The Price is Right

Do you remember that goofy game show, The Price is Right? As I recall, the contestants had to guess the price of a household appliance, such as a washing machine, and whoever came the closest to the actual retail price, without going over, won.

Regrettably, the architectural profession during this current recession has begun to resemble The Price is Right. Many clients are now inclined to stress price before value and are “bidding” fees as if selecting a design firm was like buying a washing machine. Last week a prospective client called to tell me that a competitor’s “bid” was a full percentage point lower than ours (I had proposed a very competitive fee, by the way) and that unless we agreed to drop our fee accordingly, he’d award the project to the other firm even though he readily acknowledged that we were more qualified……price before value.

I decided that the cost of “winning” that project was too high, thanked the client for their interest, and declined.

In my experience, when the design fees are insufficient to cover the professional services required to properly do the work, bad things usually happen: the firm fails to adequately service the project; construction administration is short-changed; junior staff are substituted for more experienced professionals; the design process is rushed; consultants are underpaid, etc. Everybody, including the client, suffers. And what will the client gain by a fee savings of one percent of the construction cost? Nothing! That savings, and perhaps more, will probably be lost as the result of a compromised design and construction process.

My advice to clients is simple: Stress value before price and select a design firm based on their qualifications; then, negotiate a fair fee for the services you require. Most reputable firms, like TRO Jung|Brannen, are open to reasonable fee negotiation, once selected.

Don’t play games.