Commercial Design Fee

[Anonymous]

I am interested, how does a commercial architecture company charge for their work?

[Anonymous]

Many different ways:

1. Percentage of Estimated Cost of Construction (i.e., 8%-12%) and it varies according to the type of project with Historic Preservation being on the high-end.

2. Stipulated Fee or fix price based on a defined scope of work.

3. Hourly, although this may be hard to guage for the owner.

4. Design/Build firms try to do a GMP (Guarantee Maximum Price) which sometimes include the design fees along with the construction overhead & profit all rolled into one number.

Really there are many ways. In my experience, #1 is the best for a small to medium firm, since you can use AIA contracts and national data for establishing rates. As you may know, in Texas there is a Practice Act, which prohibits potential clients from competively bidding architects against eachother. This would mean that "short listing" and subsequent interviewing followed by contract negotiation is the method to be followed. As soon as I complete my registration (Jun/July) I plan to make extensive use of the AIA documents available to architects to better understand this part of the business. I'm sure though, you could probably find those "AIA Practice Manuals" at your local AIA chapter for further reading and reflection

+pablo

[stefan]

Our board of Architects in Belgium has set up design fees.

For new buildings it is 7% of the total construction cost (divided in design, permission and construction, but these cannot be done seperately, apart from the option of letting another registered architect do the site supervision).

For renovations it's 12%.

These are minumum wages, although the Belgian board has a conflict with the European government about this fee structure. Basically, the fees cannot be legally forced. In practice the minumum wages were maximum wages, unless you are a well-known highly praised (and published) architect.

P.S. For the work that is involved with doing a design, you are better of to sell houses instead of designing them... They have a typical fee of 3% and don't carry all the work and responsabilities that an architect has.

[Anonymous]

Thanks, that is good to know.

Pablo wrote:
Many different ways:

1. Percentage of Estimated Cost of Construction (i.e., 8%-12%) and it varies according to the type of project with Historic Preservation being on the high-end.

2. Stipulated Fee or fix price based on a defined scope of work.

3. Hourly, although this may be hard to guage for the owner.

4. Design/Build firms try to do a GMP (Guarantee Maximum Price) which sometimes include the design fees along with the construction overhead & profit all rolled into one number.

Really there are many ways. In my experience, #1 is the best for a small to medium firm, since you can use AIA contracts and national data for establishing rates. As you may know, in Texas there is a Practice Act, which prohibits potential clients from competively bidding architects against eachother. This would mean that "short listing" and subsequent interviewing followed by contract negotiation is the method to be followed. As soon as I complete my registration (Jun/July) I plan to make extensive use of the AIA documents available to architects to better understand this part of the business. I'm sure though, you could probably find those "AIA Practice Manuals" at your local AIA chapter for further reading and reflection

+pablo