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preliminary estimate of cost furnished by the contracting officer, compensation for various alternates requested, a much clearer definition of the architectengineer's responsibilities, a limitation on changes or provision for additional compensation for making them and more authority for the architect-engineer to exercise responsible judgment in the performance of his services. It is especially interesting to note that these comments were received even though not requested.
9. There are many criticisms of circumstances where an architect has been retained and has later retained an engineer on a subcontract basis; presumably, there would be similar criticisms from architects in the reverse situation. Engineers performing such work on a subcontract basis feel that they should participate in the negotiations between the architect and the contracting officer in order to be familiar with the obligations undertaken. They also criticize the inadequate information furnished them by the architect, requiring unnecessary revisions and changes in their work.
10. Comments of particular interest were received on a large number of different projects from an outstanding firm which does a great deal of soils and foundation work. On six fairly large sized jobs, the fee received by this firm was substantially inadequate and resulted in a fairly large loss. On one project for which the firm was not retained, after expending a very substantial amount of money on preliminary studies and surveys necessary for estimating and negotiating, the firm learned that it did not receive the job because of its supposedly high fee. This appears to be somewhat in conflict with the Department of Defense policy that consulting engineering services are not to be retained on a price basis. This firm is doing a large amount of similar work for numerous clients both public and private, on the same basis of fees which it sought in this instance.
C. ANALYSIS OF REPLIES
1. Replies on fees for specific projects were separated, tabulated and analyzed as set forth on the following sheets. It was necessarily difficult to make a uniform classification of projects, particularly because many overlap. They were assigned to the various categories set up in accordance with the best interpretation of the information furnished. Fees shown are the actual final fees reported for each project, including adjustments and extras. Construction costs of projects where shown are in accordance with the information furnished. Although there was very widespread criticism in the replies received of the unrealistic preliminary cost estimates upon which fees are based, comparatively few replies gave data on this point which could be included in an analysis. To do this would require both the preliminary estimate of cost of construction used in the fee negotiations and the actual cost of construction or the final estimated cost based on completed plans—both figures were furnished in only a few cases. The figures shown for actual cost of construction is either such actual cost or final estimated cost in event that the work did not proceed or the architect-engineer did not have available information as to the actual cost of construction. The percentages shown are based on the replies showing the architect-engineer's costs as a percentage of the total fee and his profit as a percentage of the total fee. Where a loss is involved, the profit is shown as a negative figure. As a matter of interest, the fees are shown as percentages of construction cost; for many reasons which are apparent, these percentages vary widely even within a given classification of work. The total dollar profit or loss for each given project is shown. Based on the total net profit for each category into which projects have been subdivided and the total fets represented, both the cost of doing the work and the profit or loss are shown as a percentage of the total fee. These percentages are, in effect, averages for all of the projects reported in that particular classification.
For purposes of analysis, replies were classified into nine categories according to type of service performed. A summary of these replies is shown below:
1 Several projects included in fee totals for which construction costs were not available. This percentage was developed from reports where full data was available.
From this analysis several things are evident:
1. Certain types of work are much more profitable to the architect-engineer than others.
2. In no category is the profit greater than many Consulting Engineers Council members consider necessary to properly perform responsible services.
3. Preliminary reports or advance planning, and utilities, paving, and grading, categories No. 1 and 5, result in the largest percentage of profit to the architectengineer, yet many members consider this a minimum profit which must be earned to maintain an adequate staff and perform services of the quality required.
4. Certain types of work which carry heavy responsibility and should be adequately compensated for, such as performing complete services for major installations, do not appear very attractive. While it is true that fees as a percentage of construction should vary inversely as the cost of construction, projects of this type usually result in several construction contracts, each of which requires an individual set of plans and specifications. This is often not considered in negotiations, but rather, the total cost of all construction contracts is used as the basis for fee determination.
5. Major design of buildings, which in the replies included several large buildings of a specialized nature, resulted in an average fee of 4.3 percent of construction cost. Fifty percent of the projects reported showed a net loss to the architect-engineer. This fee is less than that required for similar civilian work, and the low margin of profit on this basis is evidently inadequate to make the project attractive to responsible architect-engineers.
6. Site adaptation of standard buildings is quite often represented as a project of a simple nature. The marginal profit reported indicates that perhaps more work is actually required in site adaptation than was intended when building plans were standardized, or that possibly too much emphasis is placed on using standard buildings when they do not readily fit local conditions.
7. Alterations, conversions, repair and rehabilitation are projects which require much additional work not normally required of new construction and, in
normal civilian practice, command a much higher fee. Actually it appears from this data that on an average basis, it neither commands an adequately higher fee nor results in a sufficient profit to compensate for the added work.
8. Civilian work for the Corps of Engineers also appears to suffer from an inadequate fee. While these projects are of their nature large and should carry low percentage fees, it would appear that the fee is now set too low to result in what could be considered an adequate return.
9. Subcontract wo for prime architect-engineers while not the direct responsibility of the Department of Defense, reflects the fees awarded to the architect-engineer. Here again, this work can only be considered marginal from the profit standpoint.
10. Over 34 percent of the projects on which complete data was received showed a net loss to the architect-engineer.
11. In most cases, the fees reported are below the minimum fees as set forth in accepted fee schedules for comparable civilian work.
12. A study of the profits shown on these returns indicate why many medium and large architect-engineers do not regard projects for the Department of Defense very desirable.
1. Storm drainage report
X 2. Corps of Engineers,
study of electrical system
X 3. Navy, widening
and realinement of road
X 4. Air Force, study on
water supply and sewerage
X 5. Navy, study for
missile facility.... X 6. Navy, aviation op
and control tower. X 7. Corps of Engineers,
dormitories- Adaptation from
standard design... X 8. Navy, aircraft
hangar and leantos.
X 9. Navy, aircraft hangar.
x 10. Navy, dispensary building.
X 11. Navy, 3 aircraft
hangars, includ. ing 1 set design drawings and 3 plot plens..
X 12. Navy, aircraft
maintenance hangar and leantos.
X 13. Navy, aviation control tower.
X 14. Navy, aircraft
X 15. Propositions only for
17, 499, 000
1 $125 per day.
1. Army classroom. X
х 3. Air Force, mess hall. х 4. Navy accounting
building 5. Air Force, base theater
XX 6. Air Force, arma
ment and elec-
х 7. Navy school.
X 8. Navy clectronic
supply building... X 9. Navy aircraft hangar.
х 10. Navy barracks (de
signed and rede
signed) 1. Airinen's dormitory.
X Х 12. Navy barracks. 13. Air Force, aircraft
maintenance shop. X 14. Air Force, auto
maintenance shop. X X 15. Maintenance shop.. 16. Navy dispensary
X 17. Navy mess build
ing and other fa
cilities 18. Air Force, rocket
and infirmary.. 19. Air Force, ware
16, 456, 000
Utilities, paving (streets, roadways, runways, aprons, taxiways, etc.) and
1. Navy, roads and utilities.
X 2. Air Force, power
and heating systems.
X 3. Water system. 4. Chemical-type fire
protection system. 5. Central heating
plant and hightemperature
water system X 6. Air Force, utilities
and taxiways. 7. Navy, utilities. 8. Navy, taxiways and aprons.
X 9. Air Force, sewerage
facilities 10. Air Force, utilities.. X 11. Drainage 12. Electrical facilities.. 13. Electrical facilities.. 14. Navy, utilities.. 15. Sewerage system.. 16. Sewage treatment
plant, pumping stations and out
fall. 17. Air Force, roads,
utilities, and sew.
age treatment plant 18. Steam distribution system...
x 19. Underground heating system.
х 20. Water supply and
treatment system. X 21. Drainage.. 22. Navy, electrical
X 23. Navy, utilities. 24. Navy, utilities.
600 41, 500 14, 200
24, 000 246,000
45 58 138
42 - 38 26
4. 3 1.9 5. 7 2.9 5. 5 4.9 7.1
7. 500 11, 900 --500 1, 800
0 7,000 - 600