PROFESSIONAL
PRACTICE
Assignment 4
Important Areas of Understanding
Additional Understanding
Critical Review of the Assignment
Professional Fees
Professional Fees
This assignment was aimed at introducing our class to the method of calculating professional fees. The way in which we went about doing this was hugely guided by the previous year’s examples which we were allowed to use as a reference for approaching our own methods of trying to complete the assignment.
For this assignment we had to use our Measurement and Design Appraisal (MDA) 3 Major Assignment as a case study. Our task was to calculate the professional fees for the following consultants and we were also required to produce a professional fee cash flow for each consultant’s fee:
-
Quantity Surveyor
-
Architectural/Landscape Architect
-
Structural/Civil Engineer
-
Electrical/Mechanical Engineer
-
Project Manager
The Professional Fees were calculated according to the most recent and most relevant gazetted fee scales, with regards to the proposed MDA 3 project. All calculations needed to be shown and for this reason, Microsoft Excel was the most appropriate software to use.
I found this assignment particularly difficult to understand the reasoning behind some of the fee calculations and what the rationale was for the differing values and methods of calculation. However, after continual persistence, I started to make some kind of sense of the previous year’s examples I had been looking at. A mistake that was common with many of the examples I had been using to guide me, had the mistake of not including the ‘Contractors Fees’, probably for this very reason of using them to guide myself, I made the same mistake in my own assignment – unknowing of the initial error.
Comments from Karen Le Jeune with regards to calculation errors:
“Please refer to your lecture notes concerning the inclusion/exclusion of contingencies, CPAP from "Value of Work for Fee Calculation purposes" ($); Contractor's fee - why excluded from fee calculation? If the contractor opted to include his overheads and profit costs with each rate, this item would not be priced as a lump sum, and the professional team would draw fees on the contractor's "fee"”
“If you indicated that a project manager was employed on your project, then you needed to reduce the Architect fees by 10%. The reduction is done just after you calculate the fee. This value is then apportioned across the work stages. Do not try to indicate it as a "discount".”
Professional Fees are an intricate part of any construction project and it is therefore extremely important to know how the Professional Fees are calculated. For our assignment we calculated the professional fees according to the estimated contract value. For estimating the contract value I used the Davis Langdon Construction Handbook to determine a square meter rate, which I then applied to the proposed development. This is not the most accurate way to determine an estimate, but for the purpose of this assignment it was deemed sufficient.
Usually professional consultants will receive the following percentages of the estimated contract value as Professional Fees:
-
Architect (8-10%)
-
Quantity Surveyor (3.5%)
-
Structural Engineer (1.5-2%)
-
Electrical/Mechanical Engineer (1.5-2.5%)
-
Disbursements (0.5%)
It is the responsibility of the SACQSP to provide the recommended fee scales for the QS professional. However, this is only used as a guideline and fees are often negotiable and market determined. Given the current economic climate, professionals will often offer discounted Professional Fees, but there is usually a reduced service offered. This may happen with or without the knowledge of the client, but, as a QS, it is your responsibility to make the client aware of such proceedings and help protect them from their ignorance.
Guest Lecturer