Last edited 18 Jun 2018

Fees and resourcing on design and construction projects

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[edit] Calculation

Fees can have impact on client's perception of a company and so it is important to get them right.

They can be based on:

  • Empirical data: practice records of previous costs.
  • Calculating the cost of the resource and other requirements (renders,printing, travel etc…) of the project on stage by stage basis.
  • Both
  • A tool such as the RIBA fee calculator based on the cost of the resource and other requirements.

[edit] Types of fee

Fees calculated as a percentage of the final construction cost:

  • Suits straightforward building projects of relatively short duration.
  • Can appear to reward design consultants for an overpriced design.
  • Risk to the consultants that the construction cost could be lower than anticipated.
  • Can be used as a basis for fee calculation rather than a 'set in stone' agreement.

Lump sum fees:

  • Appropriate when the scope of the project/ required services/ programme and cost clearly defined from outset and are unlikely to change.
  • It is possible to agree lump sum separately for each work stage.
  • Variations may allow additional fees.

Time charges:

  • Appropriate when resources or time scale cannot be predicted accurately. This is often the case in the early stages of a project.
  • An agreed hourly rate per staff category / named individual.
  • May include a provision for increases with inflation (12 monthly).

Additional fees:

[edit] Risks and uncertainties

  • Client experience/ knowledge/ reputation/relationship. It may be appropriate to carry out a credit check and speak to other firms to find out how quickly they pay/ whether they observe payment terms and so on.
  • Project definition: Are the requirements clear or uncertain?
  • Scale of project: Impacts planning timescales/ resource/ programme.
  • Complexity of the project.
  • Whether similar work has been done before.
  • Programme: scale/ planning/ resource/ uncertainties such as repairs for survey/squatters.
  • Other resource requirements: if a project is overseas, it may be appropriate to work with a local consultant to benefit from their knowledge.
  • Local opposition/support
  • Requirement to appoint sub-consultants

[edit] Key influences on resource requirements

[edit] Benefits

  • Business expansion.
  • Enhanced profit.
  • Employ existing staff
  • New market/sector
  • Quality of work
  • Prestige/enhanced reputation

[edit] Key influences on brand value

  • Practice reputation.
  • Location.
  • Culture.
  • Specialist skills.

[edit] Context/benchmarking

Whilst using the points above to aid a resource-based approach to calculate feed, cross-checks are recommended to ensure that a sensible outcome has been reached. Such checks include comparing the fee to be proposed against previous similar jobs and benchmarking the proposed fee against other projects when expressed as a percentage of construction cost.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki