SPP DOCUMENT 201 – PRE - future trends to forecast how it will perform over

DESIGN time.
- This requires primary data gathering and
SERVICES analysis.

The basic services provided by the Architect have

remained relatively unchanged over the years.
However, the Architect must expand his services
in response to the increasing demands of his/her
clients, the evolution of new standards of Site Selection and
regulated professional practice, the advancement Analysis
of technology and the enactment of new laws. This entails the formulation of site criteria,
assistance to the Client in site evaluation as well
SCOPE OF PRE-DESIGN as analysis to determine the most appropriate
SERVICES site/s for a proposed project or building program.

Pre - Design Site Utilization and Land -

Services Use
Cover a broad line of architectural services - Studies the detailed analysis of the site involves
ranging from initial problem identification to the identification of a site’s development
activities that would allow the Architect to potentials through the proper utilization of land.
initially conceptualize an array of architectural - The analysis covers the context of the site as
and allied solutions. well as that of its surrounding environment and
the development controls that apply to the site and
SCOPE OF PRE-DESIGN its environs.
SERVICES
Architectural Programming
Consultation - This analytical problem-seeking process will
When a Client calls upon the Architect to give lead to the statement and identification of both
oral or written advice and direction, to attend horizontal and vertical requirements in offering a
conferences, to make evaluations and appraisals solution.
regarding a contemplated project and similar - It incorporates a space program with
activities, the Architect renders valuable inputs characterizations of the envisioned spaces such as
whether or not the Client pursues the project. ambiance, cost range, etc.

Pre - Feasibility Architectural Research

Studies Entails the conduct of primary and secondary
- These preliminary studies involve the researches and assembled facts used as basis for
procurement, analysis and use of secondary conclusion.
information gathered for the project to aid the
Client in early decision-making. Space
- They represent the Architect’s initial assessment Planning
of a project’s soundness, allowing the Client to - The Architect determines the adequate size and
promptly explore available/ readily identifiable appropriate configuration and assemblage for a
directions / options. proposed project in consideration of the use,
- Researched / processed /validated secondary allocation and interface of spaces for given
data are generally used for such studies e.g. activities.
electronic, print, etc. - Done mainly through primary data gathering
such as interviews, consultations, interfaces, focus
Feasibility group discussions (FGDs), space planning
Studies surveys, space audits, etc. and subsequent
- Detailed analysis of the project based on pre- analyses.
feasibility studies will determine the viability of a - Spatial layouts with stacking concepts,
proposed development. particularly for multi-story structures.
The studies will set the project against present and
 Space Management Studies - Manner of Payment
- An analysis of the space requirements of the - Owner’s Responsibilities
project based on organizational structure and - Other Conditions of Services
functional set-up pinpoints linkages and
interaction of spaces. The Architect can render services in any of the
- The formulation of the space program will serve following ways:
as the basis for the development of the
architectural plan / design. - As an individual Architect he must have
special training and be knowledgeable in
different fields to supplement his skills.
- Architect’s Own Staff. It is possible for
Architects (as natural persons) working in a
single firm to specialize in a variety of
Value ways. Many Architects and firms (juridical
Management persons) specialize without losing the
- This technique is applied in the cost generalist approach of the Architect or firm.
management process to minimize the negative - By Association, Consultation or
effect of simplified operations associated with Networking another common practice is
many cost-reduction programs. consultation between an Architect and a
firm of other disciplines, under the extended
- The goal of value management is to achieve an terms of the Owner-Architect Agreement.
unimpaired program at minimum cost.
- A plan, design or system that has been METHOD OF COMPENSATION
successfully value-managed will still satisfy the The Architect’s compensation is based on the
same performance criteria as the costlier Architect’s / architectural firm’s talents, skill,
alternatives. experience, imagination, and on the type and level
of professional services provided.
Design Brief Preparation
Under design brief preparation, the Architect Compensation for Pre-Design Services may be
states the project terms of reference (ToR) based on one or more of the
including the concept, objectives and other following:
necessary requirements to bid out architectural
services (whether public or private). Multiple of Direct Personnel
Expenses
Promotional This cost-based method of compensation is
Services applicable only to non-creative work such as
- Projects may require promotional activities in accounting, secretarial, research, data gathering,
order to develop and generate financial support preparation of reports and the like.
and acceptance from governing agencies or from
the general public. This method of compensation is based on
- Architect can act as the agent of the Owner by technical hours spent and does not account for
producing and coordinating the additional creative work since the value of creative design
activities necessary to complete the services. In all cannot be measured by the length of time the
such activities, the Architect must maintain his designer has spent on his work.
professional status as the representative of the
Owner. The computation is made by adding all costs of
technical services (man hours x rate) and then
MANNER OF PROVIDING multiplying it by a multiplier to cover overhead
SERVICES and profit.
After the initial meeting, conversation,
correspondence with the Client, the Architect The multiplier ranges from 1.5 to 2.5 depending
must submit his proposal for pre-design services, on the office set-up, overhead and experience of
stating the following: the Architect and the complexity of the Project.

- Scope of Work
Other items such as cost of transportation, living
and housing allowances of foreign consultants, An agreement on the general scope of the work is
out-of-town living and housing allowances of the necessary in order to set an equitable fee.
local consultants and the like, are all to be charged
to the Client. Lump Sum or Fixed
Fee
At the start of the commission, the Architect shall This method may be applied to government
make known to the Client the rate of professionals projects since they entail more paper work and
and personnel who will be assigned to the Project time-consuming efforts.
and the multiplier that has to be applied before
agreeing on this method of compensation. Per Diem,
Honorarium Plus Reimbursable
FORMULA Expenses
Assume: In some cases, a client may request an Architect to
do work which will require his personal time such
A = Architect’s rate / hour as:
C = Consultant’s rate / hour • Attending project-related meetings,
T = Rate per hour of Technical Staff, Researchers conferences or trips.
and others involved in the Project • Conducting ocular inspection of possible
project sites.
AN, CN, TN = No. of hours spent by Architect, • Conferring with others regarding
Consultants and Technical Staff prospective investments or ventures and
the like.
M = Multiplier to account for overhead and
reasonable profit. The value may range from 1.5 For these particular activities, the Architect as
to 2.5 depending on the set-up of the Architect’s agent of the Owner may be paid on a per diem and
office and the complexity of the Project. honorarium basis plus out-of-pocket expenses
such as but not limited to travel, accommodations
R = Reimbursable expenses such as and subsistence.
transportation, housing and living allowance of
Consultant, transportation, per diem, housing and
living allowance of local consultants and technical MIXED METHODS OF
staff if assigned to places over 100 km. from the COMPENSATION
area of operation of the Architect. The SPP provides for more than one method of
compensation on a project. Each project should be
Cost of printing of extra set of drawings, reports, examined to determine the most appropriate and
maps, contract documents, etc. Over the five (5) equitable method of compensation.
copies submitted to the Client, overseas and long
distance calls, technical and laboratory tests,
licenses, fees, taxes and similar cost items needed
by the Project.

Direct cost = AN + CN + TN
Fee = Direct Cost x M

Total Cost of Service charged to Client = Fee + R

Professional Fee Plus Expenses

This method of compensation is frequently used
where there is continuing relationship involving a
series of projects.

It establishes a fixed sum over and above the

reimbursement for the Architect’s technical time
and overhead.
SPP DOCUMENT 203 – ALLIED 1.6.10 Facilities Maintenance Support
1.6.11 Building Testing and
Commissioning
SERVICES 1.6.12 Building Environmental Certification
1.6.13 Forensic Architecture
Time and technology have evolved to a level 1.6.14 Building Appraisal
where specialized architectural services are 1.6.15 Structural Conceptualization
needed to complete, complement or supplement 1.6.16 Preliminary Services
the necessary work for the totality of a project. 1.6.17 Contract Documentation and Review
1.6.18 Post-Design Services (including
Apart from the legal definition/s supplied under Construction Management
R.A. No. 9266, Architecture may also be defined Services)
as the blending of aesthetics, functions, space, 1.6.19 Dispute Avoidance and Resolution
materials and its environment resulting from the 1.6.20 Architectural Research Methods
application of various technologies and skills in 1.6.21 Special Building/Facility Planning
different fields. and Design
1.6.22 Building Components
Specialized Architectural Services 1.6.23 Management of Architectural
Deals with specific expertise for further Practices
enhancement of the architectural interior and
exterior components of a project. The term Consulting Architect (CA) shall refer
only to a RLA who may also be a separately
The Architect’s responsibility to man and Registered and Licensed Professional (RLP) i.e.
society is to make sure that both the building and a natural person under Philippine law and
its physical environment enhance the lives of jurisprudence with a valid certificate of
people by strictly adhering to national and registration and a valid professional identification
international standards with regard to public card (representing the renewable license) for the
health, safety and welfare. lawful practice of one or more State-regulated
profession other than architecture.
The architectural plan and design of the
building properly falls under the Architect’s For this SPP, the term Architect refers to the
Regular Design Services (SPP Document Consulting Architect (CA) who may be the
No. 202). holder of a valid Specialist Certificate that may be
issued by the Board and/or the Commission, upon
Design services needed within and outside the due qualification or accreditation by the IAPoA.
building which fall under Specialized
Architectural Services as listed under the pertinent
provisions of R.A. No. 9266 and its 2004 IRR,
include but are not limited to the following:

1.6.1 Architectural Interiors (AI)

1.6.2 Acoustic Design
1.6.3 Architectural Lighting Layout and
Design
1.6.4 Site Development Planning (SDP)
1.6.5 Site and Physical Planning Services
(including Master Development
Planning, Subdivision Planning
and Urban Design)
1.6.6 Comprehensive Development
Planning
1.6.7 Historic and Cultural Heritage
Conservation and Planning
1.6.8 Security Evaluation and Planning
1.6.9 Building Systems Design
SPP DOCUMENT 203.1 – assembled furniture pieces/ systems,
ARCHITECTURAL INTERIOR (AI) equipment, furnishings, built-ins,
fixtures, signages and graphic devices,
etc.
SERVICES • assists the Client in conducting bids or
negotiations with General Contractors,
Architectural Interiors subcontractors and suppliers of building
materials, furniture, equipment,
Architectural Interiors (AI), specifically fixtures, etc.
mentioned under Secs. 3 (4) (g) and 14 (3) of R.A. • checks and approves samples of
No. 9266, involves the detailed planning and materials and shop drawings of AI
design of the indoor / enclosed areas of any components.
proposed building / structure, including retrofit, • reviews and approves billings of AI
renovation, rehabilitation or expansion work components.
which shall cover all architectural and utility • conducts final inspection and approves
aspects, including the architectural lay-outing of installed AI components and related
all building engineering systems found therein. items.

Depending on the complexity of the Project, the

Architect undertaking professional AI services MANNER OF PROVIDING
must be sufficiently experienced in the planning, SERVICES
design and detailing of AI elements.
The Architect may enter into contract with the
SCOPE OF SERVICES Owner in two possible ways:

In the design of a building, the Architect works on • Working in a dual capacity as

a development concept. Architect-of-record and as Consulting
Architect for AI services.
To realize this, the Architect develops the design
by determining the size and interrelationship of • Working as Consulting Architect for AI
interior spaces, laying out the furniture, movables, services only.
equipment, built-ins and fixtures to support the
required activities, thus making both the exterior METHOD OF COMPENSATION
and interior spaces contribute to the total concept.
For projects involving extensive detailing of AI
The Architect plans and designs the architectural components such as custom floor, wall, ceiling
interiors (AI) of buildings such that they construction and finishes, cabinet design, built-in
contribute to the physical, visual, intellectual and components, equipment and special fittings, the
emotional comforts of the intended end-users. Architect’s Fee shall be a percentage of the cost of
the AI work. This excludes the fee of any
As such a specialist, the Engineering and / or Specialist Consultants (SCs)
Architect: working with the Architect.

• prescribes space plans, stacking Should the Client separately hire the services of
diagrams / sections and computations of Specialist Consultants (SCs), their professional
areas for the different activities and fee shall be for the account of the client.
spaces to be integrated in a building
Project.

• Lays out and prescribes furniture / built-

ins / equipment for the project and
prepares specifications of AI
components including all floor / wall /
ceiling finishes, doors and partition
systems, hardware, modular or ready-
 civil works and the general scope of
softscape and hardscape requirements.

SPP DOCUMENT 203.4 - SITE - conceptualizes the specifications for the

DEVELOPMENT needed civil works and utility lines.
PLANNING - assists the Owner/Client in bidding out the
(SDP) work or negotiating with landscape,
SERVICES waterscape, rock formation contractors,
etc., but mainly when no SC is available.
INTRODUCTION

The space planning, architectural lay-outing and MANNER OF PROVIDING

utilization of spaces within and surrounding a SERVICES
specific building / structure in relation with the
existing natural and/or built environments have to The Architect may enter into contract with the
be a well-coordinated effort so that both the Owner in two possible ways:
building / structure and the host environment shall
act as one. Working in a dual capacity as Architect-of-
record and as Consulting Architect for site
Arising from his concept of the total environment, development planning services.
the Architect is not merely concerned with the
building / structure he creates but with the Working as Consulting Architect for site
grounds and surrounding space as well. He studies development services only.
the existing environment in relation to the
building / structure and consequently lays out the MANNER OF
areas / grounds immediately surrounding the COMPENSATION
building / structure.
The Architect’s Fee for site development
Ordinarily, the landscaping layout of small planning (SDP) services shall depend on the
building projects could be done by the Architect estimated cost of the civil works and landscaping
as part of the site development planning (SDP) works i.e. hardscape and softscape, depending on
effort. the magnitude and complexity of the work
required by the project.
However, if the project is large in scale, the
Architect must hire other State-regulated If the Architect is also certified and licensed as a
professionals (RLPs) as qualified Specialist separate RLP e.g. a Landscape Architect, and is
Consultants (SCs). suitably experienced, the Architect’s fee shall
increase correspondingly, depending on the
SCOPE OF SERVICES magnitude and complexity of the work required
by the project.
The Architect, upon designing a building /
structure, complements this with the design of the Should the Owner/ Client separately engage the
surroundings that will make the space fit for a services of a Landscape Architect, the fee of the
specific mood and for the required activities. He said Specialist Consultant shall be for the account
lays out the open spaces in and around the of the Owner/Client and paid directly to the SC.
structure such that they contribute to the totality of
the project. For this Specialized Service, the payment of the
Architect’s services shall be as stated in the
In order to achieve a well-balanced design of the Architect’s Guidelines.
environment enveloping a specific building /
structure, the Specialist Architect:

- conceptualizes the entire site development

plan (SDP) including the generic scope of
 physical plan. By virtue of the Architect’s training
and experience in coordinating the works of a
multi-disciplinary team, the Architect becomes the
logical Prime Professional responsible for
directing team efforts to deal with the required
physical planning work.

Physical planning is concerned with the general

SPP DOCUMENT 203.5 - SITE AND quality of the settings for people and their
PHYSICAL PLANNING (INCLUDING activities, buildings and other natural and man-
made phenomenon.
MASTER DEVELOPMENT PLANNING, The Architect undertakes the site planning of a
SUBDIVISION PLANNING AND project that requires a composite arrangement of
URBAN DESIGN) several buildings/ structures and their requisite
SERVICES amenities, facilities, services and utilities within a
natural or built setting.
INTRODUCTION
Should other services be required by the project,
Physical planning refers to the orderly such as environmental studies, feasibility studies,
arrangement within a piece of land or property on market analysis, access / movement systems,
which vertical structures such as buildings, impact analysis and others, said services should be
monuments and the like, as well as horizontal performed by duly-qualified professionals with
developments such as rights-of-way (ROWs), the Architect acting as the Lead Professional of
open spaces and activity spaces are to be the physical planning team.
proposed.
Depending on the complexity of the project, the
Planning, as we know it today, started with Architect may hire additional Specialist
physical planning, with Architects performing the Consultants (SCs) whose expert advice may be
lead role. The great cities of the world have taken needed to validate certain features of the physical
shape mainly through the activities of visionary plan. The fee of any additional SC needed in the
Architects who actively engaged in physical project must be paid separately by the
planning. Owner/Client.

The Architect is concerned not merely with a When the Architect is commissioned to do
building / structure but with its immediate physical planning for building sites such as
surroundings as well. In planning for a building, Industrial Estates, Commercial, Religious,
he studies its interrelationship with other Institutional and Government / Civic Centers,
structures, the surrounding environment, and their Sports Complexes, Tourist Centers / Tourism
effect and impact on the neighboring areas. Estates / Resorts, Amusement Parks, Educational
Facilities, Residential and Housing Subdivisions
If the Architect is commissioned to do physical and the like,
plans for specific site, he has to go beyond the
study of human behavior and activities and must The
undertake an in-depth study of the host site’s Architect:
economic systems, its laws and regulations, tax
structure, infrastructure, utilities, and all other - confers with the Owner/ Client on project
components that will have a bearing on the requirements, secures sufficient primary and
project. secondary data to generate reliable
projections and analyses which are to be
SCOPE OF SERVICES used as basis for the preparation of physical
plans/designs.
All ideas and concepts have to be translated into
physical plans before they can be implemented. It - examines laws, ordinances, rules and
is the Specialist Architect who provides a multi- regulations affecting the project i.e. code
dimensional point-of-view to a 2-dimensional
 searches, and considers the best industry Working as Consulting Architect for site and
practices applicable. physical planning services only.

- prepares framework and conceptual master MANNER OF

development plans (FRDPs and CMDPs) COMPENSATION
and report/s from relevant information
gathered by other disciplines. The fee structure for Site and Physical Planning
Services by the Architect shall be as stated in the
- prepares Preliminary up to Detailed Master Architect’s Guidelines.
Development Plans (PMDPs/ DMDPs)
showing the physical layout / distribution of
areas, road network/s, vehicular and
pedestrian movement / access systems, legal
easements, basic utility layouts / corridors,
landscape layouts, lot pad elevations, lot
primacy matrices, deed of restrictions
(DoR), development standards and
guidelines (DSG), lot counts and typology,
land use tabulations, building footprints,
roof-prints, basement level-prints, view
corridors, building cast shadow projections
and/or reflected light / heat projections from
buildings, etc., and presents the same to the
Owner/Client, the Government and at public
consultations as needed.

- prepares the SPPCC for the total physical

development.

- undertakes modifications, revisions and

changes as may be required by the Owner/
Client and the project within the
engagement period.

- prepares the finalized plans, reports and

specifications needed for approval by
Owner/ Client or proper government
agencies concerned.

- prepares the phasing of the construction

with the concurrence of the Owner/Client.

- prepares Project Cost Estimates (PCE)

based on current cost parameters.

MANNER OF PROVIDING
SERVICES

The Architect may enter into contract with the

Owner in two possible ways:

Working in a dual capacity as Architect-of-

record and as Consulting Architect for site
and physical planning services.
 The Consulting Architect is concerned with the
management and use of land as well as the
conservation, preservation and upgrading of the
human environment. Since the Architect,
particularly if a separate RLP i.e. Environmental
Planner (EnP) with suitable training and
experience in physical and land use planning, has
the social commitment and technical experience
as coordinator of several disciplines, he is
qualified to lead the multi-disciplinary team in
offering Comprehensive Development Planning
(CDP) Services.

SCOPE OF SERVICES
If the Architect (an RLA) is separately qualified
and suitably experienced as an Environmental
SPP DOCUMENT 203.6 - Planner, the range of all services offered by the
COMPREHENSIVE DEVELOPMENT Architect from data base gathering, to the
preparation of environmental impact
PLANNING (CDP) assessments/statements (EIA/S), up to the
SERVICES formulation of the Comprehensive Development
Plan (CDP), may include the following
INTRODUCTION components:
Comprehensive Development Planning (CDP) Physical Component - land use and the changes
Services are based on the concept of expanded which occur within the physical environment
physical planning services to include other (within the space where such activities take
activities necessary for the proper handling of the place), represented mainly by the MDP.
numerous components considered in the Economic Component - the nation’s assets and its
formulation, implementation and realization of a management.
Master Development Plan (MDP). Comprehensive Socio-Cultural Component - the people, their
Development Planning (CDP) covers the range of living conditions and the seeking of ways to
all services from primary data gathering through ameliorate it.
the formulation of the MDP and the parallel Transport Component - road and transit
preparation of the environmental impact networks, land-sea-air linkages, the movement of
assessment / statement (EIA/S). people and goods from one place to another.
While the planning team is multi-disciplinary, the Legal and Administrative Component - the
CDP Services may place heavy emphasis on the relationship of adopted development proposals
non-physical / non-engineering components of the and policies to existing laws.
development plan i.e. financial, economic / market Comprehensive Development Planning (CDP)
demand / forecast, administrative-political- calls for the detailed study of physical, social,
institutional-legal, socio-cultural, environmental, economic and administrative components and as
and the like. In contrast, MDP Services puts a such requires the expertise and knowledge of
premium on the physical planning and Specialist Consultants (SCs).
engineering components of the development plan, When the Consulting Architect is commissioned
which are the direct or sequential physical to do a Comprehensive Development Planning
translations of the inputs from the initial stages of effort, he performs the following:
the CDP effort. - identifies existing land use, resources, social
If suitably trained and experienced, the Architect’s behavior and interaction;
ability to synthesize and organize into a whole - undertakes environmental analysis,
(the various information relating to the user’s demographic analysis and feasibility studies;
needs, perception and expectations, site and - examines existing laws, ordinances,
climatic conditions, construction technology, political/ social constraints;
materials, cost and other information) qualifies - prepares the conceptual development plans,
him to take the lead role in an undertaking that policies, implementing strategies to arrive at
cuts across various disciplines.
 the desired comprehensive and/or master normally recommended by the Architect based on
planning solution/s. their performance, and hired by the Owner. They
are answerable to both the Owner and Architect.
MANNER OF PROVIDING
SERVICES SCOPE OF SERVICES
The Architect may enter into contract with the  Quality Control
Owner in two possible ways:  Evaluation of Construction Work
Working in a dual capacity as Architect-of-  Preparation of Daily Inspection Reports
record and as Consulting Architect for  Filing of documents
comprehensive development planning the detailed tasks shall be as specified
services. under the Architect’s Guidelines.
Working as Consulting Architect for
comprehensive development planning
services only. MANNER OF PROVIDING SERVICES
MANNER OF There are two ways by which the Architect may
COMPENSATION enter into contract with the Owner:
Compensation for the foregoing specialized
architectural service shall be through man-months Working in a dual capacity as Architect-of-record
i.e. 22 man-days multiplied by 8 man-hours, and and as Consulting Architect for fulltime
multiplied by a factor to cover other direct and supervision services or as the Construction
indirect costs e.g. overhead, etc. or as prescribed Supervision Group (CSG). As the Architect-of-
by the Architect’s Guidelines. record (Aor) of the project, the Aor is in a better
SPP DOCUMENT 204 - A - FULL TIME position to interpret his drawings and documents
SUPERVISION SERVICES (REPLACING THE and to assure conformity by the Contractor. He
1979 UAP DOC. 204-A) can assign his staff to undertake the fulltime
supervisory work to perform the works as
INTRODUCTION enumerated in the Architect’s Guidelines.
For the past 50 years, four principal members
were involved in the design and building Working as Consulting Architect for fulltime
construction process: supervision services only or as the CSG.
- The Owner who orders for the
implementation of a project; METHOD OF COMPENSATION
- The Architect and his Specialist The Architect’s compensation is based on the
Consultants (SCs) who render plan / Architect’s / architectural firm’s talents, skill,
design services and limited inspection experience, and on the type and level of
work; professional services provided. Compensation for
- The Contractor who performs the Fulltime Supervision Services may be based on
construction work; one or more of the following:
- The individual or group of
individuals who assist in the supervision and Percentage (%) of Project
delivery of the work. Construction Cost (PCC)
The Architect’s Fee for Fulltime Supervision as
The Architect-in-charge of construction based on the PPC shall be detailed in
(AICC) is directly and professionally responsible the Architect’s Guidelines.
and liable for the construction supervision of the
project. Multiple of Direct Personnel
Expenses
When projects were still manageable in size, the This cost-based method of compensation is
Architect was then assisted by a construction applicable only to non-creative work such as
inspector, traditionally called Clerk-of-Works. accounting, secretarial, research, data gathering,
As projects became more complex, it became preparation of reports and the like. This method of
necessary for a construction supervision group to compensation is based on technical hours spent
do the full-time inspection at the project site. and does not account for creative work since the
value of creative design cannot be measured by
The Construction Supervision Group (CSG) is the length of time the designer has spent on his
work. The computation is made by adding all where there is continuing relationship involving a
costs of technical services (man hours x rate) and series of projects. It establishes a fixed sum over
then multiplying it by a multiplier to cover and above the reimbursement for the Architect’s
overhead and profit.                            technical time and overhead. An agreement on the
general scope of the work is necessary in order to
The multiplier ranges from 1.5 to 2.5 depending set an equitable fee.
on the office set-up, overhead and experience of
the Architect and the complexity of the Project. Lump Sum or Fixed Fee
This method may be applied to government
Other items such as cost of transportation, living projects since they entail more paper work and
and housing allowances of foreign consultants, time-consuming efforts.
out-of-town living and housing allowances of the
local consultants and the like, are all to be charged Per Diem, Honorarium Plus
to the Client. At the start of the commission, the Reimbursable Expenses
Architect shall make known to the Client the rate In some cases a Client may request an Architect to do
of professionals and personnel who will be work which will require his personal time such as:
assigned to the Project and the multiplier that has - attending project-related meetings,
to be applied before agreeing on this method of conferences or trips;
compensation. - conducting ocular inspection of possible
project sites; and
FORMULA - conferring with others regarding
Assume: prospective investments or ventures and
A= Architect’s rate / hour the like.
C= Consultant’s rate / hour For these particular activities, the Architect as
T= Rate per hour of Technical Staff, Inspectors agent of the Owner may be paid on a per diem and
and others involved in the Project honorarium basis plus out-of-pocket expenses
AN, CN, TN=   No. of hours spent by Architect, such as but not limited to travel, accommodations
Consultants and Technical Staff and subsistence.
M=  Multiplier to account for overhead and
reasonable profit. The value may range Mixed Methods of
from 1.5 to 2.5 depending on the set-up Compensation
of the Architect’s office and the complexity The SPP provides for more than one method of
of the Project. compensation on a project. Each project should be
R=   Reimbursable expenses such as examined to determine the most appropriate
transportation, housing and living method of compensation.
allowance of Consultant, transportation, per
diem, housing and living allowance of local LIMITATION OF
consultants and technical staff if AUTHORITY
assigned to places over 100km. from area The Construction Supervision Group (CSG),
of operation of the Architect. which may be a qualified architectural firm, or
which the Architect is only part of, shall not
Cost of printing of extra set of drawings, reports, assume the responsibility of the Contractor’s
maps, contract documents, etc. over the seven (7) project superintendent.
copies submitted to the Client, overseas and long
distance calls, technical and laboratory tests, The CSG shall not make decisions on matters that
licenses, fees, taxes and similar cost items needed are the sole responsibility of the Architect-of-
by the Project. record (Aor).

Direct cost= AN + CN + TN                            LEGAL RESPONSIBILITY

Fee= Direct Cost x M The Construction Supervision Group (CSG) is
Total Cost of Service charged to Client= Fee + responsible to the Owner only for administrative
R matters. For technical matters, the CSG is
responsible to the Architect-of-record (Aor).
Professional Fee Plus Expenses
This method of compensation is frequently used Under Article 1723 of the present Civil Code, the
CSG may appear not to have any legal activities with regards to quality, workmanship
responsibility since the Architect-of-record (Aor) and cost.
and Engineers-of-record (Eors) are responsible for
the design while the Contractor is responsible for FUNCTIONS
the construction. However, a Service Contract / AND DESCRIPTION OF TASKS
Agreement between the CSG and the Owner may
stipulate certain professional responsibilities and The responsibilities of the Construction
civil liabilities of the CSG, particularly if the CSG Manager (CM) include the functions of the
is party to the review of the Contract Documents Construction Supervision Group (CSG). 
and their subsequent evaluation and interpretation (Reference Doc. 204-A and Architect’s
during the course of construction. Guidelines)

If the Aor (and Eors) and the Contractor are sued - Coordination and Supervision
by an Owner for civil liabilities due to the - Cost and Time Control
performance or non-performance of certain acts - Quality Control of Work
traceable to the CSG, the Aor and Eors may file - Keeping of Records
cross claims against the CSG.
The Construction Manager (CM) may hire the
QUALIFICATIONS CSG to be under his employ or may supervise the
Inspectors of the Construction Supervision Group CSG hired directly by the Owner.
(CSG) must have the following:
- A Bachelor of Science in Architecture LIMITATION OF
(B.S. Arch.) Degree AUTHORITY
- Extensive experience in design and
building construction and must be The Architect as the
very knowledgeable in building materials Construction Manager shall not:
and construction detailing.
SPP DOCUMENT 204 - B - Involve himself directly with the work of the
CONSTRUCTION Contractor such that it may be construed that he is
assuming the Contractor’s liability as provided for
MANAGEMENT in Article 1723, etc. of the Civil Code.
(REPLACING THE 1979 UAP DOCUMENT 204-B)

Impose methods, systems or designs that will

INTRODUCTION
substantially affect the construction schedule and
impair the design concept of the Architect.
Due to the increasing complexity of construction
projects, there is an upward demand for more
effective cost control and faster project
LEGAL RESPONSIBILITY
implementation consistent with high quality of
work. Construction Management Services were
The Architect as the Construction Manager
thus instituted to fill this need in the construction
(CM) is directly responsible to the Owner on all
industry.
aspects of the construction work: programming,
coordination, quality and cost control and time
The Construction Manager (CM) could either
management.
be:
The CM assumes no liability in case equipment
- A member of the staff of the Owner,
fail to function or if a portion of the building
- An independent individual, or
collapses:
- A firm hired by the Owner to manage the
construction of a particular project.
-    due to deficiencies in the plan / design,
provided the CM did not participate in the
The Architect can serve as the Construction
plan / design review and approval, or
Manager (CM). His training in the coordination
of various specialties allows him to supervise and
-    due to the deficiencies in the manner of
assure proper monitoring of all construction
construction, provided the CM faithfully
 discharged his function/s during the performance and upkeep of buildings.
construction / project implementation.
The Architect may be engaged as the Building
QUALIFICATIONS Administrator and/or Property Manager of a
commercial, industrial, residential or institutional
The Construction Manager may be an individual building, facility or complex to maximize the
or a firm. lifespan of the building/s in order to produce the
maximum economic return.
The individual or the principal of the firm must
be a State-regulated professional, preferably an SCOPE OF SERVICES
Architect with managerial capabilities and
extensive experience in the field of construction. Building and Facilities Administration
Building Maintenance.
The Architect must be a Registered and Licensed The Architect shall:
Architects (RLA), with an updated professional - see to it that the building and all the
identification card and must be a member in good parts thereof (structure, plumbing,
standing of the Integrated and Accredited electrical, partitions, finishes, etc.) are
Professional Organization of Architects (IAPOA). all in good condition.
- formulate and enforce rules for the
Architects who are Contractors or who have proper use of the building and facility,
already been in responsible charge of construction particularly in the common areas and
works are usually capable of becoming emergency/ egress/ exit areas.
Construction Managers (CMs). - monitor security services, and
- monitor maintenance and upkeep
METHOD OF COMPENSATION services (cleanliness of corridors, lobbies,
stairs and other common areas, exits, parking
Since construction management is not part of the areas, garbage collection)
regular services of the Architect, the services
rendered by the Architect as a Construction Grounds and Landscaping
Manager (CM) shall be separately compensated. Supervision.
The Architect shall:
- supervise landscape contractors and
gardeners for the proper watering, pruning,
trimming and maintenance of the
SPP DOCUMENT 205 - POST landscape (both hardscapes and softscapes);
CONSTRUCTION SERVICES - maintain orderly entrances, exits and
(REPLACING THE 1979 UAP DOC. 205)
parking areas; and
-     maintain streets i.e. road rights-of–way
INTRODUCTION (RROWs), walkways, and ramps. 

Building administration and management goes Building Equipment

beyond maintenance and upkeep functions. It Maintenance.
requires the services of a multi-disciplinary The Architect shall:
professional who can perform a wide range or - assist the proper third parties in seeing to
functions for the efficient and economical it that all equipment (air-conditioning,
operation and maintenance of a building, facility sprinkler system, generators, transformers,
or a complex. telecommunications equipment, etc.) are
properly maintained and in good working
In Post-Construction Services, the channels of condition
communication are kept open among the building
owners, operators, architects, engineers, builders, Business Development and
manufacturers, building research groups, utility Management.
providers, furniture and equipment vendors and The Architect shall:
building administrators/ property managers to - innovate schemes to attain maximum
provide access to information regarding the building occupancy
 - bill the tenants for rentals and utilities services related to design and construction is
(electricity, water, telephone, cable, gas necessary for the execution of a completely viable
and other/ related dues) project.

Post - Construction Comprehensive Architectural Services refers to

Evaluation the range of professional services that covers Pre-
Upon the request of the Owner, the Architect design Services, Regular Design Services,
shall: Specialized Architectural Services, Construction
-     evaluate the initial design program vs. Services and Post-Construction Services.
the actual use of the facility;
-     determine the effectiveness of the In this extended dimension, the Architect is the
various building systems and the prime professional. He functions as creator,
materials systems in use; author, and coordinator of the building design
-     assist the proper third parties in which becomes the basis for the construction of a
evaluating the functional effectiveness project. In order for him to be able to properly
of the design and construction process assist and serve his Client, the Architect has to be
undertaken, and knowledgeable in other fields in addition to
-     study, research, and give solutions to building design.
any discovered/ emerging/ evolving
defects and failures such as shrinkage, The Architect is not expected to perform all the
water seepage and other problems in services. Rather, he is to act as the agent of the
the building. This is referred to as Client in procuring and coordinating the necessary
“forensic investigation” of the services required by a project.
building’s systems (Reference Doc 203).
PROJECT MANAGEMENT (PM)
MANNER OF PROVIDING By his education and training, the Architect may
SERVICES perform any or all of the services as stipulated
The Architect may enter into contract with the under Section 2.1 below. However, when the
Owner in two possible ways: Owner hires an Architect or a firm to coordinate
the whole range of Comprehensive Architectural
- Working in a dual capacity as Architect- Services (CAS), this constitutes Project
of-record and as Consulting Architect for Management (PM).
post-construction services.
- Working as Consulting Architect for post- Project Management (PM) involves management
construction services only. activities over and above the normal architectural
and engineering (A&E) services carried out
METHOD OF COMPENSATION during the pre-design, design and construction
Percentage of gross rentals, maintenance phase. The over-all objective is to have control
and security fees; and/or over time, cost and quality relative to the
Monthly salary/ fee. construction of a project.
SPP DOCUMENT 206 - THE
The presence of a Project Manager does not
COMPREHENSIVE SERVICE OF THE
relieve the designers and contractors of their
ARCHITECT(REPLACING THE 1979 UAP DOC. respective normal duties and responsibilities in the
206)
design and construction of the project. The PM
complements the functions of the Architects,
INTRODUCTION Engineers and Contractors in meeting the broad
COMPREHENSIVE and complex requirements of projects.
ARCHITECTURAL SERVICES
The concept of Comprehensive Architectural SCOPE OF SERVICES
Services crystallized through the years in response COMPREHENSIVE
to the demands of emerging complex building ARCHITECTURAL SERVICES
projects. The transition of the architectural Pre-Design Services (SPP Document 201)
profession from providing “basic” and Consultation
“additional” services to that of a comprehensive
nature is due to the realization that continuity of
 Pre-Feasibility Studies Fulltime Supervision Services (SPP
Feasibility Studies Document 204-A)
Site Selection and Analysis Construction Management Services (SPP
Site Utilization and Land-Use Studies Document 204-B)
Architectural Research Post-Construction Services (SPP Document 205)
Architectural Programming Building and Facilities Administration
Space Planning Post-Construction Evaluation
Space Management Studies
Value Management PROJECT MANAGEMENT (PM)
Design Brief Preparation Pre-Construction Phase
Promotional Services As early as during the design development phase,
Regular Design Services (SPP Document 202) perhaps even concurrently with the Architect’s
Project Definition Phase commission, the Project Manager (PM) should
Schematic Design Phase conduct regular consultations with the Owner and
Design Development Phase with the Architects and Engineers (for A&E
Contract Documents Phase services) on all aspects of planning for the project.
Bidding or Negotiation Phase
Construction Phase Construction
Phase
Specialized Architectural Services (SPP If the Project Manager (PM) also serves as the
Document 203) Construction Manager (CM) to oversee time, cost
Architectural Interiors (AI) and quality control during the construction of the
Acoustic Design project, he shall provide the services detailed
Architectural Lighting Layout and Design under SPP Documents 204-A and/or 204-B.
Site Development Planning (SDP)
Site and Physical Planning Services MANNER OF PROVIDING SERVICES
Comprehensive Development Planning COMPREHENSIVE
(CDP) ARCHITECTURAL SERVICES
Historic and Cultural Heritage Normally, the Architect enters into a contract with
Conservation the Owner to perform Comprehensive
Security Evaluation and Planning Architectural Services. By the very nature of the
Building Systems Design services, he assumes the dual role of the Project
Facilities Maintenance Support Manager (PM) and the Construction Manager
Building Testing and Commissioning (CM), or effectively the overall coordinator whose
Building Environmental Certification functions are outlined under this SPP.
Forensic Architecture
Building Appraisal To perform the variety of services indicated under
Structural Conceptualization the Comprehensive Architectural Services, the
Preliminary Services Contract Architect must make full use of his own capability
Documentation and (including as well as of services offered by other
Master Development Planning, professionals. He may expand his staff by hiring
Subdivision Review Planning and the experts needed, or he may form a team
Urban Design)   consisting of professionals such as but not limited
Post-Design Services (including to:
Construction Management
Services) Architects
Dispute Avoidance and Resolution and Engineers
Planning Market Analysts
Architectural Research Methods Accountants
Special Building/ Facility Planning General Contractors
and Design Real Estate Consultants
Building Components Sociologists
Management of Architectural Practices Planners
Construction Services Bankers
Lawyers
 Pacific region. Its purpose is “to sustain the
PROJECT MANAGEMENT (PM) growth and development of the region for the
If a Project Manager (PM) is hired by the Owner, common good of its people” by encouraging
it may be the responsibility of the PM to either trade. APEC builds on WTO General Agreement
hire the Construction Manager (CM) to be paid on Trade and Services (GATS) principles for the
either by him or directly by the Owner on salary, progressive liberalization of trade in services
or on the basis of percentage of construction cost through the reduction of regulatory restrictions,
or to serve as the CM himself. In like manner, the leading to reciprocal agreements between member
Fulltime Supervisor can either be a staff member economies where appropriate.
of the PM or hired directly by the Owner.
BEGINNINGS
The Project Manager (PM, whether individual or At its inception, the APEC Architect
firm) operates as a member of an Owner- Project was an initiative of the APEC Human
Architect-Engineer-Contractor Team. In the Team Resources Development Working Group
Approach, each member of the team will have (HRDWG), one of a number of sectorial groups
precedence in his own field of operations or established to implement APEC programs. The
expertise. In accordance with this principle: project was endorsed by the HRDWG at its year
2000 meeting in Brunei as a contribution to the
Principle Group’s strategic priority of facilitating mobility
The Architect and the Specialist Consultants of qualified persons by the mutual recognition of
(SCs) will have prime responsibility for the skills and qualifications.
plan/design of the project. A Steering Committee was formed by the
The Engineers will be responsible for their APEC economies participating in the project to
respective engineering plans. develop a mechanism by which current
restrictions on the professional recognition of
The Contractor shall be responsible for his men architects from other economies would be reduced
and equipment and the delivery of the project. or removed.
The Owner makes decisions on the project and The Steering Committee first met in
assures that funds are available to complete the Sydney on 12 - 14 June 2002. Delegations
project.  attended from Australia (Chair), People's Republic
of China, Hong Kong China, Japan, Malaysia,
The Project Manager (PM)’s primary New Zealand, Philippines, Chinese Taipei and the
responsibility is the exercise of overall cost United States of America. As a result, a set of
control.   He will plan, program and monitor the principles and an operational framework for the
various activities, and will act as an adviser on creation of an APEC Architect Register were
material costs and construction methods.  established.

METHOD OF COMPENSATION APEC ARCHITECT PROJECT UNDERWAY

The Project Manager is compensated on a The fourth meeting of the Steering
percentage basis, as shall be described in the Committee was also deemed to be the first
Architect’s Guidelines. provisional meeting of the APEC Architect
If the Architect as Project Manager (PM) performs Central Council. At that meeting a programme
regular design services for the same project, he was set for:
shall be compensated separately for these services
as stipulated in SPP Document 202. - The establishment of the APEC Architect
APEC – ASIA PACIFIC ECONOMIC Secretariat in January 2005
- The establishment of Monitoring
Committees in each participating economy
COOPERATION in March 2005
- The first meeting of the Central Council in
THE May 2005 which has met every 2 years
APEC - The inauguration of the APEC Architect
Register in May 2005.
The Asia Pacific Economic Cooperation
(APEC) is an international forum composed of
twenty-one member economies within the Asia-
In addition, a number of participating economies New Zealand People’s Republic of
have negotiated Mutual Recognition China Canada Republic of the
Arrangements for the cross-border registration of Philippines
APEC Architects as envisaged in the APEC United States of America
Architect Framework, these being: Republic of Korea Japan
Chinese Taipei China
▪ Chinese Taipei and Australia, 2007 Hong Kong Thailand
▪ Japan and Australia, 2008 Malaysia Singapore
▪ Japan and New Zealand, 2009
▪ Singapore, Australia and New Zealand, 2010 THE
▪ Chinese Taipei and New Zealand 2012. STANDARD FOR BEING AN ARCHITECT

BILATERALS Participating economies have agreed to a set of

Following the first cross-border registrations for requirements and standards that must be met by an
individual APEC Architects in 2014, all architect from any participating economy to be
economies, but especially those with active accepted and recorded as an APEC Architect.
Mutual Recognition Agreements formed under the
APEC Architect Project Framework, are The APEC Architect criteria is based
encouraged to promote and encourage the on:
movement of their APEC Architects across - A recognized architectural education
borders. - A minimum period of post-graduate
practical experience, with specified
THE APEC ARCHITECT requisites
PROJECT - Registration, licensing or other
The APEC Architect Project is based on a requirements for full professional
framework agreed to by participating economies. recognition
In essence this involves: - A minimum period of professional practice
as a registered or licensed architect, with
- Participating economies specified requisites.
- A standard for being an APEC Architect,
agreed to by participating economies CENTRAL
- The online Register of APEC Architects, COUNCIL
provided in sections by participating - The Central Council has ultimate
economies responsibility for all matters relating to the
- Overall governance provided by a Central APEC Architect framework. The Council
Council that typically meets every two comprises at least one representative of
years each Monitoring Committee
- Administrative Monitoring Committees - The Council is responsible for authorizing
within each participating economy Monitoring Committees to maintain their
- An Operating Manual that lays out the sections of the Register. Typically the
projects rules and procedures Council meets every two years.
- A secretariat that provides administrative - A decision to permit an economy to join
services. the project rests with the Central Council.
- The Central Council's decisions are
PARTICITPATING ECONOMIES generally reached by consensus and are
not binding on the regulatory authorities of
The APEC Architect Project has 14 participating participating economies.
economies. The word 'economies' is used to
describe APEC members because the APEC MONITORING COMMITTEES
cooperative process is predominantly concerned Responsibility for the project within participating
with trade and economic issues, with members economies is delegated to monitoring committees.
engaging with one another as economic entities. The duties of the monitoring committees include
Australia Mexico the following:
 - Manage and make determinations on
applications from architects within The following set of principles satisfies Central
economies to become APEC Architects Council criteria for admission to the APEC
- Operate the APEC Architect Register Architect Register and the right to use the
within each economy description ‘APEC Architect’.
- Provide representatives to the Central
Council Architectural Education
- Make public information about the APEC Educational Benchmark
Architect Project.
Statement Education as an architect shall
Monitoring Committees are the constituent bodies comprise at least four years of full time study. The
of the Central Council. They nominate one or education must be of university level, with
more representatives to the Council, with each architecture the principal component. It must
Monitoring Committee entitled to one vote. maintain a balance between theoretical and
practical aspects of architectural training and lead
OPERATING MANUAL to the acquisition of the skills and knowledge
The projects rules and procedures are necessary to underpin the required competence of
encapsulated in an operating manual which is an APEC Architect.
updated every two years.
Structured experiential learning, determined by
SECRETARIAT the regulatory authority economy to be the
Administrative services for the project are equivalent of full-time architectural study as
provided by a secretariat. described above, would also satisfy the APEC
Architect education requirements.
REGISTRATION AS AN APEC
ARCHITECT Common
A candidate for registration as an APEC Architect Elements of Architectural Education Programs
must be currently registered / licensed or
otherwise professionally recognized as an The core subject areas in an accredited /
architect in the economy that maintains the section recognized program of architectural education are:
of the APEC Architect Register to which
application for admission is made. - Design, as the predominant subject
category
Architects must demonstrate to the appropriate - Technology and Environmental Science
Monitoring Committee that they have completed - Social, Cultural & Environmental Studies,
an accredited / recognized program of - Professional Studies
architectural education, fulfilled pre-registration
experienced requirements, have practiced for at Other subject areas within architectural
least seven years as registered / licensed architects educational programs may include:
and satisfied any additional requirements, all in
accordance with criteria determined by the Central - Related Studies
Council. Architects may only be enrolled on the - General Education
section of the APEC Architect Register in their
home economy, unless otherwise provided by this Accreditation / Recognition
Manual. Procedure for Educational Programs in
Architecture

Note: Processes incorporating the following principles

APEC Architect Registration applies only to of good governance will satisfy the accreditation /
individual persons, not to architectural practices or recognition criteria for educational programs for
firms) an APEC Architect.

APEC The accrediting / recognizing body should:

ARCHITECT REGISTRATION
CRITERIA
 - Have authority and, where appropriate, At least three years of that period must have
legal status and be transparent, been undertaken as an architect:
independent and publicly accountable.
- Have a structured process for the approval - With sole professional responsibility for
of qualifications and compliance with the design, documentation and contract
agreed standards. administration of buildings of moderate
complexity;
The Central Council agrees to respect the - OR in collaboration with other architects,
accreditation / recognition procedures of each as an architect in charge of and
participating economy. professionally responsible for a significant
aspect of the design, documentation and/or
Fulfilment of Period of Pre- contract administration of complex
Registration or Pre-Licensing Experience for buildings.
Recognition as an Architect in a Home
Economy Practice
Jurisdiction
Applicants for registration as an APEC Architect
must have completed a prescribed period of Professional practice that satisfies the above
practical pre-licensure or pre-registration requirements undertaken in any economy may be
diversified experience, as defined by the home accepted by the relevant Monitoring Committee.
economy, for a minimum period equivalent to a
total of two years. Currency of Practice

Fulfillment of To ensure competence, APEC Architect

Registration / Licensing Requirements for candidates who have not practiced in a position of
Recognition as an Architect in a Home professional responsibility within the preceding
Economy two years are subject to a requirement to
undertake a program of professional development
The purpose of this criterion is, in the first or fulfill other prescribed conditions to be
instance, to establish eligibility for registration as admitted to the APEC Architect Register.
an APEC Architect, not for registration in another
economy. Fulfilment of registration / licensing ENTITLEMENT TO
requirements for recognition as an architect in a REGISTRATION
home economy is accepted as meeting this
criterion for an APEC Architect. Admission to the APEC Architect
Register
Professional Candidates for registration as an APEC Architect
Practice as a Registered / Licensed Architect must apply to the Monitoring Committee of their
home economy to determine their eligibility for
Applicants for registration as an APEC Architect enrolment on that economy’s section of the
must satisfy the home economy Monitoring Register. In addition to details on education,
Committee that they have completed a minimum training and professional recognition in any APEC
period of professional practice of seven years; jurisdiction, candidates will be required to submit
after initial registration / licensure as an architect a report on their post registration / licensure
in any participating economy. professional experience, outlining the categories
of practice in which it was undertaken and the
This experience must be gained in all of the level of their involvement.
following categories of architectural practice:
APEC Architects must also agree to be bound by
- Preliminary studies and preparation of the code of professional conduct of their home
brief economy and of any jurisdiction in which they
- Design practice.
- Contract Documentation
- Administration Particulars of APEC Architects to be recorded
on the Register include:
 - Name and business address; Should the authorization of a Monitoring
- Home economy or jurisdiction in which Committee be discontinued for any reason, APEC
the architect is registered / licensed; and Architects enrolled in that economy may enroll on
- Any other economy in which the architect a database maintained by the Secretariat for this
is registered / licensed. purpose, for a maximum period of two years.
Alternatively they may apply for registration in a
The registration numbers assigned to APEC host economy and subsequent admission to the
Architects by Monitoring Committees are section of the APEC Architect Register in that
preceded by the following abbreviations of the economy.
name of the home economy.

Applications for admission to the APEC Architect THE

Register are dealt with in a timely manner and will COMPETENCE OF AN APEC ARCHITECT
not normally exceed three months for completion.
On admission to the Register, APEC Architects The skills and knowledge required for admission
are issued with a Central Council Certificate of to the APEC Architect Register an APEC
Registration by the home economy. Monitoring Architect must be competent to create
Committee and an APEC Architect Identification architectural designs that:
Card bearing the architect’s name, name of home
economy and date and currency of APEC - Satisfy both aesthetic and technical
Architect registration. On request, Monitoring - Are informed by the history and theories
Committees also provide relevant information to of architecture and the related arts,
the regulatory authorities of other participating technologies and human sciences;
economies for registration purposes. - Demonstrate an understanding of the
relationship between people and buildings,
Maintaining APEC Architect Registration and between buildings and their
environment, and the need to relate
APEC Architect registration is to be renewed on buildings and the spaces between them to
payment of an administration fee to a Monitoring human needs and scale;
Committee at intervals no greater than three years. - Respond to environmental concerns and
Registration details are to be reviewed and address sustainability issues;
renewed on application to practice in a host - Show skill in land-use planning and the
economy. planning process;
- Take account of cultural and social factors
Renewal of registration is subject to compliance and demonstrate an understanding of the
with home economy regulatory authority or responsibility of an architect to society;
Monitoring Committee requirements to undertake
programs of continuing professional development, An APEC Architect must be competent to
or fulfill other tests of current competence. The translate a design concept into built form and be
Monitoring Committee may impose conditions on able to:
architects who have not practiced in a position of
professional responsibility during the preceding - Investigate and interpret design objectives
three years. and relevant issues and prepare the brief
for a design project;
The registration of an APEC Architect will be - Advise on project evaluations, feasibility
cancelled if the architect ceases to be registered studies and programs;
/licensed in the designated home economy. The - Evaluate and determine structural,
registration of APEC Architects found, subject to constructional and engineering elements of
due process, to be in breach of the code of a building design and integrate the advice
professional conduct of either their home and design of specialist disciplines into a
economy, or a host economy, may be suspended building project;
by their home economy Monitoring Committee. - Assess the physical influences on
buildings and the technologies associated
Acquired Rights with providing internal conditions of
 comfort and protection against the climate,
and coordinate and integrate services
systems to control them;
- Meet building users' requirements within
the constraints imposed by cost factors and
building regulations
- Provide advice on issues of construction,
procurement and contract administration; ▪
Generate the documentation and
information needed to translate a design
concept into a building;
- Manage the procurement of buildings,
administer contractual arrangements and
monitor their construction.

An APEC Architect must be competent in the

practice of architecture and:

- Observe legal and regulatory obligations

related to the planning and construction of
buildings;
- Have adequate knowledge of the
industries, organizations and procedures
involved in the management and
realization of a design project as a
building;
- Observe the standards of conduct expected
of a professional by the community;
- Maintain competence in relevant aspects
of the practice of architecture.
 PROJECT PROJECT MANAGEMENT CORE
MANAGEMENT COMPONENTS
The following core components form part of
project management:
PROJECT MANAGEMENT - Defining why the project is necessary or
Project management helps teams organize, track, important.
and execute work within a project. Think of a - Estimating how long it will take to
project as a collection of tasks to accomplish a complete and specifying the quality of
specific goal. Project management can help your deliverables. Also, listing what the project
team plan, manage, and execute your work in requires and what resources to use.
order to meet your project’s requirements on time. - Justifying the investment by preparing a
With a project management tool, your team can business case.
organize all of the details of your work in one - Securing funding risks.
place, share feedback and progress, and, - Tracking the project’s progress against the
ultimately, collaborate original plan.
more effectively. - Making sure the project is within budget.
- Liaising with stakeholders and the project
Project management is organization.
the application of skills,
experience, knowledge, STAGES OF PROJECT
methods, and processes MANAGEMENT
to achieve the In general, the project management process
objectives of a project. involves five stages:
- Planning
It is the body of knowledge regarding projects, - Initiation
i.e., planning, controlling, and reviewing. Project - Execution
management also involves making sure you - Monitoring
complete the project. - Closing
“Project management is the application of Planning
processes, methods, skills, knowledge and The project planning stage is all about setting
experience to achieve specific project objectives goals. A project’s success relies on the standard of
according to the project acceptance criteria within the planning process. Most projects that end
agreed parameters. Project management has final halfway are due to a lack of proper planning. The
deliverables that are constrained to a finite SMART and CLEAR methods are the two
timescale and budget.” common approaches to planning. At this stage,
you identify the cost, resources, and time.
PROJECT MANAGER Initiation
A project manager is a professional who plans Project initiation is formally the beginning of a
and organizes resources and personnel. They must project. The purpose of the project is defined at
make sure they complete the project on time and this stage. At this stage, the project manager will
within budget. They must also ensure that the weigh the pros and cons of the project, evaluate
project meets the requirements of the business. the problem that the project seeks to solve, and
When it comes to how projects are managed, create a project initiation document (PID). The
businesses will often need to consider everything PID will cover the project goals, size and scope,
from initial planning and strategy, to execution risks and constraints, controls and reporting
and monitoring – usually, project managers will framework, and criteria for assessment.
use tools that range from Gantt Charts, to Execution
comprehensive PPM solutions. After proper planning, you then start the
implementation process. This is the stage where
GANTT CHART you put your plans into action. At this stage, you
ensure that the tasks and activities planned at the
previous stage are carried out. While this happens,
the project manager will manage the budget,
communicate with the stakeholders and oversee The major
the team activities. challenges seen in managing small projects
Monitoring are:
Planning and execution notwithstanding, if project
progress is not well monitored, it could lead to - First, being able to recognize work that is a
failure or some other significant lapses. You can project – and conversely to distinguish
employ various tools to help you monitor factors other kinds of work from project work,
like cost, quality, risks, and time. One primary and manage it accordingly,
tool you can use is a project time tracking tool, - The lack of time taken to plan small
which will aid the equitable distribution of time in projects when they are recognized as such,
the project execution. and to do an appropriate amount of
planning (as opposed to the level needed
Closing for larger ones),
This is the last phase of the project. The closure - Having the will or determination to follow
could mean that the project has been completed or a plan once it's created for small projects,
that it is being cancelled. Project closure usually - Being disciplined enough to control and
involves handling, releasing staff and resources, track the project – and to see it through to
cancelling or closing contracts, and preparing the completion.
final budget and project report. At this stage, you
evaluate the whole process and check for lapses to FRAMEWORK
know where improvement is needed for future FOR MANAGING SMALL
projects. PROJECTS

SMALL PROJECT Once you've identified work that should be

Small projects are perceived to be relatively easy, managed as a project, now it's time to start
but other than this there is no one way to define a planning and executing the project. Our method
small project. Small could also be defined on the for managing small projects involves 5 basic
basis of time, for example, taking less than six steps.
months to complete.
- Sanctioning
Small project can be defined on the following - Scope Definition
circumstances: - Scheduling and estimating
- Is short in duration, typically lasting less - Status Reporting/Executing
than six months, and usually part-time in - Success
effort hours
- Has 10 or fewer team members PROJECT MANAGEMENT FOR THE
- Involves a small number of skill areas CONSTRUCTION OF SMALL
- Has a single objective and a solution that PROJECTS
is readily achievable
- Has a narrowly defined scope and Successful execution of a project
definition requires the following three
- Affects a single business unit and has a phases:
single decision maker - Project planning before execution of the
- Has access to project information and will project
not require automated solutions from - Project scheduling before execution of the
external project Sources project
- Uses the project manager as the primary - Project management during the execution
source for leadership and decision making of the project
- Has no political implications with respect
to proceeding or not proceeding Project planning and scheduling
- Produces straightforward deliverables with can broadly consist of items such
few interdependencies among skill areas as:
- Preparation of project report
- Awarding contract
- Preparation of design and plan
 - Site clearance
- Getting sanctions THE OPERATION
- Construction of buildings
- Inviting tender Operations is the work of managing the inner
- Construction of external works, etc. workings of your business so it runs as efficiently
as possible. Whether you make products, sell
products, or provide services, every small
business owner has to oversee the design and
management of behind-the-scenes work.
PROJECT TEAM
Project controls are a set of processes used to
The project team is the group of people understand and influence the amount of time or
responsible for executing the tasks and producing money spent on a project. Each project control
deliverables outlined in the project plan and focuses on a distinct part of the project plan, like
schedule, as directed by the project manager, at the schedule, resources, or potential risks.
whatever level of effort or participation defined
for them. Project controls and project management have
overlapping functions. Both processes help you
Project team members may or may not be keep a project on track and within scope.
involved during the entire life cycle of the project However, project controls aren’t as broad in their
and may or may not be full time to the project. purpose as project management.
Project teams are comprised of many different
roles such as project manager, subject matter While project management focuses on keeping the
experts, business analysts, and other stakeholders. entire project on track, including people,
processes, and deliverables, project controls focus
THE PROJECT TEAM specifically on quality control in order to save
RESPONSIBILITIES time and money.

The project team is responsible for contributing to

the overall project objectives and specific team 7 CRITICAL DUTIES OF
deliverables, by contributing towards the planning CONSTRUCTION PROJECT MANAGERS
of project activities and executing assigned
tasks/work within the expected quality standards, - Managing construction bids
to ensure the project is a success. - Creating construction schedules
- Planning and monitoring project budget
The project team - Hiring and managing the workforce
will: - Finding and managing subcontractors
- Managing equipment and materials
- Provide information, estimates and - Ensuring compliance with safety
feedback to the PM during project regulations
planning
- Provide business and/or technical expertise PROJECT CONTROL
to execute project tasks (work)
- Liaise with stakeholders to ensure the Why project control are
project meets business needs important?
- Analyze and document current and future
processes and systems (functional and Project controls provide information that allow
technical) project managers to make informed and timely
- Identify and map information needs decisions that prevent project risks. From project
- Define and document requirements initiation to completion, your job as project
- Support and provide end user training manager is to keep things on track and within
- Report issues and status to PM scope.
- Work collaboratively with other team
members towards achieving common
project goals/objectives
Without a project control process, it’s difficult to
answer important questions about the project, Performance
which may impact or complicate project success. Performance management is the broad process of
monitoring your project’s success. The simplest
Some reasons why projects might go off track way to do this is to set key performance indicators
without project controls include: (KPIs) to assess project performance. These may
include tracking costs against baselines, on-time
- People completion, billed hours, and return on
- Quality investment.
- Cost
- Time PROJECT PLANNING (INITIATION)

Through the control process, you can catch when The project planning phase is your chance to build
things don’t go as planned and quickly course project controls into the bedrock of your project.
correct to keep your project on track. The more detailed your plan is, the less control
management you’ll need to do later on.

Schedule

Increasing visibility into your project schedule Project planning includes:

helps you know you’re proceeding along your
project timeline. To do this, make sure you’re - Outlining your project timeline
tracking all of your project work in one place, like - Assigning roles and responsibilities
a project management tool. That way, you can get - Creating a work breakdown structure
at-a-glance insight into your tasks, deadlines, and (WBS)
dependencies. Plus, you can put project - Identifying stakeholders
milestones in place as checkpoints to gauge your - Creating project objectives
progress.

Resource

Every project depends on resources—things like

time, money, or project team member availability.
Resource management is a critical part of the
project control process because it is your team’s
chance to effectively control costs and monitor
your available time and materials. Cost estimating
and resource planning during project initiation can
also help you stay within budget.

Risk
Project risk management is a crucial project
control to proactively identify and prevent risks
from derailing your project. The best way to do
this is with a risk register, where you rank
potential risks by priority and assess how to
manage them accordingly.

Change
Change control is one of the best ways to prevent
project scope creep, which can lead to timeline
delays, increased budget, and project defects.
When you implement a change control process,
you’ll feel prepared for any project changes that
come your way.
 MANAGING
PROJECT RISK AND
OPPORTUNITIES

Managing risks on projects is a process that

includes risk assessment and a mitigation
strategy for those risks.
Risk assessment includes both the identification
of potential risks and the evaluation of the
potential impact of the risk.
A risk mitigation plan is designed to eliminate or
minimize the impact of the risk events—
occurrences that hurt the project.
Identifying risk is both a creative and a
disciplined process.
The creative process includes brainstorming
sessions where the team is asked to create
a list of everything that could go wrong.

RISK MANAGEMENT

RISK MANAGEMENT
Construction risk management is the process of Here are the five steps of
evaluating and implementing procedures to reduce the risk management
the impact of risks in construction projects. process.
• • Identification: First, make a list of every
This risk management process involves thorough possible issue that could arise.
planning to create a risk management plan that • Assessment: Not all risks are equal. Some
allows project managers to identify, monitor, and are more likely to occur, others less
mitigate risks as they arise. so.
• Mitigation: This is where you implement
Types of Risk in Construction Projects a contingency plan that will reduce
• Safety Risk: the likelihood and impact of the
Your crew is your most valuable resource. risks you identified earlier.
• Monitoring: This step is always ongoing,
• Financial Risk: as you attempt to identify these
Without money, nothing happens. risks when they show up.
• Reporting: Your construction risk
• Legal Risk: management plan should be
Managing a construction project involves analyzed and shared with the
more than the constraints of time, cost, crew and stakeholders.
and scope.
PROJECT
• Project Risk: DISPUTES
Project risks are universal project Managing risk is crucial for the avoidance of
management risks associated with commercial disputes. Risk can take many forms,
managing any project. including poor communication and delivery,
inadequate or no contract drafting, and ineffective
• Environmental Risk: risk management procedures. While businesses
AKA an “act of God,” such as face pressure to keep costs, including legal
floods, earthquakes, and other kinds of spending, down, the importance of taking a
natural disasters. proactive approach towards risk management
cannot be overstated in mitigating cost and
management time in the long term.
 Early Analysis parties seek legal advice,
The risk of a dispute escalating will be reduced if by:
an early analysis of the legal issues is completed. • Ensuring the instruction is clear that legal
This can be achieved by collating the essential advice is being sought.
documents in an organized/chronological format • Identifying who will have responsibility
and preparing a detailed description of the case by for managing instructions to lawyers.
identifying and speaking to the individuals • Ensuring any advice on the commercial
involved. aspects that could be deemed as not giving
legal advice is separated into standalone
It is recommended that legal advice is sought at documents.
an early stage. Formulating a strategy and • Seeking advice before asking staff to
spending money early will reduce the risk of undertake research or investigative work
higher, long-term expenditure and risk, should the connected to the instruction of their legal
dispute be left to escalate. Well-trained staff and advisers to preserve privilege.
encouragement of a “no blame” culture will also • Guidelines should be circulated at the
aid such investigations. outset to all managers and employees
involved in the dispute explaining the
Contractual Documents extent of the disclosure obligations and the
Your business needs written documents on which implications.
it can rely which set out the terms agreed between • Keeping communications with lawyers on
the parties, whether this is a contract, your terms, a separate file marked 'privileged and
and conditions, invoices, a Shareholders’ confidential.
Agreement, or employment contracts. Terms • Seeking immediate legal advice if a
should regularly be reviewed to ensure that they request is received for information from a
are up to date with current law and are regulatory authority or you become a party
enforceable. to an inquiry.
FIRM
You should also retain all correspondence INSURANCE
between the parties leading up to any agreement
being finalized as in the event of a dispute, this A response to certain risks such as fire, property
can prove very helpful in determining the damage, or personal injury (i.e., pure risks) is to
intention of the parties. It is without exception, far purchase insurance. Insurance exchanges an
easier, quicker, and cheaper to resolve a dispute if unknown cost impact of a known risk for a known
there are clear written terms in place. cost impact.

It will pay off to invest the money upfront in the In the example of a risk of fire, the cost impact of
preparation of the documents to ensure the terms the risk is unknown depending on the extent of the
and both parties’ obligations are watertight. fire. But when insurance is purchased, the cost
impact of a risk of fire becomes known; it is the
Management of Documents cost of the insurance.
A consistent pitfall is the inadequate management
of documents when carrying out investigations Mitigating the risk by purchasing insurance does
and ensuring that companies/businesses maintain not eliminate all impacts. There may still be
any legal advice and/or litigation privilege. residual risks. For example, there can still be
schedule delays on the project caused by the fire.
Legal advice privilege relates to confidential
communications between a client and lawyer and The Perks of Insurance to Risk
enables the exchange of information between a Management
lawyer and client in a frank and open manner Insurance should be a crucial cornerstone in risk
without fear of the communications being relied management programs because it brings so much
on by the opposing party. to the table. Risk Management Monitor recently
discussed some of the core benefits of risk
Care should therefore be taken when carrying management:
out internal inquiries and the basis on which • Protection from financial loss
–
 For young businesses, a multitude of
things can go wrong, from natural disasters Interpersonal
to theft and burglary. relationships teach us
who we are. From a very
• Better reputation young age, the people
– around us form key
New businesses are always looking for aspects of our
financial support, whether it’s from angel personalities and value
investors or banks. systems. They can help
give us a sense of purpose
• Protection from financial loss and direction. They’re also a key component to
– overall physical and mental well-being. There’s a
For young businesses, a multitude of strong link between relationships and emotional
things can go wrong, from natural disasters health. That’s why it’s vital to surround yourself
to theft and burglary. with people who give you joy, support, and
comfort.
• Better reputation
– TYPES OF INTER –
New businesses are always looking for PERSONAL
financial support, whether it’s from angel RELATIONSHIP
investors or banks. There are different types of interpersonal
relationships. They’re all equally important but
• Improve liability – each is unique. They depend on individual
General liability insurance protects connection and the expectations of the
entrepreneurs against unforeseen everyday relationship.
threats, whether it’s someone slipping on
their floors or getting their fingers jammed 1. FAMILY
in the door on the way out. Family can include our parents, siblings,
grandparents, aunts, uncles, cousins, caregivers,
and guardians. These are the first relationships we
ever form. We often have close ties to family
INTER - members. These bonds can last a lifetime.
PROFESSIONAL
2. FRIENDSHIP
RELATIONSHIP While you don’t get to choose your family, you do
get to choose your friends. Some friendships are
INTER - PROFESSIONAL even more important than family connections.
RELATIONSHIP 3. ROMANTIC
Sometimes mutual attraction evolves from “I like
Professional relationships involve people working you” to “I like you and I love you.” This is a
together to achieve a common goal for the benefit romantic interpersonal relationship. A romantic
of their company or organization. These relationship can sometimes start as a friendship,
relationships can vary greatly depending on the but they are different.
personality traits and intentions of the individuals
involved. 4. WORK
You may see your co-workers more than you see
Learning about professional relationships can help your own family, so it’s normal to form strong
prepare you to form your own workplace bonds with your work peeps. Your shared
connections. In this article, we discuss what a experiences can create relationships that impact
professional relationship is, review different types the workplace dynamic.
of professional relationships and present five tips
to help you build effective professional Here are some helpful tips for workplace
relationships. friendships:
• Set boundaries.
Why they are so • Keep office conversation about the work.
important?
 • Find an appropriate balance between Strategic
personal and professional. alliances can come in many sizes and
• Save the lengthy conversation and hot goss forms:
about last night’s Tinder disaster for happy
hour. • An oil and natural gas company might
form a strategic alliance with a research
INTER - laboratory to develop more commercially
ALLIANCES viable recovery processes.
Alliance is an arrangement between two • A clothing retailer might form a strategic
companies to undertake a mutually beneficial alliance with a single manufacturer to
project while each retains its independence. The ensure consistent quality and sizing.
agreement is less complex and less binding than a • A website could form a strategic alliance
joint venture, in which two businesses pool with an analytics company to improve its
resources. marketing efforts.

A company may enter into a strategic alliance to ADVANTAGES AND

expand into a new market, improve its product DISADVANTAGES OF A JOINT
line, or develop an edge over a competitor. The ALLIANCE
arrangement allows two businesses to work
toward a common goal that will benefit both. Strategic alliances can be flexible and some of
the burdens that a joint venture could include. The
The relationship may be short- or long-term and two firms do not need to merge capital and can
the agreement may be formal or informal. remain independent of one another.
A strategic alliance can, however, bring its own
UNDERSTANDING THE risks. While the agreement is usually clear for
STRATEGIC ALLIANCE both companies, there may be differences in how
While the strategic alliance can be an informal the firms conduct business. Differences can create
alliance, the responsibilities of each member are conflict. Further, if the alliance requires the parties
clearly defined. The needs and benefits gained by to share proprietary information, there must be
the partnered businesses will dictate how long the trust between the two allies.
coalition is in effect.

• A strategic alliance is an arrangement

between two companies that have decided
to share resources to undertake a specific,
mutually beneficial project.
• A strategic alliance agreement could help a
company develop a more effective
process.
• Strategic alliances allow two
organizations, individuals or other entities
to work toward common or correlating
goals.

EXAMPLE OF A STRATEGIC
ALLIANCE

The deal between Starbucks and Barnes & Noble

is a classic example of a strategic alliance.
Starbucks brews the coffee. Barnes & Noble
stocks the books. Both companies do what they do
best while sharing the costs of space to the benefit
of both companies.
 FINANCIAL MANAGEMENT
The four main areas of financial health that should
be examined are
• Liquidity
• Solvency
• Profitability, and
• Operating efficiency.

However, of the four, perhaps the best

measurement of a company's health is the level of
its profitability.

WHAT IS ACQUISITION
CAPITAL?

Acquisition Capital - as the capital used to

acquire other assets. You use this capital to
purchase assets like equipment, inventory,
software, or even a business itself. The purpose of
these acquisitions are, ultimately, to grow the
overall profits of a business.

FINAL COMPENSATION
PLAN?

A compensation plan - is a payment package

designed to attract and retain employees. A basic
compensation package consists solely of a salary
or wages. A more comprehensive compensation
could include additional benefits such as bonuses,
perks, commission, health insurance, or retirement
investments.

TOP 4
COMPENSATION BEST PRACTICES &
COSTS ASSOCIATED

• Base salaries and annual raises.

• Bonuses, benefits, and other payments to
employees.
• Research and development costs (arising
from building a complex HR process).
• Training and education costs (involved in
bringing employees and managers up to
FINANCIAL speed)
MANAGEMENT
GUIDE TO FINANCIAL MANAGEMENT
FINANCIAL MANAGEMENT FOR ARCHITECTURE FIRMS
Financial management entails planning for the
future of a person or a business enterprise to CREATE A BUSINESS
ensure a positive cash flow. It includes the PLAN
administration and maintenance of financial When you first set up your business, creating a
assets. Besides, financial management covers the business plan will be one of the most important
process of identifying and managing risks.
things you do. A business plan is a road map. It Path A
doesn’t need to be a big complicated document.
For most firms, even a one-page plan will do. • Project the firm’s revenues
Regardless of how long it is, every business plan • Establish staffing needs.
should include your vision, mission, goals, and • Determine overhead expenses.
actions for reaching those goals. • Develop a profit plan

An important part of any business plan will be Path B

your finances – this is where revenue projection, • Calculate staff expenses.
talent plans, overhead expense budgets, and profit • Calculate overhead expenses
plans come into play. Not only will the financial • Set a profit target
part of the plan help you prioritize and set realistic • Develop a revenue goal
goals, but potential investors like to see that you
know where you are going. REVENUE PROJECTION

PICKING The projected revenue is the money your firm

THE RIGHT TYPE OF BUSINESS expects to make in a specific time period.
PLAN Typically, you will run these projections for
Most architects will design their practice around a monthly, quarterly, or annual accounting periods.
design-bid-build or a design-build model. The What you use depends mostly on your business.
essential difference is a firm who only does the
design work versus a firm that wants to have both Why is this important?
design and construction under one roof. To make First, potential investors will want to see it. Also,
matters more complicated, there are lots of you will use the projection to develop operational
variations within the two models. and staffing plans. Your revenue is the lifeblood
of your firm and you need to know if you will
Most architects will design their practice around a have enough to keep things alive.
design-bid-build or a design-build model. The
essential difference is a firm who only does the To create your revenue projection, you will use
design work versus a firm that wants to have both research and internal knowledge. Some examples
design and construction under one roof. To make include reviewing previous sales, talking to your
matters more complicated, there are lots of marketing team, contacting clients about future
variations within the two models needs, and reading predictions on design and
business trends.
THE ORDER OF
FINANCIAL MANAGEMENT A big part of creating revenue projections (and the
other parts of financial management) is using
You might start to notice that they are all closely software. There are many different services out
related and intertwined. The decisions made at there to manage every part of financial
one stage will influence all the other stages of management. Take advantage of them – they only
financial management. You might start to wonder make things easier.
where you should start and if it matters where you
start. For an architect, a revenue projection will cover
the following:
Path A. Start with the workload that is expected,
and determine what staff and other resources will • Backlog (Existing projects to be
be needed. completed)
Path B. Start with the staff available, and • Proposals that are outstanding
determine the workload it can support. • Unidentified future work

THE SEQUENCE OF EVENTS FOR OVERHEAD EXPENSE

BOTH PATHS WOULD LOOK LIKE BUDGET
THIS:
The overhead rate is simple to calculate. Take the
total overhead costs, also known as indirect
expenses, and divide by the direct labor cost. The
total overhead costs are a mixture of fixed and
variable expenses needed to run a business, like
rent, utilities, promo material, office supplies, and
travel. The direct labor cost is how much you have
charged the client for a project.

Having a lower overhead rate is a good thing, but

the nature of architecture means the rate won’t
ever be below 100%. An industry norm is 150%
to 175%.

A rate above 175% means that overhead expenses

need to be better managed. Having an overhead
rate that high should make you concerned and
should prompt you to immediately ac.

PROFIT
PLANNING

Your profit is what is left over after you pay for

all your expenses. Profits are required to provide
bonuses to employees, to fund capital
expenditures, and to reward the owners of the firm
for their risk. Importantly, some profits are
reinvested in the firm.

FINANCIAL MANAGEMENT
KEEPS THE BOAT AFLOAT

All this planning and calculations might seem like

a huge waste of your time. Everyone wants to just
focus on the design work – it’s more fun. Plus,
you might think that focusing on great design is
the key to a successful business.

It’s certainly a key, but there are multiple keys

and proper financial management is one of them.
Think of your firm as a boat with a hole in the
bottom. You hold the bucket. It’s your job to keep
the water coming in and going out balanced and
the whole thing afloat.