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Re: Town homes project pricing

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Usually the statue of repose is set by state law. In a recent discussion I had with my E&O rep, he indicated that increasing your overall limits to account for a larger project is normally more cost effective than adding a project-specific rider. You mileage, of course, may vary. Personally, I wouldn't trust a single disclaimer in my contract language to actually limit the time or dollar amount of my liability for a large project. I think they work some of the time, but there are legal ways to invalidate such clauses so I would never take them as bulletproof. Of course, they exist in all my contracts, nonetheless.

I, too, am interested in others responses, as I don't do many, large multi-family (town or condo) projects. Since nobody usually like to talk about fees, I'll show you mine first:

A recent commercial/multifamily combination I put in a bid on (as part of a design team, and with a trusted builder) with 3 identical 8 residence units and 2 unique single 8 residence units (2 story residential over 1 story commercial, shallow footings, steel first floor, modular 2nd & 3rd floors, low seismic and wind), I think my fee came in somewhere around $0.60/sf. I don't know what the other fees were, and as far as I know, the project died due to price concerns. I suspect that my fee was a good bit less than 2% of the construction cost, but the design was probably easier than yours, and I'm comfortable with my insurance limits.



Perhaps you can reduce your insurance cost by setting
a time limit when a lawsuit can be brought against
you, say to a year after the end of construction. I
believe this is called "period of repose". Your
insurance co can help you write the appropriate
paragraph in your contract.

--- "Alexander (Sasha) Itsekson" <sasha(--nospam--at)>

Dear list:

The architectural client asked me to provide a fee
proposal for townhouse
project consisting of 29 units out of which four
buildings are 4 unit
buildings each and the rest are a single family
homes with 3 to4 inches gap
between them.  There are total of 4 separate
building designs.
Below is the information I have to date:

.The project budget is approx. $3.4 million
.Consultants' & Architect's fees anticipated to be
approx. 13% of
construction or $450,000 total.
.The architect anticipates approximately 7 months in
design and
documentation and then 20 months under construction.
.The project is in California, West Sacramento
county, non-expansive clays,
spread footing foundation.
.The rear of the 1 acre property is on a slight
slope and is adjacent to the
railroad tracks
.These are town homes and NOT condominiums, the
architect ahs a complete
indemnification in their contract with the developer
in case of the condo
conversion.  They suggested that we add the similar
language in our contract
with them.  However, I am told that there will a
home owner's association.
.The developer does not have a wrap around insurance
policy for the project
and requires 1mln/2mln aggregate policy for all the
members of the design
team.  I currently have 250k/500k policy and I
estimated that it would cost
me 3k/yr for 10 years to get a project specific
rider, if I can get one.

I don't know how reasonable the construction
estimate is.  Assuming that the
estimate is on the money what would be the
appropriate percentage for the
structural fee?  I can estimate the design fee for
the 4 separate building
types, but how do I estimate the fee for the rest of
the buildings?
Considering the additional cost of insurance does it
even have any sense in
pursuing this project?  I order to make it worth my
while the fee should be
in order of 2% of the construction cost.

What are other things that I have to be watching out

Your advice is greatly appreciated.

Alexander (Sasha) Itsekson, SE
Enginious Structures
Oakland, CA

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