A question to the Architects among you...
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Hey all:
I don't normally work with set fees or not to exceeds, except on modeling and such I haven't been doing for 30-some years, but my best client has offered me a couple of "if you'll take it on I will" projects...and I kinda need the money, though not enough to want to work for half price. This is one we're starting to negotiate:68'x40' stand alone pharmacy w/ two toilets, compounding lab w/ sink, office, mechroom, storeroom. Some ceiling soffits and wall bumps, exterior canopies and parapets.
Here's the correspondence so far...I'm in black (and SA blue:`)
Please advise if you are interested and how much $$ or hours for layout dim. site plan (no grading or utilities), arch. plan, exterior elevations, finish plan, building section and typ. wall sections, door and window schedule & typ. details, reflected clg plan and soffit details, and misc. details for roof edge, gutter, etc.
Yes, indeed...but need more info:
Bid set? Construction set for contractors. Needs to be complete to cover my butt.
Shell only? Everything except shelving and fixtures.
Drafting or full deal? I'll help with details and will communicate with client, but I really want you to run with it with minimum input from me.
You have typ dtls? Assume that we will provide our own details.
You have sample set showing approx. scope? Assume not.
Hourly to max. or set fee? It's the same thing, really, isn't it? (I thought this answer was pretty funny...and typical. :`)
It would also be helpful if you made the first offer...since you know what the market will bear? %(#FF0000)[I don't know what the market will bear............but I will attempt to assign hours to a page:
02 hrs Set up sheets, title block, etc
06 hrs Dimensioned Site Plan
16 hrs Floor Plan
16 hrs Building Sections
16 hrs Typical wall sections
04 hrs Finish Floor Plan
04 hrs Door and Window Schedule
04 hrs Door and Window Details
04 hrs Reflected Ceiling Plan & Soffit Detail
08 hrs Interior elevations & misc Interior Details
08 hrs Roof plan and typ Details
16 hrs Pick up redlines & Contingency
104 hrs total]I'm thinking he's at least 20% low for the best case CD scenario...and even then it wouldn't cover much consultant coordination, let alone the DD research and problem solving that hasn't been done. And when was the last time a project went the way of best case?
Whadaya think?
Thank you in advance for taking the time to share your project production budgeting experience, and best, Tom. -
I hate to bid by the hour... it's a missive for you and the client. sure it may take you 4 hours to do the site plan, but is that total hours of your time on this project or hours in the program actually working.
for commercial I like to charge $3 per square foot... it seems to cover the excessive time for details and such. and it normally works out to a nice amount.
this would give you $8,160.00 for the project overall and that would come in at 2/3's less than the 3-1/2% or 4% I see offered. which would be $24,000 for a stamped project.
for residential we charge $1.50 per square foot.
I also give them limited windows of opportunity to make changes before change order prices come into play.
the 104 hours you describe would pay some $5200.00 at $50.00 per hour.
I find the hours, like maybe 25% to 35% too low... it may get done quicker, but with phone calls time delays information delays... yada yada...
and most people that work alone or quasi alone cannot do other projects in the mean time.
hope this helps...
good luck... if it's anything like that last commercial remodel you did, I'm sure they'll get their monies worth no matter what you charge...
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Tom:
After years of underestimating fees, our office has adopted a policy (with most of our clients, at least) of charging an hourly fee through design development, then setting a fixed fee for contract documents and contract administration. We have found that we cannot predict how much time it will take to produce a project until we have clearly and completely defined the scope, and we can't know the scope until we've finished with DD's--and until the client has finished changing his mind or adding stuff.We'll sometimes, but not always, set a Not-To-Exceed number on the SD and DD phases, but it has to be negotiable for those clients who keep changing things. When we set an NTE, we do it phase by phase, as each preceeding phase is completed.
We're also getting pretty stringent on making sure that we get the client's written approval after every phase, and that the client clearly understands up front that, having received that approval, we will bill any subsequent changes on an hourly basis as Additional Services.
The point is that we don't mind working on a project for as long as the client wants us to, making whatever changes are desired, but we insist on being compensated for it. This method encourages clients to make decisions and stick to them, although changes for unforseen circumstances can easily be accommodated.
Hope this helps.
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Ray,
Thanks...I was hoping for some "long in the tooth" answers from firm-wise architects. Your attitude is exactly that of mine and why I have so far refused to take on any work other than hourly since going out on my own as temporary support, only to architects and a couple of engineers. But this has also kept me out of the "standard practice" loop for a few years now.I haven't talked (on the phone) with my client yet, but I'm assuming he's throwing me a bone (with a bit of a kickback attached, of course, in the form of some coordination profit for himself :`) I'm also guessing he thinks the profit margin is going to be small or I wouldn't get the project offered in this manner. We'll see.
Are there any production time range rules of thumb you use? I had it pat before cadd happened, but haven't thought much about it much since. (That's back a few years now, huh?)
Thanks again, Tom. -
Tom:
It's always difficult to estimate production time, but generally, I think of it in terms of a complete sheet every two days. That allows for time for me to check and correct the work, and to coordinate between sheets and between the architectural and engineering work, and to make any required adjustments.In that estimate, I'm also assuming that I've worked out the details before I've started the final sheets, during the DD Phase. I usually do that with pencil and paper, thinking through the construction details, making lots of hand-drawn, to-scale wall section drawings and enlarged details, then adjusting the plans and elevations accordingly. That sequence helps me ensure that I know what I'm drawing before I start, and allows the thing to flow more smoothly.
Don't forget to allow a day or so for some building code and product research before finalizing the drawings, and for writing the specifications. I find the code research particularly helpful because it keeps me from drawing something that can't actually be built legally, especially in the area of accessibility.
Finally, price yourself according to what a firm would bill you at if you were working for a larger firm. That can be two and a half or three times what you pay yourself. After all, you've still got overhead to cover, even if you're a one-man shop.
The biggest problem I had when I was working alone was believing that I was worth what I should have been charging. Because I didn't believe it myself, I had trouble convincing clients that, just because I was practicing alone didn't mean I came cheap! Once I got through my head that I knew what I knew, and that my experience, skill, knowledge, and judgment was worth real money, I was able to demand, and get, the appropriate fees. I also learned that if someone wasn't willing to pay it, I probably didn't want to work for that person anyway, and besides, someone else would.
Once you get a reputation for being cut-rate, it's almost impossible to raise your fees later. So never, ever, ever underprice. That's my advice.
Ray
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It's hard to evaluate those numbers without seeing the design. 4 hours for window and door details might be plenty if all you need are one hollow metal door detail and simple storefront details. I didn't see anything about coordinating with the engineers' work (assuming there would be mechanical and electrical engineers working on this too).
We typically base our fees on a percentage of the construction cost, broken down into phases by percentage (design, design development, construction documents, bidding, contract administration).
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What happened to the DD set?!? Back in the day they were as or more complete than CD's are now. ??? Anyway...
...my first boss (thought he was an old idiot then, since have discovered he was one of the wisest I've worked for :`) said over and again a CD set (hand drafted) took 40 hours a sheet from DD approval thru bidding. Our fees were based on a percentage also, Daniel, as were the consultants on their portion of the project (thus the "hidden gold fixture trim spec" jokes).
We always finished under...everyone was always proud and happy.
My next decade was with one-man shows where the subject rarely came up, as their practices were about something else other than the business of architecture (thus the often feast or famine after a project).
During my stint with the big firms around here, the manpower budget for CD's was typically 25-30 hours per sheet. DD's were sketchy at best by the nineties, we were always over budget, and working nights 'cause...who knows?
The turns we humans take in life, huh?
Anyway, this project is a simple box with some DD issues that need to be excluded from whatever we settle as the time for my part. Even so, I'm convinced he's a little low for drafting only, so adding some consultant coordination I will be pushing to settle on about 25% more...after the full scope is established and all the BYITB questions have been answered.
I also may propose something a little less one sided than either the set fee or the not to exceed: if I come in under the set hours we split the extra, if I'm over we split the loss...i.e. I work for half price until it's done. (Though the conflicts that could arise from such an arrangement isn't really what my little enterprise is about. :`)
Whadaya y'all think of that last bit?
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Ray,
Great to see you over here! Just wanted to say both your posts contain excellent advice, well explained and interesting reading. Perhaps it should be posted in the tutorials section "How To Run An Architects' Practice"
Regards
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Daniel:
We still allocate time internally based on percentages for each phase, but our internal historical data shows that we need to be very careful to adjust those percentages for each project. We rarely use a set percentage for billing because we've discovered that projects can be highly variable, depending on scope, unforseen conditions, and the client. For example, I recently completed a very large home remodeling and addition that took two years (!) of client handholding just to get through the design process. Can't put a fixed percentage on that!
Tom:
I'm not sure that I completely understand what your arrangement is to be, but generally I'd say, "Keep it Simple." You're worth what you're worth, and unless you're in a financial crunch and need immediate income, I'd just set a price you think is commensurate with what you're bringing to the table and with the effort you'll think it'll take, then sit back and let him react to it. It's a lot easier to negotiate downward than it is upward.Don't be shy about asking for what you're worth. I once did some consulting for which I almost asked for $4000 a week plus expenses, but at the very last minute, what came out of my mouth was $3000. The client agreed so readily that I knew I'd left money on the table.
Modelhead:
Don't know if we'd be interested or not until we saw more details. There are just so many variables... -
Ray,
Thanks for your continued interest. I probably should mention I have an ongoing relationship with this architect and all my work for him is hourly with no billing limits.As with most firms he occasionally has one walk in the door that he doesn't want to throw his overhead over. In the past I have said no to set fees...but I am a bit hungry right now. (And since most of the models I've shown here he's paid for, there is added incentive to be accommodating :`)
My idea was to take some of the one-sidedness out of the set fee / not to exceed (and also give him an incentive to push the limit up). I suggested we agree to a reasonable number of hours based on the project scope. (I work for him, and get paid hourly, regularly; he contracts a fee with the client, and gets paid when he can.) Say the estimate is 100hrs: if I do the work in 90, I get paid for 95 (half the difference); if the work takes 110hrs, I get paid for 105; etc. This way I don't work hours for free if I'm/we're wrong about the time...and I share in the bonus if I do it faster.
Sound reasonable?
Thanks again, Tom. -
Tom:
Thanks for clarifying your situation. I knew I was missing something, but couldn't put my finger on what it was
Yes, your proposal sounds reasonable to me. I'm trying to put myself in your client's shoes. If I were engaging you, I'd want to be able pretty closely to know what my costs were going to be so that I could quote a fee to my own client that I knew I could stick to. (For some reason, clients like to know what they are going to have to pay...)
What you're suggesting sounds a lot like a guaranteed maximum price construction contract, and provides incentives on both sides to produce the work efficiently, with a minimum of "scope creep" and indecision. The only thing I'd suggest, and I'm sure you've already thought about this, is that you ensure that your client knows that if the project scope enlarges, or if there are significant changes after you've started your work, your NTE will adjust accordingly. After all, you shouldn't be penalized for circumstances beyond your control.
Good Luck.
Ray
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Well, you've been so helpful I thought it right to follow up (Ray, I would have thought you were older :`)
I wrote this back:
%(#006000)[(client first name...remember we have a longish history),
First, I appreciate you offering me these āIāll take it if youāll do itā projectsā¦not particularly fun but donāt look at all painful either (bread and butter). And yes, I do want the work, so donāt let anything following make you think I donāt.
That said, if applied to (project one), I think your numbers per sheet are maybe ābest case scenarioā (and how often does that happen?), so 20-30% low on average. There is a good DD available in the set you sent, but there will be some structural coordination with the new roofsā¦and a good check of their existing CD's along the way. (Plus, Iām guessing the site and zoning issues will take a considered amount of time.) Also, every project Iāve done for you so far has been much more detailed than their set, and I have to assume you will want to stamp the level youāre comfortable with.
The (project two), however, has no DD available (I canāt read most of what you faxed, but I assume the originals will be availableā¦?). Even if the client is another contractor there will be a bit (or more) of consultant coordination, code and zoning investigation, plus some research into material selection and detailing. I would also add "some" time for franchise coordinationā¦as you know, this can be a bear. So, your numbers, plus the 20-30%, seem reasonable once we answer all the DD questions and issues.
As for the DD portionā¦I donāt know. Nobody seems to do DDās anymore. I do know that for the last decade or so, the DD/CD production phase (everything from schematic design to biddingā¦including gathering spec info but not including writing them) takes 40-50 hours a sheet (my packed sheets). So a good budget number seems to be 45-55 hours a sheetā¦the number of section and detail sheets on larger or more complex projects usually driving the total. Of course some buildings are obviously much simpler, some obviously more difficultā¦?
ā¦ābout all I know on the subject, so whatās next.
Best, Tom.Oh yeah, I know your answer to the set-price / not-to-exceed question was a bit tongue-in-cheekā¦but youāre right, if I go over there is no difference. If Iām under, however, in the former I get the extra, you get it in the latter. Iād usually rather not deal with this all, knowing you get my best work (worth every penny :`) under any circumstancesā¦so it takes what it takes, but hereās an idea: We make a best guess on the production timeā¦if Iām under we split the profit, if Iām over we split the lossā¦???
Bottom-line, I would like to expand our relationship a bitā¦it works well for me!]
So...we started an SU model of the roof alternatives for the first project, and then moved in on a schedule for CD's: without discussing the above(?) Another week and I asked him about project two and he said he sent them a proposal: still without further discussion of my estimated time(?!?)
LOL (after I got off the phone :`)
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Tom:
Sounds like you have a good handle on things. I hope it all works out in your best benefit.
By the way, I'm 62. The picture is from about a year ago--I haven't any newer ones, but don't think I've changed much since then. The portrait in my attic is looking pretty bad, though...
Ray
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Ahhhh...the portrait in the attic. I had one of those but it must have fallen apart a couple of years ago...about the time the younger ones started calling that sparkle in my eyes "sir". :`)
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@tomsdesk said:
Ahhhh...the portrait in the attic. I had one of those but it must have fallen apart a couple of years ago...about the time the younger ones started calling that sparkle in my eyes "sir". :`)
Yeah, I hate it when that happens. However, it keeps me humble...
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Yeah: humble...and sane!
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