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The Practice Management Knowledge Community (PMKC) identifies and develops information on the business of architecture for use by the profession to maintain and improve the quality of the professional and business environment.  The PMKC initiates programs, provides content and serves as a resource to other knowledge communities, and acts as experts on AIA Institute programs and policies that pertain to a wide variety of business practices and trends.

    

  • 1.  Project Delays and Additional Services

    Posted 04-25-2017 05:52 PM
    We have a single project for which we executed a B104 agreement.  We kept AIA contract language in the agreement about timing of services (Section 4.2.3 below).  

    "4.2.3  If the services covered by this Agreement have not been completed within twelve (12) months of the date of this Agreement, through no fault of the Architect, extension of the Architect's services beyond that time shall be compensated as Additional Services."

    Due to circumstances having nothing to do with us (entirely caused by the Owner), the project has dragged on MUCH longer than anticipated, and we are now beyond 12 months.  The original basic services have not been 100% completed, but we are a little upside down on our budget due to these delays. I'm curious how other architects deal with this in reality.  What sort of addendum is created, what are the terms, how do you distinguish between original basic services not yet invoiced and what is now considered an additional service, etc.?

    ------------------------------
    Daryl Bray AIA
    COO
    SGA Design Group, P.C.
    Tulsa OK
    ------------------------------


  • 2.  RE: Project Delays and Additional Services

    Posted 04-26-2017 06:08 PM

    Hi Daryl,

     

    There are several ways to handle this situation. I've been here before.    It is easier to do so when the Owner has been forewarned throughout the process that there is a contractual limit on duration and if the project schedule is extended additional fees will be required. When it is hidden in the lines of a contract, and they were not updated along the way, they often feel surprised, and not the good kind.

     

    Part 1:

     

    So, if the Owner has been kept informed, the conversation is one of:

     

    a)      The additional time.

    b)      Additional fees incurred.

    c)       The additional services proposal.

     

    My guess from your note is that the Owner is not expecting this conversation.  Then I would approach this a bit differently.

     

    1)      Create a mental story about how you would like this conversation to happen.  We designers and architects know that everything is created twice, first an idea or thought before it's a thing, and yet seldom do we apply this knowledge outside our building or design projects.  Rehearse this mental movie of how easy, simple and well this conversation goes. (Stephen Covey calls this beginning with the end in mind.)

    2)      Review your metal movie, firmly convince yourself that this is easy and works out in the best interest of all parties concerned.  Then have a preview conversation with your client, before asking for the additional services. Let them know that the schedule extended beyond the contracted duration and you are preparing additional services to meet with them.  Remind them (subtly) if needed of the contract clause.

    3)      Then, follow the ABC's above, just the facts.  Be transparent and show them the hours and fee breakdown. You and your professional services are worth it. 

     

     

    I realize this may sound rudimentary, but item #1 makes all the difference in successfully executing 2 and 3.

     

    I did this with a client who was seeking compensation for an $6000K oops on a project last year where there lighting fixtures had to be purchased twice and the client was left with attic stock.  The client wanted my engineers to pay for the extra.  On the drive to the meeting, a colleague and I loosely discussed how we wanted the conversation to work out, and let it go. We had a great meeting with the client and was never asked to pay.

     

    Don't underestimate the power of what you know as an architect. Everything is created twice, even a contract negotiation.

     

    Part 2:

     

    Our additional services template is a word document,  laid out Memo style and describes:

     

    Header:

     

    Project information (project name, number, etc.)

    Additional Service number

    Date requested

    Person requested by

    Estimated start date

    Requested date of completion

     

    Body:

     

    Description of Additional Service  (narrative)

    Compensation (table or number)

    T&C's (ask your attorney)

    Signature lines

     

     

    As you see, it gets awkward when additional services begin without authorization. I hope this helps.

     

    Sincerely,

    Tara

     

     

    Tara Brown,
    Senior Project Manager

     

    Devenney Group Ltd., Architects

    Phoenix-Los Angeles-Oakland-Dallas

     

    201 West Indian School Road                                       

    Phoenix, AZ 85013

     

    T: 602.343.0049

    M: 602.316.2514
    tbrown@devenneygroup.com

     

    Leading the transformation of healthcare delivery through value-driven innovation

    www.devenneygroup.com

     

     

    This message may contain confidential and/or proprietary information, and it is intended for the person/entity to which it was originally addressed. Any use by others is strictly prohibited.

     

     






  • 3.  RE: Project Delays and Additional Services

    Posted 04-28-2017 07:25 AM
    Monitoring your agreement consistently is important. Architects tend not to refer to it once the project starts. Then when they are in trouble, they ask, "what does our agreement say?".

    Always having a clear understanding of basic verses additional services is important for the entire team. Seems simple but is so often ignored.
    When a situation on the project puts the architect into an additional service category, we will advise the client before we move forward. Our clients want to understand their financial exposure to be able to plan and make decisions appropriately.

    Often this comes up in a job meeting. This might be a conversation one on one following the core meeting.

    We will follow up with a letter proposal indicating basis of additional service with reference to the agreement paragraph coming into play. We call this a fee modification to the agreement. It is signed by the client having authority and their financial or contracting person will make the adjustment.

    ------------------------------
    Lawrence Fischer AIA
    Architect
    Perspectus Architecture, LLC
    Cleveland OH
    ------------------------------



  • 4.  RE: Project Delays and Additional Services

    Posted 04-29-2017 05:28 PM
    This is what I would typically do assuming you are on conventional charging method. ie fixed fee for a defined scope of work.

    Try starting with the fee proposal and ascertain how the service is defined in terms of phases, duration, deliverable and exclusions. Ideally each phase should be well defined with corresponding value ie fee attached to it. Determine where you stand at this moment in time. What remains to be done form the basis of your additional service fee you need to convey to the client going forward beyond the time frame limit set in your contract. If there are scope creep remember to highlight the effect that has led to the current situation. This will soften the client's resistance to your add service request considerably.

    I would suspend all works pending client buy-in/ approval of your request for add service proposal. That way you are on much stronger bargaining position since you can always walk away if it comes to the crunch to cut loss. Have a friendly discussion with the client explaining how you plan to support them in their effort and seek their feedback.  Be prepared to spell out the staff resourcing you will need to put in from now to complete the remaining works.

    Most clients I came across are reasonable and understands when presented with the full picture. Hope the above is of some help and do let me know how it works out. Good luck. 

    Geok-Ser

    ------------------------------
    Geok Ser Lee Intl. Assoc. AIA, LEED AP
    Irvine CA
    ------------------------------



  • 5.  RE: Project Delays and Additional Services

    Posted 05-01-2017 05:53 PM
    Another viewpoint - I would be careful here. I have applied this phrase in the contract primarily to those situations where the architect is required to participate in weekly or monthly team meetings, ongoing submittal reviews, construction observation or site visits for observation beyond the contract term. If you are required to deliver services beyond the contract term, then you are entitled to ask for additional fees.

    If the project delays have not cost your firm anything (e.g. the project was put on hold), there are no regular meetings or deliverables required of your firm, why would you want to burn your client by asking them for "standby" fees? I would proceed with caution.

    In those instances where the project is put on hold, I might even prepare a new proposal for services when it fires back up again as many times codes or other basic assumptions have changed during the project delay.

    Hope that helps.

    Best,

    ------------------------------
    Gordon Rogers AIA, DBIA, LEED AP
    EAS Department Executive
    Kitchell CEM, Inc.
    Rocklin CA
    ------------------------------



  • 6.  RE: Project Delays and Additional Services

    Posted 05-07-2017 05:05 PM
    Mr. Geok Ser has the right idea.  All of us should base our fees on a detailed breakdown of costs for each phase of our work.  That certainly is the proper basis for negotiating additional services post design halt and at restart.  It definitely takes additional time to put a job on hold, especially since the prospect of restart and the time of restart is uncertain and proper filing and record keeping are essential.

    The architect should include time in his or her proposal, at the time of postponement, for a coordination and quality review as that is likely the only time when all team members familiar with the work will be available and it is essential that the work be as coordinated and correct as possible, for possible restart, as memories of what needs to be done, fade rapidly.  Remember also, that consultants will always be less complete than the architect at both the postponement and at the restart; and none will be the same percentage complete.  This will be true even if you have in-house consulting services.

    Likewise, it takes additional time to restart a job, even if restarted relatively soon after postponement, as new team members for both the architect and his or her consultants are likely, and must be made familiar with the work, and personnel schedules re-jiggled. This will require another request for additional services.

    Also, it is my experience, that when a project is restarted, the scope is often changed, often reduced or increased in budget.  What is also common, is that the total elapsed design schedule may be requested to be unchanged, or shortened, even though the work must be renegotiated, restarted, re-estimated, and modified.  A shortened design period requires more design coordination.

    The longer a project is "on hold", the more it costs to restart.  At a certain point, a year or more, it may be necessary to nearly start from scratch as the construction budget versus cost estimate may no longer be in balance.

    Many times projects are never restarted and the smart architect will anticipate this possibility by creating a request for additional services within a reasonable amount of time, say 15 days, from the client's request for postponement. 


    ------------------------------
    James Brown AIA
    Principal
    QAE LLC
    Scottsdale AZ
    ------------------------------



  • 7.  RE: Project Delays and Additional Services

    Posted 05-11-2017 10:06 AM
    Thanks for the advice and suggestions.

    ------------------------------
    Daryl Bray AIA
    COO
    SGA Design Group, P.C.
    Tulsa OK
    ------------------------------