We all learned to be negotiators. It may have been as a child trading marbles in the school yard or as a teenager bent on using the family car (Dad, I promise I’ll mow the lawn on Saturday, if I can use the car tonight!). Some of us are better at negotiating (it means we get what we want more) than others, but most of us can use assistance when entering this tricky territory.
When ski area operators become involved in negotiating with design professionals, there are several caveats to follow. First, be aware that a considerable amount of information has been provided to architects and planners to help them negotiate fees. Fee guidelines, specialized seminars, negotiation retreats and how-to handbooks have strengthened the professional’s position. It therefore behooves area operators to gather necessary information in order to deal from a knowledgeable position before the architect or planner selection process begins.
The major fee issue involves the definition and selection of the services the architect or planner will deliver. The project’s scope and requirements also need to be established. A feasibility study might be done to decide the scope as well as develop a project budget.
A budget will allow the architect or planner to quantify what to provide for the potential fee and it will allow the client to estimate the expected range of the fee. A proposed time schedule will let the players plan and schedule the resources needed to accomplish the job. Project schedules developed at this stage will probably be inaccurate; however, they are valuable for planning and programming. Ski area construction projects are particularly vulnerable because of snow country weather conditions and should be considered as flexible when determining budgets and financial constraints.
Just as the type of projects vary, services of architects and planners also vary. Most projects consist of a basic group of services and phases.
- Preliminary design — sometimes called schematic design and usually containing an initial project cost estimate
- Design development — in which refinements to the preliminary design are made, materials for construction are more fully developed and the cost estimate is revised
- Construction documents — when all the technical aspects are fully defined, a set of drawings and specifications are created to record and set forth all the requirements for the construction, and a complete cost estimate is provided
- Bidding or negotiation — when the architect or planner assists the client with the decision of the contractor or construction methods
- Construction — when the construction of the project occurs.
While some projects necessitate additional services, pre-design and post-construction services are fundamental. For example, measured drawings of existing conditions, site surveys, soil borings, soils engineering, environmental analysis, securing governmental approvals, energy analyses, occupancy and utilization studies and, possibly, special presentation drawings or models may also be required.
Competition for projects between architects and planners tends to adjust fees, but adequately compensating professionals strengthens the process and leads to the successful consummation of a project. “You get what you pay for” is an old adage with a basis in fact. Clients should be value-oriented when discussing services. The value of 10 hours of design time will be insignificant compared to the costs associated with the building during its life span. Adequate design and planning time will pay for itself over and over again.
To judge the fairness of a fee, a client can look at the job in several ways. One method is to assume from the onset that the initial and final planning will be done by different architects or planners. The initial planning would determine the scope of the project including anticipated fees and the final planning would execute the remainder of the scope. This separation of duties method is a check and balance for negotiating the fee, and also provides a second professional opinion of the preliminary design phase, in particular, the cost estimates developed. But it also may cost additional fee dollars.
Another method that is more widely used, is to establish a designated services approach, during which the client selects a specific set of available services from an architect or planner. A comprehensive list of services has been developed by the American Institute of Architects and is available through local AIA Chapters. The architect or planner then provides a compensation proposal based on the services selected.
A third method, not recommended by me, is to determine the fee as a percentage of the construction cost. This method does not relate proportionately to the value of the work or the tasks done by the professional. It is not incentive-oriented in that an architect or planner could suggest more expensive materials to drive up the cost of construction and therefore his fee.
Potentially, a hybrid, made up of these three methods, might be devised to arrive at a fee.
Often hidden costs can be a major burden to the client. A contract for services is essential to outline the exact fee and reimbursable expenses. Incidentals — the cost of printing and copying of the construction documents, advertising for contractors, postage and handling, study models, computer aided design and drafting, testing services, specialized consultants, meetings, cost of the building permit and the like — should be included. They can add up to many dollars that may not have been covered in the initial budget.
If, after preparation and investigation, there is lingering doubt about the fee, the best approach is open communication. Ask the architect or planner to review the compensation proposal and provide suggestions for cutting the scope of the project and the resultant fees. Next, review the project yourself. What is not essential, necessary or could be postponed? Perhaps the architect or planner would consider a split fee so that parts could be fixed amounts and other parts charged on an hourly basis.
When it can be said that everything is mutually understood and there still is a basis for disagreement, both the client and the architect or planner should consider discontinuing the negotiations. It is then time to begin the same system of negotiations with a different architect or planner. It may be appropriate at this point to mention that the fee negotiations with the first firm were unsuccessful.
When negotiations are successful, however, the final setup is the contract. You have confirmed that the project is necessary, a tentative time schedule has been developed and a proposed budget is on the table. You believe that the value of the services should be a certain amount, the negotiations have been straightforward and you are confident that the architect or planner can provide a successful project.
It looks like you will be able to get two moonies for your aggie. Sign the contract and let the design process begin.
