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Methods of Compensation (Sample Problems)

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0% found this document useful (0 votes)
416 views39 pages

Methods of Compensation (Sample Problems)

Uploaded by

munozkyla814
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 39

28/10/2024

Building Type Groupings


1. Buildings of simple utilization 6. Repetitive construction
and character, without 7. Housing projects
complication of design 8. Projects involving extensive
2. Buildings of moderate detail
complexity 9. Alterations, renovations,
3. Buildings of exceptional rehabilitations, retrofit, and
character and complexity expansion/addition
4. Residences 10. Rendering of professional
5. Monumental buildings opinion

Group 1: Simple
● Buildings of the simplest utilization and character and are without
complication of plan, design or detail.
● These buildings require only a minimum of architectural finishes,
engineering, and allied architectural elements.

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RPF for Group 1 (DAEDS)


Project Construction Cost in PHP Recommended Professional Fee

50M and less 5%

50M -100M 2.5M + 4% of excess of 50M

100M-200M 4.5M + 3% of excess of 100M

200M-500M 7.5M + 2% of excess of 200M

500M-1B 13.5M + 1% of excess of 500M

Over 1B 18.5M + ½% of excess of 1B

RPF for Group 1 (DADS)


Project Construction Cost in PHP Recommended Professional Fee

50M and less 3%

50M -100M 1.5M + 2.4% of excess of 50M

100M-200M 2.7M + 1.8% of excess of 100M

200M-500M 4.5M + 1.2% of excess of 200M

500M-1B 8.1M + 0.6% of excess of 500M

Over 1B 11.1M + 0.6% of excess of 1B

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Sample:
What is the recommended professional fee for a Group 1 project
worth ₱175,000,000? (DAEDS)

Computation:
₱175,000,000 - ₱100,000,000
= ₱75,000,000

RPF= ₱4,500,000 + (0.03 x ₱75,000,000)


= ₱4,500,000 + ₱2,500,000
RPF = ₱6,750,000

Sample:
What is the recommended professional fee for a Group 1 project
worth ₱175,000,000? (DADS)

Computation:
₱175,000,000 - ₱100,000,000
= ₱75,000,000

RPF= ₱2,700,000 + (0.018 x ₱75,000,000)


= ₱2,700,000 + ₱1,350,000
RPF = ₱4,050,000

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Group 2: Moderate Complexity


● Buildings of moderate complexity of plan and design, requiring a
moderate amount of research and of engineering and allied
architectural design

RPF for Group 2 (DAEDS)


Project Construction Cost in PHP Recommended Professional Fee

50M and less 6%

50M -100M 3M + 5% of excess of 50M

100M-200M 5.5M + 4% of excess of 100M

200M-500M 9.5M + 3% of excess of 200M

500M-1B 18.5M + 2% of excess of 500M

Over 1B 28.5M + 1% of excess of 1B

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RPF for Group 2 (DADS)


Project Construction Cost in PHP Recommended Professional Fee

50M and less 3.6%

50M -100M 1.8M + 3% of excess of 50M

100M-200M 3.3M + 2.4% of excess of 100M

200M-500M 5.7M + 1.8% of excess of 200M

500M-1B 11.1M + 1.2% of excess of 500M

Over 1B 17.1M + 0.6% of excess of 1B

Sample:
What is the recommended professional fee for a Group II project
worth ₱235,000,000? (DAEDS)

Computation:
₱235,000,000 - ₱200,000,000
= ₱35,000,000

RPF= ₱9,500,000 + (0.03 x ₱35,000,000)


= ₱9,500,000 + ₱1,050,000
RPF= ₱10,550,000

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Sample:
What is the recommended professional fee for a Group II project
worth ₱235,000,000? (DADS)

Computation:
₱235,000,000 - ₱200,000,000
= ₱35,000,000

RPF= ₱5,700,000 + (0.018 x ₱35,000,000)


= ₱5,700,000 + ₱630,000
RPF= ₱6,330,000

Group 3: Exceptional Complexity


● Buildings of exceptional character and complexity of plan or design,
requiring large amounts of research and of engineering and allies
architectural design.

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RPF for Group 3 (DAEDS)


Project Construction Cost in PHP Recommended Professional Fee

50M and less 7%

50M -100M 3.5M + 6% of excess of 50M

100M-200M 6.5M + 5% of excess of 100M

200M-500M 11.5M + 4% of excess of 200M

500M-1B 23.5M + 3% of excess of 500M

Over 1B 38.5M + 2% of excess of 1B

RPF for Group 3 (DADS)


Project Construction Cost in PHP Recommended Professional Fee

50M and less 4.2%

50M -100M 2.1M + 3.6% of excess of 50M

100M-200M 3.9M + 3% of excess of 100M

200M-500M 6.9M + 2.4% of excess of 200M

500M-1B 14.1M + 1.8% of excess of 500M

Over 1B 23.1M + 1.2% of excess of 1B

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Sample:
What is the recommended professional fee for a Group III project that is
3,450 sqm with a running market cost of ₱65,000 per sqm? (DAEDS)

Computation:
PCC = ₱65,000 x ₱3,450 sqm
= ₱224,250,000
₱224,250,000 - ₱200,000,000
= ₱24,250,000
RPF = ₱11,500,000 + (0.04 x ₱224,250,000)
= ₱11,500,000 + ₱970,000
= ₱12,470,000

Sample:
What is the recommended professional fee for a Group III project that is
3,450 sqm with a running market cost of ₱65,000 per sqm? (DADS)

Computation:
PCC = ₱65,000 x ₱3,450 sqm
= ₱224,250,000
₱224,250,000 - ₱200,000,000
= ₱24,250,000
RPF = ₱6,900,000 + (0.024 x ₱224,250,000)
= ₱ 6,900,000 + ₱582,000
= ₱7,482,000

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Group 4: Residences
● Residences, including:
○ Single-detached
○ Single-attached
○ Duplex
○ Rowhouse
○ Shophouse
● Small apartment houses
● Townhouses

RPF for Group 4


Service Rendered Recommended Professional Fee

DAEDS 10% of PCC

DADS 6% of PCC

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Group 5: Monumental
● Monumental buildings and other facilities requiring consummate
design skill and much precise detailing, including:
○ Exposition and fair buildings
○ Mausoleums, memorials, and monuments
○ Specialized decorative buildings
○ Museums
○ Other buildings of similar nature and use

RPF for Group 5


Service Rendered Recommended Professional Fee

DAEDS 12% of PCC

DADS 7.5% of PCC

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Sample:
With a DADS agreement, how much would the architect charge the client
for a mausoleum with a total area of 135 sqm, with a market cost of Php
₱360,000 per sqm.

Computation:

PCC = ₱360,000 x 135 sqm


= ₱48,600,000
RPF = (0.075 x ₱48,600,000)
= ₱3,645,000

Sample:
If the architect was tasked to hire his own team of architectural &
engineering consultants for the project in the previous item, how much is
the RPF the he should ask from the client?

Computation:

PCC = ₱360,000 x 135 sqm


= ₱48,600,000

RPF = (0.12 x ₱48,600,000)


= ₱5,832,000

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Group 6: Repetitive Construction


● The design is reused for the repetitive construction of similar
buildings without amending the drawing and the specifications

RPF for Group 6


Recommended Professional Fee

First building 100% of RPF for type of building

Second building 50% of RPF for type of building

Third building 40% of RPF for type of building

Fourth and succeeding buildings 30% of RPF for type of building

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Sample:
If the same mausoleum was to be RPF (3rd) = (0.4 x ₱3,645,000)
reconstructed six times, how much = ₱1,458,000
should the architect charge the client
under DADS agreement? RPF (4th to 6th ) = (3 x (0.4 x ₱3,645,000)
= ₱3,280,500
Computation:
RPF total = ₱3,645,000 (1st) +
RPF = (0.075 x ₱48,600,000) ₱1,882,500 (2nd) +
= ₱3,645,000 (1st) ₱1,458,000 (3rd) +
₱3,280,500 (4th to 6th)
RPF (2nd) = (0.5 x ₱3,645,000) = ₱10,206,000
= ₱1,882,500

Group 7: Housing Projects


● Involves the construction of several residential units on a single site
with the use of one set of plans

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28/10/2024

RPF for Group 7


RecommendedProfessionalFee
Number of Units
DAEDS DADS

1 10% of PCC 6% of PCC


(Standard RPF) (Standard RPF)

2-10 Fee for one unit + 50% of RPF for Fee for one unit + 30% of RPF for
each additional unit each additional unit

11-30 Fee for 10 units + 40% of RPF for Fee for 10 units + 24% of RPF for
each additional unit each additional unit

31-50 Fee for 30 units + 25% of RPF for Fee for 30 units + 15% of RPF for
each additional unit each additional unit

51 and above Fee for 50 units + 15% of RPF for Fee for 50 units + 9% of RPF for
each additional unit each additional unit

Sample:

How much is the recommended


professional fee for a single-detached one-
storey residential building with a total area
of 210 sqm., with the market cost of Php
35,000 per sqm.

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Computation:

PCC= Php 35,000 x 210 sqm


◦ = Php 7,350,000

RPF= (0.10 x Php 7,350,000)


◦ = Php 735,000

Sample:

If the same house was made a model home


and was constructed fifteen (15) times in
the same site, how much would be the total
RPF that the architect would receive?

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Computation:

PCC= Php 35,000 x 210 sqm


◦ = Php 7,350,000

(9x (0.5 x Php 735,000)


◦ = Php 3,307,500
(5x (0.4 x Php 735,000)
◦ = Php 1,470,000

◦ RPF total = Php 735,000 + Php 3,307,500 + Php 1,470,000


◦ = Php 5,512,500

Group 8: Extensive Detail


● Projects involving extensive details such as:
○ Designs for built-in components or elements
○ Special fittings
○ Screens
○ Counters
○ Architectural interiors
○ Development planning and/or design
● RPF: 15% of PCC

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Group 9: Alterations/Additions
● Alterations, renovations, rehabilitations, retrofit and
expansion/additions to existing buildings belonging to Groups 1-5
● RPF: 150% of RPF (increased the professional fee by 50%)

Group 10: Rendering Advice


● RPF shall be at least PHP 1,000 per hour, subject to increase
depending on the extent and coverage of service required and
the location where the Architect shall render his services.
● When rendering service as an expert witness, the fee shall be at
least PHP 5,000 per appearance, regardless as to whether the
hearing took place or not.

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Payment Schedule (Regular Design Services)


Work Phase Fee Due Cumulative Amount

Upon signing of service agreement 5% of PF 5%*

Upon completion of Schematic Design Phase +15% of PF 20%**

Upon completion of Design Development Phase +20% of PF 40%**

Upon completion of Contract Document Phase +50% of PF 90%**

Bidding or Negotiation Phase Adjust fee to be equal to 90% of RPF, based on 90%***
winning bid

Upon completion of work 10% of PF 100%****


(5% for civil liability, 5% for Periodic
Construction Supervision)

* Based on original SPCC ***Based on winning bid


**Based on latest SPCC ****Based on FPPCC

Sample:
You were hired by the client to construct a brewery that has a total area of 420 sqm, with an
estimated market cost of Php 85,000 per sqm. After some time, you meet again with the client with
an updated design proposal, complete with schemes. The client was happy with the direction that the
project is taking and told you to proceed with developing further the design. After some time, upon
reviewing your design proposal, the client suggested that you needed some more training and
research and scheduled you to attend a two-day training wherein you and the client have agreed on a
Php 4,000 per day honorarium. After the training, you were finally able to come up with the designs
that the client felt was perfect, despite it costing 10% higher than the initial proposed cost. After you,
produced the contract documents, the building was granted a permit and construction has
commenced. The client proceeded to bid out the design for the contractor, the APCC has been found
to 5% higher than last estimated cost. After project completion, records show that the FPCC was 15%
more than the original agreed upon cost with the winning bid.

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Questions:
1. Upon signing to take on the project, you and the client sign a Service
Agreement. How much should the client pay you after the signing?
2. After the approval of your design schematics, how much does the
client owe you?
3. After the seminar and the approval of the final design proposal, how
much does the client owe you?
4. After submitting the final and approved set of contract documents,
how much should the client pay you?
5. How much does the client need to pay you after the bidding?
6. Once the project has been completed, how much does the client have
to pay you?
7. How much was the total fee that you charged the client for the entire
project?

Answers:
1. Upon signing to take on the project, you and the client sign a Service
Agreement. How much should the client pay you after the signing?

PCC = ₱85,000 per sqm x 420 sqm


= ₱35,700,000

RPF (Brewery belongs to Group III)


= 0.07 x ₱35,700,000
= ₱2,499,000

Payment upon signing the service agreement


= ₱2,499,000 x 0.05
= ₱124,950

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Answers:
2. After the approval of your design schematics, how much does the
client owe you?

PCC = ₱85,000 per sqm x 420 sqm


= ₱35,700,000

RPF (Brewery belongs to Group III)


= 0.07 x ₱35,700,000
= ₱2,499,000

Payment upon signing completion of Schematic Design Phase


= ₱2,499,000 x 0.15
= ₱374,850

Answers:
3. After the seminar and the approval of the final
design proposal, how much does the client owe
you?
PPCC = ₱35,700,000 Subtract amount paid (service
PCC adjusted = ₱35,700,000 x 1.1 (this is how you agreement & schematic design)
compute the 10% more) = ₱1,099,560 - ₱499,800
= ₱39,270,000 = ₱599,760

RPF (Brewery belongs to Group III) Add compensation for seminar


RPF adjusted = 0.07 x ₱39,270,000 = ₱4,000 per day x 2 days
= ₱2,748,000 = ₱8,000
Amount due upon completion of Design
Development Phase TOTAL= ₱599,760 + ₱8,000
= ₱2,748,000 x 0.40 (cumulative amount) = ₱607,760
= ₱1,099,560

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Answers:

4. After submitting the final and approved set of contract documents,


how much should the client pay you?

PCC = ₱39,270,000

RPF = ₱2,748,900

Payment upon completion of Contract Document Phase


= ₱2,748,900 x 0.50
= ₱1,374,450

Answers:
5. How much does the client need to pay
you after the bidding?

PCC = ₱39,270,000 Amount paid = ₱2,748,000 x 0.9


= ₱2,274,010
RPF = ₱2,748,900
Payment due after bidding
APCC = ₱39,270,000 x 1.05 (5% higher) (₱2,886,345 x 0.9) - ₱2,474,030
= ₱41,233,500 = ₱123,700.50

RPF adjusted = ₱2,748,900 x 1.05


= ₱2,886,345

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Answers:
6. Once the project has been completed,
how much does the client have to pay you?

APCC = ₱41, 233,500 Amount paid


RPF = ₱ 2,886,345 = ₱2,597,710.50
FPCC = ₱41, 233,500 x 1.15
= ₱47,418,525
Amount due
RPF due after construction = ₱3,153,331.91 - ₱2,597,710.50
= ₱3,319,296.75 x 0.95 = ₱555,621.41
= ₱3,153,331.91

Answers:
7. How much was the total fee that you
charged the client for the entire project?

FPCC = ₱41,233,500 x 1.15


= ₱47,418,525 TOTAL FEE
= RPF + compensation
= ₱3,319,296.75 + ₱8,000
RPF = ₱3,319,296.75
= ₱3,327,296.75

Add compensation for seminar


= ₱4,000 per day x 2 days
= ₱8,000

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Notes
● Partial/progress payments: Acceptable, provided that such
payments are within the framework of the manner of payments
● Suspension of design work: If the work of the Architect is
abandoned or suspended in whole or in part, the Owner shall pay
the Architect for the services rendered corresponding to the amount
due at the stage of the suspension or abandonment of the work

Notes
● 90% clause: The Architect is entitled to 90% of his fee once the
Contract Documents Phase are completed.
● Extended or delayed construction: If portions of the building are
erected at different periods of time, charges pertaining to services
rendered during the Construction Phase shall be adjusted
proportionately. When the suspension of construction exceeds a
period of six months, the fee for the remaining works (Periodic
Construction Supervision) shall be doubled.

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POP QUIZ

Art Gallery

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Art Gallery
Group 2

Convention center

25
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Convention center
Group 3

Veterinary hospitals

26
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Veterinary hospitals
Group 3

Exposition
building

27
28/10/2024

Exposition building
Group 5

Mental
institution

28
28/10/2024

Mental institution
Group 3

Auditorium

29
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Auditorium
Group 3

Two-storey duplex

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Two-storey
duplex
Group 4

Industrial
building

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Industrial building
Group 1

Laundromats

32
28/10/2024

Laundromats
Group 2

Supermarket

33
28/10/2024

Supermarket
Group 2

Museum

34
28/10/2024

Museum
Group 5

Police
station

35
28/10/2024

Police station
Group 2

Schools

36
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Schools
Group 2

Observatory

37
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Observatory
Group 3

Call center

38
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Call center
Group 2

39

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