Project Delivery Method vs. Fee Structure

practice management
1

This question comes from a BS practice exam case study and is asking for an applicable fee structure but the correct answer is a project delivery method? Can someone explain if this is a correct response or if this is maybe an error in the exam question?

@coachjodidubyoski

Thanks

Which of the following would be a more applicable fee structure for this project?

Guaranteed maximum price
Incorrect. Guaranteed maximum price is utilized in construction management and not for architectural fees,

Hourly not to exceed
Incorrect. An hourly not to exceed fee is similar to an hourly fee; the profit is capped. Additionally, the architect could not bill any anticipated scope revisions.

Design/Bid/Build
Correct. The request for proposal lists services that are in line with Design/Bid/Build including request to separate the fee, deliverables, and services into the three areas of design, bidding, and construction. Additionally, the RFP notes, “If the scope is amended by Smith Properties, the design fee will not be amended,” which is likely not enforceable. However, based on the architects’ experience with the client, one can assume that scope changes should be anticipated, and the Design/Bid/Build fee structure allows for the architect to be paid for all of these services.

Hourly
Incorrect. An hourly fee has profit and overhead built-in; however, your profit is capped. You can only achieve that set percentage of profit, and although the architect could bill any anticipated scope revisions, the profit margin is small.

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2

Hi @brynnherman, This question came up in the workshop today, and based on the information provided I agreed with the participant’s answer and was also confused. Is there someone better acquainted with the Practice Exam material who could clarify this? Thanks!

3

@coachchrishopstock can you provide additional insight on this question?

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4

Thanks for pointing out this error for this exam question - we’re replacing it with a better one.
@Charlesanthonylent as you thought, design-bid-build is certainly not a fee structure (it’s a delivery method) and should not be the correct answer here.
Thanks again!

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