Fee Bidding

Fee bidding is arguably the worst way to select your architect. It is a means of selection where you ask a number of architects to submit their fees and the lowest fee usually wins the job. Fee bidding is false economy because it is unlikely to result in the best architectural outcome for you.

How are architects’ fees usually set?Architects’ fees are set by negotiation with their clients. In most cases architects will calculate the amount for which they can afford to provide the service and quote that amount to the client.

Sometimes there will be a series of offers and counter-offers between architect and prospective client until a precise scope of services is agreed upon for a fee that the client can afford.

What are the disadvantages of fee bidding?A large part of the cost of architectural services is for the architect’s time. If an architectural firm has been selected because they offer the lowest fee, they are likely to reduce the time they allocate to your project to minimise their costs. This is false economy because you reduce the time your architect will spend on getting the best value for money for you on the design of your project.

The sorts of things that are likely to be foregone if minimum time is allocated include:

•optimising site use•designing to minimise maintenance costs•minimising energy costs during the life of the building•producing a superb design rather than just a good one•quality of documentation

Depending on the project type, architects’ fees generally range between 0.1 per cent and one per cent of the lifecycle cost of a project. Lifecycle cost is the total cost of the building over its useful life. A substantial reduction in architects’ fees produces only a minor saving in initial costs but may result in substantial increases in the building’s lifecycle cost.

Why should I select the best architect, not the cheapest?Selecting the best architect for your project is likely to result in a building that precisely meets your needs, a building that you are proud of and a project where you maximise value for money.

For more information on selecting the best architect for the job, see selecting an architect .

This document is issued by the AIA for general guidance only. It does not provide legal, insurance, or other advice able to be relied on in specific circumstances. No responsibility for its accuracy or currency is accepted by the AIA, its office bearers, members, staff, or by its author(s).

The above is an extract from a publication by the Australian Institute of Architects, Knowledge Services, Level 3, 60 Collins Street, Melbourne, Vic. 3000. Telephone 03 8620 3877, Facsimile 03 8620 3864.