METHODS OF COMPENSATION

ASSIGNMENT / READER
Ar. Jomarie Viel Maglunob

ASSIGNMENT

1. In 3-5 sentences each, explain the importance of setting a definitive Methods of Compensation
and Schedule of Fees in the practice of architecture as a/an:
a. ARCHITECT
b. CLIENT

2. Why should the Methods of Compensation and its computations be standardized and defined by
the law?

READER
ACRONYMS. In the context of SPP Document 210, give the meanings of the following:
1. PCC – Project Construction Cost
2. APCC – Awarded Project Construction Cost
3. FPCC – Final Project Construction Cost
4. MDPE – Multiple of Direct Personnel Expense
5. PFPE – Professional Fee Plus Expenses
6. DADS – Detailed Architectural Design Services
7. DAEDS – Detailed Architectural & Engineering Design Services

I. STANDARDS OF PROFESSIONAL PRACTICE DOCUMENT 210

Architect’s Guidelines for Standards of Professional Practice (SPP) Compliances – Methods of
Compensation and Schedule of Fees
*This replaces the 1979 UAP Doc 208-B (Methods of Compensation and Schedule of Fees)

II. THREE MAIN TYPES OF COMPENSATION:

1. Percentage-Based Fee
1.1. Percentage based on Project Construction Cost – Fee is a percentage of the
Project Cost declare at the time of the project.
1.1.1. DAEDS – Detailed Architectural & Engineering Design Services (Assume
this if the type of service is not specified.)
1.1.2. DADS – Detailed Architectural Design Services
1.2. Unit Cost Method – Fee is computed by cost per square meter of the project and
is based on accurate and timely data.
1.3. Value-based Pricing/Percentage of Gross Rentals – Fee is based on the revenue
or profitability results of the service or building.
2. Lump-Sum of Fixed Fee – Fee is an estimation of the Direct Cost with a margin of profit.
3. Time Basis Fee
3.1. Multiple of Direct Personnel Expense (MDPE) – Non-creative work; Fee is based
on the technical hours spent for the works.

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 METHODS OF COMPENSATION
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Ar. Jomarie Viel Maglunob

Formula:
 (Architect’s Rate x No. of Hours Spent) + (Consultant’s Rate x No. of Hours
Spent) + (Technical Staff’s Rate x No. of Hours Spent) = DIRECT COST
 Direct Cost x Multiplier (Range: 1.5 to 2.5) = FEE
 Fee + Reimbursable Expenses = TOTAL COST OF SERVICES
3.2. Professional Fee + Expenses (PFPE) – Continuing relationship on a series of
projects.
3.3. Per Diem, Honorarium + Expenses – Work that requires the Architect’s personal
time (i.e. meetings, trainings, seminars, oculars, consultations, etc.).
3.4. Salary Cost x Multiplier – For projects with costs & time constraints that are
difficult to determine at the onset of the project.
Formula:
 [Salary Cost x Multiplier (Factor of 3.0)] = FEE
3.5. Per Diem or Hourly – For projects requiring intermittent personal service or
occurring in irregular periods of time; includes travel time.
3.6. Retainer – For when the Architect’s services is to be required at intervals. An
amount is paid at regular intervals.
4. Mixed Methods of Compensation – a combination of two or more methods of
compensation.

III. SCHEDULE OF FEES

1. Pre-Design Services (SPP Doc 201)
a. MDPE
b. PFPE
c. Lump Sum
d. Per Diem
e. Mixed
2. Regular Design Services (SPP Doc 202)
a. Percent of PCC
(For Recommended Professional Fees (RPF) & Schedule of Fees per building type,
see Annex A)
b. Unit Cost Method based on PCC
c. PFPE
d. Lump Sum
e. Per Diem, Honorarium + Reimbursable Expenses
f. MDPE
g. Mixed
3. Specialized Architectural Services (SPP Doc 203)
a. Percent of PCC (Cost of Work)
(For RPFs & Schedule of Fees per Service, see Annex B)
b. Unit Cost Method based on PCC (Cost of Work)
c. MDPE
d. PFPE

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METHODS OF COMPENSATION
ASSIGNMENT / READER
Ar. Jomarie Viel Maglunob

e. Lump Sum
f. Retainer
g. Per Diem, Honorarium
h. Mixed
4. Full-Time Supervision (SPP Doc 204-A)
a. Percent of PCC – RPF = 1% to 1.5% of PCC
b. MDPE
c. PFPE
d. Lump Sum
e. Per Diem, Honorarium
5. Construction Management (SPP Doc 204-B)
a. Percent of PCC – RPF = 1.5% to 3% of the PCC
b. MDPE
c. PFPE
d. Lump Sum
e. Per Diem, Honorarium
f. Mixed
6. Post-Construction Services (SPP Doc 205)
a. Value- Based Pricing or Percentage of Gross Rentals, Maintenance Fees, &
Security Fees – RPF = 4% to 6% of Gross Rentals (Incentive-Based)
b. Monthly Salary
c. MDPE
d. Retainer + Reimbursable Expenses
e. PFPE + Reimbursable Expenses
7. Comprehensive Architectural Services (SPP Doc 206)
a. Percent of PCC – RPF = 2% to 5% of PCC
b. MDPE
c. PFPE
d. Lump Sum
8. Design-Build Services (SPP Doc 207) – Design-Build Services by Administration / Design-
Build Services on a Guaranteed Maximum Cost
a. Percent of PCC – RPF = 7% of PCC (Design-Build Services by Administration)
b. MDPE
c. PFPE
d. Lump Sum
e. Per Diem, Honorarium + Reimbursable Expenses
f. Mixed
g. Built into the Guaranteed Maximum Cost (Design-Build Services on a Guaranteed
Maximum Cost) – RPF = 10% of PCC
9. Architectural Design Competition (SPP Doc 208)
a. Salary for the Secretariat
b. Office Overhead Costs
c. Honorarium for the Professional Advisor

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d. Honorarium for the Technical Advisor

e. Honorarium for the Jurors
f. Prizes and/or Honoraria for the Winners and/or Participants (See SPP Doc 208)
10. Professional Architectural Consulting Services (SSP Doc 209)
a. Per Diem or Hourly Basis
b. Retainer
c. Salary Cost x Multiplier + Reimbursable Expenses
d. Lump Sum
e. Percent of PCC (Cost of Work)

IV. GENERAL PROVISIONS

1. COLLECTION OF PROFESSIONAL FEES – It is unlawful for any unlicensed and/or
unregistered person to collect a fee for architectural services.
2. INTEREST DUE TO LATE PAYMENTS – The Architect is entitled to interest at the
prevailing rate set by the Bangko Sentral ng Pilipinas (BSP) and mutually agreed upon
by the Architect and the Client, on all fees, other charges and reimbursements due and
not paid within 30 days from receipt of billing.
3. GOVERNMENT TAXES – The Architect’s Fee is a net amount. Apart from income taxes
payable by the Architect, all other taxes (e.g. VAT) that the national government and
local government may impose on the Architect brought about by the services
performed for the project shall be paid for by the Client.
4. ARBITRATION – In case of any dispute between the Architect and the Client, the
dispute shall be dealt with in accordance with RA 9285 (Alternative Dispute Resolution
Act of 2004).
5. PENALTY CLAUSE & SANCTION – Any individual, partner. firm/corporation/consortium
who engages in architectural services, but are not qualified in accordance with the
provisions by laws, particularly under R.A. No. 9266 (The Architecture Act of 2004) and
its IRR shall be subject to sanction/s by the appropriate public or private entities,
without prejudice to the filing of appropriate criminal, civil or other administrative or
cases pursuant to existing laws.
6. AMENDMENTS – The UAP-IAPOA shall continuously enhance the contents of this
document to be responsive to new challenges and requirements of professional
practice. Any amendment to this document shall prepared by a Special Committee on
the Standards of Professional Practice of the IAPOA. The amendments shall then be
submitted to the UAP National Board for approval.
7. EFFECTIVITY – This document shall be effective after approval of the UAP National
Board of Directors and upon recommendation of the PRC and PRBoA for
implementation as part of the PRBoA-issued Resolution on the Standards of
Professional Practice (SPP) Documents. This happened on October 15, 2014.

- END OF MAIN MODULE –

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METHODS OF COMPENSATION
ASSIGNMENT / READER
Ar. Jomarie Viel Maglunob

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METHODS OF COMPENSATION
ASSIGNMENT / READER
Ar. Jomarie Viel Maglunob

ANNEX A
REGULAR DESIGN SERVICES
Recommended Professional Fees & Schedule of Fees

TABLE A.1. Building Type Groupings.

Buildings of SIMPLE utilization & character, without complication of
GROUP I
design.
GROUP II Buildings of MODERATE complexity
GROUP III Buildings of EXCEPTIONAL character & complexity
GROUP IV RESIDENCES
GROUP V MONUMENTAL buildings
GROUP VI REPETITIVE Construction (Except Housing)
GROUP VII HOUSING PROJECTS
GROUP VIII Projects involving EXTENSIVE detail
Alterations, Renovations, Rehabilitations, Retrofit, &
GROUP IX
Expansion/Addition
GROUP X Rendering of PROFESSIONAL OPINION

TABLE A.2. RPF for Group I (DAEDS).

Project Construction Cost (PCC) 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

TABLE A.3. RPF for Group I (DADS).

Project Construction Cost (PCC) 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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METHODS OF COMPENSATION
ASSIGNMENT / READER
Ar. Jomarie Viel Maglunob

TABLE A.4. RPF for Group II (DAEDS).

Project Construction Cost (PCC) 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

TABLE A.5. RPF for Group II (DADS).

Project Construction Cost (PCC) 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

TABLE A.6. RPF for Group III (DAEDS).

Project Construction Cost (PCC) 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

TABLE A.7. RPF for Group III (DADS).

Project Construction Cost (PCC) 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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Ar. Jomarie Viel Maglunob

TABLE A.8. RPF for Group IV.

Service Recommended Professional Fee
DAEDS 10% of PCC
DADS 6% of PCC

TABLE A.9. RPF for Group V.

Service Recommended Professional Fee
DAEDS 12% of PCC
DADS 7.5% of PCC

TABLE A.10. RPF for Group VI.

Service Recommended Professional Fee (RPF)
First (1st) Building 100% of RPF for type of building
Second (2nd) Building 50% of RPF for type of building
Third (3rd) Building 40% RPF for type of building
Fourth (4th) and Succeeding Buildings 30% RPF for type of building

TABLE A.11. RPF for Group VII.

Number of Units Recommended Professional Fee (RPF)
DAEDS DADS
1 10% of PCC 6% of PCC
2 – 10 Fee for one unit + 50% for Fee for one unit + 30% for
each additional unit each additional unit
11 – 30 Fee for ten units + 40% for Fee for ten units + 24% for
each additional unit each additional unit
31 – 50 Fee for 30 units + 25% for Fee for 30 units + 15% for
each additional unit each additional unit
51 and above Fee for 50 units + 15% for Fee for 50 units + 9% for each
each additional unit additional unit

TABLE A.12. RPF for Group IX.

RPF 150% of PCC (Cost of Works Covered)

TABLE A.13. RPF for Group X.

Service Rendered RPF
Technical Opinion/Advice PHP 1,000 / hour (Minimum)
Expert Witness PHP 5,000 / appearance

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METHODS OF COMPENSATION
ASSIGNMENT / READER
Ar. Jomarie Viel Maglunob

TABLE A.14. Schedule of Payments.

Work Phase Payment Due Cumulative
Amount
Upon signing of the Service 5% of PF 5%1
Agreement
Upon completion of the Schematic + 15% of PF 20%2
Design Phase
Upon completion of the Design + 20% of PF 40%2
Development Phase
Upon completion of the Contract + 50% of PF 90%2
Document Phase
Bidding or Negotiation Phase (Adjust fee to be equal to 90%, as 90%3
per winning bid)
Upon Completion of Work + 10% of PF 100%4
(5% for civil liability, 5% for
Periodic Construction Supervision)
1. Based on original SPPCC as stipulated in the Service Agreement.
2. Based on latest SPPCC submitted at that particular stage.
3. Based on winning bid.
4. Based on FPPCC.

- END OF ANNEX A –

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METHODS OF COMPENSATION
ASSIGNMENT / READER
Ar. Jomarie Viel Maglunob

ANNEX B
SPECIALIZED ARCHITECTURAL SERVICES
Recommended Professional Fees & Schedule of Fees

TABLE B.1. RPF for Architectural Interiors (AI), Acoustic Design, Lighting Layout & Design, and
Site Development Planning (SDP).
RPF 10% - 15% of Cost of Work

TABLE B.2. Schedule of Payments for Architectural Interiors (AI), Acoustic Design, Lighting
Layout & Design, and Site Development Planning (SDP).
Phase of Works Payment Due
Upon Submission of Preliminary Design 30% of RPF
Upon Submission of Final Design 50% of RPF
Upon Completion of the Project 50% of RPF
Note: Obviously, this tally does not total to 100%. This will most likely be edited in future iterations of this document.

TABLE B.3. RPF for Physical Planning.

Area RPF Amount
Basic Rate for the first 5
PHP 5.00 per sq. m. PHP 250,000.00
hectares or less
PHP 250,000.00 +
Over 5 – 10 hectares PHP 4.00 per sq. m. PHP 40,000.00 per hectare above 5
hectares and below 10 hectares
PHP 450,000.00 +
Over 10 – 50 hectares PHP 3.00 per sq. m. PHP 30,000.00 per hectare above
10 hectares and below 50 hectares
PHP 1,650,000.00 + PHP 15,000.00
Over 50 hectares PHP 1.50 per sq. m. per hectare above 50 hectares
NOTE: These rates apply to moderately flat sites only. If the site is rugged or with steep terrain, the fee shall increase by 20-30%.

TABLE B.4. Schedule of Payments for Physical Planning

Phase of Works Payment Due
Framework Development Plan (FrDP) 30% of RPF
Conceptual Master Development Plan (CMDP) 30% of RPF
Preliminary Master Development Plan (PMDP) 20% of RPF
Detailed Master Development Plan (DMDP) 20% of RPF

- END OF ANNEX B -

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