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I am the facility manager for a medium size company in Texas, and part of my job includes new construction. We hired an architect to prepare the cd’s and his fee was based on a certain percentage of the estimated construction cost (his idea, we prefer fixed cost). Let’s say that he wanted 6%, and he estimated the project would cost $500,000 so his fee would be $30,000 paid in installments as the design and project progressed (part of his fee included site visits during construction, and the punch list).
Now that the contract has been signed and work is under way, we have determined that the construction cost will be only about $450,000 and thus his fee will be $27,000. Obviously he is not in full agreement. If the contract had come in higher, I would have expected him to ask for more, and we wouls have agreed. He has stopped talking to me (that’s not all bad), and I’m wondering if I could be wrong.
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I am the facility manager for a medium size company in Texas, and part of my job includes new construction. We hired an architect to prepare the cd's and his fee was based on a certain percentage of the estimated construction cost (his idea, we prefer fixed cost). Let's say that he wanted 6%, and he estimated the project would cost $500,000 so his fee would be $30,000 paid in installments as the design and project progressed (part of his fee included site visits during construction, and the punch list).
Now that the contract has been signed and work is under way, we have determined that the construction cost will be only about $450,000 and thus his fee will be $27,000. Obviously he is not in full agreement. If the contract had come in higher, I would have expected him to ask for more, and we wouls have agreed. He has stopped talking to me (that's not all bad), and I'm wondering if I could be wrong.