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Architects New Remuneration and Commensurate Professional Services: The Architec

ts Duties and The Clients Rights


A paper delivered to the Lagos State Chapter of the Nigerian Institute of Archit
ects
By
Arc. Roti Delano FNIA
25th March 2010

ARCHITECTS NEW REMUNERATION AND COMMENSURATE PROFESSIONAL SERVICES: THE ARCHITEC


TS DUTIES AND THE CLIENTS RIGHTS
Ladies & Gentlemen I am delighted to present this paper to the members of the La
gos State Chapter of the Nigerian Institute of Architects. The issue of fees and
commensurate professional services viz-a-viz the architects duties and the clien
ts rights is always a topical issue amongst the consultants in the building indus
try and can never be over discussed. It is even now more topical particularly wi
th some of todays clients seeking consultancy services beyond Nigeria shores and
always willing to pay the fees for those consultants which is always in excess o
f what the Nigerian counterpart will earn. We therefore need to ask ourselves wh
y this situation has arisen. Is it that our clients who went to the same univers
ities as ourselves studied under the same conditions are not confident about our
services? Lets take a brief look at the fee structure as it was in the past. Fee
s Historical Background Prior to 1975, architects were earning between 6% 10% of
the final contract sum in accordance with the RIBA rules which were applicable
throughout the Commonwealth. At that time there were quite a number of foreign a
rchitects practicing in Nigeria. All the various professions in the building ind
ustry had their own scale of fees. However in the immediate post civil war era a
nd with the oil boom, the Federal Government had a number of projects country wi
de and engaged a number of foreign firms particularly from the eastern bloc on a
design and build basis. Some of the projects were Festac Village and FHA built
by the Romanians, Trade Fair Complex by Energoproject, National Theatre and 1004
Housing Estate by the Bulgarians. These were the projects in Lagos which was th
en the capital of Nigeria. At this time the few Nigerian architects in private p
ractice were also enjoying the boom and living a fast ostentatious life. Social
grumblings commenced particularly by our other professional colleagues in the ci
vil service. The engineers felt the architects were overpaid for not doing much.
To make matters worse some architects in private practice were short changing t
he engineers and at times failed to pay them. In those days the ratio of payment
was architect 6%, Structural Engineer 3%, mechanical and electrical 2% and quant
ity surveying 2%. There were a lot of complaints from our sister professionals w
ho believed that the architect did not merit the fees. During this time the gove
rnment was the biggest client in the country and was in a hurry to catch up with
developed world after the civil war. The fight within the professionals was the
reby affecting the civil service and in order to reverse the drift, the Military
cabinet decided to regulate consultancy fees. This was the beginning of the Fed
eral Fee Scale which was first produced in 1975. In 1978 the Federal Ministry of
Works reviewed the 1975 document after various meetings with the NIA and sugges
ted that the private sector may use the same agreement as used by the Ministry f
or the time being. This 1978 document had the architects fee starting at 4.5% for
a project of N250,000.00 and sliding thereafter. This Scale was used for the ne
xt 14 years until 1992 when it was revised. In this revision, the starting band
was increased from N250,000.00 to N5 Million. The starting percentage was also i
ncreased by 0.25% i.e. from 4.5% to 4.75%. In 1996, minor clarifications were ma
de to the 1992 Scale but these clarifications did not affect the bands or the pe
rcentages. It is important to note that this 1996 Scale stated clearly that the
fees were designed for use in the Public Sector as well as a guideline for emplo
yers in the Private Sector. This is the Scale in use to this day by most archite
cts for works both in the public and private sectors. In recent years with the n
ew technology and demands of the client, the 1996 Scale of Fees became no longer
commensurate for the services demanded. The economy was becoming deregulated. T
he value of the Naira was depreciating. Costs of projects increased astronomical
ly due to the
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depreciation of the Naira. Private clients and in fact government were engaging
foreign architects and were being paid fees far in excess of what the Nigerian a
rchitect will charge according to the 1996 Scale. The NIA decided that it was ti
me to have a review of the Scale of Fees and a Committee was set up in 2005. Unf
ortunately this Committee did not conclude its assignment as no new or revised d
ocument has been produced. However the current NIA President set in motion anoth
er Committee to look at the existing 1996 Conditions of Engagement and Scope of
Services with a view of producing an up-to-date document which will reflect the
realities of consultancy services in todays age of rapid technological advanceme
nts. In the meantime, the Association of Consulting Architects Nigeria was inaug
urated in 2005. One of the tasks the Association set for itself is the issue of
professional fees and scope of service. A comparative study was made by this ass
ociation of fees for Ghana, South Africa, Malaysia, UK, Australia and USA. It wa
s interesting to discover that the Nigerian architect was amongst the least paid
architect amongst the 16 countries whose scale were compared. After almost 2 ye
ars of study ACAN came out with its Conditions of Engagement and Scope of Servic
es which was launched for use in September 2009. This document maintained the pe
rcentages in the Federal Fee Scale of 1996 but increased the bandwidths of the e
stimated construction costs. (See Appendix ). Architects fees Architects fees are
a relatively small proportion of the total cost of a building project, but an ar
chitect can make a positive and often considerable contribution to a project bot
h in terms of cost effectiveness and ultimate overall value. There has been a tr
end in recent years towards competitive tendering in connection with many aspect
s of building procurement, including the provision of professional services. Arc
hitects and indeed other Consultants are always prepared to negotiate fees and o
ften do so, but it is important for clients to access the true quality and value
of the professional service being offered and not just accept the lowest bid. A
rchitects fees are usually calculated on a percentage or lump sum basis although
some work may be time-charged by agreement. Expenses may be included within the
agreed fee or charged separately.
Percentage Basis This is the basis on which mo
st architects calculate their fees. The Nigerian Institute of Architects have be
en using the 1996 Federal Government Scale of Fees for Works in the Public Secto
r also in the Private Sector even though the original document from the Ministry
stated it is a guide for the Private Sector. The architects fees are expressed a
s a percentage of the total construction cost i.e. the cost as certified by the
architect of all works, including site works executed under his direction. Befor
e fees can be estimated, client and architect need to establish the services to
be provided, the approximate construction budget and the nature of the works.
Lu
mp Sum Basis Lump sums are best used where the scope of work can be clearly defi
ned from the outset. It is necessary to deprive the parameters of service i.e. t
ime, project size and cost where applicable so that if these are varied by more
than a stated amount, the lump sum itself may be varied.
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Time charge basis This basis is best used where the scope of the work cannot be
reasonably foreseen or where services cannot be related to the amount of constru
ction. For example where the architects appointment is for reports and conservati
on work, fees could be on a time-charged basis. In this case, architect maintain
s records of time spent on services carried out and will make such records avail
able to clients on reasonable request.
Payment of fees The current normal arrangement is for architects fees to be paid
in accordance with the 3 stages i.e. on completion of each stage. Usually the st
age 3 is paid upon the issuance of payment certificates to the contractor. Howev
er the Association of Consulting Architects has approved 6 milestone payments ma
de up of 2 milestones per the current stages as follows: Stage 1 Conceptual Desi
gn Milestone 1 10% on issuance of letter of Commission and instruction to procee
d the appraisal, programming and project definition. 15% for Conceptual Design w
ith
Milestone 2
Stage 2 Construction Drawings Milestone 3 Milestone 4 20% for coordinated detail
design. 30% for construction documents
Stage 3 Tender Process and Construction Services Milestone 5 25% for Bid Process
through contract administration and inspection of the works to be paid in equal
monthly instalments during the construction services. Milestone 6 Final payment
being balance of any fees due at the final account.
Note that under Milestone 5, the monthly instalment shall be determined by the f
ees payable for Stage 3 based on the original construction period however should
the construction extend beyond the original contract period, the architect and
his team will continue to receive the monthly fee until completion of the works.
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The Architects Duties Architects are the designers of the building project and ha
ve the difficult task of translating their clients ideas into an acceptable desig
n and then into working drawings. They are qualified to design and administer th
e erection of buildings and must possess both theoretical and practical knowledg
e. Architecture is a science as well as an art, for it produces a structure as w
ell as create a form and must combine aesthetic effect with practical considerat
ions. The duties of the architect commences on his appointment. It is very impor
tant to wherever possible establish the fees during the early stages of the proj
ect since disputes during the course of a scheme can be destructive to consultan
t/client relationships. Architects must be careful not to give significant reduc
tions in fees which in most cases are likely to lead to reductions in the level
of service and/or quality although these may not immediately be apparent to the
client. Architects have a professional duty to employ sound design practice and
comply with those laws, regulations, codes and standards applicable to the proje
ct at the time the architect renders the service. The lists of duties universall
y accepted for the architect are as follows: 1. To advise and consult with the e
mployer (not as a Lawyer) as to any limitation which may exist as to the use of
the land to be built on either by restrictive covenants or by the rights of adjo
ining owners or the public over the land, or by statutes and by-laws affecting t
he works to be executed. 2. To examine the site, sub-soil and surroundings. 3. T
o consult with and advise the employer as to the proposed work. 4. To prepare sk
etch plans and a specification having regard to all the conditions which exist a
nd to submit them to the employer for approval with an estimate of the probable
cost if requested. 5. To elaborate and if necessary, modify or amend the sketch
plans as he may be instructed and prepare working drawings and a specification o
r specifications. 6. To consult with and advice the employer on obtaining tender
s, whether by invitation or by advertisement. 7. To supply the builder with copi
es of the contract drawings and specifications, supply such further drawings and
give such instructions as may be necessary, inspect / supervise the work and se
e that the contractor performs the contract and advises the employer if he commi
ts serious breach thereof. 8. To perform his duties to his employer as defined b
y any contract with his employer or by the contract with the builder and general
ly to act as the employers agent in all matters connected with the work and the c
ontract except where otherwise prescribed by the contract with the builder as fo
r instance in cases where he has under the contract to act as arbitrator or quas
icontractor.
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Architects must also have a good, practical knowledge of building and allied tra
des and must have at least a working knowledge of the more specialised aspects o
f building such as mechanical and electrical engineering services. Above all, th
ey must be creative and dedicated to solving the clients problems as expressed in
the brief. The Clients Rights The client is the Employer and has rights which in
clude the following: 1. The client expects the architect to carry out his duties
diligently with reasonable skill and care. 2. The Client has authority to issue
instructions to the Architect, subject to the Architect s right of reasonable o
bjection. 3. Ownership of drawings The ownership of copyright in drawings should
be distinguished from ownership of the actual pieces of paper upon which they a
re drawn. It is settled Law that upon payment of the architects fee, the client i
s entitled to physical possession of all drawings prepared at his expense i.e. t
he paper. In the absence of agreement to the contrary, copyright remains with th
e architect who has a lien (right to withhold) on the drawings. However if all c
opyright is assigned to the client he i.e. the client may make such use of the d
esign as he wishes. However architects should note that even if they have assign
ed the copyright, they may reproduce in a subsequent work part of their own orig
inal design provided that they do not repeat or imitate the main design. This al
lows the architect to repeat standard details which would otherwise pass to the
client upon prior assignment of copyright. 4. Appointment of other Consultants J
ust as the client appointed the architect, he/she also has the right to appoint
the subconsultants. 5. Choice of materials The client has a vision of what he is
expecting and has the right to choose materials based on the architects advice.
6. Choice of Contractor The client is the employer and enters into an agreement
with the Contractor. The client can choose the contractor based on advice from t
he architect. Conclusion As architects who have undergone rigorous studies of be
tween 5 7 years study in the universities followed by a minimum of two years pos
t graduation internship before seating for the professional examinations, we hav
e the right to demand for fairer compensation for the work we do. The work envir
onment has changed from the days of drawing boards and parallel motion to comput
ers and softwares. The building fabric has changed with new products. The way an
d manner business is conducted has changed and this has to be reflected in desig
ns. In asking for more fees we need to also give the commensurate services. Imag
ine that the estate agent who may have to sell a property you have just complete
d the construction after say 2 3 years of designing and construction period
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now earns 5% of the sales price which includes the cost of the land and building
for possibly a months work, whilst you earned less than 4.75% as an aggregate of
the construction cost for over a period of 2 3 years. Similarly most other prof
essionals outside the building industry dictate their fees in a deregulated mann
er, so why should the professionals in the building industry continue to have go
vernment regulated fees. We are already in a deregulated economy. Telecommunicat
ions is now deregulated. The media is deregulated. The Oil Industry is about to
be deregulated with the Petroleum Industry Bill. The building industry also shou
ld be deregulated. We do not need the government to do this for us. The Federal
Scale of Fees should be dropped completely and the NIA scale should be the opera
tive scale for both the public and the private sectors. Already the Quantity Sur
veyors and Estate Agents have their Scales. The other professionals, lawyers and
doctors decide what they want to earn. Finally while canvassing for new scale o
f fees from the Institute, we also need to look inwards at our duties and obliga
tions to the client. Our deliverables need to be a lot more detailed. Designs ne
ed to be well resolved and construction drawings have to be well detailed such t
hat the Quantity Surveyor can have all items measured rather than making provisi
ons under prime cost and provisional sums. We also need to appreciate our value
and the services we render by not giving unreasonable discounts on fees just to
get the job. Light fees will make it difficult for practices to reinvest in info
rmation technology, CPD and quality systems all of which are ultimately essentia
l for the level of service that can be provided to clients. If we can fulfil our
professional obligations and duties to our clients, I am sure that clients will
appreciate us more and fulfil their own obligations without asking for unreason
able discounts. Thank you. Arc Roti Delano President Association of Consulting A
rchitects Nigeria
References: 1. 1992 paper to the NIA AGM in Ilorin, Kwara State with the title Re
gulated Fees in a Deregulated Economy by Arc. Fola Alade 2. The Architect in Prac
tice. 9th Edition David Chappell & Andrew Willis.
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APPENDIX SCALES OF FEES 1960 - 1975 NIA Scale based on RIBA sliding scale rangin
g between 10% - 6% of the Contract Sum. 1975 and 1978 Scale Up to 250,000.00 250
,001 1,000,001 2,000,001 5,000,001 10,000,001 Over 20,000,000.00 4.50% 4.25 4.00
3.50 3.00 2.50 2.00
1,000,000.00 2,000,000.00 5,000,000.00 10,000,000.00 20,000,000.00
1992 and 1996 Scales Up to 5 Million Next 10 Million Next 15 Million Next 45 Mil
lion Next 75 Million Next 150 Million Next 200 Million Next 500 Million 4.75% 4.
50 4.25 4.00 3.50 3.00 2.50 1.75
2009 ACAN Scale Up to Next Next Next Next Next Next Next 250 Million 500 Million
750 Million 2,250 Million 3,750 Million 7,500 Million 10,000 Million 25,000 Mil
lion 4.75% 4.50 4.25 4.00 3.50 3.00 2.50 1.75
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APPENDIX - SCHEDULE OF WORLDWIDE FEES COMPARISON Consultancy Services Fees as a
Percentage of Construction Cost Architect GHANA Architect fees dependent on cost
of project EUROPE Belgium Denmark Finland France Germany Great Britain Greece I
reland Netherlands Portugal Spain Sweden Nigeria NORTH AMERICA Canada Mexico US
ASIA Australia Japan New Zealand *Great Britain has deregulated fees completely.
* US has no scale of fees but the architect at least earns 60% of the A/E fees
*The Structural Engineers use a sliding scale that varies from 2.5% to 4.5% *For
Mechanical and Electrical Services the range is from 2.2% to 4% depending on th
e cost of the services in the project. *The QS tend to use a sliding scale and t
hese days tend to charge for project management. The figure quoted here is about
the maximum. 8.00% *4.5% *4% *4% 8.00% Structural Engineer M&E Engineer QS/Cost
Consultant Other Total Fee
8.00% 5.00% 4.00% 4.65% 6.50% 5.50% 3.00% 5.00% 5.50% 6.00% 8.00% 5.50% 4.50% 3.
25% 5.00% 6.20%
0.05% 3.00% 2.50% 2.50% 3.90% 2.75% 1.50% 1.80% 1.20% 150% 2.40% 3.00% 1.25% 2.0
0%
1.00% 4.00% 1.60% 2.70% 3.25% 1.50% 1.65% 1.50% 2.00% 3.90% 3.90% 1.75% 2.50%
0.75% 0.40% 0.65% 1.50% 3.25% 1.00% 2.60% 0.50% 1.50% 1.25% 0.20% 2.75% 0.25% 1.
00%
0.25%
0.50% 2.00%
1.50% 3.50% 1.70%
10.05% 12.00% 8.50% 8.30% 16.60% 14.75% 7.00% 11.05% 10.20% 14.50% 10.95% 12.00%
14.15% 6.75% 12.00%
0.25% 1.50%
3.75% 4.00% 4.50%
1.00% 1.35% 2.10%
1.50% 2.20% 2.20%
1.00% 1.35% 2.00%
0.85%
8.10% 8.90% 10.80%
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Comparison of Scale of fees by South African Council for the Architectural Profe
ssion with NIA and ACAN Scales
1.0 ZAR 20.27 NGN Exchange=rate : 1ZAR = N20.27
Cost Bracket 1 2 3 4 5 6 7 8 9 10 11 12
Recommended scale of fees for Professional Architectural Services Cost of Projec
t (excl VAT) Fee (excl VAT) (Base + percentage of Project Cost ) R 1 to R 300,00
0 N6,000,000 R + 12.50% R 300,001 to R 600,000 (N6,000,000 12,000,000) R 7,500 +
10.00% R 600,001 to R 1,200,000 (12,000,000 24,000,000) R 22,500 + 7.50% R 1,200
,001 to R 2,400,000 (24,000,000 48,000,000 R 25,500 + 7.25% R 2,400,001 to R 4,8
00,000 (48,000,000 96,000,000 R 31,500 + 7.00% R 4,800,001 to R 9,600,000 (96,00
0,000 192,000,000 R 43,500 + 6.75% R 9,600,001 to R 19,200,000 (192,000,000 -384
,000,000 R 67,500 + 6.50% R 19,200,001 to R 38,400,000 (384,000,000- 768,000,000
R 115,500 + 6.25% R 38,400,001 to R 76,800,000 (768,000,000 1,536,000,000 R 211
,500 + 6.00% R 76,800,001 to R 153,600,000 (1,536,000,000 -3,072,000,000 R 403,5
00 + 5.75% R 153,600,001 to R 307,200,000 (3,072,000,000 6,144,000,000 R 787,500
+ 5.50% R 307,200,001 + (6,144,000,000 5.75%
Note :The highlighted row is where the ACAN scale starts from at 4.75% of cost o
f Project
The NIA 1996 scale starts at 4.5% for Estimated Cost of N5.0 million whilst the
South African scale starts at 12.50% for the equivalent Estimated Cost of N6.0 m
illion.
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