GUC – German University in Cairo
Architecture and Urban Design
ARCH 702 Legislation, Professional Practice and Contracts Fall 2017 Instructor: Dr. Yasser Mahgoub
Fees 1
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Services and Compensation
النقابة العامة للمهندسين الئحة الهندسة المعمارية الئحة تقدير األتعاب
Services and Compensation
Introduction ď şProject planning and pricing identify both the services and the compensation appropriate to the needs of the project.
ď şThe architect proposes the services to be provided and a compensation for those services.
Services and Compensation
The Fees Proposal EARLY in the selection process To be formulated LATE in the discussion An owner's Request for Proposal (RfP) Series of proposals …….. Verbally (not recommended!) Thick "package" Sometimes there is NO proposal! The client offers terms of what appears to be a "take it or leave it" basis!!!
Services and Compensation
I. The Architect's Services ď şWhat are the services that the architect proposes to provide? ď şWhat services are appropriate to meet the owner's objectives? ď şWhat will it take to define the scope of the project?
Services and Compensation
I.1. Options for defining services
I.1.a. Selecting from a "menu” I.1.b. Using a predefined "package" of services
Services and Compensation
I.1.a. Selecting from a "menu" Owner and architect working from a menu of possible choices. Select a complement of services specifically appropriate to the project at hand. Owner-Architect Agreement for Designated Services.
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.a. Selecting from a "menu"
Services and Compensation
I.1.b. Using a predefined "package" of services
ď şBasic services ď şAdditional services
Services and Compensation
I.1.b. Using a predefined "package" of services
Basic services are divided into five phases: 1. Schematic design 2. Design development 3. Construction documents 4. Bidding or negotiation 5. Construction contract administration
Services and Compensation
I.1.b. Using a predefined "package" of services
Other services packages include: Small projects and projects of abbreviated scope Interiors (furniture, fixtures, and equipment) projects Projects involving construction management services Design/build projects
Services and Compensation
I.2. When services cannot be defined Work with the client to:
Define the project Establish project requirements
Identify the remaining services necessary to take the project to completion
Services and Compensation
I.2. When services cannot be defined Compensation methods: lump sum hourly cost basis
Services and Compensation
II. Project planning and budgeting The Project Plan ď şCarefully constructed and formally drawn
ď şQuick calculation based on lots of comparable experience
Services and Compensation
II. Project planning and budgeting Project planning offers important opportunities: It helps the architect and the owner think through the project. It helps both parties identify the professional services that are important to the project's success. It helps the owner understand his role in the project (responsibilities, decisions, approvals, and implications)
Services and Compensation
II. Project planning and budgeting Project planning offers important opportunities: It helps the architect structure the appropriate design team for the project. It helps the architect understand how the project will affect the firm, its people, priorities, and other projects. It helps both owner and architect build a foundation for the owner-architect agreement to follow.
Services and Compensation
II.1.a. Bottom-up planning Starts with the tasks to be performed Identifying who will do them How much time each task will take What each task will cost The total cost is the proposed price (compensation or fee)
Services and Compensation
II.1.b. Top-down planning ď şStarts with the compensation or fee available to do the project. ď şBacks out the money available for various project tasks.
Services and Compensation
II.2. Tasks and responsibilities Decide if the task is to be provided: By the architecture firm, with its own staff By the architect, subcontracted to a specialist consultant
By another consultant to the owner By the owner with its own forces
Services and Compensation
II.2. Tasks and responsibilities Ideas to identify tasks and responsibilities: Review the deliverables being promised to the owner Who is likely to accomplish it (assistance, backup, and supervision) Key project tasks (approvals) even if they are not with the architect's scope of service) Include project management as a task (expertise, time, and resources)
Services and Compensation
II.3. Project schedule Construct a schedule for professional services. How long will it take to accomplish each task? How are the tasks related to each other? What are the milestone dates to be met?
Services and Compensation
II.3. Project schedule ď şSimple Milestone chart indicating major tasks or phases with target completion dates.
Services and Compensation
Services and Compensation
Services and Compensation
II.3. Project schedule ď ş More elaborate Bar Charts.
Services and Compensation
Services and Compensation
II.3. Project schedule ď ş Critical Path Method (CPM) networks and schedules.
Services and Compensation
Services and Compensation
Services and Compensation
Services and Compensation
II.3. Project schedule Suggestions: Use the task list Include activities that may influence the schedule Discuss contingencies to provide the owner with flexibility for considering options and possibilities. Consider an interactive approach that involves key people, consultants, the owner, and outsiders
Services and Compensation
II.4. Costs of providing services First-cut-budget ď şThe expenses that will likely be incurred in performing the services.
Services and Compensation
II.4. Costs of providing services Cost of providing the services
"No brainer" Based on recent very similar projects for the same client. "Built up" Based on the cost of providing services. "Start from the other end" A client-nominated amount.
Services and Compensation
II.4. Costs of providing services Ways to cost services  Make "cartoon set" of the drawings to be provided  Estimate parallel that of a recent similar project
Services and Compensation
II.4. Costs of providing services Step-by-step buildup of the cost of providing services: for each task: who, how many hours totaling the hours X each person's hourly rate = total Direct Salary Expense (DSE) for in house staff
+ payroll burden OR
X DSE multiplier (1.25) = total Direct Personnel Expense (DPE)
+ non-reimbursable direct expenses = totals for each phase + contingency + profit =
total project expenses
Services and Compensation
II.4. Costs of providing services Suggestions: Work at an appropriate level of detail:
Project - Phases - Tasks Document the internal budget carefully so you can use this information as a yardstick for measuring progress Don't neglect the costs of project management. Require senior management time and important to project success Course corrections Develop cost estimates in spreadsheet form on the computer. "what if" analysis.
Services and Compensation
II.4. Costs of providing services Suggestions: Involve the people who will be performing the work in the process. Track project expenses by task or phase Build historical database you can use in budgeting future projects Types of projects that the firm does best and that earn satisfactory profits as well as those that require extra expenses, more time, and/or higher profit margin.
Services and Compensation
III. Compensation methods
The are two fools in every market; one asks too little, one asks too much. Russian proverb