Essential Guide to Selecting Design Professionals and
School
Pennsylvania State University**We aren't endorsed by this school
Course
CE 332
Subject
Information Systems
Date
Dec 11, 2024
Pages
47
Uploaded by AgentLightning13396
CE 332Page 1Selecting a Design Professional
CE 332Page 2Selection ProcessOwner notifies selected design firms and provides Request for Proposals (RFP)Interested firms submit qualifications◼previous projects◼name of clients◼staff qualifications◼special abilities◼Project approach◼Anticipated scope◼Exclusions and assumptions◼schedule◼fee schedules
CE 332Page 3Selection Process (cont.)Owner selects qualified design professionalsOral presentations and selectionOwner negotiates feePrivate owners may forego qualifications and just select a design professionalIn the public sector, the Brooks Act prohibits selection on the basis of the fee
CE 332Page 4Methods of Design Professional Compensation
CE 332Page 5Compensation for Basic Services1.Percentage of construction cost2.Cost reimbursable (time and material)◼multiple of direct personnel expenses◼Fixed fee plus expenses3.Fixed price (Lump sum)
CE 332Page 6Percent of Construction CostMultiply construction cost by a specified percentage, ~ 8%Advantages:◼avoid bargaining over the fee◼minimal recordkeepingDisadvantages:◼No incentive to reduce construction cost◼fee may not reflect the design effort
CE 332Page 7Percent of Constr. Cost (cont.)Applies to basic services only (see AIA B101 –Agreement between Owner and Design Professional)Percentages vary with the project to reflect the anticipated work effort:◼residential vs. commercial◼single contract vs. multiple contracts◼lump sum vs. cost reimbursable
CE 332Page 8Percent of Constr. Cost (cont.)Can be applied to a wide variety of commercial projects, ◼especially where the scope of work must be defined by the d.p. and where the owner has little or no capability to monitor costThe main issue: Can the effort required be reasonably estimated? If yes, then this approach will work.
CE 332Page 9Cost Reimbursable - Multiple of Direct Personnel ExpensesMultiplier ranges from 1.5 to 3+Provides for overhead and profitWhat are direct personnel expenses? See B101 - direct salaries and fringesAdvantages:◼relatively simple◼not a disincentive to spend extra time to do the best job (unless Not-to-exceed (NTE) cost established
CE 332Page 10Cost Reimbursable - Multiple of Direct Personnel Expenses (cont’d)Disadvantages:◼requires detailed cost records of exact time spent, which project, nature of the work, and who did the work◼more work, more feeApplied to projects where scope is not well defined and the owner is not worried about design costs, as compared to construction costs.
CE 332Page 11Cost Reimbursable –Fixed Fee (aka Profit)Plus ExpensesAdvantages:◼compensation not tied directly to actual construction cost◼no disincentive to do the best jobDisadvantages:◼no real incentive to reduce design cost◼requires careful recordkeeping - what are recoverable costs?
CE 332Page 12Cost Reimbursable –Fixed Fee (Profit) Plus Expenses (cont’d)◼Cannot always tell if costs are excessive or necessary◼advance client approval can make the process cumbersomeUsed on larger or more complex projects where much work is needed to define the scope and where the owner has the resources to monitor costs
CE 332Page 13Fixed Price (Lump Sum)Advantages:◼owner knows the fee in advance◼minimal recordkeepingDisadvantages◼encourages a “cheap” “economical” designUsed where the scope is well definedWorks best for repetitive design work for the same client
CE 332Page 14Scope of Design Professional Services
CE 332Page 15Scope of ServicesDepends on the wording of the contract (look at AIA B101 - Standard Form of Agreement Between Owner and Architect; Engineers Joint Contract Document Committee (EJCDC) Standard Form of Agreement Between Owner & Engineer for Professional ServicesThere are Basic and Additional ServicesAdditional Services require extra compensation
CE 332Page 16Basic Services Divided into five phases◼schematic design (preliminary engineering)◼design development (final engineering)◼construction documents (plans, specifications and estimate (PS&E ))◼bidding◼construction contract administration (construction observation)
CE 332Page 17Basic Services (cont.)Schematic Design (approx 20% - 30% complete)◼review program and get approved budget◼provide schematic documents and specs◼determine probable cost (+20%)◼get approval to continue
CE 332Page 18Basic Services (cont.)Design Development (approx 75% complete)◼prepare design details and specs◼size members, select materials◼finalize architectural, structural, mechanical, and electrical systems◼update cost estimate (+10%)◼get approval to continue
CE 332Page 19Basic Services (cont.)Construction Documents (CD) (99.9% complete)◼finalize drawings and specifications for approval◼prepare necessary bid documents including the contract◼revise cost estimate (+5%) ◼Get approval to continue
CE 332Page 20Basic Services (cont.)Bidding Assistance ◼Assist Owner in obtaining and reviewing bids◼Respond to Contractors’ Request for Information (RFIs)◼Conduct the Pre-bid Meeting◼Issue addendum (contract changes)◼Make recommendation for contract award◼Assist in preparation of the construction contract
CE 332Page 21Basic Services (cont.)Construction Administration ◼administer the contract◼serve as the owners representative◼conduct project meetings◼determine progress payments◼interpret the contract documents (intent)◼construction observation (vs inspection)◼reject nonconforming work◼approve submittals and shop drawings◼prepare change orders◼certify completion (punch list) in general conformance with plans and specs◼finalize payments◼close out project
CE 332Page 22Additional ServicesSelected additional services◼work related to feasibility, programming, conceptual design◼investigate existing conditions or making measured drawings (as-built or record drawings)◼providing consultant services other than structural, mechanical, and electrical (e.g. geotechnical, surveying, environmental)◼providing interior design services◼coordinating work of separate contractors◼numerous other services
CE 332Page 23Other ConsiderationsSelect a contract form that is consistent with the type of contractAvoid trying to save money on design services
CE 332Page 24Contract Formation
CE 332Page 25Contracting EnvironmentGenerally, American law gives autonomy to contracting parties to choose the substantive content of their contracts. Since most contracts are economic exchanges, autonomy allows each to value the other’s performance. Autonomy assumes and supports a marketplace where participants are free to pick the parties with whom they deal and the terms upon which they deal.
CE 332Page 26What is a Contract?A contract is a legally binding agreement between two or more parties to exchange something of value
CE 332Page 27Contract Formation Principles1.Competent parties - relates to age, mental awareness (normal person)2.Mutual assent & offer and acceptance or meeting of the minds3.Reasonable certainty of terms & a third party should be able to tell if the parties have performed
CE 332Page 28Contract Formation Principles (cont.)4.Proper subject matter•cannot attempt to deceive the other party•cannot be fraudulent•cannot be obtained by economic duress•remedies relate to the degree of intent to deceive5.Considerations ($) or exchange of value6.Form & statutes may require that some contracts be in writing
CE 332Page 29Nature of Design Professional Contracts
CE 332Page 30Fiduciary vs. Commercial Arms-Length ContractsDesign services contractFiduciary relationshipBased on trust and loyaltyConstruction contractCommercial arms-lengthEvery party protects ones self
Commercial Arms Length ContractA transaction in which the buyers and sellers of a product act independently and have no relationship to each other. To ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party.Source: Investopedia LLCCE 332Page 31
CE 332Page 32Observations About Fiduciary RelationshipsFiduciary obligations often arise because of brief, sketchy, and incomplete agreementsFrequently, work is done before a contract is signed, if one is signed at allBoth parties should be open and candid in their discussions
CE 332Page 33Observations About Fiduciary Relationships (cont.)Conflicts of interest are particularly murky and need to be dealt with openlyThe client can avoid responsibility for any act of the DP that is tainted by a breach of the fiduciary obligationThe fiduciary doctrine is likely to be applied even with lengthy, written contracts
CE 332Page 34AIA B101Clauses in the B101 to protect the DP:The Architect shall review the program…Based on the mutually agreed program…The owner shall provide complete information regarding requirements . . .
CE 332Page 35Ethical ConsiderationsConfidential information should not be disclosedD.P. should not take kickbacks or bribesFunds held by the D.P. that belong to the client should be kept separate
CE 332Page 36Ethical Considerations (cont.)Financial opportunities that come to the attention of the D.P. as a result of the services performed should be disclosed to the clientThere should be no conflicts of interest--one cannot serve two mastersD.P. should not have significant financial interest in contractors, suppliers, vendors, etc.
CE 332Page 37Agency Relationships
CE 332Page 38AgencyAn Agent is one who performs work on behalf of another (called the Principal), and in doing so, the acts of the Agent are binding on the (Principal)The law seeks to protect innocent third partiesDP (Agent)Owner (Principal)Contractor (Third Party)$$
CE 332Page 39How is Agency Created?1.By Agreement (contract)◼see AIA B101◼The Architect shall be a representative of the owner and shall advise and consult with the owner…◼the Owner and Contractor shall communicate through the Architect.◼The Architect shall interpret and decide matters concerning performance…
CE 332Page 40How is Agency Created? (cont.)2.Ratification◼principal is unaware but later decides to accept the benefits of the unauthorized action◼ratification is retroactive
CE 332Page 41How is Agency Created? (cont.)3.Estoppel◼principal leads a third party to believe that another person is his or her agent◼principal cannot disavow something is done on its behalf
CE 332Page 42Example A. J. Williams was building an office complex for Mr. Aaron. A traditional three party delivery system was used along with AIA B141 and AIA 201. Mr. Walsh, the architect, was verbally told by Aaron that he wanted to approve all wall paper patterns and other specified samples. All parties were aware of this arrangement and had done this previously on this project.
CE 332Page 43Example (cont.)Williams’ contract with Aaron stated that all samples were to be forwarded to the Architect for approval.Owner(Aaron)Architect(Walsh)Contractor(Williams)ApproveSubmittalSubmit Wallpaperfor ApprovalForward to Ownerfor Approval
CE 332Page 44Example (cont.)While Aaron was out of town for several weeks, Walsh told Williams to procure and install wallpaper for several offices. Aaron did not approve the patterns as required.When Aaron returned, he visited the project and observed Williams installing the unapproved wallpaper. General discussions were had about completion dates, but nothing else was said.
CE 332Page 45Example (cont.)Several months later, Aaron directed Williams to remove the wallpaper and replace it with another more to his liking. Is Williams entitled to extra compensation from Aaron for removing the old wallpaper and installing the new?
CE 332Page 46Example (cont.)If Aaron had directed Williams to stop wallpapering when he observed the unapproved installation, would he owe Williams additional monies for the work done to that point in time that had to be replaced?Would Aaron’s actions have violated any part of the contract?
CE 332Page 47Ethical and Legal ConsiderationsKnow what the contract saysAlways follow the contract requirementsKnow the limits of your authority and act accordinglyTake positive steps to stop unauthorized activities