My design contract provides for a fixed fee, and then additional charges if the client increases the size of the project, with the fee proportional to the size increase. It prevents someone from planning a 2000 sf house and then expanding it to a 5000 sf house for the same fee. It’s worked well–no one’s tried to bump the size or add a garage without extra fee, and the few times they have “grown” the house substantially beyond the original size, they’ve expected and understood the fee.
What it doesn’t address is two other types of changes, and I’ve hit both for the first time on the same client. First is if the client _reduces_ the size of the house after the drawings are done. Hmmmm, never contemplated that one. And second, if they make other substantial changes after the drawings are done. This client is a great guy, so it’s not that he’s being difficult or anything. There’s a wall assembly that has changed from insulated spray concrete panel to precast concrete to ICF, mostly as he’s contemplated different contractors who each favor the method with which they are most familiar/comfortable. Each change, done with the best of intentions and expected to be the final change, required changes to several pages, a dozen detailed drawings, and the engineering.
Client has said several times that he expects to be invoiced. Problem is, I don’t know how much to invoice and my contract doesn’t address this. I don’t count hours and don’t intend to start. It’s only happened once in six years, but I want to anticipate it better next time. Any ideas on how to address it in the future and this time?
Replies
Just a quick thought without and vast amount of time spent on it - My first reaction is "split the difference". Like go halfway between your original fee and the fee based on the smaller footprint size you ended up with.
As you said, he did make a lot of changes. But your fee is apparently based on the size of the house. I would look at it as a sort of compromise, or win-win situation.
A lot of GCs do not give back OH&P when the size of a project is reduced. For instance, you hire me to build a complete house, and I block out 8 months to do it. Then you change your mind and want a shell only so you can do all the finish. I have turned down work to be available to you, and need to be paid for that. So, if I were you, I would not reduce fees if the house is reduced in size.
If you are not counting hours, how do you know what to charge? Are you charging for a certain chunk of time, say, a month? You need to be able to name a number or a formula when someone asks, and you need to do it without hesitation. In your case I would probably count hours starting now to make those changes, and charge them at ~$100 per hour (that's about what architects in solo practice charge here, adjust for your region). They buy the original plan set for a lump sum, they pay by the hour for changes (unless you can determine another lump sum for all changes taken together).
>I would not reduce fees if the house is reduced in size.If I implied that, then I did a poor job of writing. No, I wouldn't do a give-back. His request caused extra work. Usually extra work is in the form of an additional wing or a garage or similar, and so the extra fee is understandable to both client and designer. Making the house smaller means that every drawing page changes, and the client understood that without me even saying anything. The problem is that my contract only addresses increases in size and not decreases. [Maybe I should make it the absolute value of a size change. <G>]Even at that, the extra fee is only a crude approximation of the extra work. Once the drawings are done, an increase of 1' entails the same work as an increase of 5', assuming there's no room reconfiguration (or doors, windows, etc). But it's there as a disincentive to arbitrary changes more than anything.I charge by anticipated project complexity. I gather a lot of info up front, estimate the work involved and quote a fixed price. I'm comfortable with how it works out on a project and yearly basis. Complex house or complex clients are more work than simple houses and easy clients. Sometimes I guess wrong, but usually do ok.I acknowledge and understand your comments about hourly. The thing is, in a prior career I had to count (and account for) hours, and I hated that with a passion. Doing that now would seriously crimp my lifestyle. <g>
Obviously, your scheme for charging to increase the size of the project won't work, because in this case reducing the size also entails extra work on the design side.
In this particular case, I'd suggest the only reasonable way is to estimate the time you've spent, and concoct a number based on that. Alternatively, you could use the same figure as you would for an increase of the same size, on the idea that it's the same amount of redesign work to reduce as to enlarge.
>I'd suggest the only reasonable way is to You're likely correct, but I don't know how to codify that for future instances. Nor cover the case of material changes even if the same size. Each have the potential to cause substantial rework.
First is if the client _reduces_ the size of the house after the drawings are done.
The key words here are "after done." First you need to be paid for the first drawings. second you need to be paid for any changes drawn. Your fee schedule is currently based on the percentage of area changed (added). IMO the other change (reduction) should be computed the same way.
And second, if they make other substantial changes after the drawings are done.
Notwithstanding the above, doesn't this also cover major reductions?
SamT
Praise the Corporation, for the Corporations' highest concern is the well being of the public.
>doesn't this also cover major reductions?The key is the word "other". Size-based changes offer one way to measure changes. Other changes that don't affect size would need another measure.Reading back through this, one element that stands out to me is that the contract has been satisfied (I delivered the requested original drawings and was paid) and this is really a new contract. In the past, I'd do small changes just for the heck of it, and because creating a new contract wasn't worth the effort. This is the first that involves substantial work after the contract concluded. The confusion in my own mind is that the contract is done when the drawings are delivered, but I don't "feel" like it's done till the house is built and the owners move in. Never paid attention to that distinction before.
So the 'new' contract would be to modify the original design? Provided of course that you get the original copyright holders' permission (|:>)
You could probably cut the client some slack compared to the original cost since you have already accomplished and been paid for the pre-drawing client's dream interview, and the conceptualizing and imagineering work, and will only really have to perform the nuts and bolts stuff this time.SamT
Praise the Corporation, for the Corporations' highest concern is the well being of the public.
>>>>>>>>Reading back through this, one element that stands out to me is that the contract has been satisfied (I delivered the requested original drawings and was paid) and this is really a new contract. In the past, I'd do small changes just for the heck of it, and because creating a new contract wasn't worth the effort. This is the first that involves substantial work after the contract concluded. The confusion in my own mind is that the contract is done when the drawings are delivered, but I don't "feel" like it's done till the house is built and the owners move in. Never paid attention to that distinction before.I think you answered your own question. Are you managing construction or just doing design? Probably 25% of the super high end projects I bid never get built. I'm pretty sure the architects that did those plans got paid before I ever saw them. You've still done the design. You can't help it if the couple gets divorced, can't afford what they want, etc.http://grantlogan.net/
>I think you answered your own question.I got paid for the original. Now I've put a bunch of time into the modification. He says, "Invoice me." I'm trying to figure out how much. It was days of work, whereas the original was a coupla months. Obviously a good situation with a good client who recognizes that work warrants pay. I also have some percentage that is never built. I've learned to get paid in a certain fashion that precludes giving away time/value. Part of the Breaktime education.
If you have completed the original scope of work, anything additional is a change order. Decide how much time and negotiate with the client.
Most people will understand how much time and work you have in the project.
Good Luck!
>>>>>>>>>>>I'm trying to figure out how much. It was days of work, whereas the original was a coupla monthsI understand your trying to get away from hourly billing. OTOH, sometimes there's no way to get around it. Estimate. It took a coupla months (40 working days?) to do the original. If it took 2 days to make the revisions, then 2/40ths of the original price would seem fair to me.http://grantlogan.net/
Fwiw,
How do you figure the "added fee" when the design changes expand the scope of the project?
Can you use the same methodology and apply it to "shrinking" the scope or changing it.
Architects I have used often times just use an hourly rate for changes.
It's $/sf. Yeah, that's not a great measure in all cases, but it averages out. And it's only come into play in 1 in 10 jobs.Edit: The key is, it's gotta be something predictable to the client. My initial fee is rather arbitrary from their perspective--I make a proposal that they either accept or reject. But if they're gonna increase the scope, they should know ahead what it will cost, and not be stuck in a one-sided negotiation. With $/sf, they know what's what before they make the decision.
Edited 4/24/2007 3:17 pm ET by CloudHidden
I am not a business man, and I have yet to read the other responses.
I would upcharge the same as if he went larger. What I mean is if you charge $100.00 for adding 500 sq ft, then I would charge the same to take away 500 sq ft.
The other change I would think you need to count hours, or with all the changes you get paid "to date" and start over with a new drawing, but htis may cost him double.
Just my gut, fwiw
jeremy
The bad news is you've done exactly the right things to be exactly where you are today.
"IdahoDon 1/31/07"
Your efforts would seem to be the same regardless of the size of the box you are drawing. This is the same problem with the logic of tipping your wait staff based on the cost of the food. There really isn't a direct relation between them, other than you can assume somone buying more expensive food can afford more expensive help.
So, I suppose that's the logic...rich people build bigger houses and, therefore, should be able to spend more on the design.
The problem is that there is ALWAYS exceptions.
As such, I'd suggest sticking with your flat fees, but then charge all changes based on an hourly rate. That will take all of the guesswork out of changes.
Any change should add to the cost proportionally. So increase or shrinkage or switch out should add the same way. You also have to decide what is the work worth to you. Never try to figure out what is "fair" cause fair to the customer typically is unfair to you.
i'm kind of surprised you don't have something in your contracts about changes in general. Reductions are as much a part of the process as are increases. Clients realize they don't have the finances, bids come in too high, etc., and somewhere something needs to be decreased or eliminated.
And reducing a project in sf can be as much work as increasing it. It also changes the proportions, window spacing, etc., and affects the drawings equally. Work is work.
But then again, yours is a specialty and obviously you've been doing well if this is the only such problem you've encountered. With an agreeable client also. Sounds like a simple mediated payment for your changes would suffice.
also agree about the hourly thing . . . i'd much rather eat time and do something right than worry about whether i'm getting paid every minute of my day (within reasonable expectations)
The other thing about hours is that it gives the other person something to argue about: "That shouldn't have taken 10 hours!" Plus, I'm not fast, and don't try to be. Lots of incubation time. DW thinks it's "lazy, rooting around breaktime, watching sports" time, but it's incubation time, dammit! I've worked enough years that I've earned the right to not have to account for each quarter hour. <G>Changes have not been such an issue till now. We typically catch the conceptual changes before the prints are started. And we typically catch the layout changes before the prints are done. Those are the two big milestones. 3D renderings have helped a lot on the concepts, be/c they see exactly what they're going to get and aren't surprised later.I've "eaten" time for changes before, but they were ones identified before the work was completed. That's part of the deal, and I set fees with that in mind. It's my job to get them to a concept they want to build, and then to prints for building that. So the burden's on me to lead them through the process in a way that they will want what we've designed and not want to change it. If I guess wrong and we need more iterations to get to the goal, then it's my tough luck for not doing a better job (I'm not the "you get only two design reviews" type). And if it goes smoother than typical, then it's both our good luck. Never had a client abuse that with endless changes...I try to qualify clients enough to know that they want to build a house and not just play with designs.I think what made this one unique is that we have some new design elements involved...a new mix of materials and shapes...and the builders have been all over the place with quotes and recommendations. That's made it less predictable than typical. But he's selected a builder, we have a method that everyone's bought into, and we're moving ahead.>Sounds like a simple mediated payment for your changes would suffice.Probably the smart way to go, with the amt based on a rough guess of hours and a rate I've never established. :) And I'll think about changes to the contract, or a contract to handle changes after the original contract.Thanks, all.
I guess I didn't do so good with my first guess...here's the reply from the client:"Jim, seriously. X hrs? We both know it was more than that!
I do want to be fair about this. Perhaps you would like to reconsider?"
Dontcha jest haaaaate clients like that?
LOL
SamT
Praise the Corporation, for the Corporations' highest concern is the well being of the public.
No matter how you slice it, time is money and you've got to come up with some kind of a figure to reflect the extra time you have had to spend over the original arrangement. I think any reasonable person will realize this and would not be put out by the extra charge.
You say you don't count hours and don't intend to start, but you must have some sense of how much longer this work will take. Estimate it and attach some hourly amount to it.
Finally, I guess, count yourself lucky that this hasn't come up before with some SOB of a client.