| Author |
Message |
Tom Good, architect, CDT, SCIP, LEED AP
Senior Member
Username: tom_good
Post Number: 30
Registered: 11-2006
| | Posted on Monday, December 10, 2012 - 05:12 pm: |    |
I have been looking at various other spec writers’ web sites, and have found no instances of folks putting their typical fees to write specs on the web. I am wondering why. I can understand that each project needs its own proposal with corresponding fees, but why not give potential clients some up front information as to what one’s fee range is? My fees are around 0.1% of construction cost. I have decided to publish them here:
http://ecologicarchitecture.com/Fees.php
QUESTION ONE: Am I crazy to publish my fees?
QUESTION TWO: Are my fees crazy? I’m just asking for feedback, not collusion. I am thinking I have made this fee page too complex, but I wanted to point out the circumstances that drives spec writing fees.
There was a thread in 2005 (now archived at http://discus.4specs.com/discus/messages/2195/1445.html ) which discussed HOW folks set fees, but not WHAT the fees were or if that information was public. |
Jeffrey Wilson CSI CCS
Senior Member
Username: wilsonconsulting
Post Number: 86
Registered: 03-2006
| | Posted on Monday, December 10, 2012 - 05:36 pm: | |
IMHO, you are offering way too much info. Clients generally want the simplest proposal possible, w/ the fewer variables the better. Very few will care how you arrive at the ultimate fee -- they're more interested in whether it seems reasonable & falls within their expectations. And they certainly don't want to calculate it themselves using complex formulas.
I use fee calculation formulas that are considerably less complex than yours, but I still keep this mostly to myself & disclose only the essential info the client needs to make a decision.
I don't see any benefit in publishing my fee schedules, but I am certainly willing to share it w/ regular clients if they ask -- which is rare.
Jeff Wilson
Wilson Consulting Inc |
Anonymous (Unregistered Guest)
Unregistered guest
| | Posted on Monday, December 10, 2012 - 05:52 pm: | |
I don't see any correlation between construction cost and the work to produce specs, so I don't use that to establish fees. The estimated quantity of sections is the primary driver, with a number of multipliers for project complexities and size, client history, etc.
I look at construction cost to adjust fees to fall into a certain range. For example, I try to stay under 0.1% of construction cost for large projects (say 80-120+ sections), but this can be much too low for smaller projects that might involve 50-70 sections but have small amounts of most elements so the budget is comparatively low. |
Tom Good, architect, CDT, SCIP, LEED AP
Senior Member
Username: tom_good
Post Number: 31
Registered: 11-2006
| | Posted on Tuesday, December 11, 2012 - 01:29 pm: | |
Jeffrey, thanks for your feedback. I think you are correct that my fees page is too complex. I will revise it to be much simpler (see below). See if you folks agree with these upsides regarding the benefits of publishing spec writing fees:
1. Weed out clients who have low fee expectations.
2. Give potential clients a ‘full disclosure’ and ‘nothing-to-hide’ impression of the way one does business.
3. Advantage to clients who are comparing spec writers to go with writers who disclose fees.
4. Why not do this? What is the downside?
Anonymous, I agree that fees have little direct connection to construction cost. The number of specs and complexity of the project are how I set fees too. It does seem that, although not causal, that higher construction cost projects tend to have a lot more spec sections and complexity. So although it’s not how I set fees, saying that my fees are generally in the range of 0.1% of construction cost, may help potential clients (who are usually basing their own fees on construction cost percents) with a quick ballpark guess-timate. I suppose I could say something like 20 to 30 sections is $3000, or $100 per section, but architect looking for spec writers do not always know how many spec sections are involved. Besides, 20 Division 04-06 sections are a lot more work than 20 Division 10-12 specs.
I think I am going to try this on http://ecologicarchitecture.com/Fees.php :
“Typical Consulting Fees for Basic Services: In a written proposal, I set the fees for basic spec writing services based on the number and type of spec sections required and on the complexity of the project. To give a rough idea, fees for basic services typically happen to come out to about 0.1% of construction cost. The following will affect the final calculation for basic services fees in a written proposal:
Factors which INCREASE fees:
• Renovation included in project
• Non AIA general conditions to be used for conditions of construction contract
• General contractor bid project as opposed to owner selected construction manager
• Multiple prime contracts rather than single prime contractor
• Fast track schedule (construction starts before construction documents are complete) to be used
• Multiple project manuals required rather than a single project manual (which may have multiple volumes)
• Owner is a government, higher education, or corporate hospitality entity
• Government funded
• Project manual compilation by me rather than by architect or construction manager
• Full services scope desired (all division 00, 01, and 03-14 architectural sections) rather than basic service scope (defined list of sections)
Factors which DECREASE fees:
• Returning clients
• Green rated project
• Design development outline specifications not required
• Draft submittals schedule not required
• Nomenclature list not required
• First addendum not required
• Fixed fee rather than maximum fee
• Furniture and furnishings only
• Core and shell only” |
J. Peter Jordan
Senior Member
Username: jpjordan
Post Number: 524
Registered: 05-2004
| | Posted on Tuesday, December 11, 2012 - 02:00 pm: | |
By publishing this, you will offer a shortcut to the your client which may put you at a disadvantage. Expecially with new clients, I want to meet to go over the project in detail, making suggestions where appropriate, this gives me a much better understanding of the project and the client's capabilities in providing the information I will require. I always explain that, generally, the proposed fixed fee will be based on section count with adjustments for the number of review submittals required (only once in more than 400 projects have I requested additional fees due to scope creep). This meeting offers a marketing opportunity for our firm that we would not otherwise have.
You also provide information to competitors that may be used to undercut your proposed fees by just enough for them to get the job. Yes, I know that "fee cutting" is unethical; deal with it. |
Nathan Woods, CSI, CCCA, LEED AP
Senior Member
Username: nwoods
Post Number: 499
Registered: 08-2005
| | Posted on Tuesday, December 11, 2012 - 03:11 pm: | |
Tom, why would a "green rated project" reduce your fee? |
Liz O'Sullivan
Senior Member
Username: liz_osullivan
Post Number: 93
Registered: 10-2011
| | Posted on Tuesday, December 11, 2012 - 03:39 pm: | |
I wondered that too. I have found that green rated projects increase the amount of work I have to do, and therefore increase my fee. |
Tom Good, architect, CDT, SCIP, LEED AP
Senior Member
Username: tom_good
Post Number: 32
Registered: 11-2006
| | Posted on Tuesday, December 11, 2012 - 04:59 pm: | |
Nathan and Liz,
I reduce fees on green rated projects because I am committed to the cause. Very non-capitalist un-businesslike, but I do it for principle. Besides, the green stuff in specs is not that tough, and it’s almost more to take it out. |
Nathan Woods, CSI, CCCA, LEED AP
Senior Member
Username: nwoods
Post Number: 500
Registered: 08-2005
| | Posted on Tuesday, December 11, 2012 - 05:03 pm: | |
That's about what I figured. I agree with you BTW, except for Div 1. |
Tom Good, architect, CDT, SCIP, LEED AP
Senior Member
Username: tom_good
Post Number: 33
Registered: 11-2006
| | Posted on Tuesday, December 11, 2012 - 05:05 pm: | |
J. Peter,
Thanks for the feedback on the potential downsides of publishing fees. No one can hire me without getting a proposal first and that is after having a discussion. So I agree that the detailed discussion needs to happen. I have not had the experience of someone undercutting my fee. That is, I have never had a client say, ‘I got this other proposal which is less than yours. Do you want to cut your fee?’ Didn’t know our field was that tight. I will sometime cut my fee, if they say it is out of their budget. Thanks for your perspective. |
Robert E. Woodburn
Senior Member
Username: bob_woodburn
Post Number: 19
Registered: 11-2010
| | Posted on Tuesday, December 11, 2012 - 05:14 pm: | |
Reminds me of the Title of an AIA seminar many years ago (or maybe it was an article): "If you cut your fee, do you bleed?" |
Liz O'Sullivan
Senior Member
Username: liz_osullivan
Post Number: 94
Registered: 10-2011
| | Posted on Wednesday, December 12, 2012 - 02:02 pm: | |
On green projects, I find that more product research than normal is required to ensure that I am not creating conflicts in the spec sections.
For example, if I spec that interior sealants are to have a maximum VOC level, I have to make sure that I include in the spec products that meet that requirement, and do not include any products that don't meet that requirement. |
Anne Whitacre, FCSI CCS
Senior Member
Username: awhitacre
Post Number: 1279
Registered: 07-2002
| | Posted on Wednesday, December 12, 2012 - 04:52 pm: | |
I agree with the "too much information" comments. First of all, that particular page is pretty dense with type, and uncomfortable to read. Secondly, I think you want to give yourself the (unstated) option of modifying your fees for non business reasons. Much like your reducing fees for green projects, I used to severely cut my fees to work on homeless shelters, even though those clients were usually a pain-in-the you know what. I also increased my fees if I had a very annoying client. I buried the increase... used a bigger multiplier or something. I think its better to say: "Fees are based on a project specific proposal and we can discuss which items will increase or decrease the fee for your project."
When I consulted, I regularly had competitors who had a lower hourly rate than me -- (one guy in town was 1/2 of my rate); and in my office, when I've spoken to a project manager or two about specs, they've gone with outside consultants because "my billing rate is too high". (never mind that MY billing rate stays in the firm). oh well... if fee is the deciding factor, you are going to have a whole lot more problems than that. |
Ronald L. Geren, AIA, CSI, CCS, CCCA, SCIP
Senior Member
Username: specman
Post Number: 1065
Registered: 03-2003
| | Posted on Wednesday, December 12, 2012 - 05:27 pm: | |
Ditto Anne's comments. I look at evey project individually and base my fee on the merits or drawbacks of the project, as well as the client.
I used to base my fees on the number of expected sections and the time commitment required to prepare those sections. But I was losing potential clients because my fees exceeded what they had available, since the small projects required nearly the same number of sections as the big projects. Therefore, I now work on a percentage basis, which means I make little to no profit on the smaller projects and gain a larger profit on the bigger ones. If I can keep a steady influx of bigger projects, they will offset the loses on the smaller projects and I will always come out ahead.
I justify the higher fees on bigger projects by pointing out the fact that I have a higher risk associated with a bigger project--there's more potential for a screw-up. And if a screw-up does occur (which it hasn't, so far), the potential cost impact is typically greater on a larger project than on a smaller one.
Ron Geren, AIA, CSI, CCS, CCCA, SCIP
www.specsandcodes.com |
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