ARE 5.0 Practice Management Exam Prep

portrait, Mike Newman

Mike Newman

11h 28m

In this ARE 5.0 Practice Management Exam Prep course you will learn about the topics covered in the ARE 5.0 PcM exam division. A complete and comprehensive curriculum, this course will touch on each of the NCARB objectives for the ARE 5.0 Practice Management Exam.

Instructor Mike Newman will discuss issues related to pre-contract tasks including negotiation, human resource management and consultant development.

When you are done with this course, you will have a thorough understanding of the content covered in the ARE 5.0 Practice Management Exam including business structure, business development, and asset development and protection.

NCARB Approved ARE 5.0 Test Prep Material

Objective 1.1: Assess Resources Within the Practice

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It's a whole series of professional practice issues and those professional practice issues are gonna be fiduciary responsibilities so financial issues, legal consequences, things like that. There'll be a whole discussion about ethics and what it means to be a professional. There is a very odd thinking about that term like a lot of the terms that we'll talk about today.

We're also gonna talk about some sort of scenario ideas. And the reason that we're talking about scenarios is that the NCARB folks have decided that they're gonna move away from direct-type questions. So the idea is, you shouldn't be getting questions like, how many square feet are there in an acre, or something like that.

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So when we use the word firm we're usually talking about that kind of idea of how the business is being operated. When we use the word office, we're usually talking about the process, so we're talking about hiring people, we're talking about the organization in the office. Is it very hierarchical?

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So there are many situations where a general contractor and an architect may be talking about an issue and the architect says "OK, we're gonna paint it blue." And the general contractor can say "OK, we're gonna go, we'll go paint that wall blue." Because the architect has agency with the owner, meaning that the architect can speak for the owner. That's an important idea in how these things are rolled forward, because there's gonna be lots of times when different people sort of need to speak for different, other players. The architect specifically for the owner most notably.

So there's advantages and disadvantages, different situations will call for it, but effectively that construction manager, then, holds the contracts for the owner. Another example would be a multiple prime contract. So this would be a situation where I have an owner, I have an architect, they have the fairly standard, straight forward agreement.

That's sort of the classic example, if it's not listed what the project delivery system is, the assumption is that it would be design, bid, build. That concept has a sort of adversarial quality to it. So you have an owner, and they have a relationship with the architect, you have an owner that has a relationship with a GC, there's a very specific idea that the architect and the GC are kind of working together, but they're also, the architect is kind of overlooking the GC's shoulder in order to sort of comment to the owner, or make the owner understands what's going on and isn't getting railroaded by the GC and prices aren't too high, that kind of thing.

What is it that is needed in order to make a better, safer, and more reliable firm, be able to move forward and be a better practice and be at a better office in the world. So, okay, let's look at a couple more certain detailed looks at these ideas.

If we're talking about assessing the staff qualities or assessing the type of work that fits to this particular type of firm, what they're really talking about, the scenarios that you can imagine thinking about are, how do you make it so that firm that really should be doing, say, a hospital, suddenly ends up doing a hospital, and they don't have the appropriate staff and they don't have the resources to do it and they can't do it on time, so stuff gets cut, corners get cut and things move too fast for the type of abilities that that firm has. Suddenly you have a safety issue out in the world, right? We're talking about it as assessment, or how to put together a practice, but the exam is really thinking about it from the safety standpoint of, what makes sense for the safety of the public?

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We do quarterly check-ins, annual reviews, the senior staff and senior leadership actually do get together probably once a month to evaluate and make sure that we have people slated in the right areas, along with understanding our candidates past experiences, because it really does influence where we place them as they come in. Once they're in and we've worked with them for a while, we then re-evaluate multiples time, like I said, quarterly and annually to make sure that they're place properly. Most of our staff does come from multiple offices, whether it's large firms, small firms, residential firms, people who did mostly corporate.

But, once you have all the right staff in place, and the right people, you need a way to capture and measure the time that they're spending on the projects. So one of the resources that are absolutely critical I think, is a good time-management software. And there are a lot available out there right now.

Handling the quantity of work is very important because if you overburden your staff you're not gonna do a good job on the project. If you don't have enough work people are sittin' around not being efficient. So we have a pretty good way of projecting fees out for the next two, three, sometimes even six months and that gives us a very good idea of the picture of what we can absorb in terms of new work.

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We tend to make sure that we have a principal in charge on every project with a project lead heavily involved and supervised by all of our studio directors. Our entire office works as a single team. We don't have studios here.

Objective 1.2: Apply the Regulations and Requirements Governing the Work Environment

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But it's a really important, sort of general understanding that probably most of you haven't really thought about yet, which is this idea that, you know, it's not just a place that you go work. That that place actually fits into a whole series of sort of legal and ethical framework for a place of work. One of the things that happens a lot for architects, architects tend to see themselves as a little bit sort of removed from the world.

So in the context of the work environment, not only from a legal standpoint if an OSHA inspector by chance came by your firm, would there be an issue if you had something that was unsafe, but more likely is that an insurance agent is gonna come by your firm at some point, you're gonna be negotiating some insurance for something, and that insurance agent's gonna say, "Wait a minute, you can't have "a 10 foot drop with no handrail." And it's like what if somebody fell off that? What if a client fell? And once they start telling you those issues, then if something does go wrong, they have the ability to sort of get out of covering that from an insurance standpoint and it could really be disastrous for the design firm if the insurance company has told you to make something safer and you don't.

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"We're gonna talk about a sexual relationship "or a romantic relationship in this very dry document?" But it's actually kind of important because it can make a big difference to the morale of the folks who are working in a firm if somebody feels like somebody else is getting an unfair leg up because they have a romantic relationship with the boss or with somebody else on the team, or something. So, you need to be able to say somewhere, "Well, how are we gonna deal with that?" And here it is listed out. And it talks about prompt action if there's a problem.

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We have found some very good human resources collaborators who come from bigger firms, and we think that if we're gonna grow to that size, getting that big firm expertise is a good place to start instead of building it from the ground up. Also, for payroll and so forth, most firms outsource that. Here in Los Angeles I've found there's probably one or two that service the majority of firms and it's relief to not have that as part of the daily workflow, so outsourcing is a big way, especially in this growing, increasingly complex environment for payroll and human resources.

Objective 1.3: Apply Ethical Standards to Comply with Accepted Principles Within a Given Situation

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But what it's sort of getting at is this idea that you're not just doing work, you're actually doing work for specific clients and you should always strive to do excellent work the best you can for any particular given client but you're also striving for excellent for the people. You're also striving for excellence for quality design. You're also striving for excellence for, like, that you're always pushing for the best that's reasonable in that moment.

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So, in that category where the Canon was, we have an obligation to the public, and then one of the ethical standards might've been something about we should follow the law, well a rule would be, you can't take a bribe. You can't give a bribe. Those would be a couple of the rules.

So that's a different business, it's a different type of organization, and they have their own set of ethics and rules about how they can do things, and that's an OK thing in that world. An architect, however, cannot choose a specific type of drywall, for example, and make money from that specific choice. For example, you couldn't be where you are an owner of the drywall company or that you're getting a kickback from the supplier of that drywall because you were able to choose this one.

Objective 1.4: Apply Appropriate Standard of Care Within a Given Situation

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So when we're talking about a design practice, as we've said, there's sort of a series of different issues that we're talking about. There's this ethical construct in which a group of people are getting together to do projects for another group of people so the design firm working for the client and it's in a public sphere and there's this whole sort of series of these different set of relationships and in that process and in that sort of context there are lots of different ways that we start to think about these things, right? We have marketing materials.

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Another architect in a similar situation, doing similar type of work in a similar locale would likely have made the same set of decisions that I did, so that would be your defense in that litigation because you would be saying, no, I met the standard of care. On that first example, even though you'd be claiming that you met the standard of care, in fact, you wouldn't have been meeting the standard of care because another architect in a similar situation, in a similar locale, wouldn't have made the decision that you made. So, this is kind of a key understanding of how the legal aspect of these sets of relationships which, if it comes down to litigation, it's always a problem, and it can be very expensive and very time-consuming, so you really wanna have an understanding of, what is this standard of care and how does it relate to the decisions that I'm making?

Let's say the client says "you promised me "the most beautiful building in the city "and this is not the most beautiful building in the city." Think about that statement, "you promised me "the most beautiful building in the city." Now, you're marketing materials may have said something about "we make buildings that are beautiful" or something along those lines, but I hope your contract didn't say that because that's not something that you can really contract, right? How could you say, "well, no, I guarantee "it's gonna be a beautiful building" when your and my idea of beautiful may be quite different. So, this would be an example where this discussion is not part of the standard of care, this doesn't make any sense in the context of standard of care.

It's the context around which that underground tank sits in terms of the timeline, the information, who's involved, and it's always referencing back to would a reasonable, competent architect, in a similar situation have made the same decision or made a different, better decision, and in that first example, we said well, in a rural setting, really, how would anybody know, right? There's no way that any architect, you can't see through the ground. In that second one, well, it really depends on the specifics, right?

So the standard of care, would somebody else have made similar decisions, alright. Would they have set it up in such a way that people could get hurt by this really beautiful but difficult moment? This kind of thing happens all the time.

It's something where it sort of posits a situation that you are in, and then you have to kind of understand that there's a series of codes, there's a series of contracts and rules and principles, and you're always gonna go back to those. Make sure that what you're doing follows those codes, and follows the principles and standards, but then also follows the codes and the written aspects that are in your contracts. It also means that you can't sign contracts.

Objective 2.1: Evaluate the Financial Well-Being of the Practice

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I figure out how many billable hours that is gonna be equivalent to, who's gonna work on it and therefore, how much money per hour. And then I can kind of combine all that together, understand how much I need to charge somebody. I take that overall number, I put it into the contract.

A business plan is going to be a document that has a whole series from very big ideas down to little nitty gritty issues, and it's going to play out the whole way that you're imagining how this enterprise could work. Business plan could be a page or two, some bullet points, a paragraph of thinking about it, it could be something very simple like that, or it could be the size of a book. It could be many hundreds of pages.

So, the business plan is a lot of work, but it's a really important document to do, early on in the process. So, I have and example here from Palo Alto Software. It's a company that does lots of different example business plans and other documents, just to give you a sense of the flavor of what one of these things might look like.

So maybe there's an idea about how much financial gain you'll be able to have, and that would be important because in order to be that mission, in order to really fulfill in this case this sort of high-tech desire, you're probably gonna have to have a lotta new computers constantly, you're gonna have to have new programs, you're gonna be thinking about these things, you need to have new young talent all the time. So in order to be able to do that mission, the objective is really you're gonna have to have a certain amount of income coming in in order for that to be really believable. And then they're also talking about here about market areas, what they can do with their three-dimensional construction documents.

So we start getting down in here, we start seeing the description of the services, so presumably this paragraph or this page or two pages would start to describe very detailed versions of what was said in that mission and those objectives, so you're filling out that idea. So we said we wanted to be on the forefront of certain technological advances, well then the services should represent that, it should be very clear. Now they presumably won't only represent that, because there's probably other services beyond just the specific mission, cause you're probably gonna be a full-fledged architectural firm as well, so you need to have all those services listed, but then also clarity on the ones that are the key driving forces for this particular design firm.

You need to show somewhere what the office is going to be like, and this is that moment, where you say, This is how we're really gonna make this work. That's that competitive edge.

So obviously, when you're doing projections, you're making it as best guess as you can, and you're trying to make sure that it seems reasonable that you will actually have a cash flow. It doesn't always work the first year. Things get a little complicated, but the idea is that you get it to work over a span of time, and you want to be making reasonable expectations on your business plan so that you're not forcing yourself into a complicated and difficult situation.

By the time you're established, you wanna really make sure that the firm is actually spending the reasonable and appropriate level of the percentage of their income on each of these different sets of categories 'cause if you're spending way too much on say design, well then at some point that's gonna come back and bite you. You can't have a situation where you're spending 85% of the income on design time. That just won't function down the road.

Now we're in that project, and we mentioned that this concept of the billable hours, so part of that business plan, part of that pro forma, is understanding how long things are gonna take and how much you can charge for them, so that we're guessing that we'll be able to do these kinds of projects, it'll take roughly this amount of time, we'll be able to charge this amount of money, so we'll have this idea of how that's gonna go into the future. Time is money. Pro forma is about the projecting, how we think that's going to work.

It could be that we've decided that, "Okay, like we said, we're gonna have 12 hours "and Karen, the designer, is gonna be working on it." Or it could be that, after we sort of do this calculation, or look at the timeline and realize, "You know, instead of having Karen work on it for 12 hours, "we're gonna have Karen and David work on it "for six hours each and that's gonna total to 12 hours." So this is a system that allows you to then keep changing in order to figure out how to fit it into the workflow in an office. So, somebody is spending time looking at the overall flow of work in an office, and saying, "Alright, we've got some time over here, "we've got time coming up. "We need this five projects to get done.

Objective 2.2: Identify Practice Policies and Methodologies for Risk, Legal Exposures, and Resolutions

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Or maybe we feel comfortable with just doing one at the beginning and one at the end of a project because we do a lot of the same kind of project or something so it doesn't really need a sort of whole formal code compliance milestone review at any other point. Or maybe we don't do it per project at all. Maybe we do sort of office wide code compliance reviews once a year or once every month or something as a way to sort of know that we're complying but not to sort of get in the way of a project that's in flow at the moment.

Or it could be that the client does it for themselves, and that you're working with the client in order make sure that everybody's meeting the quality assurance plans. But the idea is that it's a written document that you physically go through and make sure that you're actually hitting on all of those notes. Not just in your head, but you're actually going through and checking off each of those different boxes.

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And the sort of main two that you would find, one is gonna be GL, a general liability insurance, and the other is gonna be what's sometimes referred to as errors and omissions, which is really a sort of technically professional liability insurance. So those two, professional liability insurance and the general liability, any architectural practice really should have both of those types of insurance. So, what are they?

First thing when you have insurance is make sure that you're using the right contract. Having the right contracts is hugely important. The insurance companies will be very emphatic about that.

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But there are these sort of different tools by which these things happen, but you should absolutely have an idea of the difference between mediation, arbitration, and litigation, 'cause that is guaranteed to be on the exam in some form. I don't think it'd be a lot about it, maybe just a question or two, but it's absolutely an important thing that you should understand, because you need to know what kinds of contracts you should be writing and signing in order to have the right kinds of situations for the projects that you're working, for the project delivery types, and the scale of the projects that you're working on.

Now, it's important because you can have a great deal of liability about certain decisions if you make a decision that is one that leads to people being hurt, like a building burning down or something, well, obviously, that's a very, very important thing. It's not that it's not important, it's that it's about decisions and ideas. Contractors is a term that you should definitely feel comfortable with is materials and methods.

So, an owner-architect contract, it'll have words in it that say things like, "The architect should act reasonably." "The architect shall endeavor to" do something. Those are kind of interesting contractual words, like, what does it mean to act reasonably from a contractual standpoint? Like, that seems kind of wishy-washy, doesn't it?

And from that big statement, there's going to be sort of policies, you know, where it's going to be like, "Alright, we're going to have a quality assurance plan," or, "We're going to use these kinds of contracts," or, you know, whatever it is. And from those policies, there's going to be, then, specific actions, and then there's going to be follow through. So, that is always going to be the case.

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I have prime number two, and I have prime number three, and each of these has a contract with the owner, and each of them would have their own subs, and those will all have contracts just with the prime, and so the whole idea here, like when we say a prime, the reason it's called a prime, is because it's not like a sub. This is somebody who's doing the shell and core of the building. They're doing concrete, they're doing steel, they're doing cladding system.

Yeah, that's gonna be an issue with the dollar amounts because we're basing our dollar amount on just the initial written program, right? There's no drawings to base those construction costs on. So, oh man, that's definitely gonna be an issue that we have to be very careful of.

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In arbitration, you run the risk of whoever the arbitration board assigns and sometimes that causes problems especially in cases in design and architecture.

Quality control and quality assurance is really important to us. That's QA, quality assurance, and quality control. We have extensive checklists that we've developed in-house, and project managers are required to implement those, and have other people who haven't worked on the project cross-check everything, and that's a way of minimizing mistakes and catching omissions, and making sure that the projects move forward smoothly.

We then communicate, hey everybody, this is now public and we're allowed to share. At the same time, the Principles are really the only ones who are allowed to speak externally about confidential projects. So, again.

Objective 2.3: Select and Apply Practice Strategies for a Given Business Situation and Policy

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That there's sort of a way of thinking about these things, sort of an overall way of organizing, and considering, and making sure the right staff is working on them, and thinking about it from a sort of strategic "What's the way that we're gonna put these things "all together to actually, really make a practice?" That seems sort of straightforward, and it is fairly straightforward, but let's just talk about some of the issues that would be sort of at issue here, some of the basic ideas that we would be thinking about when we're trying to be strategic when we're talking about like how we're gonna move the practice forward. One that we've talked about a number of times already and we'll keep talking about because, like I said, it is sort of the basis of a lot of the different relationships, and that's gonna be the project delivery type. So if you're a firm that is mostly focused on design-build, that's gonna change all the ways how you're gonna think about how your strategies work.

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But sometimes, you have owners that are just much more active in the process, and they wanna be in control of all of that, and so that's fine, that can be theirs, it's not something that you are necessarily legally mandated to do, it's something that you kind of want to do, which I know sounds ridiculous, 'cause nobody really wants to write the meeting minutes, but trust me, it's really important, and it's one of those things that will be a positive in the end, if you have the ability to keep track and control of all of this information. So, the information always has clarity about who's writing it, about what the topics are, about what date it is, about who's attending, and then a clarity of simple statements, usually declarative statements, that give an idea about what the discussion was, and where it went to, so we looked at option one and option two, and two was preferred because of this reason, so that down the road, somebody can backtrack through all that information, and understand why decisions were made. And then don't forget the various exhibitions of, if you say option one and option two, you kinda have to show those somewhere, in order for that to be meaningful down the road, so all of those different exhibitions get listed on the end.

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You have to remember to stop what you're doing, you just had a phone call with a client, they ask you to make a change, you got to go and keep track of that. You're not necessarily putting a lot of information in; what you're really focusing on is what was the change; so, a quick little description, might be bigger if it's important and more like a paragraph or something. But, it could be just a couple of words like take the second stair out and replace it with this; you know, something like that.

One is the term developer, can just mean somebody who is an owner but their intention is to, very quickly, not be an owner, so a developer who's building, say, a condo building, would be somebody who's going in, making a building, building it as reasonably fast as they can, selling off all the units, and then they're gone versus somebody who is an owner, they're going to hold onto the building for a long time, let's say a campus or somebody, or a corporate entity that this is making their corporate headquarters, they're going to hold onto that for a long time and that mentality is a different mentality than the developer mentality, which is "okay, "we just wanna do it right, we want to do it well "but we also want to get it done and then be gone." If I'm the developer, and the architect is talking to me about some sort of really great heating, cooling system that's gonna have a payback of 30 years but after 30 years it's gonna be awesome, it's gonna be really hard for that developer to think that that's a useful thing because they're long gone after three years or something. Whereas the university owner, that example of the longer-term, or the corporate headquarters, that may make perfect sense to them, right? So there are lots of examples where this difference between the developer and the owner will make perfectly logical sense of different ways of approaching them even though the buildings may be very similar.

Objective 3.1: Analyze and Determine Response for Client Services Requests

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So the RFS is gonna be more like you're gonna provide a service for us effectively you'll be on kind of a retainer and we'll just have project after project after project. And they tend to be a little bit smaller, but there's a lot of 'em. Now RFSs can be done a lot of different ways, so it's not always like that, but kind of in general, that's how people would normally think of them.

That it's worth taking a chance on this because everybody who is sort of in the production round of how these things go, you're gonna be a breath of fresh air in that process, so it's possible that you don't need to show directly experience, but most of the time, there's gonna be a desire for a client when they're looking through a bunch of RFP responses, they're gonna wanna be able to say "Yeah, these folks have experience, "yes, these other ones don't, "we're gonna take them off the table." They're gonna need reasons to be able to weed people out in order to make a decision over who is finally left, and then the finally little conversations about which proposals will get chosen. So this idea of having useful experience, generally, that's gonna be an important part of any RFP. You're gonna wanna have somebody on the team that can demonstrate work that is similar to the work that is being asked.

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So we're gonna hire team B and then tell them about team C's proposal, so that they can then sort of take that on as theirs. So there's some tricky stuff here. It's a little bit complicated to say whether this is a good thing for architects or not.

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It's a theater building that has been not well used in the last few years and they want to have something move into it. So let's see what it says. So the RFP starts with an overview, describes the overall situation, has some site facts.

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So we're just saying is this going to cost more than we're going to make, or are we going to make more than it's going to cost? Now clearly, you don't really know. No pro forma is going to be exactly correct because things will change, markets will change as you go along.

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So there's gonna be some very simple, straightforward way that they're gonna want it. They might also want a PowerPoint, or something along those lines. They also note here that all of the proposals should be eight and a half by 11.

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And then there's lots of other information that's specific to how this particular organization is gonna be going through, but you get the idea that all of these things add up into a full idea of what you really need to have prepared for how you're going to approach that information. And then in this particular case, they're gonna talk about each of the different phases. So here's the pre-design phase, then there's the design phase, and each of the different phases within the design phase are gonna be talked about.

It's about having not just a process, not just an idea, but sort of a game plan that is literally probably a plan and making sure that you're getting enough information across without sort of handcuffing your later process. So, obviously you're trying to figure out, what is it that they need? And different question but similar, what is it that they want?

The downside here is that it ends up taking a lot of time, and so if, in our normal thing of SD, DD, CDs, B and CA, so schematic design, design development, contract documents, bidding and construction administration, if you're in that, before you've even gotten the job, if you're going way into this territory, well that means you're spending what is the equivalent of 20% of the fee just to get to the spot of getting the job you know, that's too much time, that's too much of a risk. This is a problem that we should really be careful about. The other issue is that even if you get the project, the contracts aren't set up for being that far ahead of the game, so you may have a situation where even if you got the project and then something happened, you wouldn't get paid the full amount.

I'm not getting to that, I'm just taking a certain assembly and finding a linear foot or a square foot cost for that assembly, getting a pretty rough justice of the number of linear feet and the number of square feet for that, and I'm getting a much more detailed idea of the number than just a straight square footage where you're trying to balance all those things in a very loose way. So assemblies, you'll often find that is a system for approaching it. It's probably a little more detailed than most people will do for a RFP.

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Again, the process here, because we have a principle in charge with each project, you'll kind of get three principles in one. Even though one person is the principle in charge, the other two are always informing the design process. When it comes to each project when it kicks off, a lot of times we take precedence of the surrounding areas.

Objective 3.2: Analyze Applicability of Contract Types and Delivery Methods

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And one of the things you'll find is that if I hand somebody a 50 page contract or a 100 page contract for a small project, that has assumptions for them about who you are and what you're bringing to the table, and they're gonna walk away and that's not gonna give you the right set of relationships. Equally, imagine you did it the other way. I'm doing a garage.

And it's gonna be better and worse for certain aspects, but it's just sort of a different approach of a different type of contract. And then just a sort of comparison, here's for fast track. Fast track is this kind of nutty idea where speed is of the essence, where of the three things, obviously scope is important always because you need to know what you're building, but sometimes the costs take control, sometimes the schedule takes control.

The G's are about the process, so, for example, if I'm gonna do a payout review, the general contractor's probably gonna use a G702 and then that G702 is gonna be a form that he's gonna fill out and is gonna have a bunch of trades and how much money they're owed and then you're gonna review it as the architect and then you're gonna sign it, and then the owner will sign it, and the GC signs it, and that's how much money gets paid out. Well, that's gonna be one of those G documents, and there's a whole bunch of those as well. You probably, in any one practice, probably only use a few of them but different practices will use slightly different versions of those things, there's a bunch of different types depending on the project delivery and the contract types that you do.

So, in this one, instead of having this big, complicated contract with referencing in all these different things, it's going to be just a few pages, and most of that stuff that you would reference in a sort of simple version will be kind of placed directly into that contract 'cause it doesn't really make sense for a limited scope with a less sophisticated contracting situation with a less sophisticated owner, for example not somebody who builds all the time. You really wouldn't expect them to be able to reference all these other different documents all around they really should all be clear and simple and in laments terms, right? So again it's always going back, is it about the cost, is it about the scope, is it about the timeline, and then you'll find there's many many different versions, the one that you're really focused on, which is for relatively large projects but not enormous projects is gonna be the A101, and that's the one you should really read.

You should know that they exist and that they're kind of this range that's out there that you can get a specific contract for a specific scope of project, and a specific way of dealing with the fee structure, but in general, the ones that you're really gonna spend time on is gonna be that B101, and it's probably smart to know that there is a B103 and a B105, but I wouldn't really spend too much energy worrying about that. So the point of the Bs, the point of thinking about the architect ones, is that those are gonna be the ones that are about, the sort of sense of design thinking. How is the design intent being controlled?

So we've go the A101 which is the owner-contractor agreement and then we've got the B101 which is the owner-architect agreement and then we've got the A201 which is the overall general conditions so the A201 is an interesting one. It's this overall document that has lots of specific pieces of information that all the other documents reference to. So it's not actually a standalone contract.

So it's going to tell us about what the contract documents are, what the work of this contract is. That's a weird term, the work. It's actually how, in this context when you see the word work, it means the overall project, it's how they contractually talk about the making of the building.

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It's sort of a lot of information here that's just gonna describe how that's gonna go. You can change it if you need to, but generally it's just sort of putting it all on paper so that everybody understands, you're not gonna get all the money right up front, you're not gonna have to wait all the way to the end. You're gonna get paid at milestones or per month or whatever it happens to be.

What's the work that's going to be done, the scope of work, how much is that work going to cost, what are the fees and then how long will that take. Those three issues are going to be the essence of this overall contract. The way that it's going to break down, we have the architect's responsibilities, the scope of the architect's basic services.

Again, this is information that may change, and so it's sort of an expectation that as you go through the project, you may actually shift some people out and some people in so there's an ability to sort of update this information, but you have to start somewhere, and it's important that the contract includes who your team is so that they understand that they're hiring not just one person or something, but a full team who can actually handle the overall scale of the work. And then as you start looking through, you'll notice a few of these, we're not gonna talk about all of them, but look at this one, 1.3.1. Any use of or reliance on all or a portion of a building information model, a BIM model without agreement to protocols governing the use of that, the information, et cetera, et cetera.

"The architect shall perform its services consistent "with the professional skill and care ordinarily provided "by architects practicing in the same or similar locality, "under the same or similar circumstances." So what's that saying is this is not a contract to say that we're gonna provide the most beautiful building ever. This is not a contract that says this will be the most efficient building ever. This is not a contract that says any hyperbole at all.

Another thing that's sort of built right in is that it's expected that the architect will help the owner get through the permitting process or other sort of processes that involve with dealing with local townships or city officials or state officials, anybody that needs to be informed through this process, there's an expectation that you're gonna bring that information and make those connections and set that process up. The expectation there is that the owner typically wouldn't really know how to do that, and so you are expected to make that happen. Doesn't mean you're paying for the permits or anything like that unless it says you're going to in the contract, but it means that you are expected to make that work and bring all the information through that process.

It doesn't necessarily mean that you have the money in hand, but it does mean that you're explaining that the owner is responsible for if they contract for this amount of work, they have to be able to do that and so there's a place here where the owner is saying, "Yes, I understand that." And then it just goes on with lots of other specific needs that are worth reading through to really have a sense of what is expected from the owner. And then we get to article six which is the cost of the work and this is one of those spots where it seems like it should be pretty simple, but there's a lot of little nuance in here. So in general, this is the spot where you're saying, "Yeah, we'll do it for $45,000," and it's gonna have a spot where you can fill that number in.

You're just there to be a tool for their process in that, but most situations, the basic assumption is that the architect will hold onto the copyright, so built into this is saying, "Yes, you own the copyright "to your designs and to your work." But, you knew there was a but coming, the owner gets to have the right to use that work, so they have the right to the use of the work that the copyright is for for this project in this location. Now, let's say you're doing a project and you do a house for somebody and then you go by a couple years later and you realize, "Wow, my design is, like, all over the neighborhood." That means that that contractor, that owner, built that house a bunch of times, and you only got paid the once. Is that okay?

"We're stopping the process." But the owner can also say, "Look, we're just gonna "stop the process because we're just not happy. "We're gonna stop it for convenience." So there's a bunch of different little nuance differences for different ways the project can get terminated, and it would be useful and important for you to understand those 'cause those are likely to show up in some way on the exam. So one little example here is a termination fee.

And then once you're done with that, now you're getting down towards the end, you're gonna figure out how the payments work, you're gonna see that the scope of the agreement is gonna talk about all of the other family of documents that are gonna be involved and who the other players are gonna be, anything else that needs to be brought in to be able to understand the project, and then, there you go, down at the end, you're gonna sign their document. So this is where you said, "All right, this is the scope of the work. "Here's the cost of the work, "here's the schedule for the work, "here's our decisions about termination, "here's our decisions about dispute resolution, "here's all of those other elements." We gather 'em all together, we're all on the same page, this is where all of that information is really similar to the A-101, but they're different.

So as we start to run through it, the first thing you'll notice is in the index, because it's referencing to all of these different contracts, there's a whole series of ways that it's talking about all of that information so that people can find the appropriate piece of information quickly and easily, 'cause it's not just a standalone document, it has to be able to be understood by lots of different people all through these multitude ways that it gets referenced from one contract to another. So you have this whole index here, which I point out is many pages long, so that's a lot of information about just helping people track down where the information they're looking for is.

Everything that you produce in order to figure out what those final drawings and specifications are going to be, that's the instruments of service. Now, the vast majority of the time, this doesn't really matter, right? You're gonna do a project.

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So things like that do show up in the architect's purview, but then once that is handed over, it's now part of the contractor's job to follow the contract documents. So they get to decide how they're going to use that staging area. They decide when the materials are brought in.

Under 9.8, it's gonna say, substantial completion is the stage in the progress of the work when the work or designated portion thereof is sufficiently complete in accordance with the contract documents so that the owner can occupy or utilize the work for its intended use. Now that's gonna, if we look a little farther, it's gonna become clear that that would include that it has to be far enough along that it meets the code. So you couldn't have say a stairway built but no railings put in.

That's what the errors and omissions is about decision making, so that's what the architect's insurance is going to be covering. Each of the players has the appropriate level of insurance, the appropriate type of insurance, and that's what this is telling us in this document. Another term that's a really good one to know for the exam, is the idea of the wavier.

We have arbitration fully defined. And then we have a number of other individuals of specific parts about arbitration and litigation and mediation that start to fill out that whole section. Important to understand that idea that, remember when we look back at the contracts there was a moment where you said, "All right, we're gonna use arbitration.

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Here's the sum, to date, of the contract sum total, including those change orders. So, it's a way of kind of keeping track of that information as the project goes along. Change orders have a way of coming in and going out, and...

Objective 3.3: Determine Potential Risk and/or Reward of a Project and its Impact on the Practice

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So cost plus fee is a situation where instead of saying, "Alright, we're gonna do this project for you for $100,000." What you're gonna say is, "Look, we're gonna do it, "and we're gonna say we have four different levels "of payout that we do." We have our interns, we've got our designers, we've got our architects, we've got our principles, and each of those is gonna have a cost associated with them and we're gonna do this as fast as we sort of reasonably can but we're not gonna give you a total amount of money, we're just gonna give you a dollar amount per hour that's being worked on something and multiply that by the number of hours and then at the end we will have what the total cost is. So this is a situation where you don't know what the fee will be until the end because you have to go through and figure out how many hours it took and then as that is all being done it's not just the straight costs of how much it costs for that particular employee. It's also the overhead costs and it's also a little bit of extra profit or fee that's added onto the top and it's the cost plus fee part.

So doing work with somebody for one project where you're gonna get one fee for that project, but it actually damages your relationship with other potential clients or with that client, or with the code official community or with the contractor community, ruining your reputation by being attached to the wrong kind of project can have a really lasting problem. It can last for years and years and have impact on many many other projects. So what can go wrong?

It means that there are gonna be times when I might go after a project and really try to get that project, maybe even make sure I have very competitive fees or make sure that I have a really good solid team for an RFP because there's something about having done that project that will either be just an interesting thing, and what might be a useful thing for everybody in our firm, but more likely it'll be that having done that project will make us more knowledgeable about a certain type of work that's out there and therefore we can market ourselves better, we can be more accurate in our future projects. So a lot of the time what you're looking for is projects that you may not even make money on but you're gonna get something else from it, right? You're gonna get not only just reputation but also abilities, right?

Conceptually, now would be a good time to go back and now you're going back to that business plan, but in an analytical way. It's not a proposal for the future anymore. Now it's partly proposal for the future and partly direct analysis.

Maybe you're talking to lawyers, maybe you're talking to the actual previous architect, maybe you're talking candidly with the potential client and saying "Look, this is a worrying thing. "Why did this happen?" And trying to get real information. But you're probably also talking to maybe other contractors or other people who've worked with these clients before.

If this is the kind of project that you do all the time and this is the kind of project that's really not gonna lead you anywhere, and there's a really good chance you're like, you don't feel comfortable that they're really very likely at all to actually get the grant, well, then, absolutely not, you wouldn't wanna do that project. Not because you wanna treat people badly and not do a project for them, but because it just doesn't make financial sense. And putting the context into these situations is gonna be what is sort of the main thing that you're thinking about when you're taking the exam, they're asking questions along these lines.

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But what we are finding today is that most projects thankfully go through a negotiated bid process because in the old-fashioned, or the previous bid process, you would have the competitive market sometimes would force people to maybe not put their best foot forward. Meaning the bids may not be as accurate as possible because they are trying to get the lowest price. And the documents that you have to create for the design negotiated bid-built process are just as complete, but now they are going to bring a contractor on early to start pricing it and help you along the way make decisions about how to keep costs down and control them.

Objective 4.1: Analyze the Impact of Practice Methodologies Relative to Structure and Organization of the Practice

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It's a little tricky, it seems to me, to keep a sort of continuity of design idea from the design period through the detailing and into the construction, if there's never a holder of the history of the project going through there. So, it's an unusual way to do it, but you will see that, that silo idea. And there's a few other ways that you can start to, sort of, think about how you can organize these things.

And part of the way that you're going to do that is by not just being completely open, it's like okay, say what you want, or not being so harsh and controlled that people don't feel like they can say what they want, but having specific issues that you want to test. Maybe there's a certain issue about the kinds of projects we should be aiming towards, or maybe there's a certain issue about construction coordination and communication systems because there was some issue and you wanna, like, make it better next time. Like what are the issues you want to resolve so that people know what to be part of?

Objective 4.2: Evaluate Design, Coordination, and Documentation Methodologies for the Practice

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We're talking about the coordination, right, so that's not just that we have a good design, but that the good design is working with the engineers in the best ways, working with the owners in the best way, it's working with the contractors so everybody knows what's coming, that the drawings make sense. It's not just a good idea but that that good idea is coordinated in a logical way. There's a whole series of methodologies about how that needs to happen.

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Well with the conference center in a hotel, that doesn't make any sense anymore and I'm probably gonna go away from the unit and more towards a comparative or a square footage or in fact comparative doesn't even really necessarily make sense because it's not like there's lots and lots of conference centers out there. Most firms wouldn't really have a lot to compare it to, but if you did obviously comparative would be possible, but it's probably something like a square footage cost or maybe an assemblies kind of cost. So that's just sort of one of those examples where you're looking for the key words, in this case the key word is hotel, but then there's a descriptor and that's taken us into a different direction, all right?

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