Good Practice Guide

Fees

Patrick Farrall, Stephen Brookhouse

• Publisher: RIBA Publishing
• Year: 2021
• ISBN:
  9781000222159
• Edition: 1
• Topic: Architecture
• Subtopic: Professional Practice in Architecture

Architects are finding the procurement landscape increasingly complex and competitive. This book shows practitioners the ways that fees are calculated, negotiated and managed. It will increase your understanding of the different fee-earning roles for architects, professional services contracts, how to calculate sustainable fee levels and improve negotiation skills. It also includes information on how to monitor and manage fees and the resources required to deliver projects, managing change in the scope of the project and related services, where to add value and to highlight risk areas that may impact on sustaining the business.

Case studies explain good and bad practice to illustrate effective fee management, drawn from the authors' direct experience as practitioners and investigating client complaints.

1
Procurement, risk and the role of the architect

This chapter gives an overview of the different procurement routes you are likely to encounter in practice. Understanding these different routes and the associated project risks is important because the procurement choice determines how risks are allocated, the different roles carried out and when they are undertaken. Including project risks, this determines the scope of services, when they are delivered and for how much.

The topics covered by this chapter include:

• the RIBA Plan of Work 2020 and the different roles of the architect
• project risks and risk management
• the procurement landscape.

Procurement

Procurement in its widest sense is the process of taking an initial idea from your client, agreeing terms and then taking the project through to completion and eventual use. Practice typically involves working for many types of client – from domestic clients commissioning a project for the first time to developers who understand the risks entailed in a construction project.

When considering the scope of your professional services, it is worth first putting yourself in the client’s place and thinking about the wider meaning of procurement and project risks. Depending on how experienced the client is and the type of project, it is unlikely that the brief and project outcomes (what services are required, the fee and schedule) will be defined at the initial meeting to discuss the project.

You may work in a traditional procurement environment – one where the architect acts for and represents the client throughout every stage of the project – or you may work exclusively for either developer clients or contractor clients. You might consider that you know all there is to know about the different procurement routes. You may not, however, have thought systematically about project characteristics, or about risks and the ways they can affect how you plan your resources while still making a profit.

The characteristics of a project are also important. The clearer the project outcomes, timescale, boundaries and scope, the lower the perceived risks and uncertainty in terms of the professional services required and the time period needed for their delivery. This is important – time is a key resource. The scope of services and the time and effort needed to commit to a project must be estimated, defined and agreed. Without clear boundaries, the estimated scope of services and the resources allocated may be insufficient to fulfil the final project outcomes.

Poor communication at the outset makes it harder to manage client expectations. Without clarity at this stage, the scope and amount of services required are liable to grow. Furthermore, the time taken to deliver services without an overall Project Resources Programme can accumulate, often for reasons beyond your control. The fee may become stretched more thinly as a consequence, especially if there is no direct link between resources and fee (for example, if the fee is calculated according to the cost of construction). Later chapters explore further how to manage these critical early stages to ensure that the fees match the project outcomes and resources required.

The RIBA Plan of Work 2020 and the roles of the architect

The RIBA Plan of Work provides a recognised structure that can be customised to suit your needs. The roles defined in the RIBA Plan of Work are important as they align with the headline roles defined in the RIBA Professional Services Contracts (PSCs). They also delineate the various roles that architects are asked to undertake, as distinct from the all-encompassing professional service traditionally provided on a percentage basis. It is strongly recommended that you use the RIBA Plan of Work 2020.

THE RIBA PLAN OF WORK 2020 ROLES

Client adviser – a consultant who provides strategic or specialist advice, particularly during the early stages of a project.

Architect – responsible for carrying out the architectural design.

Project manager – responsible for managing all aspects of the project and ensuring that the project is delivered in accordance with the project programme.

Lead designer – responsible for managing all aspects of the design, including the coordination of the design and the integration of the specialist subcontractors’ design.

Contract administrator – responsible for the administration of the building contract, including the issuing of instructions and certificates.

Health and safety adviser – responsible for health and safety aspects, as defined by legislation and in line with other project objectives.

Setting out your project roles is crucial. You also need to make the client aware of any other additional roles and consultants that may be required. These may include: cost consultancy; structural engineering; mechanical, electrical and plumbing (MEP) engineering; surveys; and specialist advisers, such as heritage and planning consultants. You should inform the client of any other services you provide in addition to your normal ‘basic services’. It is essential that you brief the client on their statutory duties under the Construction (Design and Management) Regulations 2015 (CDM Regulations), particularly regarding the requirement for a principal designer on any project.

Generic roles can be linked to each procurement route, as shown later in the chapter.

Project risks and risk management

The aim of engaging in construction is to take calculated risks. The life-blood of any business is to make money by dealing with the risks that others do not want to bear … we should make risks explicit so that rational decisions can be taken about who should bear them.¹

Construction projects, whether small, medium or large, are characterised by uncertainty, complexity and fluidity. Significant change is a natural part of the project lifecycle. It is a common misconception that small projects are somehow less complex or less fluid. All projects require you to manage significant change and unforeseen events. Further, every project is a prototype, even when sharing many characteristics with other projects. Experiencing uncertainty and complexity means encountering risks. This increases the likelihood of things not going to plan and the impact felt when it happens.

Project teams can be described as temporary, multi-party organisations. Even small projects have many stakeholders. As well as the client, there are the contractors, the design consultants, specialist contractors, direct suppliers, installers and regulators such as development control, conservation and building control. These add to the complexity – regardless of scale or value – and can affect the programme and delivery. The different procurement routes are intended to manage project risks in different ways.

What are the risks?

Some project risks can be controlled, some cannot. Some can be predicted, some are unforeseen. The main risks you are likely to encounter are listed below. This does not include major global risks to the wider economy or unexpected political events. The list is intended to help you estimate the impact project risks are likely to have on the project itself and on your services. Alerting clients to risks in a structured way is a valuable precursor to a project’s Strategic Definition (Stage 0) and Preparation and Briefing (Stage 1). Not all of these risks will apply, but a checklist is useful.

PROJECT RISKS

Client risks (all RIBA Plan of Work stages)

• multiple clients and stakeholders – leading to inconsistency and delay, and multiple channels of communication
• ill-defined client objectives and requirements – leading to poorly defined scope (fluidity)
• lack of experience and knowledge – resulting in a lack of clarity and ill-defined objectives
• multiple changes to requirements at different stages
• ill-defined project budget
• delays to decision-making approvals
• cancellation – leading to abortive design work and cost.

Site risks (Stage 1)

• incomplete site information 1: boundaries, services below and above ground; legal issues: easements, restrictive covenants, wayleaves, party walls
• incomplete site information 2: survey information: physical, condition of existing buildings, condition of services, asbestos and issues that may affect health and safety, scope and programme
• location: restricted access and work...