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Higher Architects Profits

Hiring outside consulting engineers guarantees higher architects profits. Here is the proof.

Architects are normally paid a fee based on either a fixed dollar amount or a percentage of construction cost. Based on the project budget and the use of a current cost data book, it is easy to calculate the approximate construction cost of a consultant’s discipline.

Traditionally outside consulting engineers charge a fee that is less than the architect’s fee as it relates to the construction cost of the consulting engineers discipline. The difference is guaranteed higher architects profits.

Let’s look at an example excerpted from The “Complete Guide” to CONSULTING ENGINEERING © 2015 John D. Gaskell. Used with permission of Professional Value Books, Inc. All rights reserved. Order at http://www.TheEngineersResource.com. Use discount code “paperback” and save.

EXAMPLE

Assume that the project is an existing high school located in the state of Rhode Island. The new project is to renovate a portion of the existing school.

Existing building size: 40,000 sq. ft.

Portion to be renovated: 10,000 sq. ft.

First convert the above areas to “general” construction cost. (Use a current Cost Estimating book.)

High school – $197/sf x 1.22 x 10,000 sf = $2,403,400

(Note: I used the factor 1.22 to adjust the costs for the Rhode Island area. You would of course adjust for the area of your project. Also, I have ignored the 30,000 sq. ft. of existing high school that is not being renovated. Consulting engineers will have to spend some time assessing existing systems and possibly designing replacements or modifications, if these systems are not expandable to meet the needs of the new project. But, the architect will probably not get more fee, since their work in these areas is minimal. However, consulting engineers should include this extra time their budget of hours.)

Second use Figure 12-1 to determine the “Difficulties”.

High schools = “C”

Use Figure 12-3 to determine the architect’s fee for the renovation.

High school renovation– 9.8 %

Next determine the budgets for mechanical & electrical construction.

High school renovation

Mechanical 18.1 % x $2,403,400 = $435,015

Electrical 12.9% x $ x $2,403,400 = $310,038

The architect (Or other prime professional) expects outside consulting engineers to work for a “portion” of his fee. When I first started my consulting engineering practice it was 2/3 and later increased to 3/4. You need to check with other consultants in your area of practice to determine what the architect is expecting. I have used 3/4 in this example.

Finally, the mechanical & electrical engineering fees are determined.

Mechanical:

H S renovation 9.8% x ¾ x $435,015                  $31,973

Electrical

H S renovation 9.8% x ¾ x $310,038                   $22,787

Total MEP fees…………………………………….$54,760

But, the architect keeps ¼ or 25% of the fee associated with this work or $18,253. (Note that this is 1/3 or 33.3% of the consultants fee.) That’s 25% profit while most A & E firms make less than 15% profit. Also, if the architect had in-house engineers he still would have had to coordinate their work. Therefore this guaranteed profit is obtained without any added effort on the part of the architect.

CONCLUSION:

Architects make higher profits by hiring outside consulting engineers.

I have just shared with you the fee “secrets” that took me 35 years to perfect. Apply my advice and use your best judgment; your proposals will win you work.

To learn about FEE CALCULATIONS “Click Here“.

To discover OTHER FEE CONSIDERATIONS “Click Here“.

To understand the benefits of OVERTIME “Click Here“.

“Excerpted from The “Complete Guide” to CONSULTING ENGINEERING © 2015 John D. Gaskell. Used with permission of Professional Value Books, Inc. All rights reserved. Order from http://www.TheEngineersResource.com. Use discount code “paperback” and save.