Verifying Architectural Fees
Whether you have arrived at a fee by a wild guess or a fee schedule you want some kind of corroboration.
One option, if you keep good records, is to compare this project to a similar project. Was the fee adequate on that other one? Usually the two projects are dissimilar in some way.
Another way of checking the 'rightness' of an architectural fee is to evaluate its 'rightness' when viewed as a design budget.
This option involves doing an evaluation. It is fairly easy to 'spread out' the fee over the design phases to see how adequate the fee actually is.
Here's How...
If we use the example of a $20,000 fee, here's how it would look. First set aside any contingency you have included, say 10%.
10% of $20,000 = $2,000
Of the $18,000 remaining, how much is ear-marked for consultants? Let's say $3,000.
Now we have the net design fee that you will receive for your work.
The standard allocation per phase of work is:
Schematic Design - 15% or $2,250
Design Development - 20% or $3,000
Construction Documents - 40% or $6,000
Bidding - 5% or $750
Construction Administration - 20% or $3,000
I have seen the allocation place more in Schematic Design when you are using a 3D design tool like Archicad or Revit.
Now that you have the design budget for your own work, convert the money into hours. Rather than guess what your cost per hour will be, consider who will most likely work on the project and how much.
Person #1 - 20% whose rate is $120/hr or $24/hr
Person #2 - 30% whose rate is $90/hr or $27/hr
Person #3 - 50% whose rate is $60/hr or $30/hr
Add these adjusted hourly rates together and you have your projected cost per hour - $81.00/hr.
I suggest evaluating at least the CD phase or you could evaluate each one like this.
Schematic Design - 15% or $2,250/$81 = 28hrs
Design Development - 20% or $3,000/$81 = 37hrs
Construction Documents - 40% or $6,000/$81 = 74hrs
Bidding - 5% or $750/$81 = 9hrs
Construction Administration - 20% or $3,000/$81 = 37hrs
Here you should go with a Gut Check. Does this seem right?
Or you can take it further and dig into the biggest piece of the fee, Construction Documents by listing all the drawings you will need to produce. Estimate the hours per drawing and compare that total to the allocation for CDs that you have calculated.
This should answer the question of whether the fee is adequate or not.
A lot of this boils down to guessing. The actual experience is always different. Your only hope is to do the work as effectively as possible and monitor how you are doing compared to your 'plan’.
This is the spreadsheet that I used to allocate fees automatically based on how we approached design.
If fees never seem adequate and you have a chronic problem with underestimating what it will take, this approach will introduce some objectivity. My FeeCalqs spreadsheets can save you some time doing the evaluation (above).
If fees never seem adequate and you lose work when you try to increase them, your only choices are: move to a market with less competition on fees, or improve your competitiveness for those fees. That means - improve your project management.