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home article index owners - it's time to substantially increase your architect's and engineer's fees

Owners - It's Time to Substantially Increase Your Architect's and Engineer's Fees

April 08, 2009 - Dennis Neeley, AIA

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Overview

BIM has been sold as a tool for increasing the architects and engineers efficiency. Last year at a conference an architect gave an example of two very similar projects; one done with CAD by a team that was familiar with CAD and the building type. The other project was done by a team unfamiliar with the building type and also new to BIM. At the end of the projects the firm analyzed the time taken by both of the teams and found that the BIM team had completed their project 20% faster. This was really quite amazing considering that the BIM team had to both learn about BIM and the idiosyncrasies of the new project type.

When owners listen to BIM vendors and hear stories such as the one above, the logical conclusion is that BIM will decrease their architectural and engineering fees. However, the value of BIM is far greater than simply improving the speed of creating construction drawings and reducing architects and engineers fees. Owners will see dramatic improvements in the design, construction, and management of their buildings with the use of BIM. While it will take a few years for all of the benefits of BIM to be implemented, the results will be remarkable. The owner will be the driving force in accelerating and broadening the use of BIM because it is the owner that will realize the phenomenal cost savings that we will see in the near future. The sooner owners know about and get excited about the future with BIM, the sooner it will happen.

BIM Will Change Everything

Five years ago when I first started using Revit it was instantaneously clear that as this product matured and gained power that the results would touch and enhance the entire design, build, construction and facilities management professions. The vision that was so clear years ago is no longer just a vision but is turning into a reality as the success stories from those using BIM are being documented and published. Andrew Arnold wrote an article about a Sutter health facility, constructed by DPR construction (link: http://www.reedconstructiondata.com/articles/read/building-information-modeling-moves-into-aec-mainstream/ ). On this project the architect and engineer fees were increased by about $400,000 dollars and at the end of the project DPR construction provided the Owner with $9 million in cost savings and 6 months of time savings on $95 million project. Similar results are now being reported on other projects. The reasons for these cost savings are 1) the elimination of on-site construction conflicts, 2) coordination between the various disciplines and the optimization of the sequences for construction, and 3) increased labor productivity.

For many years I was a partner in a construction/development company. At the end of the bidding process if the total came out to be $10 million we would put into our development budget $11.5 million dollars. If BIM had been around and it resulted in the actual project cost coming in at $9 million the effects on the profitability of that project would have been beyond belief. 10% reductions when compared to today's costs substantially change how owners will look upon their projects.

A major cost to the owner when they look at the total project cost is the cost of interest on their loans during construction. The need for 10% less funding will reduce their interest payments by the same percentage. The 10% less expensive project can be the difference between building the project and abandoning the project. A 10% reduction in construction costs most likely means that an owner could build 16 projects for the same amount of money they believed they needed for 15 projects.

Modeling for Construction

In order to achieve these savings it is necessary for the BIM model to be much more sophisticated than the the model that is needed to create what is equivalent to paper construction drawings. It is critical that the architects and engineers work together to create a true model of what is going to be constructed and not just a diagramatic representation of design intent. It takes more money for this level of modeling, as noted in the Sutter Health project; however, the additional fees up front delivered the substantial savings to the owner — more than 20 times the additional fees. In many cases today, construction companies are converting CAD projects or BIM projects of less detail to BIM Models intended for Construction. Owners are happy because modeling for construction drives costs savings. The result, however, is the Owners is paying double modeling fees, once to the architects and then again to the construction company. The increase in fees is simply hidden in the process. Approaching modeling for construction up-front will increase architect and engineering fees, but also increase efficiency and eliminate additional modeling fees later.

Modeling for Estimation and Bidding

Most of the construction company modeling is oriented to constructability: how the parts fit together and in which order. However, another purpose for specific modeling a technique is for accuracy in making quantity take offs and generating cost estimates and bids. Depending on how the project is modeled it will be easier or harder to create accurate quantity take offs. These techniques include how walls are modeled (exterior walls- floor to floor or grade to roof), categories for objects (naming conventions, assembly codes), complexity (what is modeled and what data is found in liked databases) and accuracy (are models accurate or diagramatic), and what should be modeled and what should not be modeled (pipes, conduits, brackets).

Most architects and engineers have not yet even started to consider how they should model to increase the accuracy of estimation and bidding. Changing their modeling techniques to enhance estimation and bidding will require education in the proper processes and then additional modeling time to ensure that these processes are followed. The additional money spent on architectural and engineering fees to create models that are easily estimated and bid will result in tremendous cost savings for the owner. Reed research indicates that 15% of the cost of construction is for cost estimations and bidding by the general contractor, subcontractors, distributors, and suppliers. Today, Owners are spending more money to have people count and price their building than they are spending on their architects and engineers. Allocating cost to efficient processes and BIM modeling will reduce overall cost, even if fees are increased.

Modeling for Analysis

In the last couple of years several new analysis programs have come to the market that can extract the geometry from the BIM model. These programs include 1) heat gain in heat loss, 2) acoustics, 3) massing, 4) airflow, 5) wind flow, 6) structural, 7) lighting layout, 8) estimation and more. Many of these programs can now be run and the results analyzed and used by architects. It is unrealistic to think that architects will be able to pay for the programs and master the use of the programs without increasing their fees. The use of analysis programs by structural and mechanical engineers has long been part of the service they provide and their fees reflect the costs to cover the software and the expertise to run and understand the results. The use of analysis programs for architects is relatively new. However the information that can extracted from a BIM model will greatly benefit the Owners by better designed, better built, and more efficiently operated buildings.

Objects are the Foundation of BIM

Many owners build repetitive projects such as restaurants, food markets, retail spaces, gas stations, etc. Other owners build facilities that have similar objects found in each one, such as hospitals, office buildings, and theaters. For architects and engineers to model these facilities in BIM they must create the objects that are used to compose the building. Most owners use multiple architectural and engineering firms to design their facilities. Each of these firms is creating the objects that they need to design the owners projects. Reed is currently reviewing the objects that are needed for one specific building type, there are over 7000 objects. The cost to create all these objects, as some are very complex, will be well over $1 million.

The owner has two options:

1. The first option is for each of the architects and engineers working on the projects to create their own objects. The result of this approach will be that many of the objects created by the architects and engineers will not be very good as they will need to cover the cost inside of their normal fees. The other result of this approach will be that the owner will receive BIM models from many different firms full of objects that are inconsistent from one project to the other, with inconsistent naming conventions and modeling quality.

2. The second option is that the owner will pay the money (or convince the Building Product Manufacturers) to create all the objects that are needed for their facilities and to provide the objects to the architects and engineers for use while they create the designs and construction drawings necessary to build the owner's projects.

Option 2 is clearly the least expensive and best approach. Over the next few years more Owners will take this approach as it will ensure that the Owner will be able to take full advantage of the BIM models for facilities management, operations and maintenance. For most facilities the FM, Operations and Maintenance costs exceed the design and construction fees many times over and yet most owners know very little about their facilities square footage, materials, and equipment. Tracking assets, maintenance, and operating costs is very difficult. If buildings are modeled using BIM - producing good and accurate building data - savings will amount to millions of dollars per year.

Owners Need to Pay Architects and Engineers More (the ROI will be Worth the Costs)

Fees for architects and engineers have been based upon decades of balancing the scope of the work against the cost to perform the work. The traditional scope of work is: preliminary design, design development, contract documents, bid/negotiation management, and construction observation. The product of the architects and engineers work has remained virtually unchanged for decades whether they were drawing by hand or with CAD the resultant product of their work was a set of drawings and specifications that could be used by the contractors to build the project. We have now entered a new era, the architect and engineer is modeling the project in 3-D, they are working with data at levels of detail that have never been required before, or for that matter possible before. There scope of work is about to dramatically increase.

The result of these BIM projects for all of the reasons discussed above will be substantial cost savings for the owner, but only if the BIM projects are correctly created. Most architectural and engineering firms have very little experience on the proper way to model for all the topics included in this article. But it is these architects and engineers that have the best interests of the owners as the foundation of their profession. It is understandable that owners may find the concept of increasing their architects and engineers fees illogical at first, but it is very clear that once they understand the tremendous cost savings that will be associated with the creation of excellent BIM projects these increases will be happily paid and as a result, it will be the firms that can truly perform in this BIM era that will prosper.

Member Comments

» View all comments (1 total comments)
04/13/2009 - posted by shan

Agree with projected cost savings by using BIM.  One big problem that is not addressed here is the “initial investment”.  Greater adoption of BIM approach will require that owners be ALOT more educated and willing to be educated on value of BIM.  A stronger, more compelling and hard-hitting sell required.  Architects/Engineers agree with need to raise fees- no dispute there.  BIM approach puts client in the driver’s seat - A-E’s will need to be far more selective, work with “educated” client and contractor for that matter.

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