FIXED FEE EXPRESSED AS PERCENTAGE OF ESTIMATED CONSTRUCTION COST
On certain types of projects the fee for Categories 3 and 4 as described in Section 1 of this Guideline has traditionally been expressed as a percentage of the Cost of Construction.
In recent years the effects of wide swings in construction costs have introduced inequities that make this method of determining and expressing fees less appropriate even for projects in which there has been historically a predictable relationship between the costs of these two Categories of Services and construction costs.
The attached graph represents data that is based on historical cost experience for three groups of buildings categorized according to complexity. It is recommended that they be used only as a guide and that Fixed Fees be based on properly prepared manhour and cost estimates that take into account the complexity and special requirements of the project.
Care should be taken when using the graphs even as a guide, that the project under consideration is similar in complexity to the projects represented by the graph. They should not be used for establishing the fee for unusual or complex projects including alterations to existing buildings.
Select the Building Group that most closely represents the complexity of the building project for which the Prime Consultant's fee is being established. If the specific type of building under consideration is not listed in one of the three Building Groups choose the group which is most similar in complexity.
Use the graph to select the range of fee which is to be expressed as a percentage of the estimated total construction cost prepared at the preliminary design stage. Negotiate the fixed fee in accordance with the perceived complexity of the services in Categories 3 and 4 required to properly complete the assignment. In the negotiation, it should be recognized that the Prime Consultant's fee must cover coordination of the activities of all members of the project team in the execution of stages 3 and 4 of the project.
The concept of a fixed fee based on a percentage of estimated construction cost should not be used even as a guide in determining an appropriate fee for building projects involving alterations, restorations, demolition or other activities in which the cost of these categories of services is disproportionate with the cost of construction.