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RAIC overhauls fee guide

Don Wall
RAIC overhauls fee guide

Heightened project complexity coupled with procurement innovations and other factors have prompted the Royal Architectural Institute of Canada (RAIC) to incorporate significant revisions into its new fee guide.

The latest edition of A Guide to Determining Appropriate Fees for the Services of an Architect was released in late July, 10 years after the last one came out.

“The practice of architecture and the provision of architectural services have evolved considerably,” the authors note. “Today the architect and client must agree upon a wide range of project requirements and negotiate a fair exchange for value based on the unique aspects of each project.”

Donald Ardiel, the RAIC’s director of practice support who edited the new guide and debated its content as a member of the RAIC practice support committee, explained that factors such as the rise of building information modeling (BIM), integrated project delivery (IPD) and integrated design process (IDP), and the introduction of third party certifications such as LEED and WELL dictated that one long-established method of billing for services, based on a percentage of construction costs, is no longer appropriate for many projects.

 

One of the key factors is an increase in process requirements

— Donald Ardiel

Royal Architectural Institute of Canada

 

Other factors cited in the fee guide for the revised thinking included increased reliance on public-private partnerships (P3s) with their extensive RFQ and RFP phases and risk shifting, and the urging of Lean practices, with intense and project-long consultation.

“One of the key factors is an increase in process requirements,” said Ardiel. “By that I mean the process of moving the entire project through is more complicated, more involved, with many more stakeholders involved. Stakeholder management becomes a key issue, and so a myriad of additional processes comes into play.”

The 2019 edition updates the percentage fee tables to align with the Canadian Construction Documents Committee’s (CCDC) new definition of construction cost and adds fee adjustment factors to address the new project delivery models and technologies. It also introduces project delivery comparison tables with analysis of the risk factors for each delivery method.

Ardiel said the fee tables are developed through consensus among senior principals of firms across Canada. There were some regression errors that had crept into the table that were rectified in the new edition on top of the changes required to incorporate the new CCDC.

There are very few “typical” builds anymore, Ardiel said, so in more cases the percentage or fixed fee approaches are not appropriate and the stakeholders should more frequently consider the “effort-hours” put in by the architect.

“An increased number and complexity of processes and an increased number and complexity of stakeholders results in significantly increased effort-hours,” he said. “Let’s say a building has a construction value of $5 million. Except now, it needs to be high performance. So you want to significantly cut energy costs, you want to significantly increase other benefits. So the construction costs might not be much more but it sure does take a lot more time to deal with it.

“And dealing with myriad consultants. LEED, WELL, it goes on and on.”

With P3s, owners are aiming to transfer as much risk as possible, with the architect often asked to take on a greater project management role. In one extreme case, Ardiel said, one public project owner in Guelph, Ont. tried to incorporate a clause into an RFP in which the architect was asked to promise to indemnify the client for criminal activity.

All of that risk transfer — when ethical and legal — has to be acknowledged in the fees, Ardiel said.

“Our institutional clients want risk transfer to the max,” he explained. “All they want is no risk. ‘You will accept all risk so that my political masters cannot be embarrassed by anything.’

“I have seen some horrendous clauses in RFP documents and contracts. You think, what kind of a lawyer would even think such a clause was enforceable? They are just throwing everything at the wall to see what sticks.”

The fee guide notes that BIM requires more documentation in the early phases of a project — and that BIM work during different phases, such as construction documents versus contract administration, is of different value. The former work should carry a 10 per cent fee premium, the guide authors suggest.

Another BIM issue, Ardiel argues, comes when the architect’s use of BIM adds value downstream, such as in facilities management.

“The problem is, everybody in the downstream supply chain gets the value of it,” he said. “The client says, do it in BIM, but it adds significant value to the project. And that represents a real increase in effort-hours that the architect should be compensated for.”

Ardiel said he does not anticipate owners will balk at a fee regime in which architects increasingly asked to be paid based on hours worked.

“What I hope is that clients would look at all the additional factors and appreciate that architects add value and it isn’t one-size-fits-all, and all of these other factors would result in more work that the architect has to do to add value to you, the client,” he said.

 

Follow Don Wall on Twitter @DonWall_DCN.

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