| Experienced clients
recognize that adequate compensation for the architect is in their
best interest as it assures the type and level of service needed
to fulfill their expectations. You may have questions about how
to arrive at the appropriate compensation for your project; some
of the most frequently asked questions are answered here.
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| How
much should I expect to pay an architect?
That will relate to the types and levels of professional
services provided. The more service you need and the more complex
or experimental the project, the more you should budget for architectural
services. top
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What methods of compensation are available?
These are most common: |
- A stipulated sum based on the architect's compensation proposal
- An hourly rate or multiple based on the architect's labor costs
- A percentage of the construction cost
- A stipulated sum per unit of construction
- A combination of the above top
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| My project
is one characterized by repetitive units (apartments, rooms, beds,
etc.). Does it make sense to use those units as a basis for compensation?
Sometimes. For example, when the probable number of units (or alternatively,
the highest and lowest probable numbers) is known. Keep talking,
so that each understands the other’s basis for negotiation.
Often, differences result from incomplete or inaccurate understandings
of project scope or services. Perhaps some project definition services
can be performed by the architect on an hourly basis or by the owner.
Perhaps coordination of owner forces, special consultants, or other
actors mandated by the owner is adding to the architect’s
costs. When everything is mutually understood and there still is
no closure on compensation level, the owner and the architect have
no choice but to end negotiation. top
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| Percentage
of construction cost seems to be a simple method of compensation.
Is It recommended?
It depends. It is simple in concept, but it requires a rigorous
determination of what construction cost includes and does not include.
The result may be too high or too low given the complexity of the
project and the professional services needed to accomplish it. This
method may be unfair to the owner (for example, by allowing inflation
in the construction marketplace to drive up costs of professional
services) and conversely may penalize the architect for investing
extra effort to reduce construction cost on behalf of the owner.
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What does
a stipulated sum mean?
This is matter of negotiation with your architect, but generally
it includes the architect's direct Personnel expenses (salary and
fringe benefits), other expenses chargeable to the project (such
as consultant's services), indirect expense or overhead (the architect's
costs of doing business not directly chargeable to specific projects),
and profit. A stipulated sum typically does not include reimbursable
expenses. top
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When does
it make sense to consider hourly billing methods?
Again, this is a matter of negotiation, but it makes special sense
when there are many unknowns, Indeed, many projects begin this way,
using hourly billing until the Scope of services is determined and
it is possible to establish a stipulated um. It may also make sense
to use this approach for construction administration (since the
level of professional services may vary with the contractors selected
and unforseen site problems) and special services such as energy
and economic analysis. top
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What are
reimbursable expenses?
These are out-of-pocket expenses incurred by the architect on behalf
of the project that usually cannot be predicted at the outset such
as long distance travel and communications, printing, authorized
overtime premiums, and the cost of additional required insurance.
Detailed in the owner-architect agreement these expenses are usually
outside the stipulated sum or hourly billing rate, and they are
usually billed as they occur. top
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What about
payment schedules?
Once the method and amount of compensation have been established,
ask the architect to provide a schedule of payments. Such a schedule
will help you plan cash requirements for the project. top
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| What
other expenses can the owner expect?
The owner-architect agreement outlines a number of owner responsibilities,
some of which will require financial outlay. These may include site
surveys and legal descriptions; soils engineering services (for
example test borings or pits), an on-site representative during
construction; and the legal, auditing and insurance expenses needed
to fulfill the owners responsibilities. top
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| What
happens it the owner and the architect cannot agree on compensation?
Keep talking, so that each understands the other’s basis for
negotiation. Often, differences result from incomplete or inaccurate
understandings of project scope or services. Perhaps some project
definition services can be performed by the architect on an hourly
basis or by the owner. Perhaps coordination of owner forces, special
consultants, or other actors mandated by the owner is adding to
the architect’s costs. When everything is mutually understood
and there still is no closure on compensation level, the owner and
the architect have no choice but to end negotiation. top |
