ARE Live: Practice Management Mock Exam

ARE Live
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Join Black Spectacles and architect Mike Newman for our Practice Management mock exam. With these practice questions, we will explore issues related to creating a team, ethics, standard of care, and everything else you should know about the practice management side of architecture.

Answers (click the arrow to reveal):

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Question 1

Choose the types of insurance your new architecture firm is likely to encounter in the process of running your office: (Choose three)

A. Builder’s Risk
B. Municipal Bond (MB)
C. General Liability (GL)
D. Errors and Omissions (E&O)
E. Underwriters Laboratory
F. Professional Liability Insurance

Question 2

On the typical AIA contract, there is an effort to stay away from expensive and time-consuming Litigation, unless absolutely necessary. Which of the following are examples of how to help answer problems that come up between the Owner and a GC? (Choose three)

A. Initial Decision Maker
B. Civil Court
C. Dispute Resolution
D. Mediation
E. Change Order
F. Arbitration

Question 3

Your team is very excited to be working on a new architecture project for a new Library / Community Center. The negotiated fee is $200,000 for the architecture portion of the work. At the end of Schematic Design, you should probably be invoicing how much?

A. $10,000
B. $30,000
C. $60,000
D. $100,000

Question 4

Your office has an ongoing relationship with a local developer that owns 3 office loft buildings. Every time a new tenant is to move in, they get your team to do a new layout for their contractors to do a quick buildout. For the graphic design firm that is moving in, they specify that they will give you up to $3000 for their new layout. Michelle will be working on the project, and she makes approximately $30 per hour. How many hours does Michelle have to produce the work?

A. 5 hours
B. 100 hours
C. 30 hours
D. 3 hours

Question 5

What would be a big advantage of working with a Construction Manager project delivery method?

A. Better cost information early in the design process
B. Gives the Architect more control over the project
C. More direct contact with the Owner
D. It is the fastest project delivery method

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Question #4 was tricky. Drawing from professional experience, one can never produce a set of CDs in 3 or 5 hours unless the work involved was minuscule. 100 hrs is way too much given the $3k fee. Therefore, by process of elimination, 30 hrs seemed like a safe answer to pick.

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Welcome to our ARE Community!

We’ll be sure to touch on that in our live broadcast this Thursday. Thank you for taking the mock exam!

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The one that made me think the most was the question about Construction Manager delivery method. I got to the answer by process of elimination. I don’t believe this method gives the architect more control over the project, and the fastest method is Fast-Tracking. So, I chose the option of providing early cost estimating.

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Question #4. Even Though the answer of 100 hours seems to be excessive, the calculation for the number of hours I believe is correct because I am assuming that $30.00/hr salrt is the Multiple of DPE (Direct Personnel Expensive).

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Question #1 and #4. Question #4 i believe i got correct by multiplying her salary by 3 to make her billing rate and then dividing 3000 and that to make 30 hours.
And as far as Question #1. I know the insurance types, but they always get mixed up. Hopefully I got it correct

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Question #4 had me thinking about different multipliers for billing rates. Taking the given $30/hour as the base salary for the employee (i.e. without benefits, overhead, profit) and applying a billing rate of 2.5 - 3.5 would allow approx. 30-40 hours. Working backwards to check, $3k/30 hrs is $100/hr, then $100/hr div by $30/hr is a multiplier of 3.3, which falls in the range I applied.

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Question #4 - A little tricky. 100 hrs seem excessive but given the only information provided, I divided the $30/hr by the fee.

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Question #04, regarding the billable hours seemed a little speculative to me, since firm’s “overhead” multipliers can vary from location to location and economic environment. I based my answer on a multiplier of approx. 3 and crossed fingers. Look forward to seeing how this question was derived. Thanks.

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Question #4 was tricky because it wasn’t clear at first if this was billable hourly rate or the hourly rate she makes. Most like her own hourly rate, which means it should have a multiplier before dividing by fee.

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The litigation question was the hardest for me. Curious to know the answer.

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I thought the first question was hard as I didn’t realize there was a difference between professional liability and errors and omissions!

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Yeah, I agree that was a bit tricky…

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What is the pass rate for PcM

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What happens if a client falls inside the parking lot going to your office? Which insurance would that be under?

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The only question I had an issue with was fee allocation for Schematic Design- I do not have the rule of thumb percentages per phase memorized.

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I’d have to say Question#4. 100 hrs seemed like too many hours. The wording of the question was a bit tricky where it said that she makes $30/hour as opposed to what her billing rate is to the client.

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Question #5 - a typical question where depending on when the CM is brought on to the project could effect the answer.

For example, is there a scenario whereby a CM could be brought on early to provide expertise on cost, while delivering a fast-track project during CA?

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The PcM pass rate has fluctuated from 49%-51% over the past couple years (via NCARB)

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