FINANCIAL REMUNERATION FOR AN ARCHITECT
In order to establish a good working relationship between the customer and the hired architect, it is prudent to have secured information regarding the financial remuneration of the architect. The issue of financial remuneration is generally based more on negotiation between the contracting parties rather than a standardized basis. The fee would be based on various aspects of the designing and building process. The fee is generally based on the scale of individual and customized assistance provided and regarding the designing and building processes of the customer’s house or property. Other factors such as the reputation of the architect, his expertise, overheads and procurement of resources are also taken into account.
In an independent survey conducted recently in 2006, by Mirza and Nacey, it was seen that the remuneration of architects for providing complete assistance in the designing and building of new privately owned houses, ranged from eight to 12 percent of the gross construction cost. In other projects such as refurbishment of existent homes or extension and maintenance of historical buildings, the fees were significantly higher. (Finkelstein, 2007)
The fees charged for the designing, planning and submitting the plans, ranged in between 3 to 5 percent of the whole construction cost.
Before the establishment of future remuneration it is important both for the client and the architect to reach a consensus on the details of the project and services required by the client, the time required and a planned timetable for the process, the procurement methods and costs and an overall approximate idea of the construction costs. A working agreement has to be drafted regarding the details of the project along with the terms and conditions of engagement of the architect by the client and a rough estimate of the construction costs and the architect’s remuneration thereof. It is important to note that such an accurate estimation of the final construction cost may not always be possible and the final construction cost may vary significantly due to fluctuations in prices in the market or any such eventuality. The client is to be made aware of this fact beforehand and this should be mentioned in the written agreement.
Architects generally quote their fees as a percentage of the construction process or as a lump sum. He may charge on a timely basis such as an hourly or daily rate or any other pre agreed ways. Additional expenses may also be added to the accrued income of the architect if due to certain unavoidable circumstances additional work is done by the architect or additional expense incurred by the architect.
An architect who has laboured throughout the whole building process usually invoices his payment in three stages. They may charge one thirds of the whole payment during the designing stage, the same at the information related to the construction stage and the rest during the final construction phase. The fees may be paid after the completion of each phase or alternatively over a regular period. (Finkelstein, 2007)
REGULATION REGARDING THE PROFESSIONAL CONDUCT OF ARCHITECTS
The professional conduct of architects is subject to significant regulation, bearing in mind the fact that as in other professions in the service industry architects too are required to exhibit ideal professionalism in the workplace and thereby maintain the honour, integrity and competency of the profession. The Royal Institute of British Architects ahs laid down certain statutory requirements regarding its expectations that are to be met by its affiliates. In its Code of Professional Conduct, the RIBA achieves the same.
The code is divided into three sections. The sections include:
1. The three basic principles on which professional conduct is to be maintained
2. The values required to be present in professionals
3. Guiding notes, which tries to explain the reasons for doing the above?
The first section, which deals with the basic principles, requires three essential principles on which professional conduct is maintained. They are:
1. INTEGRITY/ reliability: everybody should be honest and reliable at all times.
2. COMPETENCE / ABILITY: all the members should work efficiently and should show proficiency and responsibility in their work. They should provide appropriate knowledge, financial and technological resource in their work.
3. RELATIONSHIP: affiliates have to respect the relevant rights and interests of the clients and other parties involved at all times. (Ching, 2007)
The second section of the code deals with inculcating and promoting good moral values among its members. It is expected that architects would act out of truthfulness and honesty and impartiality at all times. It is also expected that architects would insulate their own self-interest and give importance to the clients’ interest. They are required to never make an unfair statement that may be misleading if their own professional expertise and knowledge imply so. They should never accept or offer bribes and they should maintain and respect the confidentiality and privacy of its clients.
In order to enhance competency in the workplace, the members are required to act out of impartial judgments’ at all times. The architects may never accept any work, which is not in line with their own area of expertise. The client is to be well informed regarding everything and every aspect of the plan. An impartial judgment of one’s own abilities is also to be maintained. The clients are to be well informed, a written agreement regarding the project has to be made available to the clients, and strict adherence to this agreement is required.
Members are to treat all sections of the demographic equally and recognize social diversity. They are to be responsible to the environment and may never act in a manner to cause any harm to it. If in case the architects are taking part in a competition, they are to act with utmost honesty and transparency in the process. They should be prepared to deal with any eventual legal conflicts and are to deal with disputes and complaints effectively. (Kicklighter, 2007)
The idea is to create professionals with high ethical and professional standards.
NOTES ON DESIGN, BUILD AND TRADITIONAL BUILDING PROCUREMENT
BUILD: In the field of architecture, civil engineering or real estate development, the term build usually implies Construction i.e. the physical act of constructing a building such as commercial or personal workplace or houses. The act of constructing such man made structure is essentially intended to facilitate the structure to shelter individuals for purposes of continued occupancy and the requirements to sustain this need. The requirement essentially includes factors such as protection from weather, pollution in the environment, privacy and other factors affecting lifestyle. The objective thus is to create a man made structure by using available resources and applying relevant processes.
DESIGN: it is the act of preparing a schematic drawing of the proposed project after consultation with both the owner of the property and other professionals such as civil, electrical, fire and mechanical engineers. This drawing would thus help in conceptualizing the house based on the demands of the owners and in compliance with local legislations and housing regulations. The design is therefore a hand drawn or computer generated image of the future house or commercial space.
TRADITIONAL BUILDING PROCUREMENT: this process is also known as the Design-Bid-Build process. It is a method of project delivery in which the contractor or the agency or architect entrusted with the job of building commercial or personal spaces contracts with various other firms or entities for the designing and construction of the project. The process includes three stages, they are:
1. The designing phase
2. The bidding or tender stage
3. The construction phase
In the first phase, the architect designs the project along with the drafting and production of tender documents which would be later published and on which the general contractors would then in turn put in their bids. The architect prepares a geometrical or isometric schematic design after consultation with the owner that is the client and based on their needs and demands and after consultation with structural engineers, fire engineers, landscape architects, sanitation professionals, plumbers, electrical engineers and civil engineers. The final schematic drawing of the proposed project would thus be finalized and based on its requirements the tenders would be generated. (Kicklighter, 2007)
In the second stage, the tenders are opened up into the market and contractors bid to obtain the tenders. The deal may or may not go to the lowest bidder. The contractor’s reputation has a major role to play in the bidding activity and all bids are welcome as long as the bids are within the reach of the owner. The tenders are generally offered to the lowest qualified contractor. After having gotten the tender the contractors may then distribute their share of the work to subcontractors who would undertake various operations such as piping, plumbing, and concrete work.
In the final stage, the construction takes place. The architect may have added after consultation with the owner and contractor newer terms and condition or certain addendums. The construction permit from local regulating authorities is to be obtained. (Valerdi, 2008)
ARCHITECT’S RULE
Earlier the role of an architect was limited to designing of a project based on his client’s needs and demands. However, over the years the role of an architect has been changing, especially with the changing business scenario and the need of business houses for more lavish and beautiful workplaces. The architect’s role therefore did not stay confined to aesthetics only. It expanded to include within its scope various other factors such as cost control methods, green architecture, which is to create workplaces or homes that were more environments friendly and could provide occupants with effective sheltering from the ill effects of environmental pollution, especially in workplaces where people spend longer hours. Architects had the capability to change or build perceptions about individuals or their businesses, and attach both performance and value to it.
The role of the architect was therefore no more confined to designing only. They had to deal with other factors such as legal matters, construction costs and all other areas required creating a workplace or a home. They had to function as a facilitator for all the areas involved. From the initial stages of inception of the project, the architect now has to take care of every detail. They have to prepare tenders, act as a medium between potential contractors and devise the most efficient and cost effective plans for construction, consult with mechanical, civil, electrical engineers, plumbers, fire department and look after the needs of the clients. The idea is to therefore reach a balance where all the factors can be dealt in the most effective way.
Additionally the architects have to bear in mind all the legalities and legislations that are involved. Local housing regulatory authorities have to be approached and the plan devised in accordance with their regulations. Then the plan has to be notified and sanctioned by these authorities. The architect would also have to deal with eventualities that may arise due to disputes. (Kicklighter, 2007)
Overall, architects are now required by regulation to be more professional to their work and are generally more accountable.
Additionally the requirements and needs of the clientele have also changed. The focus is on modern architecture and newer techniques evolve every day. Therefore, a great deal of innovation is also required. The idea is to think out of the box and create something unique. Architecture has therefore become a full-fledged business where the rules for construction and aesthetics are venturing newer territories.
Over the years the architect has also faced a lot of technological developments and newer techniques of building procurement have also been incorporated and instead of traditional procurement method also known as the design bid build process the practice has shifted towards design build process or management procurement systems.
Therefore, it can be concluded that the role of an architect is now a bigger one and the added responsibilities have grown. Architects are continuously facing newer challenges and the role and demand of an architect is ever changing and growing. (Bratton, 2007)
HOW TO MAKE TRADITIONAL BUILDING PROCUREMENT OR DESIGN BID BUILD PROCESSES COST EFFECTIVE
To achieve a cost effective solution to the process certain new alterations have been proposed.
1. NEGOTIATED PRICE CONTRACT: In the first stage of the traditional process, the subsequent pricing was never discussed. This was done in the second stage where the bids were evaluated based on the capability and financial status of the client. In order to make the process more cost effective this pricing policy can be discussed during the first phase itself. Therefore the idea is to give the architect a more of a mediator’s role between the client and the builder and prepare a contract based on their mutual agreement on the price due to this negotiation. The contract is to be signed only when an agreement on the price has been reached.
2. COST PLUS CONTRACT: the traditional relationship between the architect and the client is maintained and the final document regarding the contract is either fully or partly established. A management fee regarding the overhead expenses and profit is in advance negotiated with the contractors or builders, the contractor may now use sub contractors to achieve the tasks, thereby reducing costs and the architect again administers a modified, new, contract. This subcontract process is generally administered by the main contractor but approved by the owner, architect, or both. (Ballantyne, 2007)
3. TWO STAGE TENDERS: the traditional relationship between the client and architect is not altered and remains the same under this parameter. The first stage tender would be based on the basic design and its outlines and the contractor is selected based on its quote of the overheads expense and profit rates, resources and site and management facilities provided by the contractor and its reputation in the market. Hereafter the contractors and sub contractors are also included in the design team and a final documentation on the overall budget devised. The prices are negotiated from the grass roots level of the sub contractors until the contractors. Therefore, negotiation is done through the various stages to avoid excessive costs. The client’s needs and financial capability are borne in mind and a balance achieved between the client and contractors and sub contractors. Therefore, the final document would suit the needs and restrictions of the client in the best possible way. This is also a very logical process because the builder’s notion on the quality of services provided at a said cost can also be evaluated and therefore the best course of action decided upon. Therefore, the costing would be more realistic. It may not always be possible to give the best at a lower price but by doing this the architect can determine the best course of action keeping in mind the clients interests. This system is also known value engineering. It is to be borne in mind that such measures may also lead to a “cheaper is better” mentality both among the client and the contractors and needs to be avoided. (Kicklighter, 2007)
References:
Ballantyne, Andrew; 2007; Architecture: A Very Short Introduction; Oxford University Press
Bratton, Benjamin & Hernan Diaz-Alonso; 2007; Notes from an Informal Discussion on Interinstitutional Design Research and Image Production; Architectural Design; 76, 5, 109-111; John Wiley & Sons, Ltd
Ching, Francis D. K & Frank Ching; 2007; Architecture: Form, Space, & Order; Edition: 3, revised; John Wiley and Sons
Finkelstein, Sidney & Donald C. Hambrick; 2007; Compensation: A synthesis and reconciliation; Strategic Management Journal; 9, 6, 543-558; School of Business Administration, University of Southern California, Los Angeles, California, U.S.A.; Graduate School of Business, Columbia University, New York, New York, U.S.A.
Kicklighter, Clois E; 2007; Architecture; Goodheart-Willcox Pub
Valerdi, Ricardo & Heidi L. Davidz; 2008; Empirical research in systems engineering: challenges and opportunities of a new frontier; Systems Engineering; Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA 02139; UTC Pratt & Whitney Rocketdyne, Inc., Stennis Space Center, MS 39529
