Professional Exam Seminar facilitation. Goitsemodimo Manowe

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Griffin Ryan
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1 FRAMEWORK FOR THE USE OF THE TARIFF AND DELIVERY OF ARCHITECTURAL SERVICES Professional Exam Seminar facilitation by Goitsemodimo Manowe 20 t h May 2017

2 SESSION OBJECTIVES Appreciation of the key components of the framework and its most essential provisions Correct applications of the framework Expectation in terms of the Act: Upon registration, a person is expected to be fit to serve the public as a professional Current Status (Framework): Awaiting approval by the Minister Section 51 Current Status (Tariff): Approved by the Minister Mandatory use (ARC Notice)

3 Two (2) parts: Tariff Delivery of Service Tariff Project Cost Based Fee (Direct Appointments) Time Based Fee (Fee bids) Service Delivery ARC Concerns: Compliance by professional Contractual Obligations of the Client ARC Concerns: Quality of Delivery Contractual Obligations of Professional

4 Arrangement of Framework: Preamble Clause : Purpose of Framework Basis and use of the tariff Conditions regarding payments Obligations of the parties The services and the context of rendering such services Framework sets out ethical and contractual Obligations Not Recommendations Clause 1.2-page 3 and 4- The Principles: Defines what shall be included in the Client/Architectural Professional Agreement Standards forms of contract sanctioned by the Council shall be used Standard or Partial Services are as defined in the framework as Architectural Professional Principal Consultant or Principal Agent The parties select and incorporate into Client/Architectural Professional Agreement The selection may include additional as services The Client/Architectural Professional Agreement takes precedence in case of discrepancy.

5 PROJECT COST-BASED FEE Net Total Construction Cost excludes VAT, Contingencies and Budget Provisions COST BRACKET NET TOTAL CONSTRUCTION COST OF THE WORKS (BWP) PRIMARY FEE PLUS SECONDARY FEE (BWP) FROM TO ADD% ON BALANCE OVER A B C D E ,000 13, % , ,000 34, % 180, ,001 1,980,000 80, % 660, ,980,001 3,960, , % 1,980, ,960,001 6,360, , % 3,960, ,360,001 12,720, , % 6,360, ,720,001 38,400,000 1,009, % 12,720, ,400, ,000,000 2,844, % 38,400, ,000, ,000,000 8,623, % 126,000, ,000, ,000,000 16,646, % 252,000, ,000,001 1,008,000,000 32,293, % 504,000, ,008,000,001 62,564, % 1,008,000,001

6 FORMULA: Professional Fee = Primary Fee (C) for applicable Cost Bracket of Value of Works + Secondary Fee for applicable Cost Bracket of Value of Works calculated as (Applicable Value of Works MINUS Column E) X % in terms of Column D EXAMPLE: Fee = C + [(Vw - E)xD] where C is Primary fee [(Vw - E)xD] is Secondary Fee and Vw is Value of Works For value of Works (Vw) of 3,000,000 Primary Fee (C) is 201,835 Secondary Fee is (3,000,000-1,980,001) x 8.50% 1,019,999 x 8.50% 86, Professional fee = Primary Fee + Secondary Fee , The Project Cost Based Fee is based on the full scope of standard services being provided as articulated in the Framework for the Use of the Tariff of Fees.

7 Fee Basis and Remuneration: Project Cost Based Fee CONDITIONS/CONTEXT: Project is not subjected to fee bidding Scope is well defined Total construction Cost exceeds Cost Bracket 1 ( lowest cost bracket) Primary and % Fee components as per tariff table Template for fee calculation provided as part of the framework 10% reduction (stages 1-4b) if not Principal Consultant 10% reduction ( stages 5 and 6) if not Principal Agent Negotiated increase to fee for additional services at Clause 5 and include in Client/Architectural Professional Agreement Cost estimate used but updated at every work-stage Estimate provided by Professional QS shall be used where cost exceeds cost bracket 1 and price by builder is not available.

8 Adjustment of Fee Fee Component Criteria for Adjustment Fees for Pre-contract (work-stages 1 through to 4b, both inclusive) Fees for Pre-contract (work-stages 1 through to 4b, both inclusive Post-contract (work-stages 5and 6) Subject only to upward adjustment based on Total Construction Cost as at workstage 4b for Work-Stages already accomplished.. but not adjustment due to post- contract escalations on the value of Total Construction Cost after work stage 4b. Subject to downward adjustment on account of reduction in the scope of work and taking into account only work-stages not yet authorized to commence, by the Client. Subject to upward or downward adjustment due to changes in the scope of Works, i.e. based on project final account of Total Construction Cost.

9 Mandatory Apportionment of Cost Based Fee by Work-stage- Subject to Clause 6.1 (2) Work-Stages 1 to 6 Proportion of Fee Cumulative Total 1: Inception 5% 5% 2: Design Concept 15% 20% 3: Design Development 20% 40% 4a: Technical Documentation 20% 60% 4b: Construction Documentation 10% 70% 5: Construction 27% 97% 6: Close Out 3% 100% Estimate used, for interim fee claims, and updated at every stage

10 Fee Basis and Remuneration: CONDITIONS/CONTEXT: Time based Fee Project is not subjected to direct apppointment Scope is not well defined Total construction Cost is within Cost Bracket 1 ( lowest cost bracket) Hourly rates as sunctioned by the ARC apply No reduction to fee build-up save for 2.1 (7) OR 2.3 (1), (2) and (3) No negotiated increase or decrease to fee (fee includes everything) Apportionment by work-stage is by prior agreement or as per fee bid allocation of manhours

11 Work-stages: As per slide 10 above Important observations: Stage 1 (Inception) Quality Policy- see Definitions Confirmation of Client s budget, constraints and availability of funds Strategy for project delivery Organizational framework for project delivery Risk assessment (should apply to all stages) Submission of Report and for own record

12 Work-stages: As per slide 10 above Important observations: Stage 2 (Design Concept) Obtain approval and instruction to proceed Framework for Building Capacity Mangagement during operational phase Strategy for project delivery (refined) Review of risks Alignment to budget submission of report and for own record Stage 3 (Design development) Obtain approval and instruction to proceed Alignment to budget Review of planned Building Capacity Management Risk Review Submit report

13 Work-stages: As per slide 10 above Important observations: Stage 4 a (Technical Documentation) Obtain approval and instruction to proceed Framework for Building Capacity Mangagement during operational phase Strategy for project delivery Review of risks Alignment to budget submit report and keep own record Stage 3 (Design development) Obtain approval and instruction to proceed Alignment to budget Review of planned Building Capacity Management Risk Review Submit report and keep own record

14 Work-stages: As per slide 10 above Important observations: Stage 4 a (Technical Documentation) Obtain approval and instruction to proceed Framework for Building Capacity Mangagement during operational phase Strategy for project delivery Review of risks Alignment to budget submit report and keep own record Stage 3 (Design development) Obtain approval and instruction to proceed Alignment to budget Review of planned Building Capacity Management Risk Review Submit report and keep own record

15 Work-stages: As per slide 10 above Important observations: Stage 4 b (Construction Documentation) Obtain authority to prepare documents Obtain all statutory approvals (prerequisite) but no guarantee of timeous approval Stage 5 ( Construction) Perform duties of Principal Agent as per building contract Issue End-of-Activity Report Assist in obtaining an Occupation Permit

16 Additional Services As read Clauses 5.1 to 5.5 Negotiated fee not to exceed 10% of Standard Fee - Clause 2.1 (6) Services may be based on a Time Based Fee Clause 6.3 (1) Fees for Prototypes-Clause 6.6 Stages 1-4b: 100% for origination of 1 st Building + 32% for repeats Modifications for repeats ( stages 1-4b) shall be on a Time Based Fee No reduction for post contract services Fees for Buildings Repeated Under Separate Building Contracts- Clause 6.7 Separate fee calculation for each building contract- 32% of Std Fee Modification of designs, technical documentation on Time Based Fee No reduction for post-contract

17 Fees for use of designs, technical and construction documentation originated by others- Clause 6.8 Royalty of 7.5% of Std Fee (1-4b) Royalty does not apply to original geographical site Fee is 37% of Std Fee ( 1-4b) No reduction to Post contract Fee Fee portion for standard drawings forming a part of the works to be calculated separately and consolidated into total fee before apportionment by work-stage Work deemed to include; -review of std drawings to assess functionality, fitness-for-purpose, health and safety of the occupants - audit of the existing structure to which the Std drawing relates Modifications to std drawings are on a Time based Fee

18 Fee Apportionment for Work Based only on STD Drawings Stage Apportionment Cumulative Work-Stage 1 (Inception) 5 % 5% Work-Stage 2 (Design Concept) 0% 5% Work-Stage 3 (Design Development) 5% 10% Work-Stage 4a (Technical Documentation) 17% 27% Work-Stage 4b (Documentation) 10% 37% Reduced Fees

19 Fees for Taking Over Incomplete Work by Another Professional- Clause 6.9 Work to be preceded by an assessment of existing design/documentation and approval of recommendation by client Project Cost Based Fee unless otherwise agreed Increase of 15% for Stage at which work commences Fee apportionment as per 6.2 (1) Work deemed to include; -review of std drawings to assess functionality, fitness-for-purpose, health and safety of the occupants - audit of the existing drawings and the taking over of liability - necessary modifications to drawings

20 Site Inspection and Contract Administration - Clause 6.10 Obligation to inspect the works once a month (Liability unchanged) - Extra site visits and meetings are Special Management Services see 5.2 (1) Frequency of extra site visits to be agreed and stated in the Client/Architectural Professional Agreement No extra fee for site visits Re: RFIs due to deficiencies or omissions

21 Fees for Review ( Work produced by Arc Tech or Arc Draft)- Clause 6.11 Review is for purposes of advancing work-stages 4b, 5 and 6 and submission for statutory approval in accordance with Section 48A Time Based Fee only for a principal of the firm (architect) Fee is a deductable not extra (Minimal for quality documentation) Fees for stages 1 to 4a are for the Arc Tech or Arc Draft Conditions include; -Itemization of work (review) for fitness-for-purpose, health and safety -Duration and cost agreed in advance Act of signing-off implies professional liability

22 Fees for Review only of Work (Quality Assurance) - Clause 6.12 Obligations in terms of the Code of Conduct and Ethics of the profession Time based Fee only Fee agreed in advance Fees for Extended Period of Initial Building Contract Calculation of monthly rate or part thereof; 27% of Standard Fee X Pex where Pex is prolongation and Pi is initial contract period Pi

23 Interim Claims - Clause % for work-stage deliverables met pending approval Deadline for client to approve Release of retention after 15 calendar days Withholding of Payment - Clause 6.20 Conditions to be in the Agreement re: set-off for errors, omissions, negligence, etc Right to report negligence to the ARC seek compensation NB: Process of inquiry shall kick-in Action (Obligations) in case of dispute- Clause 7 Architectural professional shall refer matter to the ARC for assessment, advice or recommendations ARC s recommendations not a ruling or waiver of rights in terms of the Client/ Architectural Professional Agreement ARC advice limited to use of tariff and interpretation of Framework

24 Definitions and Interpretation- Clause 8 1. Budget 2. Building Capacity Management 3. Budget Provisions 4. Construction Documentation 5. Quality Policy 6. Words and specific act Clause 8.2

25 Thank you

CLIENT-PROFESSIONAL PROJECT AGREEMENT FOR ARCHITECTURAL SERVICES BETWEEN CLIENT AND

CLIENT-PROFESSIONAL PROJECT AGREEMENT FOR ARCHITECTURAL SERVICES BETWEEN CLIENT AND PROFESSIONAL ARCHITECT (PrArch) PROFESSIONAL SENIOR ARCHITECTURAL TECHNOLOGIST (PrSArchT) mark applicable registration