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Would appreciate thoughts on a situation that hasn’t happened yet, but I see it potentially coming.
I’m an architect who received a client referral from a contractor that I’ve worked with for some time. The contractor is excellent, but over the years has risen to near the upper end of the pricing scale in a very high-end market. The clients asked for a tiny one-story addition & kitchen remodeling with $150K budget. I know that my preliminary design is appropriate for their budget – as far as the *average* marketplace in this area goes, but not sure their budget will even come CLOSE for this particular contractor. These are seemingly fairly modest clients, and I’m not even sure if this is the right contractor for these clients, at least on a strictly cost-wise basis.
I suspect the clients don’t have a clue as to the potential variation in this marketplace. They just simply like the contractor (aren’t getting competitive bids), and expect the price will be roughly similar to other contractors, but they haven’t received any preliminary pricing yet. I suspect the final number will end up probably 30-50% over their stated budget, minimum. (Please understand that I don’t have a problem with a contractor charging high-end prices, per se.)
My concern is that they may end up having to make very significant compromises in the scope of work, blame me for “overdesigning”, and never realize that they COULD have gotten most or everything they wanted with another responsible contractor. Further complicating this is that I realize my LEGAL fiduciary responsibility is to the clients. I certainly don’t want to damage the relationship with the contractor (either contractor-architect or contractor-customer)but wonder at what point (if any) my responsibility starts/ends for making sure that these clients are going into this with eyes wide-open. What do you all see as the ethical priorities here?
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It bothers me a bit that you should even think there is an ethical question. It makes me think you may be putting your desire for immediate money ahead of your ethics. If so that is a sure fire way to not only lose your business but your fundamental sense of self-worth.
Of course you give your clients the very best and the most complete information you can. If that means they go to another contractor so be it. That is both your legal and ethical duty to both the client and to yourself.
If the contractor has a problem with this remind said contractor that you aren't on said contractor's payroll. But I suspect the contractor won't have any problem at all with what you have done. After all just what will have been done?
The contractor referred them to you. You did a bang up job for them. They ended up being fully satisfied with the job. The end result is good feelings(referrals coming) about the original contractor, you, and the final contractor. This is good for the industry as a whole and all the parties involved.
Plus, you are more valuable both to the original contractor and to yourself because you have demonstrated your independence. The contractor can tell his customers that for the straight scoop, see you. You can use this as an example that above all else you are morally straight, the most valuable tool you can have.
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*Fred:This isn't a money issue, since I've already been paid. I do feel a responsibility to be somewhat protective of the prior contractor-customer relationship. After all, if the situation were reversed, and I referred a contractor to a client, I wouldn't want him to be going out of his way to suggest to the client that they could get equivalent architectural services for less money, even if they could. The issue here is VOLUNTEERING information that could be potentially destructive to the contractor (he could lose the job or at least end up having an atmosphere of distrust) when I haven't even been asked for my opinion. If directly asked, there is no issue, of course. Maybe you have a suggestion on how to convey this information in a non-destructive way?
*I would be slow to suggest they don't use the contractor that referred you. We have done something similar to that in the past and it came back to bite us. Some times you just have to let them learn the hard way because even if you can somehow politely tell them your concern, they still don't have any thing against the contractor personally. And may later think you are the problem even when you were just trying to help. We all make our own decisions.
*Gosh I thought he asked an honest question myself. Seems like he wanted perspective and not judgement.RKM it seems like it would be a good practice to maintain aqcuaintance and relationships with more than one contractor. That keeps everyone honest.
*I think I would broach the subject with the contractor first. I'm sure he knows he is higher priced. He may also feel that he provides a level of service that justifies it!If the relationship between you and the contractor would have been design/build, where would your ethical responsibility lie?
*Folks, the bottom line rests with this client. they can stick with the contractor regardless of his price, very high or very low is irrelevent. If they like him and get a long with him, so be it. RKM's "only" position is the architect that was recommended to do the design & plans. As such, his responsibility has been accomplished. If he takes it upon himself to suggest to the client that they get another bid, he will be stepping out beyond what he was recommended to do - design and draw the plans, and is unethical - period.The price they pay for this addition is a minor issue compared to the "relationship" they feel they could have with this contractor. I can get a filet at one restaurant for abaout $15 whereas I can get the exact same filet at a different restaurant for $35 - but the potato is extra! What's the difference - service and atmosphere. And people pay that $35 for that exact reason day after day.Besides, I've yet to meet a contractor who is getting paid what he should be getting paid considering the numerous potential liabilities he accepts when doing any project. Our industry is saturated with land mines.This guy does high end stuff, and if he's still getting high end work at his prices, good for him, and good for his clients. Obviously he's doing something, or a lot of things, right.Service is a commodity. It costs money, and the better and more the services the more it costs. Again, good for him.
*>>The price they pay for this addition is a minor issue compared to the "relationship" they feel they could have with this contractor.<<Maybe it is and maybe it isn't, but how can they judge how much they are paying for the "relationship"? $10K? $50K? Suppose I say to you, you can have your project with THIS contractor, or you can have a _slightly_ bumpier project with THAT contractor for the same price, but at the end you'll get a brand new Mercedes. Now how much is that relationship worth? And that's the likely order of magnitude we're talking about here. I don't know which these clients would rather have, but if I were in their shoes, I would want to know that I was making that choice.>>I can get a filet at one restaurant for abaout $15 whereas I can get the exact same filet at a different restaurant for $35 - but the potato is extra! What's the difference - service and atmosphere. And people pay that $35 for that exact reason day after day.<<Sonny, although I see this analogy frequently, it really is not appropriate for most remodeling customers. In a restaurant, you have the benefit of informed and extensive experience to know approximately how much you're paying for product and how much for service. You have made an informed choice before even entering the restaurant.For a homeowner, a better analogy is walking into a restaurant blindfolded (never having been in a restaurant before), and upon being seated, being handed a menu without prices. (The total will be provided upon ordering.) If you were a restaurant first-timer of limited means, don't you think you'd appreciate a little "heads up" before ordering to let you know that you were actually in one of the classiest joints in town, even though you really, really like your waiter?
*You can be altruistic about the construction profession if you want, but it is still a business. If the couple specifically asks you if you can give them the names of other contractors feel free to recommend some. You personally are probably inclined to shop around for price. Me too. A lot of people choose to make decisions based on emotional factors, like if they like a person or not. Too bad for them. Or maybe good for them.RKM, if you knew the clients were going to go with this contractor, why not design what you think HE could build for 150K, not what an average 150K would buy? Just curious.Mike
*Sounds like your afraid the clients will spend all their money on service rather than fixtures, hardware and finishes. It also sound like you let the budget get outtahand given the knowledge of the clients desire to use a certain contractor.Sorry, you knew ahead of time and now you have gone over and to fix your problem, your suggesting the client get someone "cheaper"Sorry, but this is nothing new. It's happened to me again and again, (I hate being the dasher of dreams!) This is the very thing that created the Design/Build industry.See if I got it right.........Client hires you to design a "tiny" $150,000.00 addition, planning to use Contractor "A". Whom you both know, and are aware of what he commands....Sounds like you failed to do the job you were hired to do.
*RKM, people who are "fairly modest" don't spend $150K on a kitchen remodel and "very tiny addition". That's more like upper middle class or higher IMHO. But that's really besides the point.Apparently the client has not asked you for your recommendation about getting another or more bids, but it seems like you're chomping at the bit to do just that, and although the contractors bid hasn't come in yet, you're pretty sure his price will be several of not tens of thousands of dollars higher than what this project can be done for. As we know, any project can always be done for less money and there's always a contractor willing to do so, but at what price? and I don't mean money.Again IMHO I'd say your 1st loyalty is to the contractor who recommended you, not to the client. That's not to say you should throw the client to the lion, but only to first wait and see if in fact a lion materializes as all. I'm just glad that our architect wouldn't even twice about recommending to our clients that they obtain other bids. Why would I maintain a relationship with an architect who would sabotoge our sales whenever the client happens to be one of "faily modest" income/net worth? Does that mean the income statue of clients I refer him determine if I should decide to refer him or not?Maybe this contractor should first take a financial statement from his potential clients and discuss it with you prior to him recommending you take the design project or not. Or, you could in all good conscience, tell the contractor that you feel his pricing is way out of line and you don't feel you can work with him any more.So don't look at this situation just with this one client, but review your entire relationship with this contractor and this issue, which is one of importance to you, in mind, and discuss it with him.Either the contractor is ripping them off, or will, or is generally overcharging everyone he sells to. In either case, you have to decide to continue working with him or not.Anyway, that's my take on the situation.
*You have no responsibility to tell these people how they can or should spend their money. You were paid to design what they wanted and were referred by their contractor. You werent asked to recommend a contractor, and if you are asked I believe your most ethical reply would be that since you were referred by their contractor it would not be right for you to recommend someone else. You are not the only architect and he is not the only contractor available. If they can come up with 150k for a small addition I would assume that they are competent enough to get a second opinion if they want one. Do you believe that this contractor is taking advantage of them? You must not because surely you wouldnt want to do business in the future with someone who is cheating his customers. I really cant see your point here.
*Folks, please understand that an architect has a fiduciary, and thus, moral responsibility to his client. If he possesses knowledge relevant to his clients situation, and does not share that knowledge, he has breached that trust. He is morally culpable.The question here isn't whether or not he should share that information, but in what fashion would it be most tactful? It seems to me that you have a responsiblity of trust to the contractor as well. Perhaps that is why you bothered to ask the question here; because you are torn between those responsibilities.Again, I would start with the contractor. Tell him of your dilema. Better yet, have the contractor sit down with you when you go to talk to the client. Tell them of the relative nature of price. Perhaps you can use some of the examples Sonny gave. RKM, you may know that there is the distict possibility that there can be lower prices by other contractors. You have a responsibility to share that with your client(s). What those prices are may be irrelevant. It may be a breach of trust that you suggest that they go to a bid situation. The fact that the project came by way of the contractor indicates the client's taste in the manner. There must be some level of trust between the contractor and client as well. In point of fact, the three of you are a team. The trust and openness needs to be communicated amongst all equally. Have you asked the contractor for some conceptual pricing on your design? How do you know what his cost are going to be? You may be assuming too much. Your fiduciary responsibility is to share facts not assumptions.
*Hi RKM,As far as this story goes an old adage comes to mind;and that's you are trying to solve a problem that you don't have! If you stay within the purview of your job there is no problem or question of ethics or fiduciary breach.Though any contractor can deliver a job to spec, the work and life of a contractor is much more than that. And those of us who are in it for the long haul know that. Its all about trust and relationships. You brush off the fact that the customer "simply likes the contractor." That is my life! We're spending our workday in other people's homes. It requires the utmost in respect and manners to make a living this way. People appreciate that, want that and its an absolute requirement for continued success. That's what fine home building is.Dan-O
*Well what a spread of ideas! You asked why I replied like I did so I copied off part of your post that drove my response.You posted: "My concern is that they may end up having to make very significant compromises in the scope of work, blame me for "overdesigning", and never realize that they COULD have gotten most or everything they wanted with another responsible contractor. Further complicating this is that I realize my LEGAL fiduciary responsibility is to the clients." This tells me that both in your mind and in reality yoiu KNOW that your responsibility is solely to your clients(the one's paying your bill). It further tells me that you have professional knowledge bearing on the commission they hired you for. Therefore, your ethical and legal course is to fully and completely disclose all the information in your possession concerning their project.Your are ducking this because you are concerned the referring contractor may cut off rererrals to you. That cannot be your primary concern. What would be ethical would be for you to obtain the clients' permission to share what you did with that contractor. That shouldn't be a big deal since they will most likely go back to that contractor for pricing and a bid anyway. Who knows you might be surprised what kind of pricing the contractor offers these folks.This also tells me you are fearful of them someday finding out that had you done your job they would have gotten what they wanted instead of what they settled for. Well, that is a valid fear! If they ever found out what happened they wouldn't blame you for "overdesigning". They would blame you for steering them wrong by withholding information. Can you say: "Lawsuit" and "Ethics Complaint"? Maybe not, it all depends on their moods and pocketbook. But it is a real possibility. For sure the bad mouthing wouldn't do your reputation or business any good.I understand the dilemma you have created for yourself. But it really isn't there if you do your legal duty and touch base with the referring contractor.
*I assume the client has not yet asked RKM if they should get other bids. Wonder why they want to stick with the contractor they have already chosen. Has RKM asked them? That much trust and confidence must be based on something eh?RKM's only concern is not really that the client may pay too much (in his opinion) for this project, but his only concern is that he might look bad in the clients eyes if the contractor "will" charge too much, making his design work overly done. So RKM's concern is a selfish one, and there's nothing wrong with being worried about one's own reputation. We all are. But let's not raise this issue to a level of the clients best interest. It's not. And let's cut the baloney about "legal" and fiduciary" responsibilities. RKM is only concerned about his rep. That's fine and appropriate but anything more than that is BS and not really pertinent, unless each of us, regardless of industry has a "legal and fiduciary responsibility" to protect our reps. Not!I say wait until he numbers come in from the contractor. I'm sure RKM is no dummy, which means that he should be able to do some basic "numbers" himself to determine if said contractor is in line or not. Like Dan stated, why try to address a problem that has yet to materialize? Until then, there is no problem.
*What is the difference in this situation and others you have done plans for for this contractor? You seem to know that he is at the upper end of the price range and you seem to think that his work is at least somewhat deserving of the price. Wouldnt you have to tell everyone referred to you that they can get cheaper work from others? Isnt there always going to be someone who will do a job cheaper? Do you have to tell your clients that they can probably get a less expensive architect if you know of one? Why would he ever refer anyone to you again?
*Very interesting range of responses! Maybe another clarification is in order.The last project I built with this contractor was two years ago. A large second story addition/remodeling -about $500K. Worked out to about $210/SF. Since then the contractor has specialized in historic restoration, etc. Recently the contractor priced out another 2nd story addition of 450SF @ $635K or about $445/SF including about 1600 SF of remodeling on the first floor. (This was very basic building; butt joint flat trim, textured drywall.) I was shocked at the change. (Project fell through, though. Client couldn't afford it. Couldn't offer an alternative, though, because it was the contractor's referral. So we ALL lost.)However, for the current situation I designed a 250 SF one-story family room addition w/ a modest kitchen remodeling in existing space. $150K budget, which would be PLENTY for most of the other contractors I work with. It just didn't register with me, I guess, that this was going to be WAY out of line for this particular contractor, since my only other experience with the high-priced version was a prelim. Yes, my mistake. Client hasn't been presented with a preliminary budget yet, but contractor feels that the number will be so out of line with the budget that it almost isn't worth the effort of a preliminary pricing. (BTW, I've done about 10 projects with this contractor in the past ten years - ALL were referrals from me. I've received a number of referrals lately from this contractor, but nothing has materialized. So I'm hardly trying to protect a needed referral source.)I consider this contractor to be highly ethical, and the pricing legitimately arrived at. Just very expensive subs (no shopping around), large overhead, etc., etc. At what point would I consider a contractor to be "out of line" with his pricing? I don't know, but I think I'm getting there.My concern is not just that I will end up looking like a doofus (I can handle that) but that the client will simply give up on the project (like the last client did) because they think they can't afford it, and don't realize they could easily afford it with someone else. I think I may just stop taking contractor referrals altogether, because I don't like being in this position at all.
*RKM, in light of your last post, it seems to me that this contractor's "market" is strictly high end only, while you service a varied market. Perhaps now is the time to be frank wit teh contractor and tell him that it's foolish for you too wo work together when the client is in a market he really doesn't serve.In fact he will be doing right by everyone involved not even recommending an architect to these particular client, and should really suggest another contractor he may know to these clients.Geeze, If I sold Fords and know the "Customter" only wanted a Ford or Chevy I'd be wasting my their time and my own by showing them Oldsmobiles and Cadillacs. I'd call my sales friend who worked for one of the above and refer the customer to him.Someone wanting a nice suit should not be shown an Armani to be customer designed and taylored specifically for him. It's no brainer.In this case, the contractor used bad judgement handling this client. He's found a niche that is both lucrative to him and expensive to perform. Apparently, he's transferring that "expensive" onto every other, non-historical renovation" client's project.I think if the above is true I'd terminate the relationship unless he recommends someone with big bucks and only wants him.
*Quietly, and seemingly innocently, start a conversation with the client about getting more than one bid. If they tell you they have already chosen this contractor, drop it then and there. If they ask you about getting other bids, just mention that it makes good sense to talk to more than one contractor before they get serious about a bid. Your job is to design their addition/remodel project. The contractor's job is to sell his services to the client. Do not interfere with this process. If he gets the job, he did so because he won the customer over fair and square. If he is too high priced for them, they will shop elsewhere. That's the name of the game.You might actually mention to the contractor that these people are on a "tight" budget. He may immediately decline the job, and thank you for the information that kept him from wasting his time. He might actually work with the clients, and do the job well within the budget. That is for him and them to decide, not you. Once you have presented their plans to them, your job is over. Now it is between the contractor and the clients. It is kinda like sending someone to look at a Mercedes when they can only afford a Chevy. Once they start talking to the salesman, they pretty much figure out they can't afford it. BUT... if the salesman figures out a way to get them into the Mercedes, then by all means, let him. He may even sell them an Audi instead. Again, LET HIM. What they eventually "buy" is their decision, not yours. Just my opinion...James DuHamel
*Seems to me that the time to discuss relative pricing of contractors was before you designed the project and showed the customer. Now you have given him the idea of what he can get for his budget, but won't if he uses the referring GC. Having created this expectation, somebody is going to have to explain.Have you told the customer that what you have designed is relative to what GC's charge? Have you told the customer that your design was based upon the median charges by GC's, but that he won't be able to get it all with his budget if he uses a very high quality, but high price, GC? And you may want to have a talk with your referring GC and tell him that it is you opinion that if he charges top dollar, the client will not go through with the deal and certainly won't be able to build what you have designed?Seems like you should have thought about this question before you put pencil to paper. SHG
*Well here we are again in one of those discussions where the facts are gradually unfolding. RKM the tone of your last post is distinctly at odds with your original topic. In your original and follow-on posts it looks like you definitely have an ethical and legal liability problem if you don't disclose to the client. Further, that you are worried about your reputation in addition to the legal/ethical situation. Now you seem to say all is well, that you just have a communications problem.So, assuming this is a real situation and not one generated just for discussion purposes, it seems the first thing to do is discuss the complete situation with your client. Then discuss it with the contractor after telling the client you are going to do so. After that if they want to do business together that is up to them.
*Sonny,I would humbly suggest that architects stick to what they know--design, and bring in a contractor (paid for his time) early on to do cost analysis of the emerging design. Of course, if the budget could be set first...........Thomas
*There is a fundamental difference between an architect's job and the contractor's job of which I am sure you are all aware.The architect generally has the goal of having his designs built, with the emphasis on design, and is paid up front. The contractor must take this design and build it for a fixed cost, make a profit while limiting future liability by by building it correctly.It would seem that there was a need for compromise in design given the modest budget and the clients intent on choosing a quality contractor. You apparently had all the facts up front given your long term relationship with the referring contractor.Perhaps your ego is to blame here. A prudent architect should underdesign and overbuild. That is the contractor's perspective.Why not G.C. it yourself? It seems you are suggesting that the contractor is cost incompetent. Are you the better man for the job?
*Aw, the old architect - contractor hostility rears its ugly head. How does an architect design if he can't estimate how much can be built within budget? The contractors answer is that he should be involved from the start, and be the one telling the architect what he can do for the money. The architect's answer is that he estimates for purposes of design, than puts it out for bid to find out which GC can build the most for the least. A basic antagonism which should, theoretically, work best for the customer.
*RKM...There is no way you should suggest to these clients that another contractor be sought. No way. Your contractor brought in the client. It is his call to let them go. If you want to offer several contractors to a client, then you have to find the client through other means then from a particular contractor who brings in a client that wants his service plus yours. You are in essence a design team though billing independently, your tide rises and falls in lock step. Hurt your contractor and you hurt yourself. No gain and all pain.Make sure you have enough work so as you can afford to lose clients delivered by your contractor from whatever the cause and while discussing what to do about it with your contractor, not us or the client.Near the stream,aj
*As AJ stated, this is a "team" process, and one I contend, where "both" parties - the architect AND contractor - get paid for their "time & expertise."Both are needed. Both bring specialized expertise and experience to the table. Both should be paid for the above.What is a Proposal? Really, a SCA. To take a section of "The Process"............."A Specification & Cost Analysis is a definitive comprehensive document stating the final costs, allowances, material selections with brand names, and all particulars of the project as agreed upon. CAD drawings and plans are just one part of a complete SCA.Preparation for a SCA include evaluation of existing construction and current building codes. If a room addition is involved, site planning is needed as well. A SCA can be compared to a "brief" in the legal profession, which is defined as "A document containing all facts and points of law pertinent to a specific case." This takes a tremendous amount of a professional’s time. Creating a SCA takes anywhere from several hours to several days, when taking into consideration: designs, meetings with specialty contractors (SCs), material suppliers, estimating, plus the time mandated by permitting requirements. The "estimating" process of a SCA involves many hours of line item costing of every single operation of each phase to reach the final cost. It is also based on each SC’s own fixed bids as well as those fixed bids from the suppliers."So, is not design and it's projected associated construction cost the construction the equivalent of a "legal brief" requiring all of the expertise and time needed to develop a "case"?
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Would appreciate thoughts on a situation that hasn't happened yet, but I see it potentially coming.
I'm an architect who received a client referral from a contractor that I've worked with for some time. The contractor is excellent, but over the years has risen to near the upper end of the pricing scale in a very high-end market. The clients asked for a tiny one-story addition & kitchen remodeling with $150K budget. I know that my preliminary design is appropriate for their budget - as far as the *average* marketplace in this area goes, but not sure their budget will even come CLOSE for this particular contractor. These are seemingly fairly modest clients, and I'm not even sure if this is the right contractor for these clients, at least on a strictly cost-wise basis.
I suspect the clients don't have a clue as to the potential variation in this marketplace. They just simply like the contractor (aren't getting competitive bids), and expect the price will be roughly similar to other contractors, but they haven't received any preliminary pricing yet. I suspect the final number will end up probably 30-50% over their stated budget, minimum. (Please understand that I don't have a problem with a contractor charging high-end prices, per se.)
My concern is that they may end up having to make very significant compromises in the scope of work, blame me for "overdesigning", and never realize that they COULD have gotten most or everything they wanted with another responsible contractor. Further complicating this is that I realize my LEGAL fiduciary responsibility is to the clients. I certainly don't want to damage the relationship with the contractor (either contractor-architect or contractor-customer)but wonder at what point (if any) my responsibility starts/ends for making sure that these clients are going into this with eyes wide-open. What do you all see as the ethical priorities here?