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REFERENCE BOOK Summarized Methods of Compensation
REFERENCE BOOK Summarized Methods of Compensation
REFERENCE BOOK Summarized Methods of Compensation
METHODS OF COMPENSATION
PERCENTAGE‐BASED FEE
1. PERCENTAGE BASED ON PROJECT CONSTRUCTION COST
Most common worldwide.
The amount of the percentage is related to the size and type of the project
PROFESSIONAL FEE = PROJECT CONSTRUCTION COST x PERCENTAGE
3 Methods to Determine the Project Construction Cost
o Probable Project Construction Cost (PPCC) – using price parameters; established on the
date of the signing of the Service Agreement.
o Awarded Project Construction Cost (APCC) – using the bid of the winning contractor.
o Final Project Construction Cost (FPCC) – based on the Cost Records that will be
submitted to the architect upon the completion of the project.
DAEDS – Detailed Architectural and Engineering Design Services
– includes architectural & basic engineering
e ngineering services
DADS – Detailed Architectural Design Services.
– Architectural design services only; PF = 60% of DAEDS
TIME BASIS
Charged on an agreed‐to hourly (man‐hour) or daily (per diem) or per month rate.
Useful when the services are difficult to determine in advance or they are interim in nature and
often short in duration.
This method is used on the following:
o Services which are not defined
o Pre‐design services
o Partial services
o Additional services
o Services as an expert witness
o Architectural Consultancy Services
Hourly billing can utilize fixed rates (such as Php 500 per hour) or a multiplier
2 Types of Multiplier
o Direct Salary Expenses
o Direct Personnel Expenses – most common
4. SALARY COST TIMES A MULTIPLIER, PLUS DIRECT COST OR REIMBURSABLE EXPENSES
Direct Salary Expenses x Multiplier (3) + Reimbursable
Suited
work.
for projects for which costs are difficult to predetermine or in cases it require additional
6. RETAINER
When the services of the PCA is required over interval period of time.
Common practice of clients who wished to be assured of always having available the services of
an architect.
Not required on a full‐time basis.
MANNER OF PAYMENT
Work Phase Breakdown of PF Cumulative Payments
Upon signing of Agreement as the 5% 5%
mobilization component
Upon completion of the Schematic Design 15% 20%
Upon completion
Upon completion of
of the
the Contract
Design Development
Document 20%
50% 40%
90%
Phase
Within 15 days after the awards of the 90%
winning Contractor
Upon completion of the work 10% 100%
Note:
When the construction is suspended over 6 months, the remaining fee of the Architect shall be doubled
CONSTRUCTION PHASE
5% fee for the Architect’s liability on the Civil Code
5% fee for the Periodic Construction Supervision (PCS)
This involve certification and documentation costs for third party certification such as LEED,
GREEEN or BERDE.
1. ARCHITECTURAL INTERIOR, ACOUSTIC DESIGN, ARCHITECTURAL LIGHTING LAYOUT & DESIGN, and
SITE DEVELOPMENT PLANNING
RPF – 10% to 15% of the cost of work
SCHEDULE OF FEE
WORK PHASE BREAKDOWN OF PF
Upon submission of the preliminary design 30%
Upon submission of the final design 50%
Upon completion of the project 50%
2. PHYSICAL PLANNING
RPF – Php 50,000.00 per hectare for the first 5 hectares.
Additional 20% to 30% in the PF if the land is rugged with steep terrain.
Professional fee does not include engineering and other allied services.
Detailed building design does not include in the Physical Planning Services.
SCHEDULE OF FEE
WORK PHASE BREAKDOWN OF PF
Framework Development Plan (FRDP) 30%
Conceptual Master Development Plan (CMDP) 30%
Preliminary Master Development Plan (PMDP) 20%
Detailed Master Development Plan (DMDP) 20%
costs.
o Cost plus Incentive Fee (CPIF) or Cost plus Adjusted Fee (CPAF) – cost reimbursement type
contracts with provisions for a fee that is adjusted by shading formulas applied to the
difference between the final allowable costs and the target costs.
o Costs plus Fixed Fee – the owner will pay the Construction Manager a fixed fee plus
reimbursement
RPF – as a Construction Manager (CM) is 1.5% to 3% of the Project Construction Cost (PCC)
POST‐CONSTRUCTION SERVICES
Manner of Providing Services
o Dual Capacity – Architect‐of‐Record (AoR) & Consulting Architect (CA)
o Consulting Architect
Method of compensation
DESIGN‐BUILD SERVICES
2 Types of Design‐Build Services
o Design‐Build Services by Administration
o Design‐Build Services on a Guaranteed Maximum Cost
Manner of providing services
o The Architect is part of the entity constructing his/her design
o The Architect works in tandem or authorized an entity to construct his/her design
o
The Architect is a State‐licensed Contractor implementing his/her own design
Method of Compensation
o Percentage of Project Construction Cost
o Multiple Direct Personnel Expenses
o Professional Fee plus Expenses
o Lump Sum or Fixed Fee
o Per Diem, Honorarium plus Reimbursable Expenses
o Built‐in in the Guaranteed Maximum Cost
RPF for Design‐Build Services by Administration – 7% of PCC
RPF for Design‐Build Services on a Guaranteed Maximum Cost – 10% of PCC
Manner of Payment
o The client directly pays the cost of labor and materials
o A revolving fund is given to the architect beforehand and is subject of the Owner’s audit
o The Owner shall pay for the cost of all the permits, licenses, etc.
Assist the Professional Adviser and the Jury in the administrative conduct of the ADC
o
Majority per
should be Architects
o
GENERAL CONDITIONS
The Architect is entitled to interest in the prevailing rate set by the Bangko Sentral ng Pilipinas
(BSP) if the client failed to pay the fees and reimbursements to the Architect within 30 days of
receipt of billing.
Any taxes imposed by the government to the Architect (except the Income Tax) shall be paid by
the Owner.