for the project. However, the price must still remain reasonable, to ensure the client is happy with the service provided and does not decide to look elsewhere.

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Tender Fee LUMP SUM FEE TO STAGE 3 FEE SCALE DERIVED COST

ANALYTICAL DERIVED COST

=

£14,762

=

£9,866

*N.B From these two figures for a fee quote we can derive our proposed tender fee as an average between the two costs. We propose a higher weighting be given when calculating the average to the analytical method as it forms a more personal and precise estimation for the project.

TABLE 4.0

Method

Fee

Weighting

Fee Scale

£14,762

0.4

Analytical

£9,866

0.6

£11,824

TOTAL

TABLE 4.1

*N.B However in compiling our tender fee we must also consider a range of other factors which might affect our proposed fee bid. (*Based on Guide to Fee Bidding)

Concern

Probability

Effect on Bid

Weighting

Exploration works: Unknown issues

Possible

Higher

+5

Omissions in estimate

Probable

Higher

+5

Desirability of the project

High

Lower

-8

Competition form other bids

Low (Lots of work around)

Higher

+2

Current Workload

Medium (But need to secure future projects)

Lower

-2

Familiarity with the project type

High

Lower

+4

Familiarity with the client

None

Higher

+2

Proximity of the site to the practice

Close

Lower

-5 +3%

TOTAL

FEE BID PROPOSAL

WEIGHTED AVERAGE FEE X EXTERNAL FACTOR WEIGHTING £11,824 X 1.03 £12,178.72

FINAL FEE BID PROPOSAL

WEIGHTED FEE BID X PROFIT X VAT £12,178.72 X 1.25 X 1.2

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£18,268

Tender Fee PERCENTAGE OF THE BUILDING CONTRACT TO STAGE 3 FEE SCALE DERIVED % OF BUILDING COST

ANALYTICAL DERIVED % OF BUILDING COST

7.6% x 0.35 (percentage up to stage 3)

2.66%

9,866 / 560,866

1.76%

FINAL FEE BID PROPOSAL AS A % OF BUILDING CONTRACT

WEIGHTED FEE BID X PROFIT X VAT / BUILDING COST

3.26%

18,268 / 560,866

[PAYMENT METHOD] TABLE 4.2

Method

Positives

Negatives

Lump Sum

Lump sum up front could allow for expansion

Creates issues with cashflow. More difficult for the client. Less flexible.

Monthly

Steady Cash flow

Difficult for short - term expansion costs that may be required.

Upon completion of RIBA work stages

Clear targets to meet for payment

Not a linear scale of payment in terms of timing and value - Irregular.

Percentage of Contract

If building fee rises, increased payment.

If project fee decreases, less money.

Less value for client, as could be seen to design expensive project deliberately for added fee percentage.

*N.B We have decided that payment is via six, monthly installments. This arrangement allows easy budgeting over the course of the project and year and keeps a steady cash flow whilst making it easier to budget for the client, making it a more attractive fee proposal.

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ARC STUDIOS Lace Market House, 54-56 High Pavement, Nottingham, NG1 1HW Phone: 0115 933 8323 Email:austin@arcstudios.co.uk Studios

1st February 2015

Mr T Williams 5 Park Terrace, Nottingham NG1 5DN

Dear Mr Williams,

We are writing to confirm the previously discussed fee offer for 10 Willow Road, Bingham, Nottinghamshire, as well as to confirm the terms of our appointment. This written agreement is for your protection and to prevent us from undertaking work as architects outside of those agreed upon within these fees, therefore ensuring clarity, ethical considerations and professionalism at all times.

The outline of your requested requirements can be broken down according to the following, based upon RIBA’s Plan of Works: Stage 0: [Strategic Definition] Consideration of your Business Case and Strategic Brief in order to fully identify the scope for the project.

Stage 1: [Preparation and Brief] Development of the Initial Project Brief, considering the project’s spatial requirements, intended project outcomes, site information and your budget. Feasibility Studies will be carried out as well as full Risk Assessment. The project team will also be established and the roles of each member outlined, including sub-contractors.

Stage 2: [Concept Design] Project Strategies will br developed as well as a Final Project Brief outlined. This includes further review of Cost Information and the development of a Construction Strategy, Maintenance and Operational Strategy and a Health and Safety Strategy.

Stage 3: [Developed Design] The Concept Design is developed further and drawings of the proposed plan, sections, elevations and 3D visualisations will be completed. The Cost Information will be aligned to the Project Budget, with the Project Strategies that were previously outlined being developed further. Change Control Procedures will also be implemented, ensuring changes to the Concept Design are fully considered before being signed off. On completion of this stage, the drawings will be submitted for Planning Permission, for the design of 10 Willow Road.

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For these services to be carried out effectively you have agreed that we will act as lead designer and you will obtain structural and building services designs to assist us.

Performance of the services detailed above will be provided accorded to the fees and costs outlined below: TOTAL FEES/BUILDING COST Estimated Total Building Cost ARC Studios Fee (Including V.A.T at 20%) Total Cost

£560,886 £18,268 £579,154

Performance and payment for our services will be carried out via six, monthly installments of £3,045, as agreed.

If other preliminary services are required these will be charged additionally on a time basis. Time based services are charged at the following rates: Partner Architect Architect Part II Assistant

Matthew Austin Matthew Chamberlain Georgia Roberts Jessica Owens

£216 £179 £179 £153

We will perform these services in accordance with RIBA’s Standard Form of Agreement, subject to the following: The fee outlined above does not include professional presentation models or 3D CAD models and videos, although these services can be arranged at an additional cost. Extra cost would also need to be considered for sub-contractors such as structural engineers. However, all external works, service installations, internal finishes and internal fittings are included.

If the terms outlined in this letter are acceptable, please sign the attached copy of this letter and from here we will be in a position to start work. The whole company is fully invested in the project and we look forward to working with you as it progresses.

Yours Sincerely,

Matthew Austin RIBA Founding Partner austin@arcstudios.co.uk Tel: 0115 933 8323

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Standard Form of Agreement CONSIDERATIONS

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[OUTLINING THE PROJECT] Sets out the client, the site and a description of the project to be completed. The time frame in which the client wishes the project to be completed is also identified, as well as their Project Budget. This ensures that all parties are familiar with this information from the outset of the project.

[LIABILITY AND INSURANCE] Sets out the legal framework for the project and ensures that all aspects are considered for insurance, such as Personal Indemnity Insurance. It also considers issues which may arise such as setting out a limit for asbestos or pollution, where relevant. By setting it out at this stage of the project ensures there can be no discrepancies later on, should problems occur.

The client is almost made aware of the ARB disciplinary procedures and sanctions.

[DISPUTE RESOLUTIONS] The client and ARC Studios agree upon mediation services which are available from RIBA, should they be needed later on in the project. Similarly an adjudicator and appropriate routes are identified, should they be needed later in the project. This means that any disputes which arise throughout the project can be resolved according to proper procedure, to help ensure the project is impacted to a lesser degree as possible.

[PROJECT APPOINTMENTS] Sets out the core project roles from the Client, to the Architect, to the Health and Safety Advisor, ensuring that everyone knows who else is involved in the work. The stages of the project for which each person is involved are also set out, according to the RIBA Plan of Work.

[WORK STAGE SERVICES] Full list of stages according to the RIBA Plan of Work are set out, including the services provided within each stage, with those not relevant to this project omitted. This also identifies the procedure carried out for handover and close of the project, as well as any post-occupation procedures. This allows the client to be fully aware of each stage of the project and how it corresponds to RIBA’s requirements and therefore the way the architect works.

[FEES AND PROVISIONS FOR PAYMENT] Sets out basic fees according to the work stages, identifying all costs and how they have been calculated. Other fees not included under basic fees are also considered, which include copyright license fee for the client’s use of materials produced by the architect after the last date of the Service is completed. Time charges are set out and any additional expenses are specified. This way, there can be no issues with fees later in the projects, with the procedure surrounding additional costs being considered from the start.

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Reflection PERSONAL INSIGHT

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[LEARNING OUTCOMES] Whilst we were already familiar with the cost of a building, the processes involved in this project have allowed us to learn about where the individual costs come from and how they break down. We found calculating the fee bid to be quite a complex process as there were many factors to consider. In particular, calculating the building cost through using Hutchin’s Black Book and SPON’s, as there were a number of additional factors to consider, such as the building type, inflation and VAT. In turn, this has taught us about exactly what it is that makes the cost of a building increase, and how this affects fees when calculated using the fee scale method.

Although we were previously aware of the RIBA Plan of Work, carrying out this exercise has fully clarified it, in particular Stages 0 to 3 and how these correspond to the previous system. We have been made aware of the work required in each stage, as well as the cost percentage of each.

The cost of running a project also has many factors to consider. Whilst many seem obvious, there are also those which we did not necessarily automatically consider, for example, the cost of travelling to the site. It has, therefore, shown us the complexities in ensuring an architecture practice is able to remain in profit, due to all the additional cost implications which must be taken into account throughout a project.

We have developed a further appreciation for the overall factors involved in the business side of running an architect’s practice and how these affect the firm’s fees. For instance, the impact the architect’s time has on the fees in relation to their position within the company and their work contribution to a project.

There are a number of external factors which have to be considered when calculating the fee bid, such as the relationship (or potential relationship with the client), the competition and the location of the project within the country. Whilst we may previously have been aware that some of these needed considering, this project taught us how direct an impact they have on the fee bid.

The Standard Form of Agreement is not something we were fully familiar with at the outset of the project. However, it is vital that it is signed at the start of the project to protect both the client and the practice and ensure the details of the framework of the project are agreed at the start.

[CHANGES TO OUR APPROACH] Initially, we were overcomplicating our approach to costing, considering aspects such as internal furnishing, not initially realising that these were not necessary. Although we later omitted the part of this we had done, in future we would know not to consider this.

As we assumed that due to the building type it was likely to be a one-off build for the client, although positive relationships would need to be established, it was not necessary to ensure that the tender fee was especially low, as repeat business would be unlikely. However, in other situations, it may be that we were more likely to expect repeat business and therefore this would need to be a consideration when calculating a fee.

When estimating the cost of the building, the Hutchin’s Black Book figures were taken from a 2007 copy and whilst we did adjust the prices according to the building price indices given in SPON’s, there could still be inaccuracies in our pricing and therefore would have been better to use more recent data. Similarly, some of the figures we used from SPON’s applied to an affordable housing scheme, which, although residential, was not an individual building. Therefore, some of these figures may have differed slightly.

Overall it has been an insightful tool in exploring the business side of architecture.

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Bibliography [Texts] ANON. Architect’s Handbook of Practice and Management. 7th Edition. London: RIBA Publications, 2007.

ANON. Appointments Contracts RIBA Agreements 2010 (2012 Revision). London: RIBA, 2012.

SNOOK, Keith. RIBA Project Quality Plan for Small Projects. 2nd Edition. RIBA. 2007.

BADEN-POWELL, Charlotte. HETREED Jonathan. ROSS, Ann. Architect’s Pocket Book. 4th Edition. Oxon: Routledge, 2014.

HUTCHINS, Hutchins UK Building Costs Black Book. London: Franklin and Andrews, 2007.

LANGDON, David. SPON’s Architects’ and Builders’ Price Book 2014. 139th Edition. Oxon: CRC Press, 2014.

NICHOLSON, M Paul. Architect’s Guide to Fee Bidding. 1st Edition. New York: Routledge, 2003.

Standard Agreement 2010: Schedules (2012 Revision – RIBA Plan of Work 2013 compatible version). RIBA, 2012.

[Websites] RIBA Plan of Works 2013. RIBA, 2013 [viewed 30th January 2015]. Available from: http://www.ribaplanofwork.com/ SPON’s 2015 Price Book Update One. Taylor & Francis, 2014 [viewed 31st January 2015]. Available from: http://s3-us-west-2. amazonaws.com/tandfmedia/products/spon/2015UPD1.pdf Guidance on Fee Scales. BHB Architects [viewed 31st January 2015]. Available from: http://www.bhbarchitects.co.uk/images/ guidance_on_fees.pdf

[Images] [1] http://www.dezeen.com/2011/08/05/house-at-alibag-by-malik-architecture/ [2] http://www.archdaily.com/464640/house-unimog-fabian-evers-architecture-wezel-architektur/ [3] http://www.dezeen.com/2014/12/17/sigurd-larsen-low-cost-family-house-sorte-hus-copenhagen/ [4] http://www.dezeen.com/2012/04/10/private-house-suha-by-arhitektura-d-o-o/

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Thank you

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