Tag Archives: Stephen Malone

Is it value for money if your architect is free?

Money by 401(K) 2013, on FlickrArchitecture and interior design fees are always something that you readers here at The Midnight Lunch seem to enjoy  – and recently I’ve been reading some great stuff about architectural fees written by other people which I thought worth talking about and sharing with you – and then you can share it with all of your friends.  (Also check  out previous The Midnight Lunch reader favourite The art (or is that science) of  architecture and interior design fees)

Whilst we may get together and grumble about fees amongst  colleagues and our friends working for competitors, how often is it that an architect speaks out more publicly about fees –  to both the client organisation and to the competing architectural community – not very often in my experience. The way architectural fees are going, maybe it is something we need to see more of if we are all to actually stay in business and earn a living.  Whilst many firms thought they could cost cut during bad times and raise the fees again later this has not been the reality.  I’d say fees now in 2014 are comparable to 2004 – and I know that nothing else is.

Recently, this wonderful email written by Stephen Malone of MCA Architects was forwarded onto me (and I thank Stephen for allowing me to share it with all of you).  I’ve removed the name of the client and some other identifying references related to them, but you will certainly get the idea.  I’ve also highlighted in bold a section which I think is particular of interest.

Thank you for the briefing  meeting  which I am  sure all attending  Architects found  helpful.

I  trust you do not mind  me  circulating the following to the other Architects in attendance.

I raised with you informally our  practice’s concern  about the  level of fees which consultants were being paid, in relation  to the client  requirements in the design of the projects being undertaken  by [the client].

It is entirely reasonable that the [client] requires projects which are well designed and documented , given the buildings are for public [use].

However , notwithstanding the  [client’s] desire to achieve high architectural standards it is accepting  fees which  are markedly below  normal commercial levels.

The following illustrates this.

The total Project on costs commercially for similar projects are about 14% – 16% related to  a  construction  cost of say $3,000,000 made up as follows:

All  consultants fees design and  documentation only (excluding  QS and  specialist consultants) approx 8%- 9%

Tendering  and Contract administration approx  4%- 5%

Project Management                                                     2% -3%

You indicated in a previous  discussion with me that a similar figure of about 15% was used by the  [client] .

 

However the Fees being  accepted for Design and Documentation  only, by  consultants are in the  order of 4% (viz  50% of normal  commercial practice)  and  sometimes in  our recent  experience even  less . This means Architects are prepared to design and document buildings for the  [client]  for about 2% of the  value of the works ( the architectural  component is about 50%  -60% of the  consultants fees).

This in normal commercial practice would hardly cover  the  cost of the considerable amount of work involved in obtaining a Development Approval!

This also means the [client’s]  residual percentage is  about 11% or  about twice normal  practice, so the client ends up paying the same amount for all on costs , but  does it get the quality ?

Given  the massive amount of [projects] which has  been, and is being undertaken by the [client]  there should be by now  quite a few awards and public recognition and appreciation. I respectfully suggest this has rarely occurred and at these level of Fees is unlikely to occur.

Consultants whilst wishing to create work of a high standard sooner  or later look at their time sheets and  press the off button on the  computer.

You  can only “buy’  work so often and Architects are particularly naive in this  respect. As a fellow Architect you would know the practice of architecture is commercially vulnerable , subject very much to supply and demand. In difficult times fees can absurdly low.

You indicated to me that if a consultant offered to undertake a commission for nothing , they may still be  engaged, as it is in the [client’s] interests  to obtain the  lowest fees available. However Governments and their agents have a long term social responsibility and  a superior outcome would be achieved if fees more in  line with normal practice were accepted.

This can be done, and our own  practice has a variety of clients (including institutions ) who  will not  accept bottom line fees.

They know from bad  experience what the outcome is likely to be.

We view the [client’s]  mandate as immensely important for the public [deleted] and will trust these concerns will receive appropriate consideration .

Sincerely

Stephen Malone

DIRECTOR

MCA  architects

 

Madness, isn’t it.  We are driving our own profession into decline, by the practice – which if we were selling goods – would be known as dumping, and in many jurisdictions would be illegal! (See a discussion of ‘dumping’ in the comments in this post on Entrepreneur Architect) But here in Australia, many government clients (at all levels) are positively encouraging it – to the detriment of those now and in the future that occupy the buildings and spaces procured this way.

So how can we encourage our clients that this process of selecting the cheapest will not result in value for money? We all have to educate them, and we all have to resist the urge to undercut our competitors.  For a great blog post explaining in simple terms why architects charge different levels of fees, check out this post from Di Mase Architects – perhaps this should be essential reading for all clients.

At the end of the day, we all need to also remember that fees = salaries.  Do you want to be working for free?  Recently spotted on Twitter – “It’s amazing how creative you can be when your have interns working for free” (Tweeted by the great parody account @RoyalAusINSArch).  This one is certainly pretty close to the truth in a lot of practices – but its not just the interns working for free.  If you look at the latest DIA salary survey, design salaries are at minimum wage levels or less, and I have seen UK surveys that have indicated architects salaries are static.

I applaud Stephen for his stand, and for communicating such a well considered email, as well as the fact that he sent it both to the client and to the other architects working with this client. Its interesting to me that back in the 70’s price fixing for architecture was removed as a consumer protection – but now we are in a situation where we as architects and designers seem to be needing protection from the consumers, and that the consumers seem to need protection from themselves – as Stephen points out, you don’t get great architecture for free.

Ceilidh Higgins

Image Credits:

PS. Come and see me at RTC Melbourne where I am presenting “Get your Groupon” at 2.30pm on Saturday 31 May.  Soon after I’m off to the USA where my alter ego Stuart (the girl) BIMimion is presenting as part of BIMx at RTC Chicago.  Follow the BIMinions on twitter throughout both RTCs – @BIMinions.