Time to rethink the 6 percent fee cap

It’s time to rethink the 6 percent fee cap.

That's the conclusion of the AIA Federal Architecture Task Group, which recently issued a report on the controversial issue. Under a longstanding federal statute, design services fees for both civilian and military federal design and construction projects are capped at 6 percent of the total estimated project cost. Subsequent regulations and guidelines establish which services are within the 6 percent cap and which are not.

The 6 percent cap is a major topic of concern for architects and other design professionals – both for those who perform work for the federal government and those who don’t. For architects in the federal sector, the limitation on fees does not reflect the increasing complexity of design projects, the larger number of services that need to be provided to complete a successful 21st century project, and the growing amount of upfront work and extensive management requirements that firms must perform just to compete for a job, the report concluded.

In addition, there is a lack of education among both agencies and private sector architects about what is included within the fee limitation; that is, services that don’t fall under the cap and which qualify for separate compensation and reimbursements.

Architects who don’t perform federal work are also affected by the federal law since many state and local governments – and even some private sector clients — follow federal practices. The 6 percent statutory fee cap has the effect of devaluing the complexity and scope of work that architects perform, the Task Force report said.

The Task Force supports efforts to reform the 6 percent fee cap.  

In addition, the task force supports the following recommendations:

• Launch a thorough and in-depth research initiative that analyzes billings data from firms performing work for federal agencies. Having actual data on fees paid to architects performing federal work is a critical component in understanding and addressing the impact of the 6 percent fee limitation.
• Convert the research findings into effective messaging and advocacy tools to be used by the government relations staff.
• Determine the best path forward for reforming the statutory fee cap and establish a timeline.
• Further engage AIA members employed at federal agencies on the issue to broaden the organization’s understanding of the issue and generate buy-in.
• Explore avenues, existing or otherwise, through which AIA members can be educated about fee negotiations on the federal stage.