_____________________________________________________________________________________________ Richter
+ Ratner to perform effectively ,” he says . “ This is particularly problematic when they attempt to lump sum bid intricate projects that require pre-construction input throughout the design stages , and confirmation by an estimator and a subcontractor in a very short bid time frame .
“ A compounding effect is that many of those hiring contractors are driving down fees because of overall economic pressure from owners . With compensation so competitive , those individuals , or companies , awarding contracts don ’ t understand the basics of fee structures , or if they do , they prefer to ignore them . We are in a tough market and the nature of driving fees lower has , and will , put contractors out of business . Rather than recognizing that contractors are entitled to make a fair fee , certain basic elements are profoundly overlooked to the detriment of fair compensation .
Fighting for fairer fees
“ A basic fallacy of compensation pertains to earnings for a given period . For example , if you take a $ 10 million job over the space of five months , and are compensated a four percent fee , you ’ re going to be earning $ 80,000 per month . However , if that very same project is a two-phase project and double the construction period , then the builder will be making half as much in fees while still utilizing the same resources . Too many people are stuck on percentages , no matter the length of the job , and do not take economies of scale nor expected earnings for dedicated resources , into account . Fees are just too low ; they need to be balanced with time and resources . We
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