Architect's Guidelines for SPP Compliances

Architects' Guidelines for SPP Compliances

• Architects' Guidelines are integral to the IRR of RA9266 and serve as a reference for compensation methods and standards in fixing fees for professional services.
• These guidelines aim to guide architects on different compensation methods and aid clients in understanding an architect's value.

Rule I: Title and Rationale

• The document is titled "UAP-IAPOA DOC. 210: ARCHITECT'S GUIDELINES FOR STANDARDS OF PROFESSIONAL PRACTICE (SPP) COMPLIANCES - METHODS OF COMPENSATION AND SCHEDULE OF FEES," replacing the 1979 UAP DOC. 208-b.
• The rationale is to set parameters on Architect's Guidelines on Compensation and Schedule of Fees.
• Standardize ranges in which Clients compensate Architects for the services they provide.
• This complements regulatory laws like R.A. 9266 and adheres to the Architect's National Code.

Rule II: Methods of Compensation

• The evaluation criteria for Architect's compensation is based on evaluation of the architectural firm's talents, skill, experience, effort, and time for the project.
• The fee should reflect the Architect's service value and focus the Client's attention on the performance quality of the Architect's services.
• The professional fees computation depends on complexities and architectural and engineering services types provided.
• Compensation for services requiring only one expertise type differs from those needing multiple expertise types.
• Time schedules, client inputs, review procedures, administration costs, potential contingencies, and the number of required consultations need to be considered.

Section 4: Methods of Compensation

• Architectural fee variables make it hard to determine a fee basis as preferable for a specific project.
• The 2010 SPP Documents identify compensation methods classified into three main types.
• Percentage-based Fee, is related to the size and project type.
• Lump Sum or Fixed Fee
• Time basis

Percentage-based Fee

• Most common compensation for architectural services worldwide.
• The Professional Fee (PF) is determined by multiplying the set percentage times the project's estimated, awarded or final Project Construction Cost (PCC).
• Both the Client and the Architect benefit from the cost of the Project they are willing to undertake.
• Easy to apply is flexible as the professional fee of the Architect adjusts if there are changes, additions, or deductions of the work of the project.
• Charges based on percentage of construction cost are based on:
  • "Probable Project Construction Cost (PPCC)" with unit price parameters;
  • "Awarded Project Construction Cost (APCC)" using the winning contractor's bid;
  • "Final Project Construction Cost (FPCC)" based on cost records.
• Detailed Architectural and Engineering Design Services (DAEDS) includes the architecture and engineering design services.
• The architect's design services make up sixty percent (60%) of the stated fee for DAEDS.

Unit Cost Method

• Involves remuneration based on cost per square meter of the project, and is a variation of the percentage based method.
• Unit cost estimation requires accurate and timely data to provide services for each unit.
• Renovation of a unit requires more service effort than service towards a new unit.

Value-based Pricing

• Remuneration is valued on the outcome of revenue, cost, and measurable profit.
• It is a percentage of gross rentals.
• This is applicable to Building Administration and Management Services in building occupancy and performing operational maintenance.

Lump Sum or Fixed Fee

• This is used when the services can be defined at the beginning of the project.
• Both parties need to agree on project scope, design approvals, construction schedules, and other variables.
• Two methods to arrive at a lump-sum compensation:
  • Percentage cost of the project
  • Developing a fixed amount estimating the cost outlines, plus a reasonable margin of profit, all expressed as a lump-sum.
• Include a time limit and extra time compensation for any changes ordered by the Owner after preliminary design documents are approved.

Time basis

• Fees charged on an agreed-to hourly (man-hours), daily (per diem) or per month rate.
• Useful when services are difficult in nature and duration.
• Used for services, pre-design services, partial services, additional services, expert witness, and specialist architectural consultancy services.
• Hourly rates vary across the country and by the experience level.

Multiple of Direct Personnel Expenses

• It is applicable to non-creative work.
• Cost-based, that has been based on hours spent and doesn't account for creative work.
• Made up of adding hours of technical services and multiplying it by a multiplier to cover overhead and profit.
• Multiplier ranges depending on the office, overhead, and experience.

Professional Fee Plus Expenses

• Used where there is a continuous relationship on a series of Projects.
• Establishes the agreed rate or sum over the reimbursement for the technical time and overhead.

Per Diem

• Client requests for Architect's time with meeting, conferences, reviewing projects etc.
• Paid on per diem, honorarium, travel, and accommodations.

Salary cost

• Pays the employees in the project and reimburses the PCA to undertake work.

Retainer

• Guarantees the service will be able in a certain amount of time.
• Client to Owner is paid a certain amount at certain intervals.

Mixed Methods of Compensation.

• Each project should be examined to determine the most appropriate method of establishing an equitable Method of Compensation between the Architect and the client.
• Using one method may not be relevant all of the time.
• There is no reason an assortment of compensation methods should not be used if appropriate in projects
• An appropriate compensation may be used and for another phase a different method may be applied.

Rule III and beyond

• Following sections described what to do after selecting a services and compensations.
• Includes compensation fees, and types of the services that can be provided.
  • There must first be a 5% acceptance fee based on the agreed upon professional fee for signing the agreement.
  • Following payments after completion of certain phases.
  • Any adjustments to the price should be made at the signing of the Architect's contract of service.
  • Payment to service according to breakdown of amount and phase.
• In order to figure a proper fee, there needs to be consideration to a variety of sources.
• Project type, scope Recommendations for project fees, professional fees etc.