Practice Management Member Conversations

We are discovering over the past year that many jurisdictions in several different states are becomingly increasingly onerous with their permitting requirements.  Issues that have never required appeals in the past now do (along with the requisite fee), information in the documents is now required to be re-formatted for the jurisdictional convenience (along with a resubmittal fee), etc.  Clearly this can be attributable to pervasive income and  staff reduction in building departments across the country, but it is impacting our workload significantly.  Has anyone found a way to obtain additional service fees to cover these "unforeseen conditions"?

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Calvert Helms AIA
Project Manager
BOORA Architects, Inc.
Portland OR
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The way I find more successful in dealing with this situation is to cleary spell out the permit related scope that is included in the fee when I submit a proposal.  This includes listing the permit transactions included.  Additionally, transactions excluded from scope and fee are also noted.  Equally important is to list the assumptions made with regard to permits that are in fact included in the fee and scope of services.  For example, the proposal (and consequently the contract) would indicate the expected cursory review turn around time from each agency based on the experience or on the particular regulation itself.  If such background is not available, a number of hours are allocated for follow-up meetings or visits to the regulatory body in pursuit of the approval.  Deviations from any of these conditions become grounds for additional equitable compensation. 

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Jose A. Moreno-Rivera, AIA, CCCA, LEED-AP
Vice President
CSA Architects & Engineers, LLP
San Juan, PR

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Jose,

One method that has served me well to address this common problem is to include a Due Diligence Phase in my proposals and eventually in the service contracts.  The purpose is to allocate some time and fee to duly investigate the permit requirements as the project gets difined and develop a permit work plan.  Doing this provides me with a paid research time to better understand the permits that will be required and the process and then develop the Work Plan (Scope of Services) that will be required to permit the project appropriately. The deliverable of this phase is the Permit Work Plan that includes the description of the permits required, the timeline associated with it, the input required from the client to achieve the permits and, of course, the fee to achieve the Permit Plan.  Iam sure there are other ideas out there as to how to deal wit this particular situation. 

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Jose Moreno-Rivera AIA
Vice President
CSA Architects & Engineers, LLP
San Juan

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Original Message:
Sent: 10-20-2010 09:41
From: Denis Cassidy
Subject: Additional services for excessive permitting requirements

Jose,

In the event you work in more than one jurisdiction, which is my condition, the ability to foresee and develop these criteria becomes more difficult. Each contract in each jurisdiction has it's own set of rules based on your experience with the local enforcement officers in that jurisdiction. This earlier time spent replaces the time you would have spent dealing with the items later when they came up. Is it possible to develop a universal method which does not require rewriting the contract for each jurisdiction? I have discussed these parameters with my clients and provide for the additional time and effort in the additional services clause in the AIA contracts without being specific about the exact items and associated length of time that will come up just to allow the initiation of dialogue when this does happen. I'm not saying this has been ultimately completely successful, because it has not and there is a lot of free services being preformed, but at least I can begin the dialogue without it being a surprise. If anyone could come up with a way to truly compensate Architects equitably for what they do, I'm all ears! Somehow we need to engage Insurance companies and let them fight it out with the clients when these things happen. They are very successful when it comes to health care. 

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Denis Cassidy AIA
Senior Principal Architect
Cassidy Architecture, LLC
Waterbury CT
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Michael Clark AIA
Director Of Design
H&H Design-Build
New Albany IN
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I am licensed in over 30 states and do work in small towns and major metropolitans.  I research permitting requirements for each project and they all read about the same, but actual experience can be much different.
It is not uncommon for the hours in permitting to accumulate to over 40 hrs.  There is no way you can accurately estimate the costs for permitting because they can be so different for so many reasons.  I have tried hiding hours in my design proposal for these unknowns, but it can distort your actual design fee and could cost you a project.  
 
You need to be up front with your Client and from what I have read in these blogs, an hourly rate in your contract seems the most fair.  It keeps your design fee seperate, eliminates some budget risk, and provides your Client with an accurate cost.

I plan on adding this clause to my proposals and contracts and see how it is accepted.  I know it will make me feel more comfortable about my budgets.





Original Message:
Sent: 10-21-2010 12:34
From: Jose Moreno-Rivera
Subject: Additional services for excessive permitting requirements

One method that has served me well to address this common problem is to include a Due Diligence Phase in my proposals and eventually in the service contracts.  The purpose is to allocate some time and fee to duly investigate the permit requirements as the project gets difined and develop a permit work plan.  Doing this provides me with a paid research time to better understand the permits that will be required and the process and then develop the Work Plan (Scope of Services) that will be required to permit the project appropriately. The deliverable of this phase is the Permit Work Plan that includes the description of the permits required, the timeline associated with it, the input required from the client to achieve the permits and, of course, the fee to achieve the Permit Plan.  Iam sure there are other ideas out there as to how to deal wit this particular situation. 

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Jose Moreno-Rivera AIA
Vice President
CSA Architects & Engineers, LLP
San Juan

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I do the same thing - include X number of permit revisions in the base fee, and include language in the proposal which describes the turn around time from when comments are received to when drawings would be ready for resubmission(s).

I also offer the option of utilizing a permit expediter if there are multiple departments other than only bldg and fire (i.e. zoning, conditional use, etc.).

Clients also seem to understand this better when they get a time line with bullet points, how much effort it really takes to get from point A to point B

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Lisa Stacholy AIA
LKS Architects, Inc.
Dunwoody GA
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Original Message:
Sent: 10-19-2010 17:10
From: Jose Moreno-Rivera
Subject: Additional services for excessive permitting requirements

The way I find more successful in dealing with this situation is to cleary spell out the permit related scope that is included in the fee when I submit a proposal.  This includes listing the permit transactions included.  Additionally, transactions excluded from scope and fee are also noted.  Equally important is to list the assumptions made with regard to permits that are in fact included in the fee and scope of services.  For example, the proposal (and consequently the contract) would indicate the expected cursory review turn around time from each agency based on the experience or on the particular regulation itself.  If such background is not available, a number of hours are allocated for follow-up meetings or visits to the regulatory body in pursuit of the approval.  Deviations from any of these conditions become grounds for additional equitable compensation. 

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Jose A. Moreno-Rivera, AIA, CCCA, LEED-AP
Vice President
CSA Architects & Engineers, LLP
San Juan, PR

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We feel your pain. We have, over the last 2 years, developed a volunteer task force of interested architects and allied professionals (civil engineers and landscape architects) from around the state to discuss this specific issue. During that time we have developed language defining just what is considered basic services. Anything outside that realm is then considered "additional services". Now that we have come to consensus we are approaching those state and local governmental clients educating them on this issue. I will say that to some degree they are sympathetic and are listening to us. We have not as of yet effected change in our agreements but we are getting there. It should be noted that many of our engineers just refuse to go thru the permitting and review process without being compensated hourly since most of this work effort is not reflected in construction costs.

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Lawrence Schwering AIA
Lucas/Schwering Architects
Lexington KY
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We have found similar issues as well. We have some jurisdiction and want new OSA calculations for a TI that does not change occupancies but is only add electrical and a sink.

We did about two years ago add one simple line in our agreement under additional services that state "plan review and re-stamping " is not included in the base services. We have only executed this clause once over the past two years and have only had one objections to the clause. We use this more as a safety net than anything else.

We have also found that in today's economic environment  clients do not even want to pay for prints on a re-submittal.

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Larry Warner AIA
Architect
Warner Group LLC
Peoria AZ
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