(Paraphrased)
An architect hired an engineer who submitted a $10,000 invoice for the SD phase. The architect submitted a $40,000 invoice to the owner for the SD phase. The owner only paid $30,000 to the architect because they are unhappy with the design. How much should the architect pay the consultant?
Question: Is the consultant’s fee taken into account in the architect’s invoice? If so, how so? If not, why not?
Hi @Citrillion thanks for writing in! I need to redact your post a bit because we don’t allow copying and pasting of our paid content.
Yes, when an architect submits an invoice to a client for a phase of work, they should be billing for the consultant’s work also up to that point in the project. For consultants you hire, it’s generally all included in one lump sum when presented to the client - the client doesn’t know how much the engineering fees are.
In the B101, you’ll break down your fee into phases; those fees by phase include your consultant’s work. So, for this question, the B101 would have said that the SD phase has a fee of $40k. Your C401 with the engineer would have a similar clause, but the SD phase there would be for $10k. When you’re paid by the client, you pay your consultants.
I hope that helps and good luck on your next exam!
@coachchrishopstock Thanks for the response. It’s really hard to ask questions without referring to ‘paid content’. After you redacted my original post, it took me some time to reconstruct the source of the original question. It’s very disorienting.