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.
• 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:

• Standard appointments generally have provision for additional fees.
• Beware of bespoke appointments that limit additional fees to client instructions.
• Licence fees for the design if the developer uses it on other sites.

[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

• Type of procurement and scope of services.
• Speed
• Quality
• Project size
• Complexity
• Extent of works to existing buildings
• Repair / conservation of historic buildings
• Degree of design repetition
• Practice size and overheads
• Geographic proximity
• BIM

[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] Related articles on Designing Buildings

• Appointing consultants.
• Architects fees.
• Consultant team.
• Design team.
• Fees.
• Hourly rate.
• Letter of appointment.
• Planning fees.
• Schedule of services.
• Winning work.