METHOD OF COMPENSATION

What is the main purpose of the Methods of Compensation?

To ensure that an architect’s professional fee is fair, ethical, and proportional to the scope, complexity, and value of services rendered.

What law and document govern the Methods of Compensation for architects in the Philippines?

Republic Act 9266 and the Architect’s Guidelines for Standards of Professional Practice (SPP).

What are the three main categories of architectural compensation?

Percentage-based fee, Lump Sum (Fixed Fee), and Time-based fee.

Which method of compensation is the most commonly used worldwide?

Percentage-based fee.

How is a percentage-based fee computed?

By multiplying the agreed percentage by the Project Construction Cost (PCC).

Why is percentage-based compensation considered fair?

Because the architect’s fee adjusts proportionally with increases or decreases in project cost and responsibility.

What does PCC stand for?

Project Construction Cost.

When is the Lump Sum or Fixed Fee method appropriate?

When the scope of services and project requirements are clearly defined at the outset.

What is the major risk of using a lump sum fee?

Changes in scope may require renegotiation or additional compensation.

When is time-based compensation most appropriate?

When services are undefined, advisory, short-term, or consultative.

Give examples of time-based compensation.

Hourly rate, per diem, retainer fee.

Why is time-based compensation not suitable for creative design?

Because creative value cannot be accurately measured by time spent.

What is a retainer fee?

A regular payment to ensure the availability of an architect’s services over a period of time.

Can an architect use more than one compensation method in a single project?

Yes, mixed methods of compensation are allowed and encouraged when appropriate.

What factors influence an architect’s professional fee?

Project complexity, scope of services, time requirements, risks, coordination needs, and responsibility.

True or False

A lump sum fee should remain unchanged even if the project scope increases.

False

True or False

Architectural fees are based only on the number of drawings produced.

False

True or False
Creative architectural work can be accurately measured using hourly

False

True or False
Percentage-based compensation reflects the architect’s responsibility for the project.

True

True or False
Architects may legally combine different compensation methods in one project.

True

METHODS OF COMPENSATION

PERCENTAGE BASED FEE

▪ PPPC : Probable Project Construction Cost

▪ APCC : Awarded Project Construction Cost

▪ FPCC : Final Project Construction Cost

GROUP 4: Residences

GROUP5: Monumental buildings

GROUP6: When the plan/design and related Contract Documents are re-used for the repetitive

GROUP7: When the Architect is engaged to undertake a Housing Project involving the construction of several residential

GROUP8

RPF : 15% of the PCC

GROUP9

the compensation of services should be

increased to fifty percent (50%) or a total of one hundred fifty

percent (150%) of the RPF.

GROUP10

RPF shall not be less than One Thousand Pesos (Pl,000.00) per

hour

MANNER OF PAYMENT FOR 202

METHODS OF COMPENSATION FOR 203

Recommended Professional Fee (RPF) is 10% to 15% of the

cost of work

Physical Planning for building sites such as lndustrial Estates,

Commercial, Religious, lnstitutional and Government

METHODS OF COMPENSATION FOR 204

1% to 1.5% of the Project Construction Cost (PCC).

METHODS OF COMPENSATION FOR SPP 205

The Recommended Professional Fee (RPF)

based on value-pricing is from 4% to 6% of

gross rental.

METHODS OF COMPENSATION FOR SPP 206

Project Manager is 2% to 5% of Project Construction Cost (PCC).

METHODS OF COMPENSATION FOR SPP 207

Administration shall be 7% of the Project Construction Cost (PCC),