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RE: Design fee guidelines

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Title: RE: Design fee guidelines

We usually use a simplified "in house" method of 1/8th of total fee (usually 6-7%, 0.75-0.875%) based either upon project budget, or actual awarded bid for Struct and we "throw in" cost estimating.  It really hurts having to send a check back to the owner when the bids are extremely favorable ! This method would make the 10% of the fee rule about right without including the cost engineering. 

A current contract negotiation has struct fee at 1/2 of architects percentage applied to the total "structural" cost (DIV 2, 3, and 5) from the GC's request for payment similar to the typical MPE fee structure.  We figure that the type of building that one is (multiple story library) means roughly the 0.6% mentioned below. (1/2 of 6% * 20% of the total building cost).  That is assuming that the "structure" is 20% of the total building, which is probably at least 2 to 5% high !  Assuming struct @ 17.5% of total, that means 1/20th of the total 6% design only fee, or 0.5% of the total construction cost, certainly less that RS Means thinks we are to get.  Does MEANS include construction admin as part of the 1%?

How about the ethic concern, in that i consider it part of my job to maximize the value of my clients $, meaning in effect, design the least expensive structural system that i can given the parameters (loads, codes, etc. as well as experience) available.  With this type of contract, it seems as though it would tend to tempt many a structural engineer be awfully "conservative" with his systems, thereby increasing his fee directly, wouldn't it?  Does this type of contract really serve the owner best, versus negotiated fixed fee?

This is serendipity to post this topic, as this particular contract is under negotiation today !