ARE 5.0 PJM PCM

In cost of construction estimation, what is Order of Magnitude?

It is based on the cost of similar completed projects adjusted for size, complexity, location and inflation. It is used in very early stages of a project when very little is know about the project details.

What is an “Efficiency-based” firms main focus

Expedient and inexpensive project delivery

What is an “Experience-based” firms main focus

The ability to organize and deliver significant and complicated projects

What are the traits of an “Experience-Based” firm

Proficiency in problem solving non-routine and complex design problems

Most successful when applying accrued knowledge to diverse project types

Sustainability is enhanced when they can gain experience from projects that can be applied to future work

What are the traits of an “Expertise-based”

Design services offering deep knowledge and exceptional skill

Specializing in a “narrow band” of professional knowledge

High hourly billing rates

What type of architectural practice would work well in smaller communities

Generalist, accept a wide variety of work of all degrees of difficulty

For solo practitioners seeking a “First Hire”, who might benefit them the most if hired

An Administrative Support, they would allow the Architect to do more billable work

What are the traits of an “Efficiency-Based” firm

Often specialize in one project type with a narrow range of services

Seek clientele that expects standard design solutions with quick turnaround

Sustainability is contingent on improvements in work processes and modern technology/trends

In legal terms, what is “duty”

The architects legal obligation to do or refrain from doing something.

In legal terms, what is “Breach”

The architects failure to perform duty or does something that should not have been done

In legal terms, what is “Cause”

The breach of contract is the cause of harm to the claimant.

Was the claimant harmed as a consequence of negligence

In legal terms, what is “Damage”

The actual harm that resulted from the breach

Breach → Cause → Damage

T or F: Increasing the architects Standard of Care increases their liability exposure

True

If an architect is sued for designing an incompliant staircase an owner may be entitled to:

The cost of replacing the stairs and the installation of a new set that is compliant

What is a Limitation of Liability clause

A contract clause that limits claims by the owner up to a certain amount

What are Consequential Damages

Damages that arise as a result of some act or omission.

E.g. Profit loss from opening date delays

What is a Mutual Waiver of Consequential Damages

The owner would not be able to collect compensation for these kinds of damages

What are Indemnification Provision

A contractual requirement that the architect will reimburse the owner for damages cause by the architects acts or omissions

T or F: The architect should always properly document any changes to their agreements with the owner during the course of the project

True

Compensation for damages should be viewed as putting______

The plaintiff back in the position they would have been in had that part of the contract not been breached

What is a Statute of Repose

A definitive timespan that claims against the architect can be made after a projects completion

Typically longer than Statute of Limitations

What is a Statute of Limitations

A set time limitation that claims can be made against the architect based on when the alleged digression is discovered

T or F: Just because it is within the Standard of Care, the does not mean it is insurable

True

What is Income Approach in project value calculation?

Determining the value of a property based on how much revenue/income/profit it can potentially generate

T or F: An architect should always certify another architects “As-Builts” drawings for a project

False

What contractual terms towards another party may void an architects coverage?

Hold Harmless, Indemnification, As necessary, As required. Avoid all releases of liability for the other party

What is an Addendum?

Changes made to the design after the drawings are completed and the bid documents have been issued, but before the construction contract is signed.

What are Architect's Supplemental Instructions (ASIs)?

Small, uncontroversial changes to the design after the construction contract is signed (for instance, we're now using a different type of flashing because the manufacturer stopped making the original one specified). These don't alter the schedule or budget.

What is a Change Order?

Changes to the design, after the construction contract is signed, that give the contractor more money or give the contractor more time to complete the work.

E.g. "Your drawings and specs never called for flashing so we didn't work it into our price. It's not in our owner-contractor

agreement, so it's an extra charge of $10,000."

What are Construction Change Directive?

Issued when the owner and contractor can not agree on the cost for a design modification that will alter the price or schedule of the project to avoid a delay; occurs after the contract is signed

Why is Cost + Expense (Cost + Fixed Fee) fee structure best for a project with evolving design and changes

The architect will be appropriately compensated for their work and will not need to worry about exceeding a budget

What is the nature of a Stipulated Fee agreement

• The owner pays the architect $150,000 for the job, regardless of the number of hours worked.

• Because the firm makes no more money for working more hours, it incentivizes the firm to work efficiently.

• If the scope of the project changes over time, new contracts and/or "additional services" design fees are required

When is a Change Order needed?

When there are changes to the construction contract that affect budget or schedule.

T or F: In a typical Design-Bid-Build project, the contractor will eat the cost of mistakes that breach the contractors agreement to meet the schedule.

True, not the owner

What is a Surety Bond?

A performance bond that pays the owner to complete the project if the contractor walks off the job with the project partially-complete, but it doesn't pay for routine shortcomings in the project.

T or F: If a code official wrongly approves an aspect of design they are financially responsible for the error

False, the architect is as it is their responsibility to abide by all relevant code compliances, regardless of wrongful approvals

T or F: The architect is the owner's invoice-checker, approving the contractors bill to the owner

True

What are reimbursable expenses for an architect

• Transportation and authorized out-of-town travel and subsistence

• Long distance services, dedicated data and communication services, teleconferences, Project web sites and extranets

• Permitting and other fees required by authorities having jurisdiction over the Project

• Printing, reproductions, plots, and standard form documents;

• Postage, handling, and delivery

• Expense of overtime work requiring higher than regular rates, if authorized in advance by the Owner

• Renderings, physical models, mock-ups, professional photography, and presentation materials

  requested by the Owner or required for the project

• Registration fees and any other fees charged by the Certifying Authority or by other entities as

  necessary to achieve the Sustainable Objective

• Site office expenses

• Other similar Project-related expenditures.

What are 2 common practices when two firms collaborate on one project:

• They submit the proposal listing one firm as the Architect of Record and the other as the Design Consultant.

• The two firms enter in a Joint Venture agreement

An LLP is more suited for long term efforts

______ are what you owe to other parties, not on an ongoing monthly basis, but rather on a total-going-forward basis.

Liabilities

A Design-Bid-Build with Negotiated Team is most appropriate when

The owner would like to hire a preferred contractor separate from the architect early in the design process

High Profile projects where money is not an issue but quality of work must be ensured

What is Unit Pricing Approach in project value calculation?

Pricing per a measurable unit.
Valuing a property based on the cost/value of a single measurable unit, then multiplying by the total number of units.

What is Sales Comparison (market) Approach in project value calculation?

Value a property based on what similar properties recently sold for.

What is Cost Approach in project value calculation?

Value the property based on what it would cost to replace/reproduce the building today, minus depreciation, plus the land value.

Typically for unused/special purpose buildings

T or F: In an Integrated Project Delivery Method, all parties involved decide the profit, losses and risk collectively amongst themselves

True

Who owns the construction document set after construction

The architect

What are Direct Damages?

The actual, immediate cost of fixing the problem caused by the breach/negligence.

E.g. The owner's ski shop has a roof that cannot handle normal local snow loads. Depending on who she thinks is at fault, the owner can sue the architect or the contractor (or both) for the cost of the repair.

What are Consequential Damages?

Financial losses that happen as a consequence of the problem, rather than the cost of fixing the problem itself.

What are Liquidated Damages?

When the compensation is contractually predetermined for consequential damages, often delays

E.g. the amount agreed upon in advance for a breach; $5,000/day for late completion.

The architect does not guarantee anything, but they do ensure:

All of their work and signed consultants work meeting the necessary building and zoning codes

The project stays within budget and on time

The architect and owner disagree whether the buildings failure to meet a necessary code is within the architects Standard of Care obligation, what are the most common ways for dispute resolution:

A dispute is filed that moves to mediation; if one party doesn't accept the mediator's judgement, it moves to binding arbitration

A dispute is filed and moves to mediation; one party doesn't accept mediator's judgement it moves to binding litigation in court

Lawyers and insurance representatives from each side come to an equitable agreement on their own

T or F: Construction Administration are billable hours

True

The owner is entitled to: and is responsible for:

An on-time, on-budget project

and are responsible for the site as-is, including permitting and zoning approvals, and assume most of the rest of the risk.

Contractors guarantee to build exactly what is in the contract, and build it to a high standard and are also responsible for:

The means and methods of construction, worksite safety, and shop drawings. Changes and questions have a process through RFI’s, Change Orders, Design Directives

What is a Negotiated Select Team project delivery method

When the contractor is selected early in the design process

What are the pros and cons of a Negotiated Select Team project delivery method

Pros: Saves time by avoiding a typical bidding phase and improves collaboration between architect and builder, reduceing costly design errors or change orders later.

Cons: Eliminates open public bidding competition and relies heavily on upfront trust and informality.

T or F: The owner can terminate the owner-architect agreement "for the owner's convenience"

True, but they will need to pay architect and their subcontractors a termination fee

T or F: If an owner pauses or “terminates” a project for whatever reason during any early design or construction documentation phase (below 51%) they are obligated to re-sign with the initial architect if the project where to resume

False, if a contract is terminated for any reason the original architect is not entitled to continuing the work

T or F: Similar to the owner, the architect may terminate their contract for convienience

False

T or F: The architect should never give away anything for free

True, they should charge for supplemental and additional services

T or F: In a Construction Manager as Agent agreement, the CM acts on owners behalf for all matters regarding design and construction contracts

True, this is beneficial for inexperienced owners

T or F: A limited partner allows an ownership interest with limited control/authority compared to a general partner.

True

T or F: A general partnership is a traditional partnership where all partners can manage and bind the firm.

True

What is a Joint Venture:

A temporary entity that two or more firms form to pursue specific projects and share risk and profit

What is the duty of an Owner's Rep?

Be a consultant contracted by the owner (client) in a project delivery context, not as part of a firm's business structure.

What are some strategies most associated with an architecture firm quality management (QM)?

ISO 9001

Tracking RFIs

Utilizing check sheets

T or F: In a CM-Agent agreement, the CM is the main point of contact between the architect, contractor and owner

True

T or F: In a CM-Risk agreement, the CM has a direct line of contact between the architect and owner

False, Owner is main point of contact between architect and CM

T or F: In a CM-Advisor agreement, the Owner has a direct line of contact between the architect, contractor and CM

True

Per AIA B101, the architect is bound to responsibilities of:

Considering environmentally responsible design

Meeting the standard of care for the profession

Building falls under necessary building, zoning and accessibility requirements

Avoid “Always, Error-Free, Never, Guarantee” verbiage

If a consultant that is contracted directly to the architect specifies inadequate equipment to be installed for a project that leads to damages in the building, who does their engineer pay to remedy the error?

The consultants insurance will pay the Architect as a reimbursement . The owner will make a claim against the architect and the architect will pay

Which project type are deemed the “Highest Risk” with highest rate of litigation?

Residential/Condos

T or F: If the architect is terminated for cause, they must forfeit the construction documents ownership to the project owner

True

T or F: The project owner owns the construction documents outright

False. The Architect owns the drawings and licenses them to other parties for construction purposes.

After construction, the architect retains ownership of the drawings as intellectual property and has the right to sell them for re-use.

If an architect is to give their drawings for a project to another architect for whatever reason, per request of the owner, the original architect should _____ themselves?

Indemnify or Hold Harmless, to release liability since they no longer have control over their work

T or F: The owner is responsible for everything regarding pre-existing site condition and project programming

True; Geotechnical, Site Survey, Traffic Consultant, Permitting, Hazardous Materials, Zoning Approvals, sometimes interior designers

T or F: The architect maintains responsibility for everything construction-related

False, the contractor does; Excavation Subcontractor, Concrete Subcontractor, Electrical Subcontractor

T or F: The architect maintains responsibility for most other professional consultants and all the subconsultants who work on the design of the work

True: Sustainability Consultant, Wayfinding Consultant, Landscape Architect

What poses the most risk for the architect if it is included in their contract and why?

Any guarantee or warranty. Warranties typically are not covered by liability insurances

If an architect, while walking the site, sees an improper assembly/installation or incorrect location for a fixture or built-in equipment, they should notify who via

The contractor via writing

The only guarantee an architect should agree to abide by is

the Standard of Care

Typical deliverables for: Schematic Design

Digital/physical mockups, conceptual plans, elevations, sections, diagrams, massing models, renderings and multiple design options

Typical deliverables for: Design Development

Developed plans/sections/elevations, material selections, building-system coordination, updated cost estimate

Typical deliverables for: Construction Documents

Detailed drawings, dimensions, details, schedules, specifications, coordinated BIM/CAD model

Typical deliverables for: Bidding & Negotiation

Bid documents, addenda, contractor bids, bid evaluation/recommendation

Typical deliverables for: Construction Administration

Submittals, RFIs, pay applications, site observations, change orders, punch list, closeout

What phrases in an owner’s contract TO an architect may void the architects insurance coverage?

“As required” “As necessary” “Hold Harmless” “indemnification”

What is a submittal

A formal package of information, documents, or samples provided by contractors to the architect and engineer for review and approval before materials are purchased, fabricated, or installed.

The primary goal is to verify that the contractor's proposed materials and methods match the design intent and contract specifications

Why should “As required/As necessary” verbiage be avoided in architects agreements?

they could potentially provide a guarantee in the agreement

What does “Hold Harmless” mean

one party agrees that the other party won't be held liable/responsible for certain claims or losses.

What does “Indemnification” mean

one party agrees to reimburse/protect the other party from certain losses, claims, or damages.

T or F: Residential projects are the most subject to litigation?

True

T or F: In an agreement, an architect should avoid any omissions and guarantees generally

True

What is an addendum

Revisions to the construction documents made by the architect after the project has been released for bidding but BEFORE a contractor has been selected. Addendums allow for more accurate pricing.

What is an allowance

An allowance is a placeholder amount in a construction contract for work or materials whose exact cost isn't known yet.

Changes to construction drawings AFTER a contractor has signed on is called a

Change order

What is a construction change directive

A formal change to the work “on the fly” directed by the owner/architect when immediate action is needed and the cost or schedule adjustment has not yet been agreed upon.

General liabilities of an owner for a Design Bid Build project

Everything outside of the project contract
Latent info, change orders, site conditions before construction

General responsibilities of an architect for a Design Bid Build project

Instruments of service, coordination, maintaining project schedule & designing the project within budget