A/E Fees as an Impediment to Teaming

Parties have a different view about A/E fees as an impediment to teaming but this disparity is greatest in those with little CMAR experience.

Summary
CMs and Subs feel A/E fees are an impediment to teaming more often than A/Es and Owners do. That is, they might feel the A/E is reluctant to change design because it costs the A/E money. This is a trust issue, since the A/E must usually explain their reluctance to change the design based on technical issues. However we found that 40% of the A/Es felt fees were often an impediment to teaming or might be an impediment to teaming, and 40% of the CMs feel it is not usually or not an impediment to teaming, so it is clear that many of participants do not disagree. The opinion that fees were an impediment is strongest in those new to CMAR, while those with more CMAR experience are less inclined to believe the real problem is fees.

Report
An important issue of trust may be the perception of the effect of A/E fees on the preconstruction process. In other sections we found that A/Es want the CMs and Subs hired early and were happy to have their involvement. One (admittedly slightly cynical) interpretation of this is that the earlier the constructors are hired and the more active they are, the less the A/E will have to change the design. Design changes early in the process are much cheaper than changes later. An unfortunate corollary to this would be that later in the design process, the A/Es are reluctant to chance and will suboptimize the design or the project in order to avoid major design changes and will use budget argument to defend this. Regardless of the actual situation, if the other parties feel that A/E fees are the real issue, trust will diminish and it will interfere with teaming.

So we asked, “In general, do you believe issues related to design changes and A/E fees are: (If you are not an A/E, please give your impressions anyway.)
___  Are often an important impediment to teaming
___  might be an impediment to teaming;
___  not usually an impediment to teaming;
___  have not been an impediment to teaming;
___  don’t know.”

Observations
The data is easier to interpret if we group “Often an important impediment” and “Might be…” and compared that to “Not usually…” and “Have not been…” and exclude “Don’t know.” On that basis, 2/3 of the Owners feel fees are usually not an impediment to teaming, about half A/Es feel thus, while about 60% of the CMs and Subs feel fees might be an impediment.

Thus we see a trust issue; with constructors feeling A/E fees are really the problems, while Owners and A/E feel so less. Of course 40% the A/E, who know, feel they are an impediment.

Looking at CMAR experience, we see:

There is a trend to perceive fees as less of a problem with increasing CMAR experience. That could mean that trust is building between the parties.

This may indicate a tension that CMs and Subs believe a fee issue is at the root of a problem, while A/Es and Owners believe it is something else. For example an A/E is reluctant to change a design feature based on his perception that his current design is best suited to the Owner’s requirements, while the CM and Sub see it as reluctance to put in more work to redesign. On the other hand, with increasing CMAR experience, the team is better able to focus on the underlying problems – but of course if there is a lot of redesign, the A/E will want to be compensated. An important point from the comments is that the later the CM is brought into the design, the more likely A/E fees will become an issue.

A commenter wrote, “ If the constructors were brought on late and the changes were significant, AE fees would become an issue. Also lots more meetings during design phases, lots of extra work doing redesign or finding alternatives each time the cost estimate comes in too high, etc…...