SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

METHODS OF COMPENSATION

PERCENTAGE‐BASED FEE
1.  PERCENTAGE BASED ON PROJECT CONSTRUCTION COST
   Most common worldwide.
   The amount of the percentage is related to the size and type of the project
   PROFESSIONAL FEE = PROJECT CONSTRUCTION COST x PERCENTAGE
   3 Methods to Determine the Project Construction Cost
o  Probable Project Construction Cost (PPCC) – using price parameters; established on the
date of the signing of the Service Agreement.
o  Awarded Project Construction Cost (APCC) – using the bid of the winning contractor.
o  Final Project Construction Cost (FPCC) – based on the Cost Records that will be
submitted to the architect upon the completion of the project.
   DAEDS – Detailed Architectural and Engineering Design Services
 – includes architectural & basic engineering
e ngineering services
   DADS – Detailed Architectural Design Services.
 – Architectural design services only; PF = 60% of DAEDS 

2.  UNIT COST METHOD

   Variation of the percentage based on project construction cost.
   GFA & Non‐GFA (PF = 50% of GFA) are of different cost

3.  VALUE‐BASED PRICING/PERCENTAGE OF GROSS RENTALS

   Based on the outcome of revenue, cost and profitability result of a project engagement or based
on a measurable profit on specific revenues by the client.
   For Building Administrative and Management Services

LUMP SUM OR FIXED FEE

   May be used when the scope of services required can be clearly and fully defined at the outset
of the project.
   2 Methods to determine the Lump‐Sum Compensation

   As appropriate percentage of the project probable construction cost

o
o Direct development if a fixed amount of compensation by estimating the individual
elements of the cost outlines, plus a reasonable margin of profit
   There are project parameters beyond the control of the Architect, it is recommended to include
in the Service Agreement a clearly stated time limit for the performance of the services &
provisions for additional compensation for extra time used in changes ordered by the owner.

TIME BASIS
   Charged on an agreed‐to hourly (man‐hour) or daily (per diem) or per month rate.
   Useful when the services are difficult to determine in advance or they are interim in nature and
often short in duration.
   This method is used on the following:
o  Services which are not defined

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

o  Pre‐design services
o  Partial services
o  Additional services
o  Services as an expert witness
o  Architectural Consultancy Services

  Hourly billing can utilize fixed rates (such as Php 500 per hour) or a multiplier
  2 Types of Multiplier
o  Direct Salary Expenses
o  Direct Personnel Expenses – most common

1.  MULTIPLE OF DIRECT PERSONNEL EXPENSES

  Applicable only to non‐creative work.
  Multiplier ranges from 1.5 to 2.5
  Direct Cost = An + Cn + Tn
  Fee = Direct Cost x M (Multiplier)
  Total Cost of Service = Fee + R (Reimbursable)
  Reimbursable – transportation; housing and living allowances for consultant & staff assigned to
places over 100km from their office; cost of extra production contract documents

2.  PROFESSIONAL FEE PLUS EXPENSES

  Frequently used where there is continuing relationship on a series of projects.
  Fixed rate/lump sum + reimbursement

3.  PER DIEM, HONORARIUM PLUS REIMBURSABLE EXPENSES

  Work that requires the personal time
o  Attending project related meetings
o  Conducting ocular site inspection on possible project site
o  Meeting with others regarding prospective investments or ventures, etc

4.  SALARY COST TIMES A MULTIPLIER, PLUS DIRECT COST OR REIMBURSABLE EXPENSES
  Direct Salary Expenses x Multiplier (3) + Reimbursable

  Suited
work.
for projects for which costs are difficult to predetermine or in cases it require additional

5.  PER DIEM OR HOURLY BASIS

  Well suited for consultation services, testimony in court or similar work
  Out‐of‐the pocket expenses shall be reimbursed in the client.

6.  RETAINER
  When the services of the PCA is required over interval period of time.
  Common practice of clients who wished to be assured of always having available the services of
an architect.
  Not required on a full‐time basis.

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

RECOMMENDED PROFESSIONAL FEE (RPF)

CLASSIFICATION PROJECT CONSTRUCTION COST RPF FOR DAEDS

(PCC)
GROUP 1 < Php 50M 5%
o  
Simplest
characterutilization and Php 50M to Php 100M Php 2,500,000
+ 4% of excess of Php 50M
o  Industrials, parking bldg., Php 100M to Php 200M Php 4,500,000
public markets + 3% of excess of Php 100M
Php 200M to Php 500M Php 7,500,000
+ 2% of excess of Php 200M
Php 500M to Php 1B Php 13,500,00
+ 1% of excess of Php 500M
> Php 1B Php 18.500,00.00
+ 1/2% of excess of Php 1B
PROJECT CONSTRUCTION COST RPF FOR DADS
(PCC)
< Php 50M 3%
Php 50M to Php 100M Php 1,500,000

+ 2.4% of excess of Php 50M

Php 100M to Php 200M Php 2,700,000
+ 1.8% of excess of Php 100M
Php 200M to Php 500M Php 4,500,000
+ 1.2% of excess of Php 200M
Php 500M to Php 1B Php 8,100,000
+ 0.6% of excess of Php 500M
> Php 1B Php 11.100,00.00
+ 0.6% of excess of Php 1B
PROJECT CONSTRUCTION COST RPF FOR DAEDS
(PCC)
GROUP 2 < Php 50M 6%
o  Moderate complexity of Php 50M to Php 100M Php 3,000,000
plan/design + 5% of excess of Php 50M
o 
o 
Galleries
Commercial Bldg. Php 100M to Php 200M Php
+ 4%5,500,000
of excess of Php 100M
o  Condominium bldg. Php 200M to Php 500M Php 9,500,000
o  Religious Bldgs. + 3% of excess of Php 200M
o  Civic Centers Php 500M to Php 1B Php 18,500,00
o  Parks + 2% of excess of Php 500M
o  Schools > Php 1B Php 28.500,00.00
o  Shopping center + 1% of excess of Php 1B
o  Motels PROJECT CONSTRUCTION COST RPF FOR DADS
(PCC)
< Php 50M 3.6%
Php 50M to Php 100M Php 1,800,000
+ 3.0% of excess of Php 50M
Php 100M to Php 200M Php 3,300,000

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

+ 2.4% of excess of Php 100M

Php 200M to Php 500M Php 5,700,000
+ 1.8% of excess of Php 200M
Php 500M to Php 1B Php 11,100,000
+ 1.2% of excess of Php 500M

> Php 1B Php 17.100,00.00

+ 0.6% of excess of Php 1B
PROJECT CONSTRUCTION COST RPF FOR DAEDS
(PCC)
GROUP 3 < Php 50M 7%
o  Buildings of exceptional Php 50M to Php 100M Php 3,500,000
character & complexity of + 6% of excess of Php 50M
design Php 100M to Php 200M Php 6,500,000
o  Airports + 5% of excess of Php 100M
o  Auditoriums Php 200M to Php 500M Php 11,500,000
o  Theater + 4% of excess of Php 200M
o  Storage facilities Php 500M to Php 1B Php 23,500,00
o  Hospitals + 3% of excess of Php 500M
o  Hotels > Php 1B Php 38.500,00.00
o  Laboratory & research bldg. + 2% of excess of Php 1B
o  Transportation facilities PROJECT CONSTRUCTION COST RPF FOR DADS
o  Telecom bldg. (PCC)
< Php 50M 4.2%
Php 50M to Php 100M Php 2,100,000
+ 3.6% of excess of Php 50M
Php 100M to Php 200M Php 3,900,000
+ 3.0% of excess of Php 100M
Php 200M to Php 500M Php 6,900,000
+ 2.4% of excess of Php 200M
Php 500M to Php 1B Php 14,100,000
+ 1.8% of excess of Php 500M
> Php 1B Php 23.100,00.00
+ 1.2% of excess of Php 1B
GROUP 4 RPF FOR DAEDS  10% of PCC
o  Residential RPF FOR DADS  6% of PCC
GROUP 5 RPF FOR DAEDS 12% of PCC
o  Monumental bldgs
o  Expo bldg. RPF FOR DADS  7.5% of PCC
o  Mausoleums, monuments
o  Museums
GROUP 6 1st building 100% of RPF for type of bldg
o  Re‐used for repetitive 2nd building 50% of RPF for type of bldg
construction without 3rd building 40% of RPF for type of bldg
amending the drawings & 4th building 30% of RPF for type of bldg.
specifications
GROUP 7 No. of units DAEDS DADS
o  Housing projects 1 unit 10% of PCC 6% of PCC

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

2‐10 RPF of 1 unit + 50% RPF of 1 unit + 30%

RPF per additional RPF per additional
unit unit
11‐30 RPF of 10 units + 40% RPF of 10 unit + 24%
RPF per additional RPF per additional
unit unit
31‐50 RPF of 30 units + 25% RPF of 30 unit + 15%
RPF per additional RPF per additional
unit unit
51 + RPF of 50 units + 15% RPF of 50 unit + 9%
RPF per additional RPF per additional
unit unit
GROUP 8 RPF 15% of PCC
o  Architectural Interior
o  Development
Planning/Design
GROUP 9 Should be increased by 50% Total of 150% of the RPF
o  Alteration
o  Renovation
o  Expansion/additions to
existing bldgs
GROUP 10 Consultation Minimum of Php 1000 per hour
o  Gives professional opinion Expert witness in the court Minimum of Php 5000 per
appearance
Cost of transportation and
accommodation is excluded
Over 100km from their office Additional 60% of RPF

MANNER OF PAYMENT
Work Phase Breakdown of PF Cumulative Payments
Upon signing of Agreement as the 5% 5%
mobilization component
Upon completion of the Schematic Design 15% 20%

Upon completion
Upon completion of
of the
the Contract
Design Development
Document 20%
50% 40%
90%
Phase
Within 15 days after the awards of the 90%
winning Contractor
Upon completion of the work 10% 100%

Note:
When the construction is suspended over 6 months, the remaining fee of the Architect shall be doubled

CONSTRUCTION PHASE
   5% fee for the Architect’s liability on the Civil Code
   5% fee for the Periodic Construction Supervision (PCS)

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

FEE ADJUSTMENT FACTORS

1.  PROJECT DOCUMENTATION
  Many clients require unique forms of documentation and presentation to adjust on their own
standard format thus it is time consuming and expensive.

2.  CONTRACT DOCUMENT SUBMITTAL

  In today’s fast‐paced business world, everything must be done in the shortest period of time
possible to accommodate such building’s purpose or start making the revenue thus requiring
the architect to hire more staff, do overtime to finish the work faster.

3.  CONSTRUCTION TECHNOLOGIES

  Technological innovation in the new face of building design. Many clients want to incorporate
these innovations with their project. There are risks to consider before adapting to these
technologies. Additional research, tests, certifications or even a special consultant be required
to guarantee the functionality and safety of the technology before application in the peoject.

4.  THIRD PARTY CERTIFICATION



  This involve certification and documentation costs for third party certification such as LEED,
GREEEN or BERDE.

5.  CONSTRUCTION BID MODE

  More complex projects on builders with limited experience and newer methods of project
delivery beyond traditional will require more time, more services and consequently more
additional fees.

6.  CONSTRUCTION SCHEDULE

  If the construction is extended, the architect’s services is also extended and there must be
additional fees.

7.  CONSTRUCTION ADMINISTRATION

 
Additional meetings, coordination, site visits, etc.
  Minimum number of meetings and site visits for the architect.
  Additional clarification and site visits to assist the client’s selection of specific contractors, sub‐
trades, suppliers.

SPECIALIZED ARCHITECTURAL SERVICES

  Manner of providing services
o  Dual Capacity – Architect‐of‐Record (AoR) & Consulting Architect (CA)
o  Consulting Architect (CA)
  Methods of Compensation
o  Percentage of Cost of Work
o  Unit Cost Method based on Cost of Work
o  Multiple Direct Personnel Expenses

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

o  Professional Fee plus Expenses

o  Lump Sum or Fixed Fee
o  Retainer
o  Per Diem, Honorarium plus Reimbursable Expenses
o  Mixed Method of Compensation

  The fee of the Specialist Consultant (SC) is on the account of the Owner.
  The fee of the AoR for coordinating with the SC will be 5% of the SC’s fee.


1.  ARCHITECTURAL INTERIOR, ACOUSTIC DESIGN, ARCHITECTURAL LIGHTING LAYOUT & DESIGN, and
SITE DEVELOPMENT PLANNING
  RPF – 10% to 15% of the cost of work  


SCHEDULE OF FEE
WORK PHASE BREAKDOWN OF PF
Upon submission of the preliminary design 30%
Upon submission of the final design 50%
Upon completion of the project 50%

 
2. PHYSICAL PLANNING
  RPF – Php 50,000.00 per hectare for the first 5 hectares.  


  Additional 20% to 30% in the PF if the land is rugged with steep terrain.


  Professional fee does not include engineering and other allied services.


  Detailed building design does not include in the Physical Planning Services.


AREA RECOMMENDED PROFESSIONAL AMOUNT

FEE (RPF)
< 5 hectares Php 5.00 per sqm
5 hectares to 10 hectares Php 4.00 per sqm
10 hectares to 50 hectares Php 3.00 per sqm
> 50 hectares Php 1.50 per sqm
Php 250,000
Php 250,000
+ Php 40,000 per hectare in
excess of 5 hectares
Php 450,000
+ Php 30,000 per hectare in
excess of 10 hectares
Php 1,650,000
+ Php 15,000 per hectare in
excess of 50 hectare

SCHEDULE OF FEE
WORK PHASE BREAKDOWN OF PF
Framework Development Plan (FRDP) 30%
Conceptual Master Development Plan (CMDP) 30%
Preliminary Master Development Plan (PMDP) 20%
Detailed Master Development Plan (DMDP) 20%

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

FULL‐TIME CONSTRUCTION SUPERVISION

  Manner of providing services
o  Dual Capacity – Architect‐of‐Record (AoR) & Consulting Architect (CA)
o  Consulting Architect
  Method of compensation
o
  Percentage of Project Construction Cost
o  Multiple of Direct Personnel Expenses
o  Professional Fee plus Expenses
o  Lump Sum or Fixed Fee
o  Per Diem, Honorarium plus Reimbursable Expenses
o  Mixed Method of Compensation
  RPF – 1% to 1.5% of the Project Construction Cost (PCC)  
  The fee of the AoR for coordinating with the SC will be 5% of the SC’s fee. 

CONSTRUCTION MANAGEMENT SERVICES

  Manner of providing services
o  Individual or principal of the firm or State‐regulated professional, preferably an Architect
o  Architects who are Contractors or in‐charge of construction

  Not part of the regular design services, shall be separately compensated
  Methods of compensation
o  Percentage of Project Construction Cost
o  Multiple of Direct Personnel Expenses
o  Professional Fee plus Expenses
o  Lump Sum or Fixed Fee
o  Per Diem, Honorarium plus Reimbursable Expenses
o  Mixed Method of Compensation
  Types of contract for Construction Management
o  Firm Fixed Price – the owner will pay the Construction Manager (CM) a fixed fee regardless
of the variations between the estimate and the bids or by the change order.
o  Fixed Price Incentive – the owner will pay the Construction Manager (CM) a fixed fee which
is adjusted according to the difference between the final allowable costs and the target

costs.
o  Cost plus Incentive Fee (CPIF) or Cost plus Adjusted Fee (CPAF) – cost reimbursement type
contracts with provisions for a fee that is adjusted by shading formulas applied to the
difference between the final allowable costs and the target costs.
o  Costs plus Fixed Fee – the owner will pay the Construction Manager a fixed fee plus
reimbursement
  RPF – as a Construction Manager (CM) is 1.5% to 3% of the Project Construction Cost (PCC)  

POST‐CONSTRUCTION SERVICES
  Manner of Providing Services
o  Dual Capacity – Architect‐of‐Record (AoR) & Consulting Architect (CA)
o  Consulting Architect
  Method of compensation

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

o  Value‐pricing or Percentage of Gross Rentals, Maintenance, and Security Fees

o  Monthly Salary/Fee
o  Multiple Direct Personnel Expenses
o  Retainer plus Reimbursable Expenses
o  Professional Fee plus Expenses

  RPF – 4% to 6% of gross rental based on value‐pricing
COMPREHENSIVE ARCHITECTURAL SERVICES
  Manner of providing services
o  Architect as Project Manager/Project Development Manager/overall coordinator
o  The architect may form a professional team (Architect, Engineers, Market Analyst,
Accountants, General Contractors, Real Estate Consultants, Sociologists, Planner, Bankers,
Lawyers)
o  Project Manager hired by the owner; the PM needs to hire a Construction Manager (CM)
either to be paid by the PM or the Owner by salary or by percentage basis of construction
cost.
  Method of compensation
o  Percentage of Project Construction Cost
o
Multiple Direct Personnel Expenses
o   Professional Fee plus Expenses
o  Lump Sum or Fixed Fee
  RPF – for Project Manager (PM) will be 2% to 5% of the Project Construction Cost (PCC)  
  If the AoR performs as the PM, the architect must be separately compensated.

DESIGN‐BUILD SERVICES
  2 Types of Design‐Build Services
o  Design‐Build Services by Administration
o  Design‐Build Services on a Guaranteed Maximum Cost
  Manner of providing services
o  The Architect is part of the entity constructing his/her design
o  The Architect works in tandem or authorized an entity to construct his/her design
o 
The Architect is a State‐licensed Contractor implementing his/her own design
  Method of Compensation
o  Percentage of Project Construction Cost
o  Multiple Direct Personnel Expenses
o  Professional Fee plus Expenses
o  Lump Sum or Fixed Fee
o  Per Diem, Honorarium plus Reimbursable Expenses
o  Built‐in in the Guaranteed Maximum Cost
  RPF for Design‐Build Services by Administration – 7% of PCC
  RPF for Design‐Build Services on a Guaranteed Maximum Cost – 10% of PCC
  Manner of Payment
o  The client directly pays the cost of labor and materials
o  A revolving fund is given to the architect beforehand and is subject of the Owner’s audit

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

o   The Owner shall pay for the cost of all the permits, licenses, etc.

ARCHITECTURAL DESIGN COMPETITION

  Competition Secretariat
o  Body formed by the Owner and approved by the Professional Adviser

  Assist the Professional Adviser and the Jury in the administrative conduct of the ADC
o

o   This include the following: Secretary/Receptionist, Encoder & Support Staff/OJTs

  Professional Adviser
o  An Architect nominated by the Owner and approved by the IAPOA
o  Organize the ADC on behalf of the Owner
o  Supervision of the conduct of the ADC and the preparation of the Conditions
o  Assist the Jury and will be present on deliberation but will have no vote in the selection
process
  Technical Adviser
o  Consulted by the Jurors during the conduct of the ADC for necessary relevant information
  Jury
o  Appointed by the Owner and approved by the IAPOA
o  Assess the entries of the competition

  Majority per
should be Architects
o

  Honorarium moth shall be paid to respective professionals in the ADC committee

(Competition Secretariat, Professional Adviser, Technical Adviser & Jury) during the period of
time they covered on the ADC
  Transportation and accommodation shall be separately paid by the Owner
  Prizes, Honoraria and Mentions
o  In Ideas Competition, it is possible to remunerate the 1st prize only
o  The owner shall pay the prizes within 1 month of the official announcement of the ADC
results.
o  Each participant in a limited ADC by invitation shall receive an honorarium in addition to the
prizes awarded
o  In two‐stage competitions, honorarium shall be paid to each of the competitors selected to
participate in the 2nd stage.
o  
ADC plans/designs may not be used or altered in any way possible unless agreed upon with
the author

PROFESSIONAL CONSULTING SERVICES

  Professional Architectural Consulting Services (PACS)
o  Rendered by a Professional Consulting Architect (PAC) or a Registered Consulting Firm (RAF)
o  Render independent advice, extension of technical assistance and services
  These services can be provided by:
o  Filipino Professional Consulting Architect (FPCA)
□  Who possesses the qualifications of a Filipino Consulting Professional (FPC)
o  Foreign Consultant (FC) or Foreign Architect (FA)
□  Satisfies the definition of PCA

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SANDER PAUL S. BAUTISTA JANUARY 2020 ALE REVIEWER

ADAMSON UNIVERSITY

□  Has acquired Temporary/Special Permit (TSP) to engage in the practice of architecture

on Philippine soil.
□  Allowed by Department of Labor and Employment (DOLE), Bureau of Immigration and
Deportation (BID) and other regulatory bodies.
□  Registered and Licensed Professional Architect in his own country of origin.

  Only FPCAs are allowed to practice architecture in the Philippines
  For FC/FA to practice in the Philippines, they need 2 RLAs as Filipino Counterparts

GENERAL CONDITIONS
  The Architect is entitled to interest in the prevailing rate set by the Bangko Sentral ng Pilipinas
(BSP) if the client failed to pay the fees and reimbursements to the Architect within 30 days of
receipt of billing.
  Any taxes imposed by the government to the Architect (except the Income Tax) shall be paid by
the Owner.

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