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Yonatan Pick

Architectural Price Proposal

A Price Proposal is one of the most important documents regulating the relationship between the client and the architect.
The proposal outlines the nature and scope of the project, defines the services to be provided by the architect throughout the project stages, and specifies the payoff, including the payment schedule.

After summarizing the price offer at the initial stage, there are two scenarios: either a full legal agreement is signed, or the signed offer stands as the only document.
The latter is often preferable, involving a simple and relatively short document, rather than a complex agreement drafted by lawyers.

Given the importance of The Proposal and its impact over the long term, throughout the entire project, it is better that The Proposal is transparent, clear, and covers all issues as much as possible.
This approach is preferable to ambiguity and leaving risks to disagreement.

The design of an architectural project and its construction can extend over a long term, often taking years, and requiring significant effort. This includes tasks such as developing the initial concept, producing comprehensive plans, and coordinating meetings and site tours led by the architect.
Therefore, it is better to take into work only a project that meets two conditions:

1.  Architecturally interesting

2. Financially profitable.

The Proposal should take care of the second condition.

In this short post, we will review a number of important points that should be included in The Proposal. At the end of the post, you will find a link to download a sample of the Price Proposal.

Here are 10 important points to note in the Price Proposal:

1. Fees: It is advisable to specify the scope of the project, the total to be paid to the architect, and the method used for calculating fees. Simply stating a percentage of the project cost or unit price may not be enough.
For example: The scope of the project is 2,000 square meters built above ground, 1,000 square meters below ground.
Total fees for the architect NIS 230,000.
According to 100 NIS per square meter above ground, 30 NIS per square meter below ground.
This ensures that both the client and the architect have a clear understanding of the fees, even if the project size changes slightly.

2. Payment stages: Each price proposal must include an advance prepayment stage with the signing of The Proposal as a condition for starting the work. The signature and prepayment serve as evidence of the client’s seriousness and cover the initial sketching stage.
It’s best to ensure that payment percentages cover the initial stages, which are vital for planning and creativity. Each stage’s payment should include costs and profit, regardless of external factors affecting project progress.
Partial monthly invoices can be submitted during project stages, not just at the end, since some stages, like licensing and plan preparation, take a long time.
It’s essential to specify payment terms for contract termination. For instance, the architect should be compensated for completed and ongoing stages, possibly with additional compensation.
Additionally, consider attaching an indicative project schedule as a separate appendix to the price proposal.

3. VAT and Indexing: It should be noted that the price does not include VAT, and it should be linked to an index. It is possible to link it to the Construction Cost Index – the field we are dealing with, which has been rising over time in contrast to the Consumer Price Index, which hardly changes lately. Many architects do not insist on payment terms for the cost increase, but there are thousands of shekels hidden there.
Additionally, it should be defined that the validity of the proposal is limited to a certain period, so if several months or even years pass, it needs to be updated.

4. It must be specified which additional payments will be applied to the customer, such as the copying institute, couriers and printing; payment of fees and charges to the authorities; Payment to other consultants, etc.

5. The proposal must define what the architect’s area of ​​responsibility is and in which areas other consultants are required, with whom the architect coordinates and leads the project planning. Of course, the larger the project – the greater the number of professional consultants, and it may include a project manager, supervisor, surveyor, constructor, system consultants such as: electricity, plumbing, air conditioning, elevators; Traffic consultants, safety, protection, accessibility, environmental, marketing visualization office, and more.

6.  The architect’s responsibilities for the building must be clear compared to other designers like interior and landscape architects. If the proposal is only for architecture, it covers building and interior design but not furniture, lighting, layouts, or outdoor design details.

7. Licensing: The proposal includes preparing one permit application. Nowadays, licensing is online and involves uploading materials from other consultants, along with more complex bureaucratic processes.  Any changes requested, especially those due to client decisions, will require an extra payment.

The proposal must also indicate whether it includes/does not include a change to the TABA. (The preparation of The City Building Plan in Israel called TABA)

8. Changes: It’s important to state in the proposal that significant alterations after planning and customer approval will result in extra fees, usually charged hourly.

9. Publication of the Project: The Proposal should state that project publication across various media platforms (press, television, internet) will credit the architect or architectural firm. This acknowledgment is crucial for the architect’s recognition, as sometimes projects or designs are presented without proper credit. Regardless of font size, it’s essential to give credit where it’s due.

10. Working Hours: It’s important to address the misconception that architects are available around the clock. Clients should understand that sending messages, like WhatsApp, at late hours or during weekends may not receive immediate responses.

Given the prevalent technology and the expectation of constant availability, there’s a tendency for individuals to blur the lines between work and personal life, often driven by a desire to showcase their dedication, even during odd hours and weekends.

To address this, a new clause has been added to the price proposal: “The office’s working hours for meetings and communication via phone and email are from Sunday to Thursday, 9:00 to 18:00”

Sample Of The Proposal



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