Hello, Questions asks “What is the cost per gross square foot of the construction only?” The answer gives the Total project cost/ Total Square footage of project to gain answer. My understanding per AHPP is that design fees are not considered part of the construction fees. Can someone from black spectacles please confirm if this was a mistake on their end or if I’m interpreting the wording used in the question incorrectly?
Thank you
-RM
I am NOT from Black Spectacles - but I hope I can answer this question since I am taking this exam on 25th:).
Source#1:
Per The Project Resource Manual - CSI Manual of Practice 2.5.1 Project Budget:
“The project budget should not be confused with construction budget. Costs are divided into two categories: hard cost and soft cost.
Hard cost include tangible components of the completed project…examples are items included in construction budget, the purchase of site, demolition, built-in systems and equipment…
Soft cost are all other items such as A/E , fees, bonding, insurance, and financing cost”…
It goes on into details…
Source#2:
AIA B101 - 2017, Art.6.1 Cost of the Work - “… The Cost of the Work… (read the 6.1”:)… does not include the compensation of the Architect:."
Where I had to read over and over is the AIA B101 6.1 that doesn’t use the hard cost and soft cost definitions.
It just defines"… the Cost of the Work shall be the total cost to the Owner to construct all elements of the Project… and shall include contractor’s general conditions costs, overhead and profit…includes reasonable value of labor, materials and equipment donated or furnished by Owner"
CSI manual includes the cost of land in soft cost - vs contracts say that " the cost of land, rights-of-way, financing, or contingencies for changes in Work; or other costs that are the responsibility of the Owner .
Thank you for your reply @aj1. From the references you cited it seems that the black spectacles exam answer may not be accurate since it included the Architect’s design fee for the total construction cost. @coachglennparks, Can you confirm if I missed something from the practice question #63/ Exam #3?
Thank you,
-RM
Hi - don’t you think it is disappointing that no coach responds?
So sorry for the delayed response from our coach. @coachdarionziegler will be able to help clarify this question.
I’ll do my best to help clear this up.
First of all, good luck on your exam Thursday @aj1 ! You provided a lot of great information, and I think you’re going to do great on your exam!
As far as the original question goes, it gives the “Total Project Cost” as $4,400,000. It then defines Cost per sq. ft. as $176, Architect fee as 8 percent, Engineering fee as 3 percent, and consultant and other soft costs as $75,000. The total square footage is defined as 25,000 sq. ft.
Then, the question asks, “What is the cost per square foot of the project excluding professional fees and soft costs?”
Now, the “Cost per sq. ft.” in the scenario is meant to be a red herring in this instance. By the question’s wording, we can start to assume that this number is including the architect fees, which typically shouldn’t be included. It’s then asking you to extrapolate just the the cost per square foot from the given information.
So, the question is taking the total project cost and taking 8% of it to determine the architect fee and then 3% to determine the engineer’s fee. It is then subtracting consultant and other costs to leave only the construction fee remaining. It is then dividing this out by the square footage to get the cost per square foot only including construction.
However, the B101 article 11 makes clear that typically when the architect is compensated as a percentage this is tied to the owner’s budget for the cost of work. The question above calculated this based on the total cost they are paying, and not the cost of work.
So, I can absolutely understand how this question can be confusing. The architect should be compensated as a percentage of the cost of work per B101 and not the total project cost as this question is supposing. This question is asking you about a situation that would be atypical according to the AIA contracts.
I’m going to refer this question back to the QC team for their review to make sure it’s really aligning with what NCARB expects you to know. My apologies for any confusion this has caused.
*edit- formatting
@aj1 Thanks for posting this info!
You can also look up Hard Costs and Soft Costs in the AHPP. Typically soft costs are items not included in the cost of work.
I’ve had candidates ask me about soft/hard costs in the past and I like to share this website and video because he does a great job of breaking it down quickly and simply!
Thank you!!!
