Last week I started a discussion on how the client and their expectations impacts on the cost of design. Whilst there was some hope expressed on linkedin about this next post offering solutions…I’m not really sure I’ve got the answers. As I was originally writing this blog, I found that as I wrote I was moving more and more towards discussion of another contentious topic – competitive tendering. So today, while I continue pondering the impact of the client, this has segwayed into a consideration of the problems of competing tendering.
Often the project brief (or lack thereof) is the beginning of the problem. Whilst developing the brief can be part of the architect or interior designers scope, if it is teamed with unreasonable contract conditions or unreasonable interpretations by the client, significant additional work can be required. I have encountered contracts which expressly forbid the designer from claiming variations due to a prolonged program, limiting the number of meetings or site inspections or from an increased project value. This, to me is incredibly unfair on the part of the client. When the brief is little more than this – design a 5,000m2 fitout in a new building of 5 storeys to accommodate 400 staff in a mix of open plan and enclosed offices with support facilities. To me, the program and budget are key considerations in my scope, the scope is not just the final construction documents. Whilst it is true that the architect or interior designer could increase the construction cost due to design decisions, it is equally true that the client could increase construction costs and the amount of detailed design and documentation required due to their decisions on a higher level of acoustics or particularly extensive and complex joinery requirements as examples. I guess the decision has to be made at the fee proposal stage – do I take this risk of bidding on an very undefined scope and how do I (if possible) cost this into my structure. If the client then gets unreasonable in assessing variation claims, this is a recipe for cost overruns. In the end this kind of client should suffer with reduced quality for their project, but often they don’t, because we as designers still want to do a good job and keep the client happy. And our companies can often somehow think they will be able to make the money back on the next job, but in my experience its hard to make this work if you are dealing with clients who require competitive tendering on every job.
At the other end of the scale I have seen very detailed briefs, which (I thought) set out the clients full expectations of activities and deliverables. I responded to this detailed scope, pricing accordingly. We were even shortlisted for a tender interview. However, it turned out the client was interviewing all the tenderers (there were 3-5 selected tenderers) because there was such a large difference in the fee values (I think it was something like 200%) and they wanted to ask further questions of each party. I thought the interview went very well, but then we didn’t get the job. When we asked for a debrief, we were informed that we were offering a ‘blue ribbon’ service and that the client couldn’t afford this. So apparently the project had gone to someone with a much lesser level of services than they had put the tender out for, and a matching lower price. So much for fair tendering processes. If they didn’t want our ‘blue ribbon’ services, we should have been given the opportunity to price the same as the other company – or perhaps if they weren’t fixed on the services but on the outcome (eg the fitout) then they shouldn’t have specified all the detailed meetings, reports and the like in the tender. Very frustrating.
Although the tender process makes these things worse, even with more involvement with a potential client up front there is still no telling. Just like a job interview, it is a pretty brief time you spend with someone, where both parties are on their best behaviour. Later when things start to get even a little bit difficult or go wrong it could be a different story. Or it could be that the people change, or additional people get involved in the project. Having a user group that violently disagrees with the project manger/property person responsible for delivering the project can be a challenging process to work through for both the architect or interior designer and the client representative.
The most time consuming client I ever had, was one who used to pop into the office every single day for weeks at a time. She had decided to personally take charge of the colours and finishes. Whilst I wasn’t happy with that, the client organisation had agreed she would do this (I think that people thought it would reduce our workload! Little did they know…) If I told reception I wasn’t available she started to ask for the other project team members. She would then ask to come in and look at the samples library – but she wouldn’t just be doing this quietly on her own, the whole time she would be asking the opinion of whoever had let her into the office and they couldn’t get back to their own work. At the end of the project she sent back a removalist size carton of samples. We did actually end up charging the client extra fees, and thankfully in this case, the organisation was reasonable and recognised the additional work we had incurred due to the behavior of their staff member.
For me the problems is that these different client attitudes have costs attached and this time can also impact upon the project program. We have planned the project process based upon certain time periods, and its not always a simple matter of throwing extra resources against the project when the client requirements expand the time required. So how do we as an industry change this? We can’t always work for repeat clients that we know and understand, where we can somewhat predict their behaviours and expectations at the fee proposal stage. Particularly when it comes to competitive tendering we don’t have the opportunity to get to know the client. Or if we do know them, we might overprice the job or the opposite, we can win the job by offering a lesser level of service than the tender calls for. In my view, we as an industry need to take some responsibility for this. Architects and interior designers need to be less hesitant about defining scope and claiming variations. All architects and interior designers need to take responsibility for this, as often client attitudes are determined by the other architects/consultants they have worked with in the past. We need to educate our clients. But I also think that large client organisations, who purchase architectural and design services frequently also need to take responsibility. In particular, in Australia, government at all levels is a large user of architectural services, generally uses competitive tendering processes and frequently promotes one sided contracts. Clients need to understand their roles in the process and what has been allowed for in the fees. The staff involved need further support and education. Value for money does not mean cheapest. The conditions at tendering stage need to suit the actual project expectations. Client organisations need to judge project management success on more than just keeping consultant fees down.
If one of our largest clients (as an industry) treats architects and interior designers as not worth being treated as professionals with a high level of skills and value, what does that say about our profession? What is your experience – do you think competitive tendering offers the client the best outcomes? Do your clients understand that program or meeting attendance is part of the scope and can impact on your fees? What kinds of additional services have your clients expected without changes to your fees?
by Philip Taylor PT