Practice and Management 2015 Architects Fee Estimation and Competitive Bidding
Studios
ARC Studios
Matthew Austin Matthew Chamberlain Georgia Roberts
Studios
Contents 1.0 1.1
Company Profile Employees
01
2.0
Building Cost Estimate
03
2.1 2.2 2.3 2.4 2.5 2.6 2.7
Room Booklet Elemental Analysis HCE Tender Price Indices SPON’s Construction Estimate Precedent Cost Estimate Regional Variations Final Cost Estimate
04 05 06 07 08
3.0
Fee Estimation
11
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8
Fee Scale Analytical Method Indirect/Direct Cost Time Charge Calculation Employee Specific Figures Stage 01 Stage 02 Stage 03 Final Project Fees
12 13 15 16
4.0
Tender Fee
25
4.1 4.2 4.3 4.4 4.5
Final Tender Fee Considerations Lump Sum Fee to Stage 03 Percentage of The Building Contract to Stage 03 Letter Considerations for the Standard Form of Agreement
26 27
5.0
Reflection
33
5.1
Bibliography
35
02
09 10
17 19 21 23
28 29 31
Studios
Company Profile ARC Studios is focused on delivering carefully considered, sustainable and innovative designs that provide real value to the client. We approach all our projects with the desire to create great spaces and design buildings that reflect the contemporay life. Matthew Austin, Georgia Roberts and Matthew Chamberlain established the practice in 2015 after winning the competition for, ‘Young Architect of the Year Award’. ARC’s offices are based in Nottingham, UK. We are currently working on multiple projects across the country, including the design of a new country house in Nottinghamshire.
01
Staff Senior Director Matthew Austin, RIBA Matthew graduated from the University of Nottingham in 2010, before establishing Austin Studios in 2012. The following year he founded ARC Studios and was joined by fellow architects Matthew Chamberlain and Georgia Roberts in the practice. He has worked on a number of residential projects, gaining particular acclaim for his work in aiding residential regeneration in London.
Principle Architect Matthew Chamberlain, RIBA After graduating from the University of Nottingham in 2010, Matthew left to work in New York for three years, before returning to England to join ARC Studios in 2013. His work in New York led him to develop a keen interest in urban architecture, and the process of designing and shaping cities, something he hopes to further as he continues his career.
Principle Architect Georgia Roberts, RIBA After graduating in 2010 from the University of Nottingham, Georgia spent three years working in London, gaining a variety of experience on a number of projects. She returned to Nottingham in 2013, joining ARC Studios, seeking an opportunity to work within a growing firm and aid their vision for the future. She has also gained high praise amongst the architecture profession for her continued experimental works on concrete, as well as her recently published book, entilted, ‘Living with Concrete’.
Part 2 Undergraduate Jessica Owens Jessica graduated from the University of Bath in 2014, obtaining a ‘First Class’ Honours Degree and joined ARC Studios later that year. She is now working towards her Part III qualification with a keen interest in the development of Nottingham both as a city and the surrounding area.
02
Building Cost Estimate Residential Country House Through an analysis of SPON’s and Hutchins construction manuals, a carefully considered estimate of figures will be established for the scheme. Comparitive investigations of related precedents will be used alongisde this estimate in order to obtain a more critical and accurate assessment.
Indicative Ground Floor Plan
Dining Room
Living Room
Playroom
Wine Cellar
Garage
Kitchen
Boot Room
Home Cinema
Arrival Court
Indicative First Floor Plan
ensuite Bedroom 2
ensuite
ensuite
ensuite
Bedroom 1
03
Bedroom 3
Master Bedroom
Room booklet Residential Country House
1
Arrival Court
6m × 6m [36m2]
2
Garage
6m × 6m [36m2]
3
Boat Room
4
Entrance Hall
5m × 4m [20m2]
5
Kitchen
4m × 7m [28m2]
6
Dining Room
4m × 5m [20m2]
7
Wine Cellar
3m × 3m [9m2]
8
Playroom
4m × 7m [28m2]
9
Home Cinema
4m × 5m [20m2]
10
Living Room
5m × 5m [25m2]
11.1 11.2
Master bedroom Ensuite
7m × 4m [28m2] 2m × 3m [6m2]
11.1 11.2
Bedroom 1 Ensuite
5m × 5m [25m2] 2m × 3m [6m2]
11.1 11.2
Bedroom 2 Ensuite
5m × 5m [25m2] 2m × 3m [6m2]
11.1 11.2
Bedroom 3 Ensuite
4m × 4m [16m2] 2m × 3m [6m2]
Total
3m × 2m [6m2]
346m2
04
Element Analysis Hutchin’s Construction Estimate TABLE 1.0 Elemental Analysis (2007 Prices)
DETATCHED HOUSING
Ite
2001 Prices Cost (£)
Nottingham Studio
Element
Cost / m2
Percentage of Cost
SUBSTRUCTURE
82.78
5.97
SUPERSTRUCTURE
511.72
36.92
Frame
24.85
1.79
Upper Floors
30.02
2.17
Roof
145.89
10.52
Stairs
18.18
1.31
External Walls
92.4
6.67
Windows and External Doors
123.69
8.92
Internal Walls and Partitions
27.92
2.01
Internal Doors
48.78
3.52
INTERNAL FINISHES
111.31
8.03
FITTINGS AND FURNISHINGS
83.1
6
SERVICES
220.65
15.92
Sanitary Appliances
20.76
1.5
Services Equipment
0
0
Disposal Installations
16.18
1.17
Water Installations
5.62
0.41
Heat Sources
12.36
0.89
Space Heating and Air Treatment
75.56
5.45
Ventilating Systems
0
0
Electrical Installations
52.2
3,77
Gas Instalations
0
0
Lift and Conveyor Installations
4.63
0.33
Protective Installations
0
0
Communication Installations
0.52
0.04
Special Installations
25.34
1.83
Builder’s work in connection
6.08
0.44
Builder’s profit and attendence
1.39
0.1
£1,009.57
72.83%
Ite
2001 Prices Cost (£)
Nottingham Studio
Element
Cost / m2
Percentage of Cost
EXTERNAL WORKS
253.43
18.28
Site Works
148.18
10.69
Drainage
39.44
2.85
External Services
58.27
4.2
BUILDING SUB-TOTAL
05
Minor Building Works
7.54
0.54
PRELIMINARIES
123.14
8.88
FACILITY CONSTRUCTION COST
£1,386.14
100%
Element Analysis Tender Prices Indices TABLE 1.1 Alterations in tender prices since 2000
Year
First Quater
Second Quarter
Third Quarter
Fourth Quarter
Annual Average
2000
480
482
496
498
489
2001
498
499
516
515
507
2002
516
522
553
554
536
2003
555
560
578
577
568
2004
579
586
617
618
600
2005
621
623
660
660
641
2006
664
670
694
699
682
2007
703
707
730
730
718
2008
733
742
781
780
759
2009
773
770
771
778
773
2010
780
793
797
798
792
2011
807
818
824
827
819
2012
833
834
832
842
835
2013
857
856
857
857
857
2014
859
859
875 (P)
876 (F)
867
2015
878
881
899
900
890
2016
903
906
927
929
916
P = Provisional F = Forecast Thereafter Updated from SPONS 2015*
BREAKDOWN TOTAL FLOOR AREA
346m2
FACILITY CONSTRUCTION COST / m2
£1,386
BLACK BOOK BUILDING COST
£479,604
ADJUSTING 2007 PRICES TO 2015 PRICES BUILDING COST CONVERSION
1.26
Using Building Price Indices(819/718)
(2007 - 2015)
ADJUSTED BUILDING FACILITY COST /m2 ADJUSTED BUILDING COST
£1,718 £594,428
06
Element Analysis SPON’S Construction Estimate TABLE 1.2 Elemental Analysis (2007 Prices)
Element
Low
High
Average
Detail
SUBSTRUCTURE SUPERSTRUCTURE Frame Upper Floors Roof Stairs External Walls Windows and External Doors
145 714.44 10 52 150 25 70
190 939.72 15 68 200 30 91
167.5 827.08 12.50 60.00 175.00 27.50 80.50
Strip/trench fill foundation with ground bearing capacity (foundations up to 1.5m deep)
213.85
300
256.93
Internal Walls and Partitions
46
55
50.50
Internal Doors
147.59
180.72
164.16
INTERNAL FINISHES
98.85
135.25
117.05
-
Timber Frame Softwood floor, joisted floor plasterboard ceiling Natural Slate covering timber roof trusses Timber construction, softwood Cavity wall facing brick outer skin, insulation, plasterboard on stud inner skin, emulsion Softwood standard windows painted double glazed Softwood stud, 100x38mm at 600mm centres with head and sole plates 12.5mm plasterboard, tape and fill joints, emulsion finish Standard door, cellular core, softwood, softwood architrave aluminum ironmongering, single leaf, hardboard face, gloss paint finish One mist and two coats emulsion finish (wall finish) hardwood t&g strip flooring, polished including fillets, with hardwood skirting stained finish (flooring) emulsion paint (ceiling)
FITTINGS AND FURNISHES SERVICES Sanitary Appliances Services Equipment Disposal Installations
207
264
235.50
248.64 15 0 5.98
326.56 25 0 15
287.60 20 0 10.49
Kitchen including medium standard units, worktops, stainless steel sink and taps including utility area, white goods not included Affordable Housing Precedent Affordable Housing Precedent
Water Installations
41
58
49.5
Affordable Housing Precedent
Heat Source
N/A
N/A
N/A
N/A
Space Heating and air treatment
55
77
66
Affordable Housing Precedent
Ventilating Systems
0
0
0
-
Electrical Installations
74
100
87
Affordable Housing Precedent
Communication Installations
6.1
6.1
6.1
Affordable Housing Precedent
Special Installations
37.56
37.56
37.56
Affordable Housing Precedent
Builders work in connection
9
9
9
Affordable Housing Precedent
Builders profit and attendance
5
5
5
Affordable Housing Precedent
1413.93
1855.53
1634.73
Low
High
Average
Detail
EXTERNAL WORKS
167.96
188.47
178.22
-
Site Works
109.63
110.72
110.18
Gravel Driveway and Preparation Works
Drainage
22.70
32
27.35
Single Stack Drainage System
BUILDING SUB TOTAL
External Services
35.63
45.75
40.69
-
Minor Building Works
0
0
0
-
PRELIMINARIES
114.63
114.63
114.63
-
FACILITY CONSTRUCTION COST
1696.52
2158.63
1927.58
*N.B. In using SPON’s to form our construciton estimate we tried to select costing for the elements most appropriate to our scheme for a masonry load bearing construction.
07
Precedents TABLE 1.3 Precedent Analysis
Building
Architect
Year
Building Cost
Area
Cost m2
House at Alibag (1)
Malik Architecture
2009
£569,400
1070m2
£532
House Unimog (2)
Fabian Evers Architecture and Wezel Architektur
2012
£127,300
120m
£1,060
Family House (3)
Sigurd Larsen
2014
£95,000
80m2
£1,188
Private House Suha (4)
Architektura d.o.o.
2012
£337,000
210m
£1,605
AVERAGE COST/m
2
2
£1,284.33
2
*N.B. We chose to calculate the average cost/m2. However, we chose to emit, ‘House Alibag’, constructed in India, from our calculation, as labour and construction rates are much cheaper.
1
2
3
4
*N.B. Due to the often confidential nature of private residence construction it is difficult to find suitable precedents for comparison. Those we did find were all foreign builds and, therefore, varied in cost according to differing economic conditions than the UK.
08
Regional Variations TABLE 1.4 Regional Variation
Region
Adjustments to Measured Works Section
Inner London
-2%
Outer London
+6%
East Anglia
-2%
EAST MIDLANDS
-10%
Northern
-16%
Northern Ireland
-45%
North West
-16%
Scotland
-11%
South East
0%
South West
-6%
Wales
-12%
West Midlands
-10%
Yorkshire and Humberside
-10%
Diagram 1.0 Map of UK
East Midlands
Inner London +6% Outer London -2%
09
Final Cost Estimation TABLE 1.5 Weighted Outcome
Costing
Weighting 2
Hutchin’s (£/m )
£1,718
0.3
SPON’S (£/m )
£1,928
0.6
Average Precedent Estimate (£/m2)
£1,284
0.1
Weighted Average
£1,801
1.0
East Midlands
-10%
-
£1,621
-
2
Final Estimation (£/m ) 2
*In order to adjust for current prices, the building price index from SPON’S, with the most adjusted forecast for 2015, has been used. As SPON’s was the most accurate in terms of costing, owing to be the most recent publication and containing more specific information regarding to the type of construction, we chose to give it a larger weighting than the others. Equally, the precedent figure was given the lowest weighting due to the differences in location and therefore economic factors.
TOTAL BUILDING COST (1621 × 346)
£560,866
10
Fee Estimation There are two methods used in fee calculation. The first is referred to as, ‘Fee Scale’, which is a standard method using values taken from percentage graphs supplied by the RIBA but no longer mandatory or even recommended. The second, known as the, ‘Analytical Method’, is a detailed comprehensive method that determines estimates based on careful analysis of practice’s overheads and time costs.
11
Fee Scale Class 5 Residential Houses and flats for individual clients
Graph 1.0 Indicative percentage fee scales: New Works
12 11 10 09 08 07
Class 5 Class 4
06
Class 3 Class 2
05
Class 1
04 03 0
20
50
100
200
500
£000
1
2
5
10
20
£m
BREAKDOWN ESTIMATED FEE PERCENTAGE
7.6%
*N.B The estimated fee total is for all architectural stages of work. Therefore the quoted price will only be a percentage of this as the work is only to completion of design development part way through Stage 03. The payment could be monthly or by completion of stages. For the purposes of this exercise we have assumed a payment by stage completion. In order to determine the appropriate fee quoted to the client using this method, we need to establish the total percentage cost for each completed stage, typically 10-15% for Outline Proposals and 15-20% for Scheme Design (as suggested by the RIBA).
OUR % FEES FOR STAGE C & D
35%
*N.B Assuming this is a one-off client for a private residence commission we feel appropriate to charge 35% as it would be unlikely to see repeat business benefited from offering the first project at a more competitive rate. Taking external competition factors to be low in weighting with a high availability of work and a steady stream of work within the office allowing a higher profit margin to be sought.
OUR FEE PROPOSAL
£14,762
12
Analytical Method Indirect/Direct Costs *N.B Comparison prices are from an eight man practice at 2001 prices. We assumed a serviced office based in the Lace Market, Nottingham. Choosing a serviced office covers much of the typical overheads into one monthly fee whilst also allowing flexibility for a small practice such as ours with the ability to easily upgrade or downgrade according to demand.
TABLE 2.0 General Office Running Costs
Item
2001 Prices Cost (£)
Nottingham Studio
Rent
15,500
6,000
Business rates
4,000
Inlcuded
Electricity
1,000
Included
Gas
1,500
Included
Water Rates
150
Included
Office Maintence - Including Security
3,000
Included
Telephone
4,500
Included
£29,650
£6,000
Item
2001 Prices Cost (£)
Nottingham Studio
Computer Equipment
6,000
3,000
Software Updates
1,200
2,000
Internet / Email account excluding calls
240
360
TOTAL
TABLE 2.1 Computer System Running Costs
TOTAL
£7,440
£5,360
TABLE 2.2 Banks, Insurance and Legal fees
Item
2001 Prices Cost (£)
Nottingham Studio
Proffesional Indemnity Insurence
5,125
2250
1,025
Included
£6,150
£2,250
Insurance [Office / Third party] TOTAL
13
TABLE 2.3 Miscellaneous
Item
2001 Prices Cost (£)
Nottingham Studio
Advertising
1,000
750
Printing Costs
25,000
15,000
Parking
350
1,920
£26,350
£17,670
Item
2001 Prices Cost (£)
Nottingham Studio
Photocopier [Rent and Inc]
1,000
1,000
Office Refreshments
600
Included
Stationary
2,300
400
Sundries
1,250
400
Magazines / Technical literature
1,000
1000
£6,150
£2,800
Item
2001 Prices Cost (£)
Nottingham Studio
Salary staff cost
150,000
114,731
£150,000
£114,731
Item
2001 Prices Cost (£)
Nottingham Studio
General Office Running cost
29,650
6,000
Computer Systems running cost
7,440
5,360
Bank / Insurance / Legal fees
6,150
2,250
Miscellaneous Costs
26,350
2,800
General Office Consumables
6,150
17,670
Salary’s
150,000
128,136
Total
225,780
162,206
TOTAL (Less Salaries)
£75,780
£34,080
TOTAL
TABLE 2.4 General Office Consumable
TOTAL
TABLE 2.5 Salaries
TOTAL
TABLE 2.6 Office Running Cost Total
14
Analytical Method Time Charge Calculation TABLE 2.7 Basic Salaries
Staff Name
Position
Salary P.A
Matthew Austin
Senior Director
£35,000
Georgia Roberts
Principle Architect
£28,000
Matthew Chamberlain
Principle Architect
£28,000
Jessica Owens
Part 2 Assistant
£23,000
Calculating Costs [per employee / day] Practice Wide Figures - All Projects
TOTAL COST PER MAN YEAR AVG. COST PER MAN YEAR
TOTAL OFFICE RUNNING COST / NO. OF STAFF 162,216 / 4 £40,554 TOTAL COST PER MAN YEAR / NO. OF WORKING DAYS PER YEAR 40,554 / (260 - (28+8)) £181.05
*N.B For calculations, working days/year are based upon eight Bank Holidays and 28 days holiday per person
Employee Specific Figures - All Projects
15
OFFICE RUNNING COSTS PER
TOTAL RUNNING COSTS – TOTAL SALARIES / PRODUCTIVE STAFF MEMBERS
EMPLOYEE PER YEAR (LESS SALARIES)
34,080 / 4 £8,520
Employee Specific Figures TABLE 2.8 Office Running Cost Total
Position
Assumed Salary
Partner
£35,000£1,386.14
Architect
£28,000
Architect
Assistant Part II
FACILITY CONSTRUCTION COST
TOTAL
National Insurance Contribution (10.4%)
Pension Contribution (2%)
Total Cost to Employer
£3,640
£700
£39,340
£560
£31,472
£28,000
£2912100%
£2,912
£560
£31,472
£23000
£2,392
£460
£25,852
£114,000
£11,856
£2,280
£128,136
*N.B For calculations, Category D assumed for National Insurance contributions and an Employer matched Pension scheme of 2%
TABLE 2.9 Employee Specific Cost per Day
Calculation
Position
Holiday Allowance
Senior Director
30
39,340+8,520 260 - (30+8)
£216
Principle Architect
28
31,472+8,520 260 - (28+8)
£179
Principle Architect
28
31,472+8,520 260 - (28+8)
£179
Part 2 Assistant
28
25,852+8,520 260 - (28+8)
£153
Cost to employer + Office Running Costs per employee per year Working days in a year - (Holiday + Bank Holidays)
Employee Specific Costs per day
BREAKDOWN PARTNER COST PER DAY
£216
ARCHITECT COST PER DAY
£179
ASSISTANT COST PER DAY
£153
16
Stage 01 PREPERATION AND BRIEF Stage 01 merges the residual tasks from the former Stage A - Proposal - with the Stage B - Design Brief tasks that relate to carrying out preparation, activities and briefing in tandem. (RIBA Plan of Work 2013)
17
TABLE 3.0 Architectural Drawings TRAVEL TO SITE [YES / NO]
ORIGINAL TIME ALLOWANCE (DAYS)
Director
Architect
Part 2
As Exisiting site plan
NO
0.5
As existing site section
NO
0.5
TOTAL
0
0
0
1
TABLE 3.1 Additional Workstage requirements TRAVEL TO SITE [YES / NO]
ORIGINAL TIME ALLOWANCE (DAYS)
Director
Architect
Part 2 0.5
Office Programming
NO
0.5
0.5
Client meeting on site (1)
NO
1
1
Site apprasial including photographic study
YES
1
Site Feasibilty Study
YES
1
Consultation with surveyors
NO
0.25
Quantity Surveyors meeting
NO
0.25
Miscellaneous Project Time
NO
2
1
2
3.5
5
TOTAL
1
2.5
18
Stage 02 CONCEPT DESIGN Stage 02 correlates exactly to the former Stage C - Concept (RIBA Plan of Work 2013)
19
TABLE 3.2 Architectural Drawings TRAVEL TO SITE [YES / NO]
ORIGINAL TIME ALLOWANCE (DAYS)
Director
Architect
Part 2
As proposed site
NO
0.5
As proposed ground floor plan
NO
0.5
As proposed first floor plan
NO
0.5
As proposed roof plan
NO
0.5
As proposed elevation A
NO
0.5
As proposed elevation B
NO
0.5
As proposed elevation C
NO
0.5
As proposed elevation D
NO
0.5
As proposed Section A-A
NO
1
0.5
3D model views 1
NO
1
1
3D model views 2
NO
2
1
4
6.5
TOTAL
0
0
TABLE 3.3 Additional Workstage requirements TRAVEL TO SITE [YES / NO]
ORIGINAL TIME ALLOWANCE (DAYS)
Director
Architect
Part 2
Office programming meeting
NO
0.25
0.25
0.25
Scheme Redesign
NO
2
3
1
Client meeting (2) on site
YES
1
1
Client meeting (3) at office
NO
0.25
0.25
Consultation with QS
NO
0.25
Consultation with planning authority
NO
0.5
Miscellaneous Project time
NO
TOTAL
1
1 4.5
1 6.25
1.25
20
Stage 03 DEVELOPED DESIGN MAPS Stage 03 maps broadly to the former stage D and part of Stage E (RIBA Plan of Work 2013)
21
TABLE 3.4 Architectural Drawings TRAVEL TO SITE [YES / NO]
ORIGINAL TIME ALLOWANCE (DAYS)
Director
Architect
Part 2
As proposed site
NO
0.25
As proposed ground floor plan
NO
0.25
As proposed first floor plan
NO
0.25
As proposed roof plan
NO
0.25
As proposed elevation A
NO
0.25
As proposed elevation B
NO
0.25
As proposed elevation C
NO
0.25
As proposed elevation D
NO
0.25
As proposed Section A-A
NO
0.25
3D model views 1
NO
1
1
3D model views 2
NO
1
1
Landscaping Scheme
NO
1
External finishing board 1
NO
0.25
0.5
0.5
External Finishing board 2
NO
0.25
0.5
0.5
0
0.5
4
5.25
TOTAL
TABLE 3.5 Additional Workstage requirements TRAVEL TO SITE [YES / NO]
ORIGINAL TIME ALLOWANCE (DAYS)
Director
Architect
Part 2
Office programming meeting 3
NO
0.25
0.25
0.25
Scheme Redesign
NO
1
2
1
Client meeting (2) on site
YES
0.5
0.5
Client meeting (3) at office
NO
0.25
0.25
Consultation with QS
NO
Consultation with planning authority (PA)
NO
1
Consultation with PA fire officer (FO)
NO
0.5
Consultation with structural engineer
NO
0.5
Meeting with structural engineer
NO
0.25
Consultation with PA building control officer
NO
0.25
Consultation with service providers
NO
0.25
Administration work for planning
NO
0.5
Planning application submission to PA
NO
0.25
CDM administration
NO
Miscellaneous Project time
NO
2
1
1
4
8.25
TOTAL
0.5
0.25 1.25
22
Final cost TIME BASED
23
TABLE 3.6
Stage
Senior Director Time (Days)
Principle Architect Time (Days)
Part 2 Time (Days)
Journeys To Site
01
3.5
5
3.5
2
02
4.5
10.25
7.75
1
03
4.5
12.25
6.5
1
TOTAL
12.5
25.5
16.75
4
TABLE 3.7
Position
Total Days on Project (Days)
Cost per Day
Fee
Senior Director
12.5
£216
£2,700
Principle Architect
25.5
£179
£4,565
Part 2 Assistant
16.75
£153
£2,563 £9,828
TOTAL
TIME BASED FEES
JOURNEY TO SITE COST
£9,828
Total No. of Journeys x Distance (miles) x Cost/mile
4 x 21.2 x 0.45
£38.16
*N.B For calculations, Distance = round trip to Bingham at 10.6 miles each way at standard mileage rate of 0.45p/mile
FEES
£9,828 + £38.16 £9,866.16
24
Tender Fee DEVELOPED DESIGN MAPS
25
Tender Fee CONSIDERATIONS AFFECTING FINAL TENDER FEE BID
[REGIONAL FACTOR] Whilst original costing figures applied to London and the South East, with the proposal being situated in the East Midlands, the implication this had on cost had to be considered when calculating the construction costs. This therefore impacts the fee when using the fee scale method to calculate. However, the analytical method is not subject to the same adjustment, although with the office running costs, such as rent, being cheaper in the East Midlands than they may be elsewhere in the country, this does have an indirect impact on the tender fee.
[THE CLIENT] The situation of the client had to be considered, in particular the potential for repeat business. As it is private client, who is most likely making a one-off build (ie. they are unlikely to want to build another home in the future), we did not have to consider attracting their business again in the future. Therefore, whilst it was important to ensure a suitably competitive figure to gain their business for this project, it does not need to be targeted at attracting their business again in the future.
[THE COMPANY] ARC Studios is a relatively new company, still trying to establish themselves within the profession and therefore have to be wary of overcharging, as this could lead to poor professional reputation.
[THE BUILDING] The construction of the building itself is relatively simple, using load bearing masonry. Similarly, the design itself is not especially complex, as, although it is quite a large area, the rooms themselves are simply those found in a standard house. Therefore, it is unlikely that specialist advice would have to be sourced and is therefore not something we would be charged for, as sub-contractors are an additional charge to the client.
[THE ECONOMIC CLIMATE] Whilst the 2008 recession caused a downturn in construction, the building industry is now recovering. Therefore, whilst in a more fruitful position than 7 years ago, this still has to be considered, as there is still a sense of instability within the profession.
[THE COMPETITION] In this instance, the client has come directly to ARC Studios to request we design their house and, therefore, there is no direct competition whom we are competing with, for the project. However, the price must still remain reasonable, to ensure the client is happy with the service provided and does not decide to look elsewhere.
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Tender Fee LUMP SUM FEE TO STAGE 3 FEE SCALE DERIVED COST ANALYTICAL DERIVED COST
=
£14,762
=
£9,866
*N.B From these two figures for a fee quote we can derive our proposed tender fee as an average between the two costs. We propose a higher weighting be given when calculating the average to the analytical method as it forms a more personal and precise estimation for the project. TABLE 4.0
Method
Fee
Weighting
Fee Scale
£14,762
0.4
Analytical
£9,866
0.6
£11,824
TOTAL
TABLE 4.1
*N.B However in compiling our tender fee we must also consider a range of other factors which might affect our proposed fee bid. (*Based on Guide to Fee Bidding)
Concern
Probability
Effect on Bid
Weighting
Exploration works: Unknown issues
Possible
Higher
+5
Omissions in estimate
Probable
Higher
+5
Desirability of the project
High
Lower
-8
Competition form other bids
Low (Lots of work around)
Higher
+2
Current Workload
Medium (But need to secure future projects)
Lower
-2
Familiarity with the project type
High
Lower
+4
Familiarity with the client
None
Higher
+2
Proximity of the site to the practice
Close
Lower
-5 +3%
TOTAL
FEE BID PROPOSAL
WEIGHTED AVERAGE FEE X EXTERNAL FACTOR WEIGHTING £11,824 X 1.03 £12,178.72
FINAL FEE BID PROPOSAL
WEIGHTED FEE BID X PROFIT X VAT £12,178.72 X 1.25 X 1.2
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£18,268
Tender Fee PERCENTAGE OF THE BUILDING CONTRACT TO STAGE 3 FEE SCALE DERIVED % OF BUILDING COST ANALYTICAL DERIVED % OF BUILDING COST
7.6% x 0.35 (percentage up to stage 3)
2.66%
9,866 / 560,866
1.76%
FINAL FEE BID PROPOSAL AS A % OF BUILDING CONTRACT
WEIGHTED FEE BID X PROFIT X VAT / BUILDING COST
3.26%
18,268 / 560,866
[PAYMENT METHOD] TABLE 4.2
Method
Positives
Negatives
Lump Sum
Lump sum up front could allow for expansion
Creates issues with cashflow. More difficult for the client. Less flexible.
Monthly
Steady Cash flow
Difficult for short - term expansion costs that may be required.
Upon completion of RIBA work stages
Clear targets to meet for payment
Not a linear scale of payment in terms of timing and value - Irregular.
Percentage of Contract
If building fee rises, increased payment.
If project fee decreases, less money. Less value for client, as could be seen to design expensive project deliberately for added fee percentage.
*N.B We have decided that payment is via six, monthly installments. This arrangement allows easy budgeting over the course of the project and year and keeps a steady cash flow whilst making it easier to budget for the client, making it a more attractive fee proposal.
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ARC STUDIOS Lace Market House, 54-56 High Pavement, Nottingham, NG1 1HW Phone: 0115 933 8323 Email:austin@arcstudios.co.uk Studios
1st February 2015
Mr T Williams 5 Park Terrace, Nottingham NG1 5DN
Dear Mr Williams,
We are writing to confirm the previously discussed fee offer for 10 Willow Road, Bingham, Nottinghamshire, as well as to confirm the terms of our appointment. This written agreement is for your protection and to prevent us from undertaking work as architects outside of those agreed upon within these fees, therefore ensuring clarity, ethical considerations and professionalism at all times. The outline of your requested requirements can be broken down according to the following, based upon RIBA’s Plan of Works: Stage 0: [Strategic Definition] Consideration of your Business Case and Strategic Brief in order to fully identify the scope for the project. Stage 1: [Preparation and Brief] Development of the Initial Project Brief, considering the project’s spatial requirements, intended project outcomes, site information and your budget. Feasibility Studies will be carried out as well as full Risk Assessment. The project team will also be established and the roles of each member outlined, including sub-contractors. Stage 2: [Concept Design] Project Strategies will br developed as well as a Final Project Brief outlined. This includes further review of Cost Information and the development of a Construction Strategy, Maintenance and Operational Strategy and a Health and Safety Strategy. Stage 3: [Developed Design] The Concept Design is developed further and drawings of the proposed plan, sections, elevations and 3D visualisations will be completed. The Cost Information will be aligned to the Project Budget, with the Project Strategies that were previously outlined being developed further. Change Control Procedures will also be implemented, ensuring changes to the Concept Design are fully considered before being signed off. On completion of this stage, the drawings will be submitted for Planning Permission, for the design of 10 Willow Road.
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For these services to be carried out effectively you have agreed that we will act as lead designer and you will obtain structural and building services designs to assist us. Performance of the services detailed above will be provided accorded to the fees and costs outlined below: TOTAL FEES/BUILDING COST Estimated Total Building Cost ARC Studios Fee (Including V.A.T at 20%) Total Cost
£560,886 £18,268 £579,154
Performance and payment for our services will be carried out via six, monthly installments of £3,045, as agreed. If other preliminary services are required these will be charged additionally on a time basis. Time based services are charged at the following rates: Partner Architect Architect Part II Assistant
Matthew Austin Matthew Chamberlain Georgia Roberts Jessica Owens
£216 £179 £179 £153
We will perform these services in accordance with RIBA’s Standard Form of Agreement, subject to the following: The fee outlined above does not include professional presentation models or 3D CAD models and videos, although these services can be arranged at an additional cost. Extra cost would also need to be considered for sub-contractors such as structural engineers. However, all external works, service installations, internal finishes and internal fittings are included. If the terms outlined in this letter are acceptable, please sign the attached copy of this letter and from here we will be in a position to start work. The whole company is fully invested in the project and we look forward to working with you as it progresses. Yours Sincerely,
Matthew Austin RIBA Founding Partner austin@arcstudios.co.uk Tel: 0115 933 8323
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Standard Form of Agreement CONSIDERATIONS
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[OUTLINING THE PROJECT] Sets out the client, the site and a description of the project to be completed. The time frame in which the client wishes the project to be completed is also identified, as well as their Project Budget. This ensures that all parties are familiar with this information from the outset of the project.
[LIABILITY AND INSURANCE] Sets out the legal framework for the project and ensures that all aspects are considered for insurance, such as Personal Indemnity Insurance. It also considers issues which may arise such as setting out a limit for asbestos or pollution, where relevant. By setting it out at this stage of the project ensures there can be no discrepancies later on, should problems occur. The client is almost made aware of the ARB disciplinary procedures and sanctions.
[DISPUTE RESOLUTIONS] The client and ARC Studios agree upon mediation services which are available from RIBA, should they be needed later on in the project. Similarly an adjudicator and appropriate routes are identified, should they be needed later in the project. This means that any disputes which arise throughout the project can be resolved according to proper procedure, to help ensure the project is impacted to a lesser degree as possible.
[PROJECT APPOINTMENTS] Sets out the core project roles from the Client, to the Architect, to the Health and Safety Advisor, ensuring that everyone knows who else is involved in the work. The stages of the project for which each person is involved are also set out, according to the RIBA Plan of Work.
[WORK STAGE SERVICES] Full list of stages according to the RIBA Plan of Work are set out, including the services provided within each stage, with those not relevant to this project omitted. This also identifies the procedure carried out for handover and close of the project, as well as any post-occupation procedures. This allows the client to be fully aware of each stage of the project and how it corresponds to RIBA’s requirements and therefore the way the architect works.
[FEES AND PROVISIONS FOR PAYMENT] Sets out basic fees according to the work stages, identifying all costs and how they have been calculated. Other fees not included under basic fees are also considered, which include copyright license fee for the client’s use of materials produced by the architect after the last date of the Service is completed. Time charges are set out and any additional expenses are specified. This way, there can be no issues with fees later in the projects, with the procedure surrounding additional costs being considered from the start.
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Reflection PERSONAL INSIGHT
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[LEARNING OUTCOMES] Whilst we were already familiar with the cost of a building, the processes involved in this project have allowed us to learn about where the individual costs come from and how they break down. We found calculating the fee bid to be quite a complex process as there were many factors to consider. In particular, calculating the building cost through using Hutchin’s Black Book and SPON’s, as there were a number of additional factors to consider, such as the building type, inflation and VAT. In turn, this has taught us about exactly what it is that makes the cost of a building increase, and how this affects fees when calculated using the fee scale method. Although we were previously aware of the RIBA Plan of Work, carrying out this exercise has fully clarified it, in particular Stages 0 to 3 and how these correspond to the previous system. We have been made aware of the work required in each stage, as well as the cost percentage of each. The cost of running a project also has many factors to consider. Whilst many seem obvious, there are also those which we did not necessarily automatically consider, for example, the cost of travelling to the site. It has, therefore, shown us the complexities in ensuring an architecture practice is able to remain in profit, due to all the additional cost implications which must be taken into account throughout a project. We have developed a further appreciation for the overall factors involved in the business side of running an architect’s practice and how these affect the firm’s fees. For instance, the impact the architect’s time has on the fees in relation to their position within the company and their work contribution to a project. There are a number of external factors which have to be considered when calculating the fee bid, such as the relationship (or potential relationship with the client), the competition and the location of the project within the country. Whilst we may previously have been aware that some of these needed considering, this project taught us how direct an impact they have on the fee bid. The Standard Form of Agreement is not something we were fully familiar with at the outset of the project. However, it is vital that it is signed at the start of the project to protect both the client and the practice and ensure the details of the framework of the project are agreed at the start.
[CHANGES TO OUR APPROACH] Initially, we were overcomplicating our approach to costing, considering aspects such as internal furnishing, not initially realising that these were not necessary. Although we later omitted the part of this we had done, in future we would know not to consider this. As we assumed that due to the building type it was likely to be a one-off build for the client, although positive relationships would need to be established, it was not necessary to ensure that the tender fee was especially low, as repeat business would be unlikely. However, in other situations, it may be that we were more likely to expect repeat business and therefore this would need to be a consideration when calculating a fee. When estimating the cost of the building, the Hutchin’s Black Book figures were taken from a 2007 copy and whilst we did adjust the prices according to the building price indices given in SPON’s, there could still be inaccuracies in our pricing and therefore would have been better to use more recent data. Similarly, some of the figures we used from SPON’s applied to an affordable housing scheme, which, although residential, was not an individual building. Therefore, some of these figures may have differed slightly. Overall it has been an insightful tool in exploring the business side of architecture.
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Bibliography [Texts] ANON. Architect’s Handbook of Practice and Management. 7th Edition. London: RIBA Publications, 2007. ANON. Appointments Contracts RIBA Agreements 2010 (2012 Revision). London: RIBA, 2012. SNOOK, Keith. RIBA Project Quality Plan for Small Projects. 2nd Edition. RIBA. 2007. BADEN-POWELL, Charlotte. HETREED Jonathan. ROSS, Ann. Architect’s Pocket Book. 4th Edition. Oxon: Routledge, 2014. HUTCHINS, Hutchins UK Building Costs Black Book. London: Franklin and Andrews, 2007. LANGDON, David. SPON’s Architects’ and Builders’ Price Book 2014. 139th Edition. Oxon: CRC Press, 2014. NICHOLSON, M Paul. Architect’s Guide to Fee Bidding. 1st Edition. New York: Routledge, 2003. Standard Agreement 2010: Schedules (2012 Revision – RIBA Plan of Work 2013 compatible version). RIBA, 2012.
[Websites] RIBA Plan of Works 2013. RIBA, 2013 [viewed 30th January 2015]. Available from: http://www.ribaplanofwork.com/ SPON’s 2015 Price Book Update One. Taylor & Francis, 2014 [viewed 31st January 2015]. Available from: http://s3-us-west-2. amazonaws.com/tandfmedia/products/spon/2015UPD1.pdf Guidance on Fee Scales. BHB Architects [viewed 31st January 2015]. Available from: http://www.bhbarchitects.co.uk/images/ guidance_on_fees.pdf
[Images] [1] http://www.dezeen.com/2011/08/05/house-at-alibag-by-malik-architecture/ [2] http://www.archdaily.com/464640/house-unimog-fabian-evers-architecture-wezel-architektur/ [3] http://www.dezeen.com/2014/12/17/sigurd-larsen-low-cost-family-house-sorte-hus-copenhagen/ [4] http://www.dezeen.com/2012/04/10/private-house-suha-by-arhitektura-d-o-o/
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Thank you
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