PPP Notes - Services and Compensation

(These notes are compiled from AHPP) 

ARCHITECTURAL SERVICES AND COMPENSATION

 

• The Common Challenge for Architects
• Identifying and then receiving appropriate compensation for services they provide their clients.
• Historically
• Architects/their works were commonly supported by the state. 
• The church supported the majority of architects during the Middle Ages.
• During the Renaissance the concept of patronage of architecture extended to wealthy families and private businesses in leading European cities.
• Now
• Over the last two centuries the roles of architects, practitioners in new engineering disciplines, and construction contractors have become more separate, and project engagements have become the standard for everyone in the industry.
• Early project-based fee structures were widely based on percentages of construction cost, and the AIA and other industry groups once promoted standard fee percentages.
• FEE-BASED STRUCTURE
• Complexity, scale and uniqueness of twentieth-century building projects led to the adoption of cost-based fees for design services. 
• This approach emphasizes recovery of costs – labor and expenses – incurred in performing the architect’s services.
• Invites detailed negotiation of the projected effort, staff salaries, overhead rates, fee multipliers, and profit margin that the architect is allowed.
• LIMITATIONS OF FEE-BASED STRUCTURE
• Many architects recognize the opportunity to make maintaining long-term client accounts (rather than individual project engagements).  For this, flexible compensation terms are devised to cover many different services, individual projects, and locations.
• More projects involve delivery methods beyond design-bid-build.  They typically include a third-party construction manager / design-build responsibility.  They also require new combinations of architectural services and fee considerations.
• Architects are increasingly sensitive to business risks imposed by different service approaches, and are seeking appropriate rewards in contract and compensation terms.  If an architect shares direct risk for construction cost, he/she might negotiate an incentive fee derived from savings under the project budget.
• Architects/clients are developing a clearer sense of value based on the contribution of architectural services to the success of a client’s enterprise.  Sophisticated clientele realize an architect can speed the process while saving money.

 

• THE ARCHITECT’S SERVICES
• Most clients’ needs do not begin with programming and design and end with construction.
• Architects must now address the entire facility life cycle that concerns their clients: planning, change management (including design and construction) and facility operation.
• Architects can serve their clients continuously long-term relationships – sometimes with traditional design services.
• Diversification of services has led to increased specialization among individual architects, firms, and consultants.
• Options for Defining Services
• First step in structuring architectural services – and their appropriate compensation – is determining the scope and specificity of a client’s service requirements.  May be defined very precisely or very loosely, depending on the clarity of the client’s goals.
• CLIENT-GENERATED WORK SCOPE:
• Detailed service requirements as part of a REQUEST FOR PROPOSALS (RFP) soliciting architectural services.  This approach is employed for repetitive/standard assignments, managed by client’s own personnel, for the purpose of comparing competing proposals.
• OWNER-ARCHITECT AGREEMENTS:
• Standard service agreements are useful in defining architectural services, primarily for relatively traditional design and construction projects.  Particularly true for AIA standard forms.
• CUSTOMIZED WORK PLANS / SCOPE DESCRIPTIONS:
• For a set of special services, it is up to the architect to create a customized definition, after extensive consultation with the client, as the basis for a service and compensation agreement.
• Consider:
• Client goals
• Service tasks and expected work products
• Key review and decision milestones
• Schedules of tasks, phases, and milestones dates
• Requirements for information or services provided by others
• Allowances for changes or events outside the architect’s control
• Exclusion and additional services available
• THE VALUE POSITION
• A traditional emphasis on cost-based project compensation has contributed to a low level of profitability among architecture firms as an industry.
• Many architects have been conditioned to accept pretax profits – this cannot be sustained long-term.
• Cyclical nature of design and construction investment has exacerbated this problem.
• Architects today have a new awareness of the value of their services in relation to those of other professionals, and the distinct benefit their clients derive from their architectural services.
• RELATIONSHIP TO FIRM MARKET POSITION AND STRATEGY:
• The most successful firms have adopted overall business strategies and market positions based on services provided.
• Firms perceived as the best or offering something unique in serving client needs will be in demand and will be paid a premium for their services.
• Conversely, undifferentiated firms will be evaluated on price alone.
• Several clients seek to engage firms on a commodity price basis, which will be unprofitable to the firm unless it can deliver its work at a lower cost.
• Some possible dimensions for firms include:
• DESIGN PREEMINENCE:
• A firm honored for the signature quality of their design work.  Can be regional, national or international in scope.  Clients value name-value association.
• BUILDING TYPE EXPERIENCE:
• A firm with successful experience in the facility types that concern them.
• PROJECT LEADERSHIP CAPABILITY:
• As clients seek simpler and more efficient ways to manage facility projects, they look for firms to lead the delivery process – through program management, construction management, or design-build services.
• UNIQUE SERVICE METHODS:
• Firms offering value through special services that improve quality, speed, and accountability in the planning, construction, and management of their clients’ facilities.
• Other firms offer unique computer-aided design (CAD) and computer-aided facility management (CAFM) capabilities.
• RISK ASSESSMENT IN PRICING ARCHITECTURAL SERVICES
• Architects must be sensitive to business risk (a financial loss outside of one’s control).
• Few “typical” assignments; each one must be evaluated in terms of special risks as compensation and contract terms are proposed.
• Goal is either to find ways to eliminate sources of risk or else to receive fair compensation for changing conditions that are outside control.
• A FUNDAMENTAL RISK is a misunderstanding of what is included in an architect’s services, particularly under a fixed-fee contract structure.
• Some specific risks include:
• CLIENT DECISION MAKING AND APPROVALS:
• The architect should understand the structure and pace of the client’s decision-making process.
• SCOPE CHANGES:
• If an assignment is expanded or substantially altered during the design and construction process, the change creates more work and cost for the entire project team.
• THIRD-PARTY PROJECT MANAGEMENT:
• If a client has engaged a third-party program manager or construction manager to lead a project’s design and construction, the relationship can be more complex.
• FAST-TRACKING AND CONSTRUCTION-DRIVEN DELIVERY SCHEDULES:
• Accelerated construction schedules drive the demand for design decisions and an architect’s bidding and construction documents. 
• CONSTRUCTION COST RESPONSIBILITY AND CONTINGENCY STRUCTURE:
• Architects are usually held accountable for designing to a client’s budget based on the architect’s budget review and estimating services.  Risk is compounded when the architect is asked to rely on estimating by others (third-parties or construction managers).
• EXPECTED STANDARD OF CARE IN DESIGN / COORDINATION:
• As instruments of service, architect’s technical documents are never perfect or immune to differences in interpretation.  A small percentage of the total cost can be related to the coordination issues or omissions.
• FINANCIAL RESOURCES AND PAYMENT TERMS
• Architects should confirm their clients’ financial resources and intended payment practices related to any project assignment.
• COMPENSATION OPTIONS
• FIXED (STIPULATED SUM) FEES:
• A fixed fee is a firm compensation amount related to a particular scope of service.  Convenient / appropriate when services precisely defined.
• Greatest profit potential to the firm.
• Important to include a contingency within the fixed fee to cover the foreseeable risk.
• HOURLY BILLING RATES AND FEE MULTIPLIERS:
• Most flexible fee option for architects and clients.  Generally preferred when no exact service scope can be defined.
• Often used for preliminary phases of project assignments that are later converted to fixed fees.
• Can utilize fixed dollar rates (e.g., $125 per hour) in which rate is calculated to cover direct salary cost, fringe benefits, overhead and profit.
• Some clients prefer to negotiate a fee multiplier, which is applied to salary cost incurred by the project team.  One is a multiplier of direct salary expense (DSE) and the other of direct personnel expense (DPE).
• Disadvantages include limited profit potential in that a planned profit percentage is earned only as staff effort and cost are applied to the work.  Can be made worse if client chooses to implement a “ceiling.”
• COST PLUS FIXED FEE:
• Hourly fee option in which a client is billed for the actual cost of an architect’s effort – base salaries, fringe benefits, and firm overhead – on a rate or multiplier basis, and a fixed fee is negotiated.
• Useful when a client does not want an open-ended fee arrangement but there are many unknowns and it is difficult to establish a stipulated sum at the outset.
• UNIT COST METHODS:
• Compensation based on cost per square foot, room, store, building or other unit.
• Office planning and interior design are often priced per square foot and the same units are used in lease rates and tenant allowances in commercial buildings.
• Requires accurate and timely data on the cost of providing the services for each unit.
• PERCENTAGE OF CONSTRUCTION COST:
• Tying compensation to the construction cost of the project and not to the scope or cost of the professional services provided.
• Method is rarely used as a compensation basis today because of its inequities for clients and architects.
• Fallacies include the assumption that construction cost is directly proportional to the architect’s effort.  It also allows construction market conditions to benefit a client but penalize and architect, or vice verse. 
• Lastly, it can penalize an architect who invests in reducing construction costs.
• REIMBURSABLE AND NONREIMBURSABLE DIRECT COSTS:
• While staff labor represents the majority of an architect’s cost of service, there are other direct costs that are related to the work and not covered in a firm’s overhead. 
• These include travel, long-distance communications, mail and courier services, printing, photography, computer services and output, and materials or equipment dedicated to the architect’s effort.
• Direct costs may be reimbursable or non-reimbursable.
• SERVICE AND PRICING STRATEGY:
• No single best strategy or compensation approach.
• 6 processes do work well for many firms, however:
• CONSULTING WITH THE CLIENT ABOUT NEEDS/PRIORITIES:
• Most important step is knowing the client – understanding his/her needs, expectations, style, and concerns.
• Discover a client’s “value drivers,” paramount concerns that, if addressed properly, can ensure an architect’s selection and a higher level of compensation.
• This step is more difficult when an architect is asked for service proposals through a formal RFP process.  In this case, opportunity for direct discussion of the client’s goals may be limited.
• IDENTIFY SERVICE STRATEGY, TEAM, WORK SCOPE:
• Once needs are understood, develop an overall service strategy to address them successfully.
• Helpful to use a description of the architect’s services using the standard form of agreement (AIA B141).
• Consider:
• Is the effort limited to design and documentation services?  Or is it a long-term agreement where multiple services can be authorized over time?
• Which services and key people are appropriate?
• What consultants and outside resources are necessary?
• How will the architect relate to the client, users, public agencies and other team members in terms of communication?
• ESTIMATE THE COST OF PROVIDING THE SERVICES:
• Unless open-ended in an hourly billing arrangement, tt is important to estimate the actual cost of providing the services (including the firm’s staff, outside consultants, and direct costs) as the starting point for compensation.
• Architect should determine the hourly rate or multiplier that will represent actual cost, including salaries, fringe benefits, and firm overhead.
• EVALUATE RISK FACTORS AND APPLY CONTINGENCIES:
• The architect should evaluate the potential risks and decide what additional compensation is appropriate to offset them.
• May be specific dollar amount, a markup of hourly cost rates, or an increase in the base fee multiplier.
• ASSESS THE FIRM’S VALUE POSITION AND ADD THE APPROPRIATE PROFIT TERMS:
• Finally, the architect should assess the special value of the firm’s services to a client and determine the most favorable fee and profit structure for each case.
• Three considerations:
• The firm’s minimum profit targets.
• The value of the firm’s services in the marketplace.
• The value of the project to the firm.
• The target profit levels will determine the architect’s fixed-fee, fully loaded hourly rates, or fee multiplier.
• COMPARE THE PROPOSAL WITH PAST EXPERIENCE:
• Compare a new client or project opportunity with the firm’s past compensation experience.
• Most firms take an early educated guess about basic design service fees as a percentage of a project’s estimated construction cost.
• It is still wise to review proposed compensation terms with several firm principals or project leaders before completing the service proposal.
• Finalization
• When the scope of services and compensation terms are finalized, they are normally included in a written proposal document presented to the client.
• Different forms typically are used: letters with attachments, completed owner-architect agreements (AIA B141), or more elaborate formats prescribed by a client’s RFP.
• At a minimum, the service proposal should contain the following elements:
• A description of the professional services covered by the proposal.
• A time schedule for the services proposed.
• Identification of the architect’s key team members and their relationship to the client’s own staff and other project participants.
• Proposed compensation terms, including the basis for reimbursable expenses and additional work.
• Assumptions and qualifications upon which the proposal is based.
• The proposed form of agreement for the client’s review and approval.
• BILLING AND COLLECTIONS
• UNDERSTANDING A CLIENT’S ACCOUNTING PRACTICES
• Discussing preferred billing and payment terms in earliest consultation with a client about goals, needs, and service scope.
• Asking:
• “We prefer to bill for services every (_) weeks.  Is that acceptable?”
• “Is there a particular schedule to which invoices should be submitted?”
• “What documentation is required with our invoices?”
• “Who will review our invoices and approve for payment?”
• “How quickly will payments be processed once invoices are approved?”
• APPROPRIATE INVOICING AND PAYMENT TERMS
• Most architects invoice their clients for services monthly or every four weeks, depending on their internal accounting practices.
• Thirty days is a general standard for invoice payment.
• Some architecture firms, however, average collection periods of sixty days or more.
• SPECIAL RISKS AND RESPONSES
• Uncertain credit:
• Architect has a right to ask about a client’s financial resources to support a specific project assignment.
• If financial capacity is in doubt, the architect should consider declining the engagement.
• Fee retainage:
• Contracts that allow retainage (amounts withheld from professional service fees until the completion of a project or work phase) dilute an architecture firm’s financial performance and increase it’s risk.
• Slow payment:
• Clients who describe a slow and complex payment process, or decline to commit to any specific process present serious risks for architects.
• PAYMENT PATTERNS AS PERFORMANCE FEEDBACK
• As is the case with buyers of any goods or services, payments made by architecture clients often reflect their perceptions about the quality and value the firm is providing.
• Regular invoices provide a natural opportunity for the architect to ask – on paper or in person – for a client’s assessment of the firm’s performance.
• If payment patterns change, it’s usually a sign that the perceived value of the service has changed.

 

 

 

PPP Notes - Architectural Design Team

(These notes are compiled from Spreiregen's ARE Exam Review)

CHAPTER FIFTEEN - THE ARCHITECTURAL DESIGN TEAM

STRUCTURING THE ARCHITECTURAL DESIGN TEAM

The architect can act as the sole provider of design services if his or her firm has experienced and qualified in-house staff that can provide the necessary engineering and other specialty services that are required on a project.  However, most architects typically form alliances with other firms to provide these services.  

In a typical alliance, the architect has the prime contract with the owner and then subcontracts services to other professional firms that act as the architect's consultants for a project.  Consultants can include structural, mechanical, electrical, plumbing, civil, or acoustical engineers; landscape design firms; kitchen design consultants; information technology/communications firms; and soil and construction testing services firms.  

Architects may also create joint ventures with other firms, creating a single project-based entity with other architecture, engineering, or construction firms that have specific areas of expertise or geographical experience.  An architect would typically form a joint-venture with a construction firm as part of a design/build delivery method, and would then act as a vendor rather than as an owner's agent.  Acting as a vendor would then require the architect to act on behalf of the joint-venture and its best interests rather than for the owner.

An architect may also act as one of several independent design and engineering firms hired by an owner.  In this situation, an owner would typically have some level of project and construction management capabilities to handle and coordinate the different contracts.

CONSTRUCTION DOCUMENTS OF CONSULTANTS

COMPLIANCE WITH CODE REQUIREMENTS AND REGULATIONS

A coordinated and detailed response to code requirements from the entire design team is essential to the success of a project.

Consider, for example, energy requirements.  Siting, preliminary selection of materials, and schematic organization of programmatic elements are largely within an architect's control.  These energy considerations must be balanced against other requirements more closely controlled by others, including structural requirements.

Fire protection also requires building team coordination.  The incorporation of interior courtyards or atriums, for example, may require engineering for fire protection.  Mechanical, electrical, and plumbing equipment are often critical elements in a fire protection plan.  When there are no physical barriers to the spread of potential fires, protection depends upon sensing devices, sprinkler systems, and air handling equipment.  These systems and building components are likely to be designed or selected by the engineering and fire protection consultants, rather than the architect.

The mechanical, plumbing, and electrical codes often have provisions that are the same as or that complement the building and life safety codes.  These common provisions are generally understood by most design professionals.  Architects, however, cannot always be certain that engineers and other consultants have complied with all code provisions.  As a practical matter, architects of complex projects may simply inform consultants about which codes are applicable, and ask them to research the detailed requirements.  This does not relieve architects, however, of responsibility to meet code requirements.  As leader of the design team and the party contracting with the owner for professional design services, the architect has prime responsibility for code compliance.  However, each engineering consultant must sign his or her drawings submitted for plan review by the code official and thereby also becomes responsible for compliance.  Moreover, the AIA Architect-Consultant Agreement (Document C141) states that the consultant is responsible for code compliance in the same manner and extent that the architect is responsible to the owner.

Initially, architects should verify that each member of the project team is working from the same set of code requirements.  Consultants should inform the architect about significant aspects of their work that are required by code.  Although codes generally allow several responses to requirements, they occasionally require specific design features.  Consequently, architects must know which design elements may change and which may not.

Architects are responsible to notify their consultants of design decisions that have code implications.  For example, fire walls must be clearly identified, so that air handling ducts passing through them include fire and smoke dampers.  Alternatively, the duct work could be arranged to avoid fire walls altogether.  Ceiling appearance is affected by the type and location of sprinkler heads.  If ceilings are required to be fire-rated, light fixtures and air handling grilles must be properly accommodated.

COMPLIANCE WITH DESIGN CRITERIA

AESTHETICS

Consultants can significantly influence the aesthetic character of a project.  Structural expression, for instance, is an important element in many architectural designs.  Structural engineers often collaborate with architectural designers to achieve such aesthetic goals.  The structural design of the cross-braced frame of the John Hancock Building and the bundled tube design of the Sears Tower, both in Chicago, are good examples of positive aesthetic qualities achieved through the mutual efforts of architects and their structural engineers.  On a smaller scale, the structural design of framing members influences floor-to-floor height, and thus overall building height, by establishing the floor structure's depth.  The relationship of spandrels to window openings is often critical to the proportions of a building's facade.  In many instances, the basic character of a building is a result of its structural expression, as in a domed structure or an air-supported roof.

Mechanical engineers may influence wall treatments by their response to energy considerations.  Their work can affect the character of the building's envelope, including its fenestration in relation to solar orientation.  On a smaller scale, the location and design of air diffusers can affect the aesthetic appearance of interior spaces.  Where mechanical equipment is exposed to view, architects normally ask to review and approve illustrations showing the equipment's physical appearance.  Unsightly fans on rooftops can seriously detract form an architect's design.

Electrical engineers, through selection and placement of light fixtures, can affect the aesthetic quality of spaces and ceilings.  With the development of open plan office design and the use of task lighting, electrical engineers may also influence the design and placement of partitions, furniture, and equipment.  Offices commonly contain video display equipment, computers, communications equipment, and electronic sensing devices for security and fire protection.  These items of equipment are generally selected by the electrical engineer, in consultation with the architect.

Food service consultants, lighting consultants, acoustical consultants, and art advisors may also influence a building's aesthetic qualities.  Architects must always inform their consultants of design criteria and the aesthetic effects they are trying to achieve.  Product data, study models, and photographs may be used to assess intermediate design progress, and are subject to the architect's final approval.  Architects must know enough about the details of their consultants' work to maintain design control.  At times, they may suggest alternate approaches or solutions more compatible with the desired aesthetic character of the project.

QUALITY CONTROL

Since many of the construction documents prepared by consultants are based on calculations, quality control is relatively easy to achieve.  Parameters are well defined and solutions can easily be checked.

Details that are shown on the drawings must be in conformance with engineering design assumptions.  If a structural engineer designs a moment-resisting frame, for example, the joint details must reflect that condition.  Architects may review consultants' construction documents to confirm that designs, details, and specifications are compatible with the consultants' calculations and assumptions.

An architect can support a consultant's quality control by informing him or her of all relevant design criteria to which the consultant must adhere, and by requiring the consultant to schedule periodic reviews by experienced senior staff members or peer review by others in the consultant's profession.

Although architects can check for internal consistency and for apparent compliance with standards, consultants are primarily responsible for quality control of their own work.

COST CONTROL

Estimating initial costs is an essential part of a consultant's work.  The percentage of the total budget allocated to each discipline varies with building type and project scope.  Architects often establish budgets for the major elements of construction work for incorporation into an overall project budget.  Once the budget is established, consultants are expected to design within its limits.  Consultants must, therefore, be accurate in predicting initial costs so that the architect can prepare a reliable overall project estimate.

Because operating costs tend to vary inversely with initial costs, a relatively low construction budget may imply that life cycle costs will be relatively high.  Consultants must evaluate conflicting considerations in order to produce optimum design solutions.  Likewise, architects must review each alternative to be sure that a consultant's decision serves not only his or her particular discipline, but the project as a whole.

Operational costs may be difficult to calculate.  Calculations involve more than the characteristics of the owner's organization and other factors affecting a facility, such as changing climatic conditions.  Engineering calculations may, in some instances, be based on assumptions different from actual conditions.  For example, a facility may be operated differently than anticipated by its program; calculations may be based on average conditions, in spite of the fact that extreme weather conditions may have been experienced in recent years; or fuel prices may have increased suddenly and unexpectedly.

It is important that basic design assumptions are realistic.  Architects should understand the operating characteristics of facilities, and they must ensure that design assumptions are accurate and that designed elements and systems will be appropriate.

Maintenance is an important aspect in the selection of products and systems.  Some mechanical and electrical systems are complicated, sophisticated, and sensitive.  If properly balanced, they can be efficient and economical.  But, they can also be troublesome and more difficult to maintain than simpler, less technically advanced systems.  Equipment maintenance costs vary with the size and skill of maintenance staffs.  Some design professionals have expanded their practices to include facilities management services, including the preparation of detailed operational and maintenance programs.

Specified systems must be properly installed, reliable, and receive scheduled maintenance to be successful.  The architect should determine that such systems are appropriate to the contractor's and building manager's degree of sophistication.

COMPATIBILITY WITH OTHER ELEMENTS

The size and weight of equipment is another design consideration.  Engineering drawings are largely diagrammatic, making it difficult to verify that design criteria have been met.  For example, a large pipe or duct may be represented by a single line on a drawing, but its actual size determines the clearances which must be provided and maintained.  Unfortunately, these considerations are sometimes ignored.  Architects can create similar problems by providing insufficient space for equipment and services during design development phases.  Allotted spaces might prove to be too small, and increasing the building's gross area may be difficult without disrupting the overall architectural solution and budget.

Operational characteristics of mechanical and electrical equipment must be considered by the design team before final selections and placement are made.  In critical cases, a special consultant such as an acoustical engineer may be retained to advise the design team on the placement, isolation, and construction of large air handling equipment.  Electrical distribution equipment can interfere with the operation of sensitive laboratory or hospital equipment.  In this case, the architect may ask the owner to provide the services of a special consultant to advise the design team on the placement, selection, and isolation of certain equipment.

EASE OF CONSTRUCTION

LABOR AND EQUIPMENT REQUIREMENTS

Architects and their consultants should determine that the systems they design can actually be built, considering the space, equipment, and labor required.   For example, if a floor system utilizes precast concrete T-beams, there must be sufficient room on the site to position the cranes required to erect these units.  If construction access is available from one side of a site only, construction must be able to proceed in only one direction.  Post-tensioned structures require accurate placement of tension cables and hydraulic jacks to stress tendons properly.  The availability of the skilled and experienced labor necessary for these operations influences the decision to utilize such systems.

Large air-conditioning chillers and cooling towers are often placed on the upper stories or roofs of multistory buildings.  If they cannot be disassembled and installed in sections, they must be lifted intact to their final locations.  Once in place, equipment and systems may require sophisticated pneumatic and electrical controls and precise balance in order to operate properly.  The installation of sensitive equipment requires the availability of skilled technicians.

In making design decisions, the architect's consultants must consider the limitations of local labor and the availability of special equipment.  They must be aware of the implications of applicable union rules.  Although contractors must determine the appropriate trade for each part of the work, both architects and consultants should follow established and generally accepted operating procedures, and understand their impact on design decisions.

SEQUENCING

Engineers and other consultants must see their drawings in terms of the construction sequence as well as the final product.  Very large components of mechanical equipment must be brought up to, and placed into, equipment penthouses after they are manufactured.  Buildings must remain structurally stable during construction.  Once installed, equipment must be accessible for servicing or to remove and replace malfunctioning units.

Architects should review consultants' construction documents with the construction process in mind.  The sequence of construction and workability of the scheme throughout the construction process must be considered.  Major building elements must fit into place at the appropriate time and without disrupting other ongoing activities.

SCHEDULING

It may be desirable to order certain components of a building well in advance of their installation.  Major HVAC components, large electrical transformers or switchgear, and curtain wall systems are frequently custom made for a particular project.  These elements are not generally in a warehouse waiting to be purchased.  Even standard catalog items are often manufactured only when specifically ordered and require a significant amount of lead time before delivery.

Architects' consultants must be involved in scheduling to enable major items to be available when needed.  Contractors are often selected too late to order long-lead-time equipment in a timely manner.  One solution is for the owner, on the advice of the architect and consultants, to order equipment directly.  When a contractor is subsequently selected, purchase orders are assigned from owner to contractor.  Upon delivery, the items are received and installed in the same way as if the contractor had been involved from the beginning.

Fast-track delivery procedures work generally the same way.  A project is divided into packages or stages of work, each of which represents a separate prime contract.  Starting construction and ordering items before all the construction drawings are completed helps to ensure the availability of products when needed, and tends to control costs during periods of rapid inflation.

Architects must be sure that consultants specify and package items according to proper criteria.  Information about a project's ultimate character and configuration may be limited when ordering.  Circumstances may change between the time orders are placed, or a construction package let, and the time an item is received, or final drawings completed.  An architect must work with consultants to determine important features while leaving other aspects open to inevitable change.  This may result in excess capacity in equipment or the need to alter designs to integrate with equipment or items already ordered.

Consultants must also be aware of overall construction schedules and, within these schedules, pertinent installation periods.  If a new chiller or cooling tower is required before summer, or a new boiler or heating plant before winter, engineering designs must allow equipment to be built and installed in time.  Or, if construction must occur during winter months, structural engineers may want to avoid the use of reinforced masonry, which requires special measures to protect mortar from freezing.

These concerns are especially applicable to renovation projects.  An old system may have to be changed to a new one, or an owner may require that a new wing or suite be ready before the old one is abandoned.  Some considerations will be apparent from construction documents, while others will not.  Architects must be certain that timing has been considered and is realistic.

An owner may rely upon the architect and the architect's consultants for pre-construction services such as cost estimating, scheduling and sequencing, and reviewing ease of construction.

CONSTRUCTION MANAGEMENT

With the advent of fast-track and other sophisticated methods of procurement, some owners have retained construction managers (CMs) to provide these pre-construction services.

Construction management may be defined as activities over and above normal architectural and engineering services, conducted during the pre-design, design, and construction phases, that contribute to the control of time and cost.

Despite this simple definition, the scope of the CM's functions vary widely from project to project.  The CM often joins the project team during the design phases and either remains as an adviser or becomes the constructor as well.

If the CM is an adviser, it acts as the owner's agent and provides the owner with impartial technical advice.  The appropriate AIA form is the Owner-Construction Manager Agreement (Document B801/CMa).

If the CM is the constructor, there are two appropriate AIA forms; either Document A121/CMc or A131/CMc.

INTERNAL COORDINATION OF CONSULTANTS' DOCUMENTS

The architect is the prime professional under contract to the owner, and as such, liable for his or her consultants' work.  Prudent architect, therefore, try to make certain that their consultants provide appropriate levels of professional service.  There are some practical limits, however.

One limit is that architects cannot check each consultant's documents for internal consistency and coordination.  That is the responsibility of each consultant.  If an electrical engineer specifies one type of lighting fixture, the drawings should not show another.  Dimensions should be accurate and drawings and specifications should be coordinated.  The AIA Architect-Consultant Agreement (Document C141) specifically requires the consultant to be responsible for coordinating his or her own work.

When a consulting firm combines more than one engineering discipline, coordination becomes more complicated.  For example, structural, HVAC, plumbing, and electrical work may all be done in different departments of the same consulting firm.  Generally, a consultant's documents must be made internally consistent by that consultant.  Structural and mechanical documents must be checked against each other for conflicts prior to being sent to the architect.  Someone in the consulting firm must be responsible for this interdisciplinary checking.

OVERALL COORDINATION OF CONSULTANTS' DOCUMENTS

FORMAT FOR SPECIFICATIONS

Specifications prepared by an architect and his or her consultants are bound together into a Project Manual.  All the work of the individual parties must be coordinated to produce a unified document, not a collection of individual parts.  To accomplish this, architects establish formats for consultants to follow.

Coordination extends from simple considerations, such as the color of the paper on which the specifications of different consultants is printed, to the format and numbering system used.  The consultants' input to bid forms, including instructions to bidders, and to Division One, the general requirements of the specifications, must be established.  Overall, each consultant's work must be coordinated with that of the architect and other consultants.

The architect must require that his or her consultants participate in the preparation of the requirements of Division One, so that their individual specification sections are appropriately coordinated.  The architect is the one professional on a project team with the required perspective to coordinate the many diverse elements of a Project Manual.

DIAGRAMMATIC MECHANICAL AND ELECTRICAL DRAWINGS

Most construction documents prepared by mechanical and electrical consultants are diagrams or schedules.  HVAC drawings show dimensions of ducts.  Major pieces of equipment are shown, but other physical conditions are not represented.  Duct dimensions may not include the thickness of required insulation.  Electrical documents are more diagrammatic.  Typically, wiring is indicated in floors or in ceilings, as are home runs to panelboards.

Actual conduit locations, however, are usually determined by contractors in the field.  Plumbing drawings are less diagrammatic than HVAC and electrical drawings, but pipes and fittings are not drawn to scale.  The exact location of piping may be determined by the contractor in the field.

While these different methods of representation are logical, checking and coordination is difficult.  Architects can overlay drawings of the various consultants to spot potential conflicts.  Even where lines do not cross in such overlays, this does not guarantee adequate clearances, since the diagrams may not be precise enough.  Overlay drafting and CAD make it easier for architects to identify and resolve conflicts before they become construction problems.

Serious construction problems may be caused by uncoordinated drawings.  Contractors may have problems installing mechanical ducts and electrical conduits within the space actually provided.  For example, walls may be framed without adequate space for plumbing lines.  Architects must address such potential problems when checking the consultants' documents.

THE SUSTAINABLE PROJECT DESIGN TEAM

Is a sustainable design organized and implemented differently than a conventional design?

DESIGN TEAM

What kind of design team is necessary for a sustainable project?

The scope of sustainable design invites an expanded team approach, which may include the following:

- Architects or engineers (structural, MEP) with energy modeling experience

- A landscape architect with a specialty in native plant material

- A commissioning expert (if LEED employed)

- An engineer/architect with building modeling experience

The design team for a sustainably designed project tends to have a larger pool of talent than a typical architectural project.  Because the buildings will be more holistic, the sustainable design team will have additional consultants that bring a broader range of experience and innovation to the project.  Wetlands, scientists, energy efficient lighting consultants, native plant experts, or commissioning engineers, are examples of the additional talent that may be added to sustainable design project.

As with any architectural design, there is a hierarchy of design goals:

- Initial imperatives such as budget, timing, image, and program necessities. - Subjective goals such as a functionality improved and more pleasing work environment, pleasing color schemes, and landscaping that complements the architecture.

- Specific goals such as more open space, more natural lights, less water usage, and adjacency to public transportation.

And with the inclusion of sustainability there may be additional goals:

- Initiatives that are specific to sustainability such as fewer toxins brought into the space, daylighting in all spaces with people occupancies, less overall energy consumed, less water usage, adjacency to public transportation, and improved indoor air quality.

- Desire to exceed existing standards such as ASHRAE, USGBC, or American Planning Association (APA).

SUMMARY

The integration of the design team typically relies on the architect's ability to coordinate and manage the resources at hand.  As challenging as the task may be, it is ultimately one of the most important steps towards the realization of a successful project.  An overall understanding of the typical consultant's responsibilities and how they affect the scheduling and the execution of a project are expected from all candidates for the Programming, Planning & Practice exam.

PPP Notes - Delivery Methods

(These notes are compiled from Spreiregen's ARE Exam Review)

CHAPTER FOURTEEN - DELIVERY METHODS

OWNER REQUIREMENTS

The method of delivering design and construction services is typically based upon an owner's needs and capabilities.  A small organization, a small firm, or an individual that wishes to develop a project would typically require full professional design services from an architect and a traditional design/award/build delivery process.  An owner who desires to participate in the design process would likely select this traditional method, ensuring that the final project meets all of the owner's criteria.  The design/award/build delivery method allows for all design decisions to be made before contracting.

A large organization or firm that wishes to develop a project may have an in-house staff that has capabilities for project programming, design, engineering, facilities management, construction management, or construction.  Such a firm may not require the traditional design/award/build delivery method.  An owner also might have certain time frame and/or cost considerations that would require other types of delivery methods.  An owner who has a commitment to deliver a project for occupancy in a short time frame may not be able to take the amount of time required of the traditional design/award/bid process.  Such firms may require other project delivery methods, which typically consist of either the construction management or design/build methods.

DESIGN/AWARD/BUILD DELIVERY METHOD

The design/award/build delivery method typically begins when an owner hires an architect to develop a project program and its subsequent design and construction documents.  Bidding of the project to several contractors occurs after all construction documents and specifications have been completed.  This allows for the establishment of the lowest reasonable cost for the project.  The owner then awards a single prime construction contract to a general contractor to build the project based upon the completed design documents.  The architect acts as the owner's agent, representing the owner's interest throughout the design and documentation phases.  The architect's services typically include construction administration services.  The architect then acts as an impartial interpreter of the construction documents during construction.

The benefits of the design/award/build delivery process include owner participation in the design of the project and well-established construction costs based upon relatively complete documents.  The architect acts in the owner's best interests during design, and the architect acts as an impartial interpreter of the contract documents during construction.  This process allows for clear separation of design and construction responsibilities, and allows for simplicity in project scheduling since each phase of the design and construction process is separate.  

The design/award/build delivery process however, requires an extended time period for design and documentation before final costs can be determined and construction can begin.  This is a problem if an owner wishes to expedite a project.  Also, pricing and constructibility experience of the contractor who is to build the project is not available during the design and documentation phases of the project.  

CONSTRUCTION MANAGEMENT DELIVERY METHOD

The construction management delivery method allows an owner to address constructibility and cost issues during design.  An owner can also address time issues by utilizing fast-track construction, in which multiple construction contracts are let for different parts of a project as soon as each part of the work is defined enough for a contractor to reasonably commit to a price.  In this delivery method, the owner hires or utilizes his or her own construction manager to work with an architect to facilitate the process of design, bidding, and letting of the construction contracts.  The construction manager can act as either an advisor to the owner, or as a construction contractor.  The construction manager typically has substantial expertise in construction technology, constructibility issues, construction scheduling, and construction costs.

A construction manager who acts an advisor administers the design contracts and works as the owner's representative with the design team.  He or she also manages the various construction contracts, but does not have any financial responsibility for the construction of the project.  A construction manager may, however, handle some of the typical nonconstruction activities at the site, such as arranging temporary site facilities, site and construction testing, engineering, building and site layout, and construction site cleaning.  Some architecture firms offer construction management services, acting in an advisory role to the owner.

A construction manager who acts as a contractor assumes a vendor relationship with the owner.  This person or firm will take on the financial responsibility for the construction of the project, typically utilizing a fixed-price, cost-plus, or guaranteed maximum price cost structure.  The construction manager is brought onto the project before design work is complete so that he or she can help resolve constructibility and cost issues.

A fixed-price structure allows the manager to establish a guaranteed cost of construction, including his or her own services, before the design is fully documented.  The owner is not liable for bid-cost overruns.  However, the owner does not obtain any of the savings that might occur from a positive bid climate.  A cost-plus structure allows the construction manager to charge the owner the actual construction costs of the project plus a negotiated fee that is agreed to before construction begins.  The actual costs are typically determined by the lowest bids received from the manager's subcontractors, plus the cost of any construction work performed by the construction manager's own forces.  The guaranteed maximum price structure is a highest-probable-cost limitation for the construction of the project guaranteed by the construction manager.  This price is established before design documents are completed, and anticipates the full scope of work and detailing needed to complete the project.  Any cost savings from a positive bid climate go to the owner rather than the contractor.  However, the contractor becomes responsible for any bid-costs over the guaranteed maximum price.

The advantage of using the construction management delivery method is the ability of the owner to determine the costs of a project before construction documents are complete.  The ability to let portions of the work for bid before other portions of the design are complete allows for construction work to commence before all other project drawings are completed.  This is a great advantage for an owner who has a short time frame to complete a project due to occupancy requirements or when an owner has to work with high interest rates, which can add substantially to the financing costs of a project.  Another benefit of this method is the ability of the construction manager to resolve technological or constructibility issues before construction begins, which helps reduce costs due to construction change orders.

The construction management delivery method, however, adds a cost for the construction manager that an owner would not have in the more common design/award/build process.  The addition of a construction manager adds complexity to the design and construction team.  This can be a benefit if the relationships are managed effectively, but can become problematic if these relationships are not adequately defined and handled.  The use of the fast-track construction method also adds to the complexity of the project, requiring the management of multiple prime construction contracts.

DESIGN/BUILD DELIVERY METHOD

The design/build delivery method allows an owner to utilize a single entity that is responsible for both the design and construction of a project.  This is the single greatest distinction between this method and both the design/award/build and the construction management methods.  A design/build firm can be a single company that has its own architectural and construction staffs, or a company that has its own construction staff that hires an architect to perform design services.  A development firm can hire an architect for design services and a contractor for construction services.  A design/build firm can also be a joint venture between an architect, construction, and/or a developer.

An owner who wishes to proceed with the design/build process typically issues a request for proposals to selected design/build firms that state the design and performance requirements for the project.  The design/build entities submit proposals to the owner that provide a design for the project and the costs for the design development and construction of the project.  The selected design/build firm then develops the design, provides construction documents, and builds the project based upon the proposal requirements.

An owner who wishes to have more control over the design of the building can have an architect develop the schematic concept for the project.  This can then become part of the request for proposals, which makes the selected design/build firm responsible for the development of the design, the construction documents, and the building of the project.

The advantages to the design/build delivery method include a single source of responsibility for both design and construction of the project, allowing the owner to select from a number of submitted designs.  A reliable cost for the project is determined early in the process, and conflicts between the designers and the builders are minimized.  This process also facilitates fast-track construction, since the portions of the design work that can be built early can be released for construction before the balance of the design and documentation work is complete.  

This delivery method, however, minimizes the ability of the owner to participate in the design of the project.  The design/build firm acts solely as a vendor so that the owner does not have an independent agent working for his or her interests.  This requires the owner to be adept at managing the design/build contract through construction, or to hire an independent firm to act on his or her behalf.  Any design changes would likely require a change order that the owner would have to pay.  Since the submitted designs are likely based upon incomplete drawings, disputes may arise regarding the actual scope of work provided in the proposal.  Also, a selection that is based solely on the lowest bid may have significant quality issues that would be difficult to address.

SUMMARY

Architects need to be well acquainted with different project delivery methods, from the possible liability issues they prevent to the extent to which the process may compromise the execution of the intended product.  Candidates should be familiar with the different methods and their benefits and drawbacks as they apply to different types and sizes of projects.