Phases of Design Guide

Understanding Phases of Design, Fees, and Deliverables

Design Services Provided by Architects

by Marco Aguirre

Published August 20, 2022.

Architecture firms offer their clients a variety of services, including planning, project design, construction management, and overseeing operations for the completed building. In this article, we will discuss the entire project delivery process and the fees and deliverables associated with each step.

Executive Summary

The structure of this article will be broken into 2 parts. Part 1 will track how the overall project costs are distributed and how much and when various teams are compensated. Part 2 will follow the six phases of design as outlined in the AIA Best Practices Handbook, “Defining the Architect’s Basic Services”.

The first phase is programming, also known as predesign (PD), this stage is not a required step but is highly recommended to owners who have yet to define the project budget, schedule, and other necessary parameters to begin work on the design cycle. The second is schematic design (SD), in which the architect and client discuss project goals and requirements and develop a basic schematic for the work. The third phase is design development (DD), in which the architect creates the project drawings and specifies detailed design elements and major building systems. Most of the services architects perform—typically accounting for two-thirds of firm billings—are for project design stages. Next, the architect prepares the construction documents (CD) for the project, which include much more detailed and specific plans—including material specifications—sufficient for a contractor to develop a construction bid. These plans are then submitted to contractors for their bids. At the conclusion of the bidding and negotiation phase (BID), the client evaluates contractor estimates, selects the winning bid, and awards the construction contract. The final phase is construction administration (CA), in which the architect’s role is to work with the contractor and owner to ensure that the project is built as specified in the plans and construction documents, and consistent with the design intent.

As a young architect pursuing licensure, I found existing guides on the design phases lacking a concise explanation of deliverables, the breakdown of fees, and the involvement of non-architect collaborators. As there are many moving parts and parties involved, I wrote this article to educate myself on the process and share it with anyone else looking to understand how buildings get built. Last, this article should serve as a baseline reference, nothing in the building industry is ever “one size fits all” so do your own research to find what best process and data best suits your own circumstances.

- Marco A. Aguirre

Breaking down Project Fees

Billings by Phase of Design

Architectural service billings are typically back-loaded, meaning fiscal arrangements are made ahead of time but paid off as a large portion of activity has occurred. The schematic design and design development phases together typically account for just over one-third of total billings, even though they often account for a larger portion of time in the design and documentation phases. The construction documents phase alone accounts for 40 percent of project fees, on average. The final two phases, bidding and construction administration, typically account for less than one-quarter of billings. In the project delivery process, the greatest share of billings is incurred during the last three phases (CD, Bidding, CA). This will be discussed in the next section in more detail, but the Predesign phase is not listed because on average this cost of services for planning is absorbed by the firm to win the contract from the owner or conducted by an independent architect not involved in the rest of the stages.

Source: AIA’s Architecture Billings Index 2014 White Paper "Designing the Construction Future."

Length of the Design and Documentation Phases

For the majority of projects, the design and documentation phases (schematic design to construction documents) last less than nine months. However, there are many factors that can affect the duration of a project in the pre-construction stages. Having a public (as opposed to private) client or designing larger, more complex projects are two major factors cited by architecture firms that have the greatest potential to increase the project design time. Projects that are retrofits or rehabilitation (as opposed to new construction) and buildings with a proposed LEED (Leadership in Energy and Environmental Design) certification are also factors with the potential to increase the design time. External factors that are difficult to predict might also upend your project timeline, like economic recession, material scarcity, turnover, and so on. On the other hand, more collaborative project delivery processes such as design/build, construction management, and integrated project delivery can result in projects that have shorter overall project schedules than projects using a traditional design/bid/build project delivery method. Again from the AIA’s Architecture Billings Index, we see (image below) the distribution, in months, of the length of time to complete the design and documentation phases for the typical architecture firm.

Source: AIA’s Architecture Billings Index 2014 White Paper "Designing the Construction Future."

On average, nearly half of architecture firm billings are from projects where the design and documentation phases last less than six months, and two-thirds of billings are from projects where the design and documentation phases last less than nine months. Just a small share of architecture firm billings is from projects where the design and documentation phases last for more than two years. These estimates will be used to estimate the average duration in the breakdowns below.

Percent Fee Compensation by Project Team

Guidelines for determining compensation are based on the typology and complexity of the design, the projected cost of construction, and the hourly fees of the teams and team members involved. Below, we will elaborate on each of these three points to see how costs are estimated and compensation calculated.

1. Building Typology and Complexity

The more complex the project, the higher the percent fee compensation. Some organizations will know right away the level of complexity will be based on their past experience with working on the same or equivalent typologies. This is because building typology is one of the top indicators for knowing the predicted energy consumption and expenditure, as well as what facilities, equipment, and other systems strategies will be required. Knowing typology is also crucial for cost estimating in the planning stages and benchmarking in the design and construction stages.

Complexity is usually divided into the following five categories:

Projects of above-average complexity or buildings with special facilities and complex building systems.
Projects of average complexity, buildings with more repetitive elements than special facilities, and complex building systems.
Projects of less than average complexity or buildings with repetitive elements and no special facilities and simple building systems.
Utilitarian buildings or buildings with no special facilities and no building systems, i.e., simple loft-type structures (without any special equipment), such as parking garages and warehouses.
Repairs/renovations of limited complexity involving a single discipline (engineering or architecture), i.e., repairs, replacements, mechanical/electrical plumbing work, etc primarily.
Other factors not listed above include time acquiring additional personnel, training, or equipment before or during design.

2. Cost of Construction

As mentioned above, the level of complexity is first considered so a cost of construction estimate can be established. In the table below, we show an example of how an Architect's fee may vary depending on the project cost of construction and the project's level of complexity.

Cost of Construction	Least Complex	Average Complity	Most Complex
up tp $100K	8.0%	10.0%	12.0%
$100K+ to $250K	7.0%	9.0%	11.0%
$250K+ to $500K	5.9%	7.9%	9.9%
$500K+ to $1M	5.5%	7.5%	9.5%
$1M+ to $5M	4.7%	6.7%	8.8%
$5M+ to $10M	4.2%	6.2%	8.2%
$10M+ to $25M	3.7%	5.7%	7.7%
$25M+ to $50M	3.0%	4.9%	6.9%
$50M+ and up	2.5%	4.5%	6.5%

Source: architecturalfees.com

3. Hourly Rates and Fees

Hourly rates are essential for an organization to document, calculate, invoice, and distribute compensation. The method used below shows the average hourly rates for the 3 main teams: architecture, engineering, and construction. The average hourly rates (Salary Plus Overhead) are documented in USD ($) and sourced during Q3-Q4 2022.

Design Team

Principal (Architect/Engineer): $150 per hour (up to $400/hr, based on experience)
Project Manager (Architect/Engineer): $120 per hour
Senior Architect/Engineer: $100 per hour
Design Architect/Engineer: $75 per hour
CADD: $50 per hour
Administrative: $40 per hour
Cost Mark-up: 18% (National average according to US DOI, 07/22)
Instead of hourly rates, you could also encounter architects who charge per square foot. Most professionals use these rates on smaller projects that are simple to estimate in this regard. Generally, the standard architectural fees per square foot are about $1 to $5 per square foot.

Construction Team

General Contractor: $50 per hour (Up to $150/hr)
Construction Project Manager: $50 per hour (Ranges between $25/hr to $85/hr)
Construction Superintendent:$50 per hour (Ranges between $40/hr to $60/hr)
Project Administrator: $25 per hour
General and Trade Foreman: $25 per hour
Construction Crew Worker: $15 per hour
Sub-contract: $35 per hour
Labour Burden Cost: 20% (National average according to US DOI, 12/22)
Cost Mark-up: 50% (12/22)

Conclusion

With these factors explained, the best reference for the percent fee compensation by category is broken down below. The research to compile this conclusion came from a patchwork of sources and industry recommendations. Learn more about the reference in the source cited section at the end of this article.

Cost of Construction: 78% (Materials, Labor, Equipment, Overhead, and Fees)
- Soft Costs: 28% (real estate fees, inspection fees, project management, and taxes)
- Hard Costs: 50% (building, site work, landscaping, and overhead)
Architect fees: 5% of overall costs (Ranges from 2.5%to 12%)
Engineering fees: 1% of overall costs (Ranges from 0.75% to 1%)
Contractor fees:15% of the overall cost (Ranges from 14% to 22%)
Other A/E services: 1% of overall costs (ranges from 0.5% to 1%)

It is important to remember that 80% of projects run over budget. Recent studies have found that, on average, nationwide construction projects exceed their budget by 16% at a minimum—and often far more, leading to a recommended 20% contingency for cost overrun. That is to say that costs are hard to predict, but at least now there is an understanding of the buckets they're distributed into.

The Project Delivery Process

Pre-Design Phase

According to the AIA, programming –or pre-design (PD) – isn’t an official or required phase of design, but rather a responsibility of the owner. Depending on the project's ease of design or restrictive parameters, some projects can leap directly into the schematic design phase (ex., gas stations, big box retail, chain restaurants). The aim here is to gather all the information needed to begin the project. No drawings or designs are created during programming. Instead, you focus on defining the design scope of work and begin discussions around budget and schedule. While not technically part of the design phases, it can help ensure the project runs as smoothly as possible. The client answers questions about their wants, needs, and problems. If more planning is required, Architects may also conduct additional research, analysis, and surveys to best understand the limitation and opportunities of the site. Then they'll discuss the most appropriate path moving forward based on the architect's discovery and recommendations.

Goal: Uncover important information, identify potential roadblocks, and define what a successful end result looks like.
Billings: 0.0% of Architectural Fees. Firms can either make it an add-on service if the project has already been awarded or absorb the costs as firm overhead to win more projects.
Duration: No data has been collected to estimate the duration of predesign. Turnaround is based on the complexity of the design scope.
Deliverables: Program of Requirements, the exact format will vary by firm but likely a catalog, tabulation, or summary of all the information collected.

Another reason predesign is not an official phase of design is that it is usually an absorbed cost of the architecture firm. Firms attempting to win work from a new client, do so by demonstrating their services and project skills in this stage. Work done in pursuit of winning competitions, RFP (Request for Proposals), RFQ (Request for Qualifications), and any other outbound marketing efforts fall under this umbrella. For some growing firms, profits from awarded projects are used to cover the costs of active and unsuccessful project pursuits. According to the 2021 AIA's Technology, Culture, & the Future of the Architectural Firm publication, 60 percent of firms prioritize winning more new clients in the next 3 years, and one-third plan to incorporate more outbound efforts to do so. This makes optimizing predesign, one of the most potentially profitable phases when it comes to business growth.

Schematic Design Phase

Schematic design (SD) tends to be an architect's favorite stage because most of us explore many ideas in this phase in order to achieve the best possible design solutions. During the schematic design phase, an architect consults with the owner to determine project goals and requirements. The team takes what was agreed upon and translates it into architectural and spatial designs. Deliverables include the estimated square footage(s) of each usage type(s) and any other elements that achieve the project goals. To get to the final schematic design, an architect commonly develops study drawings, documents, or other media that illustrate the concepts of the design and include spatial relationships, scale, and form for the owner to review. This is also where the majority of early-stage analysis is conducted, like site analysis, orientation and massing studies, Window-to-Wall Ratio comparisons, benchmarking, and more. Zoning requirements or jurisdictional restrictions are discovered and addressed in this phase. Before moving into the next phase, an estimated project cost based on the overall project volume is also conducted.

Goal: Create a basic design for the shape and size of the space.
Billings: 15% of Architectural Fees (Range from 10-25%)
Duration: Two-thirds of firms will take under 3 Months for this phase, with 5 percent of architecture firms taking over 12 months.
Deliverables: Schematic design often produces a site plan, floor plan(s), sections, an elevation, and other illustrative materials; computer images, renderings, or models. Typically the drawings include overall dimensions, and a construction

cost is estimated. Note: The contract may actually spell out what is to be delivered.

Schematic designs are about laying the groundwork upon which more rigid components like Mechanical, Electrical, and Plumbing rely on.

Design Development Phase

The name appropriately describes this stage of design: it develops – from the schematic concept into a more refined and articulated architectural idea. Design development (DD) services use the initial design documents and take them one step further. This is where we develop the details by diving deeper into finishes, materiality, and system integration. This phase is also where we focus heavily on coordination. Each discipline, including Structure, Landscape, and MEPs (mechanical, electrical, plumbing), will need to provide a drawing set to the architect, including plans, sections, diagrams, details, and reference sheets. Accompanying the DD drawing set will be a draft project manual that includes an outline of the project specifications; more on specifications in the CD phase. The more developed documentation provided at this phase of design, the more successful later phases tend to be with the least redesigns. These documents may also be used as part of the approval process for early building permits and can serve as a basis for cost prediction in bidding, essentially providing the basis for an estimate for construction.

Goal: Refine and develop the design with more details and specifications.
Billings: 20% of Architectural Fees (Range from 10-25%)
Duration: Two-thirds of firms will take under 3 Months for this phase, with 5 percent of architecture firms taking over 12 months.
Deliverables: Design development often produces floor plans, sections, elevations, door and window details, and outlines material specifications with full dimensions. This drawing set also includes structural drawings, MEP (mechanical, electrical, and plumbing) drawings, civil engineering drawings, and landscape architecture drawings. Other consultants such as acoustics, fire protection, and envelope may provide drawings and documents as well.

The level of detail provided in the DD phase is determined by the owner’s request and the project requirements. The DD phase often ends with a formal presentation to, and approval by, the owner.

Construction Document Phase

The next phase is construction documents (CDs). This phase entirely revolves around producing the final drawing set and project manual that will be the binding contract between the Architect, the Contractor, and the Owner. In the CDs, all the building practices coordinate to turn the design into something buildable and safe to inhabit. Good construction documents provide the Contractor with the most comprehensive understanding of the Architect’s intent. These documents will precisely describe every facet of the design and how it will be built. Some of the most arduous tasks occur here, such as spec writing. Technical specifications (specs) are written descriptions of the materials, products, and workmanship used to construct a building, as well as the standard and performance of related services. Typical 100% CDs will include hundreds of pages of architectural drawings and specifications with sections dedicated to Architecture, Structural, Mechanical, Electrical, Plumbing, Landscape Architecture, and Civil. Once CDs are satisfactorily produced, the architect sends them to contractors for pricing or bidding if part of the contract. This phase results in the contractors’ final estimate of project costs. Last the CD set is also used to obtain a building permit.

Goal: Create even more detailed and comprehensive drawings and get documents submitted to local authorities.
Billings: 40% of Architectural Fees (Range from 35-50%)
Duration: Two-thirds of firms will take under 3 Months for this phase, with 5 percent of architecture firms taking over 12 months.
Deliverables: The construction document phase produces a set of drawings that include all pertinent information required for the contractor to price and build the project. Required components of the CD set includes:
- Architectural plan, section, elevation, and details. General building and zoning code analysis, life safety plans, and accessibility and sustainability standards. Civil grading and utility plans. Landscape plans, sections, and details. Structural plans, calculations, and details. Plumbing diagrams, details, and schedules. Locations and sizes of all mechanical equipment. Power calculations and locations of all power outlets, sources, light fixtures, and switches.

Embrace revisions but use analysis to mitigate them

As you progress, changes are bound to happen. The CD phase tends to see the most design revisions. Here are the top 3 reasons:

Finding conflicts in the micro details. The design of a building is incredibly complex, human error is inevitable so make sure to coordinate early and often to prevent as many misalignments as possible.
Going over budget. 80% of projects go over budget. Sometimes this is due to unforeseen events beyond human control, other times it is the result of poor communication. Preparation and planning can help reduce some of the most costly errors.
Failing to meet project goals. Whether it's meeting local code compliance or meeting the owner-contracted requirements, incorporating analysis early to stay on track to hit your targets is key.

Coordination of the specifications and drawings allows for accurate bids, and in turn, affords a more seamless construction process

Bid or Negotiation Phase

Out of all the design phases, the bidding phase is rather simple – the goal is to find a construction company to build the project. Typically, as part of the architect's contract services, they will be responsible for guiding their client to the best construction company based on their qualifications and price. There are two different types of bids: a negotiated bid and a competitive bid. The negotiated bidding process is more relaxed, as you are only dealing with one contractor. With this type of bid, the client or the architect selects a preferred contractor and works with that contractor to develop a cost and proposal for the construction. A competitive bid is where you have several contractors competing against one another for the project. The first step of this phase is the preparation of the bid documents to go out to potential contractors for pricing. For some projects that have unique aspects or complex requirements, the architect and owner elect to have a prebid meeting for potential contractors. After bid sets are distributed, both the owner and architect wait for bids to come in. The owner, with the help of the architect, evaluates the bids and selects a winning bid. Any negotiation with the bidder of price or project scope, if necessary, should be done before the contract for construction is signed. The final step is to award the contract to the selected bidder with a formal letter of intent to allow construction to begin.

Goal: Select a construction company to build the project
Billings: 5% of Architectural Fees
Duration: 1 Month. Typically, contractors take about three weeks to put together a bid. Once you receive all the bids it’s time to pick a contractor.
Deliverables: The first deliverable is a bid document set that includes an advertisement for bids, instructions to bidders, the bid form, bid documents, the owner-contractor agreement, labor and material payment bond, and any other sections necessary for successful price bids. A final deliverable is a construction contract. Once this document is signed, project construction can begin.

Usually, cost is the most important factor during the bidding phase. This is where the accuracy and completeness of your construction documents come into play. If the bids are all similar in cost, give yourself a pat on the back – you did your job well!

Construction Administration Phase

During the construction phase, the architect provides construction oversight. Contract administration (CA) services are rendered at the owner’s discretion and are outlined in the owner-architect construction agreement. Different owner-architect-contractor agreements require different levels of services on the architect’s part. CA services begin with the initial contract for construction and terminate when the final certificate of payment is issued. New to the mix are subcontractors who undertake the work that a General Contractor (GC) cannot do but for which the contractor is responsible. This is usually done to mitigate project risks or lower costs as subcontractors are usually specialists in one area like Electrical or HVAC. While most construction schedules are set to begin from the signing of the contract, often, the actual, on-site construction work for each of the individual parties hired to work on the project may not begin until they receive a Notice to Proceed from the party that hired them.

The architect’s core responsibility during this phase is to help the contractor and sub-contractors to build the project as specified in the CDs as approved by the owner. Questions may arise on site that requires the architect to develop architectural sketches: drawings issued after construction documents have been released that offer additional clarification to finish the project properly. Different situations may require the architect to issue a Change in Services to complete the project. In order for a completed building to receive its final certificate of occupancy from the local authority, the building must closely match the construction documents submitted and any changes of services, and pass a final building inspection.

Goal: Present the client with their dream space, on time and within budget.
Billings: 20% of Architectural Fees (Range from 20-30%)
Duration: No data has been collected to estimate the duration of bidding and negotiations
Deliverables: Progress photos, field reports, unexpected change orders, and a punch list. Final delivery is a successfully built and contracted project.

Sources:

Appendix B. Definitions of Design Phases, Excerpted from the AIA Best Practice, “Defining the Architect’s Basic Services”
AIA’s Architecture Billings Index: Designing the Construction Future. 2014
2021 AIA's Technology, Culture, & the Future of the Architectural Firm
Architecuralfees.com, architectural fees for homes and buildings explained. Check them out at https://architecturalfees.com/
Office of Financial Management. "Guidelines for Determining Architect/Engineering Fees for Public Works Building Projects".

by Marco Aguirre

Published August 20, 2022.

Cite: Aguirre, Marco. “Phases of Design, Fees, and Deliverables.” Cove.tool Help Center. Cove Tool, Inc., August 20, 2022. https://help.covetool.com/en/articles/6390200-phases-of-design-fees-and-deliverables.

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