Design Process
Fees and Fee Compensation
Fees
Because each individual project is unique, we have tailored our fee structure to reflect the complexity of each project.
Architects typically calculate fees based on the following:
• Percentage of cost basis.
• Hourly rate basis.
• Stipulated sum basis.
• Cost plus basis.
At HCO, Inc. we almost exclusively utilize the percentage fee structure because it allows us and the Owner to add and manipulate construction variables without forcing the Architect to process a fee change order.
Consequently, it enables the Owner to retain the flexibility to manipulate and modify the design without a constant revision of the Architectural and Engineering fees. Occasionally, we have utilized the hourly rate and fixed fee structure; however, we find these structures most suited for small-sized projects, additional incidental changes made by the Owner after the Design Development phase is completed, or changes made or services needed beyond the basic Architectural and Engineering services. Prior to commencing on any project, we advise the Owner of the project's probable construction cost and all the associated Architectural/Engineering fees.
The percentages of our Architectural/Engineering (A/E) fees vary, based on the following:
• Size of project
• Scope of work
• Complexity of project
• Duration of project
Fee Compensation
We treat each project uniquely and try to utilize the best fee structure that allows us to charge the minimum fee percentage needed to very successfully complete each project. We utilize the best consultants on all our projects. We have realized the most "expensive" fees a client will pay for a project is construction change order fees needed to correct design deficiencies. A lot of clients gravitate toward cheap fees and overlook the heavy cost overruns associated with such services.
To maintain our reputation and continue to provide excellent services to our clients, we only invoice our clients based on the most modest service compensation. We advise all prospective clients/builders never to select a design professional based on the fees charged, but rather, to look at the quality and experience of the design professional. A reference check is always advisable. Most of the jobs we are often asked to correct and complete are those jobs where the client has selected a rather inexpensive and inadequate designer who would promise a cheap service. Most often, the job ends up in ruins or disarray.
We invoice for our services only based on the portions of the service completed. Our fees are invoiced only at the completion of each phase, except the Construction Documents phase and Construction Administration phase. HCO, Inc.'s fees are very reasonable; however, our service is unparalleled.
The following is our typical breakdown of the percentage of the fees we charge based on the phase of the project completed. (These percentages can vary from project to project.)
| Project Phase | % Charged | |
| Programming & Schematic Design Phase (S.D.) | 15% | (3%/12%) |
| Design Development Phase (D.D.) | 20% | |
| Construction Documents Phase (C.D.) | 45% | |
| Bidding Phase (Bidding) | 5% | |
| Construction & Post Construction Administration Phase (C.A.) | 15% | |
| | |
| Total | 100% | |
Design Phases
Due to the considerable cost in developing a completed set of architectural drawings we have introduced a phased billing system to accomodate organizations who would prefer to leverage the ballance of their constuction finances over the course of the entire document development cycle.
We typically complete the S.D. phase and provide drawings, such as the plans and rendering, to the client for fund raising. We advise that the Owner complete the D.D. drawings so that a more realistic project cost can be developed at the onset of the project. At the completion of these phases, the Owner would be allowed to utilize these instruments to further define and revise their project budget while raising the needed funds for the project. Upon reaching the targeted budget, HCO, Inc. would then come back and finish the construction documents and serve out the contract. This process can take anywhere from six (6) months to a few years, depending on the client.
Payment Arrangements
HCO, Inc. tries to provide services to all clients regardless of their financial strength. We have developed a unique way of assisting those clients, especially faith-based organizations, at the elementary stage of project development without depleting all their construction funds in design fees.
By utilizing the "CASHFLOW SOLUTION" payment system, most clients can now afford to get the preliminary drawings they need for their project kick-off up front and make automatic bank payment arrangements to HCO, Inc. according to their weekly or monthly receivables. We have elected to use this unique payment system to help those faith-based organizations at the preliminary stages of their project.
Give us a call, or send us an e-mail, to find out more about this program.
Project Financial Assistance
We can assist you with serving the most aggressive financial package that would work for you. We have access and affiliations to several financial organizations willing to provide you with the maximum funding that your local financial institution may find difficult to obtain.
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