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