Building design and construction fees - Revision history

Designing Buildings at 08:31, 30 December 2022

2022-12-30T08:31:27Z

← Older revision		Revision as of 08:31, 30 December 2022
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−	= ~~Introduction~~ =	+	= What are fees? =

−	The term ‘fees’ generally refers to payments made by the client to consultants for services under the terms of an agreement. They are generally paid in instalments based on regular dates or at pre-defined stages of completed work. The core consultant team for most building projects will include:	+	The term ‘fees’ generally refers to payments made by the client to consultants for services under the terms of an agreement. They are generally paid in instalments based on regular dates or at pre-defined stages of completed work.
		+
		+	= What fees are paid on construction projects? =
		+
		+	The core consultant team for most building projects will include:

	* Architect (see [[Architect%27s_fees\|Architect's fees]]).		* Architect (see [[Architect%27s_fees\|Architect's fees]]).
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	In addition, specialists may be required depending on the nature of the project, such as legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant and fire engineer. Other fees will also be payable on most projects, including planning fees and building regulations fees.		In addition, specialists may be required depending on the nature of the project, such as legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant and fire engineer. Other fees will also be payable on most projects, including planning fees and building regulations fees.

−	= ~~Variability of~~ fees =	+	= What are fees based on? =

−	~~Fees are~~ entirely dependent on the nature of the project and the circumstances of the appointment. Large new-build projects may attract lower percentage fees than small works to existing buildings, commercial work may attract lower fees than private residential work, and works to historic or listed buildings may attract higher fees.	+	The size of fees is entirely dependent on the nature of the project and the circumstances of the appointment. Large new-build projects may attract lower percentage fees than small works to existing buildings, commercial work may attract lower percentage fees than private residential work, and works to historic or listed buildings may attract higher fees.

−	Fees charged by consultants vary according to:	+	Fees charged by consultants may vary according to:

	* Size of project.		* Size of project.
	* Type and complexity of project.		* Type and complexity of project.
−	* Scope of services. For example, full design and site inspection will attract a higher fee than concept design that is then developed by ~~the~~ contractor.	+	* Scope of services. For example, full design and site inspection will attract a higher fee than a concept design that is then developed by a contractor.
−	* ~~Anticipated~~ repeat ~~and/~~or bespoke elements of the design.	+	* The number of repeat or bespoke elements of the design.
	* Location of site and other consultant practices.		* Location of site and other consultant practices.
−	* Reputation of practice. For example, a signature architect might charge more than one that is newly qualified.	+	* Reputation of the practice. For example, a signature architect might charge more than one that is newly qualified.
	* Client organisation and track record. This will affect how much support is required and the risk perceived by consultants.		* Client organisation and track record. This will affect how much support is required and the risk perceived by consultants.
	* Conditions of engagement. For example, the requirement for collateral warranties and partnering arrangements.		* Conditions of engagement. For example, the requirement for collateral warranties and partnering arrangements.
−	* Anticipated programme and resources. The outputs in a short or long programme are the same, However, a longer programme prolongs administrative resources required such as attending meetings and responding to requests for information. ~~Thus~~ percentage fees for a longer period will tend to be higher.	+	* Anticipated programme and resources. The outputs in a short or long programme are the same, However, a longer programme prolongs the administrative resources required such as attending meetings and responding to requests for information. So percentage fees for a longer period will tend to be higher.
−	* Economic climate ~~of supply and demand~~. Fees may be lower during recessions and higher during booms.	+	* Economic climate. Fees may be lower during recessions and higher during booms.
−	* Consultant workload.	+	* Consultant workload. Busy consultants are likely to charge higher fees.
−	* Assessment of the competencies of other consultants.	+	* Assessment of the competencies of other consultants. This may affect the amount of support that is required.

−	= ~~Historic~~ fee scales =	+	It is very important that the scope of services required are agreed in advance so there is no ambiguity about what is being paid for and what will be charged as extras. For more information see: Scope of services.
		+
		+	= Why are there no standard fee scales? =

	Professional institutes used to publish recommended fee scales expressed as a percentage of construction costs for a range of different building types. However, legislation aimed at preventing anti-competitive behaviour forced the institutes to abolish these scales, leaving fee negotiation to market forces.		Professional institutes used to publish recommended fee scales expressed as a percentage of construction costs for a range of different building types. However, legislation aimed at preventing anti-competitive behaviour forced the institutes to abolish these scales, leaving fee negotiation to market forces.

−	Consequently, bidding for consultancy work has become a free-for-all in a highly competitive market. Some commentators argue that this has driven down fees, however, it has also been suggested that it has driven down standards and led to much design work being transferred from consultants to specialist contractors and suppliers who include design costs in their building agreements. The design co-ordination issues this has caused has had far reaching consequences and supplied the legal profession with a constant flow of disputes about ~~responsibility~~ for ~~[[Disruption_claims_in_construction\|~~disruption]] and delays.	+	Consequently, bidding for consultancy work has become a free-for-all in a highly competitive market. Some commentators argue that this has driven down fees, however, it has also been suggested that it has driven down standards and led to much design work being transferred from consultants to specialist contractors and suppliers who include design costs in their building agreements. The design co-ordination issues this has caused has had far reaching consequences and supplied the legal profession with a constant flow of disputes about who is responsible for disruption and delays.
		+
		+	= How are fees calculated? =

−	~~= Fee calculations =~~	+	Despite the demise of fee scales, developers are still inclined to use percentages of building costs for early calculation of the likely fees associated with construction. However, they will then generally negotiate fixed price lump-sums, with each consultant wrapping up any early work in the conceptual stages when fees might have been paid for on agreed hourly rates as the construction cost may not have been known at that point.

−	~~Despite the demise of fee scales~~, developers are still inclined to use percentages of building costs for early calculation of the likely fees associated with construction. However, they will then generally negotiate fixed price lump-sums, with each consultant wrapping up any early work in the conceptual stages previously paid for on agreed hourly rates. Interim payment of fees is then ~~related to~~ pre-defined stages ~~reached~~ or ~~related to time~~, for example, monthly payments against a payment schedule based on anticipated resources.	+	Regular, interim payment of fees are then made at pre-defined stages, or on a timed basis, for example, monthly payments against a payment schedule based on anticipated resources.

	The table below is a very approximate guide based on commercial office developments in the London area, where the fees of the core team of consultants are expressed as percentages against construction costs (excluding contingency allowances and VAT). Clearly, fees on actual projects will vary considerably depending on the nature of the building required, the site, state of the economy and other factors as discussed above.		The table below is a very approximate guide based on commercial office developments in the London area, where the fees of the core team of consultants are expressed as percentages against construction costs (excluding contingency allowances and VAT). Clearly, fees on actual projects will vary considerably depending on the nature of the building required, the site, state of the economy and other factors as discussed above.
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−	= ~~Quantum~~ meruit (time charging) =	+	= What is quantum meruit (time charging)? =

−	Occasionally, scope cannot be determined or a project involves significant uncertainty. Consultants may then be employed on pre-agreed hourly rates for different categories of staff. Generally, the hourly rate will reflect 2.5 x payroll cost based on a 1,500 working hour year.	+	Occasionally, the scope cannot be determined or a project involves significant uncertainty. Consultants may then be employed on pre-agreed hourly rates for different categories of staff. Generally, the hourly rate will reflect 2.5 x payroll cost based on a 1,500 working hour year.

−	= ~~Competitive~~ tendering ~~and~~ value =	+	= How does competitive tendering affect value? =

	Attempting to save money by driving fees down can be a mistake. Fees represent a small part of the whole-life costs of a project, but poor design can have a long lasting and expensive impact.		Attempting to save money by driving fees down can be a mistake. Fees represent a small part of the whole-life costs of a project, but poor design can have a long lasting and expensive impact.
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	It suggests that project/design team fees estimate means '...the total estimated cost of all project/design team fees at the estimate base date (i.e. excluding tender inflation and construction inflation).'		It suggests that project/design team fees estimate means '...the total estimated cost of all project/design team fees at the estimate base date (i.e. excluding tender inflation and construction inflation).'

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Appointing consultants.		* Appointing consultants.

Designing Buildings at 08:02, 1 October 2020

2020-10-01T08:02:33Z

← Older revision		Revision as of 08:02, 1 October 2020
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	It suggests that project/design team fees estimate means '...the total estimated cost of all project/design team fees at the estimate base date (i.e. excluding tender inflation and construction inflation).'		It suggests that project/design team fees estimate means '...the total estimated cost of all project/design team fees at the estimate base date (i.e. excluding tender inflation and construction inflation).'
−
−	~~[[File:C_link_property_development_for_SMEs.png\|link=http://zpr.io/gk2hR]]~~

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Designing Buildings at 05:59, 27 August 2020

2020-08-27T05:59:22Z

← Older revision		Revision as of 05:59, 27 August 2020
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	{\|		{\|
−	\| [[File:~~Calculator blk~~.jpg]]	+	\| [[File:Calculator_blk.jpg\|link=File:Calculator_blk.jpg]]
	\|-		\|-
	\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].		\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].
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	* Winning work.		* Winning work.

−	[[Category:Appointments]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Project_Knowledge]] [[Category:Appointments]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]]

Designing Buildings: Reverted edits by 37.131.52.39 (talk) to last revision by Designing Buildings

2020-06-23T06:07:24Z

Reverted edits by 37.131.52.39 (talk) to last revision by Designing Buildings

← Older revision		Revision as of 06:07, 23 June 2020
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	{\|		{\|
−	\| [[File:~~Calculator_blk.jpg\|link=File:Calculator_blk~~.jpg]]	+	\| [[File:Calculator blk.jpg]]
	\|-		\|-
	\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].		\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].
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	* A contractor on management fee contracts.		* A contractor on management fee contracts.

−	In addition, specialists may be required depending on the nature of the project, such as legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant and fire engineer. Other fees will also be payable on most projects, including planning fees and building regulations fees..	+	In addition, specialists may be required depending on the nature of the project, such as legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant and fire engineer. Other fees will also be payable on most projects, including planning fees and building regulations fees.

	= Variability of fees =		= Variability of fees =

37.131.52.39 at 17:41, 22 June 2020

2020-06-22T17:41:56Z

← Older revision		Revision as of 17:41, 22 June 2020
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	{\|		{\|
−	\| [[File:~~Calculator blk~~.jpg]]	+	\| [[File:Calculator_blk.jpg\|link=File:Calculator_blk.jpg]]
	\|-		\|-
	\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].		\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].
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	* A contractor on management fee contracts.		* A contractor on management fee contracts.

−	In addition, specialists may be required depending on the nature of the project, such as legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant and fire engineer. Other fees will also be payable on most projects, including planning fees and building regulations fees.	+	In addition, specialists may be required depending on the nature of the project, such as legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant and fire engineer. Other fees will also be payable on most projects, including planning fees and building regulations fees..

	= Variability of fees =		= Variability of fees =

Designing Buildings: Reverted edits by Hallen508 (talk) to last revision by Editor

2020-04-12T18:09:34Z

Reverted edits by Hallen508 (talk) to last revision by Editor

← Older revision		Revision as of 18:09, 12 April 2020
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		+	{\|
		+	\| [[File:Calculator blk.jpg]]
		+	\|-
		+	\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].
		+	\|}
		+
	= Introduction =		= Introduction =

Hallen508 at 14:02, 12 April 2020

2020-04-12T14:02:35Z

← Older revision		Revision as of 14:02, 12 April 2020
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−	{\|
−	~~\| [[File:Calculator blk.jpg]]~~
−	\|-
−	\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].
−	\|}
−
	= Introduction =		= Introduction =

Editor at 10:51, 22 July 2019

2019-07-22T10:51:41Z

← Older revision		Revision as of 10:51, 22 July 2019
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−	The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].	+	{\|
		+	\| [[File:Calculator blk.jpg]]
		+	\|-
		+	\| The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].
		+	\|}

	= Introduction =		= Introduction =

Editor at 10:41, 22 July 2019

2019-07-22T10:41:11Z

← Older revision		Revision as of 10:41, 22 July 2019
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−	The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article ~~click edit and change it. Alternatively~~, ~~you can~~ tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].	+	The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article, tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].

	= Introduction =		= Introduction =
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	* Services engineer.		* Services engineer.

−	Larger projects may need additional consultants for management and cost control.	+	Larger projects may need additional consultants for management and cost control, including:

	* Project manager.		* Project manager.
−	* Cost consultant (see ~~Quantity~~ surveyor’s fees).	+	* Cost consultant (see 'quantity surveyor’s fees').
	* A contractor on management fee contracts.		* A contractor on management fee contracts.

−	In addition, specialists may be required depending on the nature of the project, such as; legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant, fire engineer~~, and so on~~. Other fees will also be payable on most projects, ~~such as~~ planning fees, building regulations fees~~, and so on~~.	+	In addition, specialists may be required depending on the nature of the project, such as legal adviser, landscape designer, interior designer, environmental consultant, access consultant, planning consultant and fire engineer. Other fees will also be payable on most projects, including planning fees and building regulations fees.

	= Variability of fees =		= Variability of fees =

−	Fees are entirely dependent on the nature of the project and the circumstances of the appointment. Large new build projects may attract lower percentage fees than small works to existing buildings, commercial work may attract lower fees than private residential work, works to historic or listed buildings may attract higher fees~~, and so on~~.	+	Fees are entirely dependent on the nature of the project and the circumstances of the appointment. Large new-build projects may attract lower percentage fees than small works to existing buildings, commercial work may attract lower fees than private residential work, and works to historic or listed buildings may attract higher fees.

	Fees charged by consultants vary according to:		Fees charged by consultants vary according to:
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	* Reputation of practice. For example, a signature architect might charge more than one that is newly qualified.		* Reputation of practice. For example, a signature architect might charge more than one that is newly qualified.
	* Client organisation and track record. This will affect how much support is required and the risk perceived by consultants.		* Client organisation and track record. This will affect how much support is required and the risk perceived by consultants.
−	* Conditions of engagement. For example, the requirement for collateral warranties, partnering arrangements~~, and so on~~.	+	* Conditions of engagement. For example, the requirement for collateral warranties and partnering arrangements.
	* Anticipated programme and resources. The outputs in a short or long programme are the same, However, a longer programme prolongs administrative resources required such as attending meetings and responding to requests for information. Thus percentage fees for a longer period will tend to be higher.		* Anticipated programme and resources. The outputs in a short or long programme are the same, However, a longer programme prolongs administrative resources required such as attending meetings and responding to requests for information. Thus percentage fees for a longer period will tend to be higher.
	* Economic climate of supply and demand. Fees may be lower during recessions and higher during booms.		* Economic climate of supply and demand. Fees may be lower during recessions and higher during booms.
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	= Fee calculations =		= Fee calculations =

−	Despite the demise of fee scales, developers are still inclined to use percentages of building costs for early calculation of the likely fees associated with construction. However they will then generally negotiate fixed price lump sums with each consultant wrapping up any early work in the conceptual stages previously paid for on agreed hourly rates. Interim payment of fees ~~are~~ then related to pre-defined stages reached or related to time, for example, monthly payments against a payment schedule based on anticipated resources.	+	Despite the demise of fee scales, developers are still inclined to use percentages of building costs for early calculation of the likely fees associated with construction. However, they will then generally negotiate fixed price lump-sums, with each consultant wrapping up any early work in the conceptual stages previously paid for on agreed hourly rates. Interim payment of fees is then related to pre-defined stages reached or related to time, for example, monthly payments against a payment schedule based on anticipated resources.

−	The table below is a very approximate guide based on commercial office developments in the London area, where the fees of the core team of consultants are expressed as percentages against construction costs (excluding contingency allowances and VAT). Clearly, fees on actual projects will vary considerably depending on the nature of the building required, the site, state of the economy and ~~so on~~ as discussed above.	+	The table below is a very approximate guide based on commercial office developments in the London area, where the fees of the core team of consultants are expressed as percentages against construction costs (excluding contingency allowances and VAT). Clearly, fees on actual projects will vary considerably depending on the nature of the building required, the site, state of the economy and other factors as discussed above.

	== Core consultant fees ==		== Core consultant fees ==
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	== Other fees on an £80m office ==		== Other fees on an £80m office ==

−	It is likely that other, more variable fees will also be incurred. These are much more difficult to predict without a detailed understanding of the nature of the project~~, however~~, to give a sense of the type of fee that might be payable, indicative figures are presented below based on actual records of costs incurred on an £80m office block development in the City of London~~, updated to 2013 prices~~.	+	It is likely that other, more variable fees will also be incurred. These are much more difficult to predict without a detailed understanding of the nature of the project. However, to give a sense of the type of fee that might be payable, indicative figures are presented below based on actual records of costs incurred on an £80m office block development in the City of London.

	=== Acquisition fees ===		=== Acquisition fees ===

	{\|		{\|
−	\| Legal (for developer)	+	\|width="50%"\| Legal (for developer)
−	\| £600,000	+	\|width="50%"\| £600,000
	\|-		\|-
	\| Agent (for developer)		\| Agent (for developer)
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	\| £10,000		\| £10,000
	\|-		\|-
−	\| TOTAL	+	\|
−	\| £775,000	+	=== TOTAL ===
		+	\|
		+	=== £775,000 ===
	\|}		\|}

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	{\|		{\|
−	\| Survey	+	\|width="50%"\| Survey
−	\| £30,000	+	\|width="50%"\| £30,000
	\|-		\|-
	\| Party wall		\| Party wall
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	\| £40,000		\| £40,000
	\|-		\|-
−	\| TOTAL	+	\|
−	\| £1,368,400	+	=== TOTAL ===
		+	\|
		+	=== £1,368,400 ===
	\|}		\|}

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	= Quantum meruit (time charging) =		= Quantum meruit (time charging) =

−	Occasionally scope cannot be determined or a project involves significant uncertainty. Consultants may then be employed on pre-agreed hourly rates for different categories of staff. Generally, the hourly rate will reflect 2.5 x payroll cost based on a 1,500 working hour year.	+	Occasionally, scope cannot be determined or a project involves significant uncertainty. Consultants may then be employed on pre-agreed hourly rates for different categories of staff. Generally, the hourly rate will reflect 2.5 x payroll cost based on a 1,500 working hour year.

	= Competitive tendering and value =		= Competitive tendering and value =
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	* 200 for the cost of operating the business during the lifetime of the building.		* 200 for the cost of operating the business during the lifetime of the building.

−	(Ref. Report of the Royal Academy of Engineering on The long term costs of owning and using buildings (1998).)	+	(Ref. Report of the Royal Academy of Engineering on The long term costs of owning and using buildings (1998)).

	However, this has been criticised as misleading, not least because the construction industry accounts for around 7% of GDP, implying a much more significant proportion of business costs than the ratio suggests. Other ratios of construction costs to operational costs to business costs have suggested figures as low as 1:0.6:6 for some types of buildings. However, the usefulness of these ratios is questionable, other than if they are calculated based on actual figures for specific businesses.		However, this has been criticised as misleading, not least because the construction industry accounts for around 7% of GDP, implying a much more significant proportion of business costs than the ratio suggests. Other ratios of construction costs to operational costs to business costs have suggested figures as low as 1:0.6:6 for some types of buildings. However, the usefulness of these ratios is questionable, other than if they are calculated based on actual figures for specific businesses.
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	= NRM1 =		= NRM1 =

−	NRM1: Order of cost estimating and cost planning for capital building work defines project/design team fee(s) as '...project team and design team consultants’ fees for pre-construction, construction and post-construction related services, other consultants’ fees, fees and charges for intrusive site investigations, specialist support consultants’ fees and main contractor’s fees for the provision of pre-construction services.	+	NRM1: NRM 1 provides guidance on the quantification of building works for the purpose of preparing cost estimates and cost plans. Order of cost estimating and cost planning for capital building work defines the project/design team fee(s) as '...project team and design team consultants’ fees for pre-construction, construction and post-construction related services, other consultants’ fees, fees and charges for intrusive site investigations, specialist support consultants’ fees and main contractor’s fees for the provision of pre-construction services.

	See Group element 11: Project/design team fees for an indicative list of project/design team fees.		See Group element 11: Project/design team fees for an indicative list of project/design team fees.
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	It suggests that project/design team fees estimate means '...the total estimated cost of all project/design team fees at the estimate base date (i.e. excluding tender inflation and construction inflation).'		It suggests that project/design team fees estimate means '...the total estimated cost of all project/design team fees at the estimate base date (i.e. excluding tender inflation and construction inflation).'

−	[[File:~~C link property development for SMEs~~.png\|link=http://zpr.io/gk2hR]]	+	[[File:C_link_property_development_for_SMEs.png\|link=http://zpr.io/gk2hR]]

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Designing Buildings: Reverted edits by 87.81.249.146 (talk) to last revision by Designing Buildings

2019-07-13T13:10:04Z

Reverted edits by 87.81.249.146 (talk) to last revision by Designing Buildings

← Older revision		Revision as of 13:10, 13 July 2019
Line 1:		Line 1:
		+	The calculation of fees is a complicated and controversial subject. If you disagree with the contents of this article click edit and change it. Alternatively, you can tell us what you think by clicking on the submit comment button at the bottom of the page, or by adding your thoughts to the discussion page, or by emailing [mailto:info@designingbuildings.co.uk info@designingbuildings.co.uk].
		+
	= Introduction =		= Introduction =

	The term ‘fees’ generally refers to payments made by the client to consultants for services under the terms of an agreement. They are generally paid in instalments based on regular dates or at pre-defined stages of completed work. The core consultant team for most building projects will include:		The term ‘fees’ generally refers to payments made by the client to consultants for services under the terms of an agreement. They are generally paid in instalments based on regular dates or at pre-defined stages of completed work. The core consultant team for most building projects will include:

−	* Architect	+	* Architect (see [[Architect%27s_fees\|Architect's fees]]).
	* Structural engineer.		* Structural engineer.
	* Services engineer.		* Services engineer.
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	\|}		\|}

−	== ==	+	== Other fees on an £80m office ==
		+
		+	It is likely that other, more variable fees will also be incurred. These are much more difficult to predict without a detailed understanding of the nature of the project, however, to give a sense of the type of fee that might be payable, indicative figures are presented below based on actual records of costs incurred on an £80m office block development in the City of London, updated to 2013 prices.
		+
		+	=== Acquisition fees ===
		+
		+	{\|
		+	\| Legal (for developer)
		+	\| £600,000
		+	\|-
		+	\| Agent (for developer)
		+	\| £45,000
		+	\|-
		+	\| Legal (for vendor)
		+	\| £120,000
		+	\|-
		+	\| Agent (for vendor)
		+	\| £10,000
		+	\|-
		+	\| TOTAL
		+	\| £775,000
		+	\|}
		+
		+	=== Specialist fees ===
		+
		+	{\|
		+	\| Survey
		+	\| £30,000
		+	\|-
		+	\| Party wall
		+	\| £228,000
		+	\|-
		+	\| Acoustics
		+	\| £62,400
		+	\|-
		+	\| Site inspector
		+	\| £358,000
		+	\|-
		+	\| Soil investigation
		+	\| £67,000
		+	\|-
		+	\| Landscape design
		+	\| £30,000
		+	\|-
		+	\| Traffic engineer
		+	\| £28,000
		+	\|-
		+	\| Programmer
		+	\| £35,000
		+	\|-
		+	\| Interior designer
		+	\| £200,000
		+	\|-
		+	\| [[Right_to_light\|Right of light]]
		+	\| £100,000
		+	\|-
		+	\| Archaeology
		+	\| £40,000
		+	\|-
		+	\| Building regulations
		+	\| £100,000
		+	\|-
		+	\| CDM co-ordinator
		+	\| £50,000
		+	\|-
		+	\| Planning fees
		+	\| £40,000
		+	\|-
		+	\| TOTAL
		+	\| £1,368,400
		+	\|}
		+
		+	=== Letting fees ===
		+
		+	{\|
		+	\| Agents
		+	\| £2,800,000
		+	\|-
		+	\| Promotion costs
		+	\| £3,000,000
		+	\|-
		+	\| Legal (for developer)
		+	\| £400,000
		+	\|-
		+	\| TOTAL
		+	\| £6,200,000
		+	\|}
		+
		+	= Quantum meruit (time charging) =
		+
		+	Occasionally scope cannot be determined or a project involves significant uncertainty. Consultants may then be employed on pre-agreed hourly rates for different categories of staff. Generally, the hourly rate will reflect 2.5 x payroll cost based on a 1,500 working hour year.
		+
		+	= Competitive tendering and value =
		+
		+	Attempting to save money by driving fees down can be a mistake. Fees represent a small part of the whole-life costs of a project, but poor design can have a long lasting and expensive impact.
		+
		+	The relative cost of a typical project is sometimes illustrated using the ratios shown below:
		+
		+	* 0.1 to 0.15 for design costs (ref. OGC [http://webarchive.nationalarchives.gov.uk/20100503135839/http:/www.ogc.gov.uk/documents/CP0067AEGuide7.pdf Achieving Excellence Guide 7 - Whole-Life costing]).
		+	* 1 for construction costs.
		+	* 5 for maintenance and building operating costs during the lifetime of the building.
		+	* 200 for the cost of operating the business during the lifetime of the building.
		+
		+	(Ref. Report of the Royal Academy of Engineering on The long term costs of owning and using buildings (1998).)
		+
		+	However, this has been criticised as misleading, not least because the construction industry accounts for around 7% of GDP, implying a much more significant proportion of business costs than the ratio suggests. Other ratios of construction costs to operational costs to business costs have suggested figures as low as 1:0.6:6 for some types of buildings. However, the usefulness of these ratios is questionable, other than if they are calculated based on actual figures for specific businesses.
		+
		+	= NRM1 =
		+
		+	NRM1: Order of cost estimating and cost planning for capital building work defines project/design team fee(s) as '...project team and design team consultants’ fees for pre-construction, construction and post-construction related services, other consultants’ fees, fees and charges for intrusive site investigations, specialist support consultants’ fees and main contractor’s fees for the provision of pre-construction services.
		+
		+	See Group element 11: Project/design team fees for an indicative list of project/design team fees.
		+
		+	It suggests that project/design team fees estimate means '...the total estimated cost of all project/design team fees at the estimate base date (i.e. excluding tender inflation and construction inflation).'
		+
		+	[[File:C link property development for SMEs.png\|link=http://zpr.io/gk2hR]]

−	=~~== ==~~=	+	= Related articles on Designing Buildings Wiki =

−	~~= =~~	+	* Appointing consultants.
		+	* Architects fees.
		+	* Base date.
		+	* Charge-out rate.
		+	* Compensation.
		+	* Consideration.
		+	* Construction organisations and strategy.
		+	* Consultant team.
		+	* Contractual obligation.
		+	* Design team.
		+	* Disbursement.
		+	* Hourly rate.
		+	* Invoice.
		+	* Letter of appointment.
		+	* Planning fees.
		+	* Quantity surveyor’s fees.
		+	* Rates.
		+	* Schedule of services.
		+	* Search fees.
		+	* Sub-consultant.
		+	* Winning work.

	[[Category:Appointments]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]]		[[Category:Appointments]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]]