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The AIA Project Delivery Knowledge Community (PD) promotes the architect’s leadership role in all project delivery methods by assembling and distributing knowledge and best practices for a variety of project delivery methods, e.g. design-build (DB), integrated project deliveries (IPD), and public-private partnerships (P3).

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Architect's Restart Cost to Owner Project Delay

  • 1.  Architect's Restart Cost to Owner Project Delay

    Posted 04-12-2018 15:10

    All,

     

    We do fairly large scale projects ($10M-$80M constr. cost) using AIA B101. Though rare, we've just experienced (thru no fault of Architect) Owner's suspension of a Project for more than 3 months.

    Now the Project is back on.

     

    When the "hold" occurred, we notified the Owner in writing there would most likely be a restart cost as we had to re-assign the project team (incl SMEP subconsultants) to other projects

    and spend additional time to re-mobilize and re-familiarize our team and Owner w/where we left off regarding key assumptions and construction cost increases.

     

    In cases like this, have you have been able to communicate a successful rationale for re-start costs w/your Clients?  What aspects did you include in calculating that additional cost?

     

    I sincerely appreciate the wisdom of this forum and thank you for your thoughts.

     

     

    ACi LA Blue (2)

    Larry H. Adams, Jr. AIA

    Founding Partner

    ACi Architects

    955 North Pennsylvania Avenue

    Winter Park, FL 32789 USA

    www.acistudios.com

    w 407 . 740 . 8405

     

     

     

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  • 2.  RE: Architect's Restart Cost to Owner Project Delay

    Posted 04-13-2018 17:53
    ​I would do an analysis of the additional man/hours for administration costs to close down the project and restart it. Also, salary increases and inflation.  There could be code changes. There could be staff who could not be reassigned and the firm had to either terminate their employment or pay them for a period of time during which they were not billable. You may have to hire new people and there is a cost to that.  I have found that it sometimes takes time to get your head back into a project so you have to review files, notes and sketches to get "back up to speed." You probably will need a new "kick-off" meeting with your engineers and may find that they are working on other projects so you will have to re-educate a new team.  This is one of the scenarios that reduces profit in architectural firms and the loss of income will filter down to staff .  I hope this helps.  Joel Ives, AIA

    ------------------------------
    Joel Ives AIA
    Owner
    The Ives Architecture Studio LLC
    Fair Lawn NJ
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  • 3.  RE: Architect's Restart Cost to Owner Project Delay

    Posted 04-13-2018 18:34

    Yes, this extra cost can be successfully negotiated. In my experience, clients accept that a delay increases cost to deliver; the sticking point is how to value that delay. An approach that's worked for me is this:

     

    1 Start with the earned value of the work delivered to date

    2 Offer a 'credit' to reuse some portion of that work

     

    For example, say project was 15% complete when placed on hold. You could offer client that you can reuse 60% of the completed work, which is 9%. The additional cost of the delay is the delta to get team back to 15%; in this case, 6% of total fee.

     

    This approach works because its easy for owner to agree that a new team is reusing the work of another. In this case, they both just happen to work for the same practice.

     

    Hope this helps.

     

    Sam Spata, AIA
    Owner | Principal
    Method Lean
    +1 9176648900

     




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  • 4.  RE: Architect's Restart Cost to Owner Project Delay

    Posted 04-16-2018 08:44
    ​I have been in similar situations and sometimes you can successfully renegotiate a restart fee with he criteria indicated in the two previous comments. If you receive an initial rebuke, don't necessarily take that as a final no since you are planting a seed for consideration. An owner can understand a  contractor remobilizing fee, but initially do not realize there is a similar impact upon design professionals.
    If they initially say no, tell them to take time to consider the information and then circle around in a week to complete the conversation.
    Its unfortunate, but I find architects in the public sector are usually the most difficult people to acknowledge this type of request.

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    Charles Michelson AIA
    Principal
    Saltz Michelson Architects
    Fort Lauderdale FL
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