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 work 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. |