Arc 807: Professional Practice and Procedures

A PAPER

CALCULATION OF ARCHITECTS’ FEES ACCORDING TO THE 1996 CONDITIONS OF ENGAGEMENT AND REMUNERATION FOR PROFESSIONAL ARCHITECTS’ SERVICES

FOR

ARC 807: PROFESSIONAL PRACTICE AND PROCEDURES

OJO, Olusola Michael

ARC/07/0982

In Partial Fulfilment of the Requirements for the Award of

Master of Technology (M.Tech.) Degree in Architecture,

Federal University of Technology, Akure.

June, 2013

1.0 INTRODUCTION

The revised professional Scale of Fees for consultants in the Nigerian Construction Industry was first approved and signed into use in November, 1992. The release of this new legal document was received with mixed feelings, applause for the far-reaching decisions made on major issues affecting scale of fees in the Construction Industry on one hand, and on the other hand however, some obviously candid criticisms were made in respect to some of its details. This prompted the then Hon. Secretary of Works and Housing; Engr. Barnabas Gemade to set up another committee to look into the observations and criticisms with a view to correcting them.

The committee basically maintained the framework of the Professional Scale of Fees of 1992, with changes introduced only in areas that obviously require such. Highlight of the changes introduced in this edition include;

· Emphasis on the areas affecting Prime Consultants.

· Equal Man-Month rates for supervision of projects, whether the Consultant is on the project or one that is invited to participate only on Stage 3 of the project.

· Ambiguities on the Scales of Fees for Quantity Surveying in Engineering Works reviewed.

· Reimbursable as a percentage of Estimated Total Cost (ETC) of projects.

· Elimination of Extra services and a careful review of what goes into Additional Services.

NOTE: The revised scale of fees (1996) is designed for use in the Public Sector as well as a guideline for employers in the Private Sector. It also supersedes the 1992 Professional Scale of Fees.

1.1 AIM OF PAPER

The paper is designed to enlighten student architects on how fees are charged in the Construction Industry, as well as the different charges that apply to different aspects of the architect’s services between 1996 and 2010.

1.2 OBJECTIVES OF PAPER

· To familiarize students with a brief history of how the 1996 Scale of Fees came into existence.

· To explain the usefulness of the Scale of Fees in the Construction Industry.

· To examine the scope and capacities of an architect’s services, as well as their corresponding payment pattern.

· To illustrate objective 3 with the use of relevant examples.

2.0 SCALE OF FEES FOR ARCHITECT

2.1 STAGE PAYMENT

The proportion of the total fees payable to all categories of Consultants (including architect) at the different stages of implementation is as follows;

Stage 1: should be 25% of fees based on the Estimated Total Cost (ETC) of the project.

Stage 2: should be 50% of fees based on the Estimated Total Cost (ETC) of the project.

Stage 3: should be 25% of fees based on the Total Construction Sum (TCS) of the project.

The fees for stages 1 and 2 shall be calculated on the basis of the Estimated Total Cost (ETC) of the project and payments shall be made on these stages accordingly. The fees for stage 3 shall also be calculated on the basis of the ETC of project which is reviewed periodically as the project progresses and payments shall continue to be made periodically accordingly. The Total Construction Sum (TCS) shall only be used to adjust the final payment in Stage 3. The tender sum shall be adopted as the ETC where this is known.

2.2 ARCHITECT AS PRIME CONSULTANT

The Prime Consultant is the leader of the team of Consultants on a project. He conceives and initiates the project, produces the guiding designs or sketches, co-ordinates and in some cases manages the project.

TABLE 1: SCALE OF FEES FOR PRIME CONSULTANT

COST OF PROJECT / FEES PAYABLE AS A PERCENTAGE OF COST OF PROJECT
Up to 5 million / 4.75%
Next 10 million or part thereof / 4.5%
Next 15 million or part thereof / 4.25%
Next 45 million or part thereof / 4.0%
Next 75 million or part thereof / 3.5%
Next 150 million or part thereof / 3.0%
Next 200 million or part thereof / 2.5%
Balance over 500 million / 1.75%

Source: Conditions of Engagement and Consultancy Services Agreement, 1996.

2.3 ARCHITECT NOT PRIME CONSULTANT

Where the Architect is not the Prime Consultant on a project, the following is the table of fees.

TABLE 2: SCALE OF FEES WHERE THE ARCHITECT IS NOT THE PRIME CONSULTANT

COST OF PROJECT / FEES PAYABLE AS A PERCENTAGE OF COST OF PROJECT
Up to 5 million / 3.0%
Next 10 million or part thereof / 2.5%
Next 15 million or part thereof / 2.25%
Next 45 million or part thereof / 2.0%
Next 75 million or part thereof / 1.75%
Next 150 million or part thereof / 1.5%
Next 200 million or part thereof / 1.25%
Balance over 500 million / 1.0%

Source: Conditions of Engagement and Consultancy Services Agreement, 1996.

2.4 REPETITIVE WORKS

Repetitive works refer to unit(s) of the same design types and specification to be constructed on the same site or other sites as the case may be. Fees payable for different scales of repetitive works are as follows;

TABLE 3: SCHEDULE OF REPETITIVE FEES

NUMBER OF REPETITIONS / FEES PAYABLE AS A PERCENTAGE OF COST OF PROJECT
Initial Project / 100%
First 10 Repetitions / 30%
Next 10 Repetitions or part thereof / 20%
Next 30 Repetitions or part thereof / 15%
Next 50 Repetitions or part thereof / 12.5%
Next 150 Repetitions or part thereof / 10%
Next 250 Repetitions or part thereof / 7.5%
Balance over 500 Repetitions / 5%

Source: Conditions of Engagement and Consultancy Services Agreement, 1996.

NOTE: Repetitive reduction shall not apply to single buildings, all sub-structure and post-contract services of the project.

2.5 RESIDENT SUPERVISION FOR PRIME CONSULTANTS

In addition to the design services an architect renders, as a Prime Consultant, the architect might be required to supervise the construction phase of the project as a resident architect on site. The fees charged for this aspect of services for the architect is done in accordance with man-month rates (Time Charges).

TIME CHARGES

All man-month rates are applicable to Time Charges on a pro-rata basis and in accordance with the following principles;

10 Months (200 Days) in a Year

20 Days in a Month; and

8 Hours in a Day

TABLE 4: MAN-MONTH RATES FOR PRIME CONSULTANTS IN 1996

CATEGORY OF STAFF / MINIMUM YEARS OF EXERIENCE / MAN-MONTH RATES (N) (PRIME CONSULTANT) / MAN-MONTH RATES (N) NOT PRIME CONSULTANT
Chief Resident Architect/Engineer / 15 / 102,300 / 92,400
Principal Resident Architect/Engineer / 12 / 92,400 / 78,000
Senior Resident Architect/Engineer / 6 / 69,300 / 56,100
Resident Architect/Engineer / 4 / 56,100 / 46,200
Assistant Resident Architect/Engineer / Under 4 / 46,200 / 33,000
Senior Technical Officer / - / 69,300 / 52,800
Technical Officer / - / 46,200 / 33,000
Assistant Technical Officer / - / 33,000 / 23,100
Draughtsman / - / 23,100 / 16,500

Source: Conditions of Engagement and Consultancy Services Agreement, 1996.

2.6 PROJECT MANAGEMENT

Where the architect is the Project Manager, the sliding scale in the table below shall apply.

TABLE 5: SCALE OF FEES FOR PROJECT MANAGEMENT

NUMBER OF REPETITIONS / FEES PAYABLE AS A PERCENTAGE OF COST OF PROJECT
Up to 5 million / 1.0%
Next 10 million or part thereof / 0.90%
Next 15 million or part thereof / 0.80%
Next 45 million or part thereof / 0.70%
Next 75 million or part thereof / 0.60%
Next 150 million or part thereof / 0.50%
Next 200 million or part thereof / 0.40%
Balance over 500 million / 0.30%

Source: Conditions of Engagement and Consultancy Services Agreement, 1996.

2.7 REINBURSIBLE EXPENSES FOR ALL CATEGORIES OF CONSULTANTS ON A CONSTRUCTION PROJECT

The payment of Reimbursable claims on transport, accommodation, printing, computer rentals, office equipment and other incidental expenses incurred on the project shall be made to all the consultants in addition to normal fees, but only after the receipts backing up such claims have been accepted by the client, subject however to a maximum of 1% of the cost of the project. This amount shall be distributed among the consultants as follows;

Architect (Prime Consultant) - 40%

Structural Engineer - 15%

Quantity Surveyor - 15%

Mechanical Engineer - 10%

Electrical Engineer - 10%

Geotechnical Engineer - 5%

Builders - 5%

Where the Architect is not the Prime Consultant, he will exchange his place on the distribution list with the professional that is the Prime Consultant on the project. For example, in a refinery project where the mechanical engineer is the Prime Consultant, the Architect’s share is 10% of the total sum for reimbursable expenses.

Where the 1% of the total cost of project as distributed is found to be inadequate, the approval to exceed must first be obtained from the client before the affected consultant is free to make a case for additional reimbursement supported with relevant receipts.

Also, where a Geotechnical Engineer and/or a Builder is/are absent on the project, his/her share(s) of reimbursement revert(s) to the Prime Consultant.

2.8 SCALE OF FEES FOR MULTIFARIOUS COMPLEX PROJECTS

Multifarious complex projects may usually have more than one Prime Consultant on them. In this sort of projects for example, the Electrical Engineering Consultant is treated as a Prime Consultant on the design of the street lights in an estate. The buildings in the estate are treated separately with the Architect as the Prime Consultant while the sewage system is treated as a separate project with the Structural Engineer as the Prime Consultant. Such complex multifarious complex projects should be considered on the basis of each profession.

2.9 ADDITIONAL SERVICES

When the Consultant is employed to perform additional services beyond the normal service and contract period, he shall be entitled to remunerations at the rate(s) indicated for the individual services considered hereunder;

ADDITIONAL SERVICES STAGE 1

· Site Investigations and Project Design Studies

The Consultant Architect is entitled to some remuneration in accordance with the man-month rate(s) on Time Charges.

· Research on Brief and Development of Same

The Consultant Architect is entitled to remuneration for this Additional Service in accordance with the man-month rate(s) on Time Charges.

· Feasibility or Viability Studies

The Consultant Architect is entitled to remuneration for this Additional Service at the rate of 0.2% of the Estimated Total Cost of Project.

· Special Drawings and Models

The Consultant Architect is entitled to remuneration to be negotiated with the client.

· Processing of Outline Approval

The Consultant Architect is entitled to remuneration in accordance wth the man-month rate(s) on Time Charges.

TABLE 6: ADDITIONAL SERVICES STAGE 1

ITEM / DESCRIPTION OF SERVICES / FEES PAYABLE
(i) / Site Investigations and Project Design Studies including inventory of staff spaces, measured drawings, general surveys (as distinct from land and quantity surveying) / MAN-MONTH RATES ON TIME CHARGES
(ii) / Research on Brief and Development of same. / MAN-MONTH RATES ON TIME CHARGES
(iii) / Feasibility or Viability Studies / 0.2% of ESTIMATED TOTAL COST (ETC)
(iv) / Special Drawings and Models / Negotiation with clients
(v) / Processing of Outline Approval / MAN-MONTH RATES ON TIME CHARGES

Source: Conditions of Engagement and Consultancy Services Agreement, 1996.

ADDITIONAL SERVICES STAGE 2

· Processing for and obtaining Final Planning Approval

The Consultant Architect is entitled to remuneration in accordance with the man-month rate(s) on Time Charges.

ADDITIONAL SERVICES STAGE 3

· Making any Site Visits or attending any Site Meetings other than the Normal Single Monthly Meetings

The Consultant Architect is entitled to remuneration in accordance with the man-month rate(s) on Time Charges.

· Any Visits or Work done to Rectify Defects during Defects Liability Period

This is a normal service of the Consultant Architect and therefore shall not be additionally remunerated.

· Any Normal Supervision rendered beyond the Original Contract Period

The Consultant Architect is entitled to remuneration in accordance with man-month rate(s) on Time Charges.

TABLE 7: ADDITIONAL SERVICES STAGE 3

Source: Conditions of Engagement and Consultancy Services Agreement, 1996.

OTHER SERVICES

· Redesign and Additional Design Work.

· Interior Design Work

· Furniture and Fittings

· Landscape Design

The fees payable for the above services shall be negotiated between the client and the Consultant Architect.

REHABILITATION, RESTORATION AND REFURBISHING WORK ON DAMAGED EXISTING BUILDING AND STRUCTURE

The Consultant Architect is remunerated in accordance with the basic scale of fees for basic Architectural Services, applying the cost of restoration in place of the cost of the project.

3.0 ILLUSTRATIONS: CALCULATING ARCHITECTS’ REMUNERATION

3.1 EXAMPLE 1

As a Consultant Architect, you have been commissioned to design a residential project worth N25M. Calculate your remuneration as the Prime Consultant.

Solution

Total Estimated Cost (ETC) of Project - N25M

Calculating Prime Consultant’s Fees (reference to Table 1)

1st N5M - (4.75/100) x 5,000,000

= N237,500

Next N10M - (4.5/100) x 10,000,000

= N450,000

1st N10M - (4.25/100) x 10,000,000

= N425,000

Total Architect’s Remuneration = N1,112,500