Help with proposal & fee

[David Sisson]

I’m a small firm. Most of my work is small residential and small commercial. Fee is usually in the thousands, not tens or hundreds.

Was just approached about a 100,000 square foot new build. Probably $20m construction cost.

Not sure how to figure fee. Even at 1% fee-it’s way more fee than I’m used to.

Can someone give guidance? I want the job to build my biz-but don’t want to lowball either.

I’ve done well on the upfront sales, now just need to hit the magic number.

I’m thinking 3-5% fee and add on consultant costs. Maybe do 2% and then CA hourly. Help!

[Wayne Williams]

More information please. Private client or public/institutional? Industrial project with lot’s of open square footage on a single for or some type of school or office with multiple stories, lot’s of interior spaces, mechanical, zones, etc?

[David Sisson]

Yikes . I was a bit exhausted when I posted. Mixed use-multi family and commercial. 4 story. Wood frame. Private client. Parking beneath. Luxury.

[Wayne Williams]

I didn’t get a notification when you followed up so sorry for the late reply. For me, I would propose 5% inclusive of MEP, FP, and Structural or 3.75% for architecture only. The beauty of this is that in my experience the engineering will run 30% to 33% of the overall fee. So… give up 25% to save 33% and the client thinks they’re saving money.

And yes, that’s a $1 million fee. Just be worth it.

[David Sisson]

Thanks Wayne, pretty much what I was thinking too, but I like your “give up 25% to save 33%”. I didn’t get this project – client changed their mind about the whole thing, but starting to bid out many more large projects, which is a new ballgame for me. Just did a proposal for an assisted living, my fee was 5.35% excluding engineers, and the project is just an addition to an existing facility, so relatively simple building. I can probably tweak it down to 4%, if I reduce scope, no idea if they’ll bite on the negotiation or not. Doing another small project for the owners right now which is a bit of a monkey’s fist to get them to sign on for the larger one.

 

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