1. Preparing for Appointment Part 3 Update Course 2011 The Mackintosh School University of Strathclyde University of Dundee

2. 2 Dunstrathtosh short course 2011 MARKETING PROCESSES The orientation Internal Audit External Audit Marketing Planning Marketing Strategies APPROACHING, BIDDING AND PRESENTING Methods of gaining work Basic requirements for client acceptance Assessment criteria Putting together a proposal OVERVIEW

3. 3 Dunstrathtosh short course 2011 THE ORIENTATION Every architectural practice must make a profit to survive, by targeting and obtaining the right kind of work. A marketing orientation allows a practice to sell the right things to the right people in the right place at the right time. The marketing orientation of an architectural practice must be client-centred. Without clients, an architectural practice has no work. Good clients are contented customers who: Need what your practice can provide readily within the resources available Are trustworthy and loyal Appreciate the service your practice provides Pay handsomely and on time Refer you to other good clients or come back again themselves. MARKETING GENERALLY

4. 4 Dunstrathtosh short course 2011 THE PROFILE OR BRAND In the retail market, branding is obvious. When one buys a tin of beans, one often thinks more about the brand than the product or process involved. Branding is intentional. Once a reputation is established it is promoted as a “badge of quality” giving the consumer comfort in the buying decision. A brand can be damaged by a bad experience or inappropriate behaviour. Maintenance of Corporate Image is therefore important, even for architectural practices, who brand themselves by: service or product specialisation design style or ability quality of service, administration and management scale of work that can be undertaken geographical coverage or range of services provided MARKETING GENERALLY

5. 5 Dunstrathtosh short course 2011 THE PROFILE OR BRAND The profile or brand gives an impression of the organisation to attract a certain type of customer, but it must be backed up by an equivalent service. The outward appearance of the practice needs to be addressed, in everything from the offices to the letterhead and the way telephones are answered. To determine the most appropriate method of operating, displaying and promoting the practice, a marketing plan should be prepared to ensure the best match of abilities and resources with available or target markets. Some practices will only serve the existing, most readily accessible market and may not need to analyse too much. Others may strive to enter more profitable or prestigious markets. They must plan and then may need to expend considerable resources. Once a new market has been entered, the practice will need to constantly review the quality or suitability of service to deal with the competition. To do so, the practice must first look inwardly and audit itself. MARKETING GENERALLY

6. 6 Dunstrathtosh short course 2011 INTERNAL AUDIT The practice must look at its own abilities and try to align them with the best possible opportunities for obtaining suitable work, while reducing risk. This process is know as the internal audit and usually takes the form of a SWOT analysis, assessing for the practice in relation to each market sector: The Practice’s STRENGTHS, such as design skill, experience, organisation The Practices WEAKNESSES, such as inappropriate scale, lack of resources The OPPORTUNITIES within the market sector, such as available contacts And the THREATS that may be encountered, such as late payment or competition This information is tabulated and comparisons are made between market sectors to determine the best possible fit. If penetration of a particular market is desired and the marketing audit shows a “skills, resources or technology gap” that needs to be bridged, this can be targeted for development by the practice by acquisition, recruitment or CPD. MARKETING PROCESSES

7. 7 Dunstrathtosh short course 2011 EXTERNAL AUDIT It is also necessary for a practice to look at the available markets to determine whether they are worth targeting. The external audit is the appropriate device, which, when compared with the findings of the internal audit will also become part of the Marketing Plan. An external audit will utilise some of these various methods: The use of Market Researchers Links with organisations such as the CBE, CEBE, RIBA/RIAS Practice Services Information gained through CPD, attending seminars Monitoring the press reports on business performance and new legislation “Keeping one’s ear to the ground” Another audit technique is Benchmarking, whereby the practice compares itself to its immediate competitors, through analysis of survey information. MARKETING PROCESSES

8. 8 Dunstrathtosh short course 2011 MARKETING PLANNING To produce a marketing plan, the practice must look at the aims of the company and match them with clear objectives which must be well defined in terms of time and money. Objectives need to be SMART: Specific Measurable Attainable Realistic and Time-related. A clearly stated SMART objective (if realistic and attainable) would be: “This practice will have a turnover of £3 million, with a profitability of 22%, be occupying offices in central Glasgow, with 18 staff working on £10 million plus projects in the healthcare sector, all within two years” To achieve these goals, the plan must contain Marketing Strategies MARKETING PROCESSES

9. 9 Dunstrathtosh short course 2011 MARKETING STRATEGIES Strategies revolve around the four Ps: Price (How much to charge) Place (where is the office based, what is its sphere of operation) Product (what services are provided, quality, extent, niche markets) Promotion (method of letting people know you are there) The most visible marketing attribute is Promotion. Each activity must fall within the Marketing Budget and the overall Business Plan of the practice. Business opportunities present themselves to practices through: word of mouth (OBN), recommendation or repeat business from existing clients architectural competitions OJEU notices response to advertising or promotional activity. MARKETING PROCESSES

10. 10 Dunstrathtosh short course 2011 METHODS OF GAINING WORK Some opportunities only require negotiation of a fee, others involve Competition or Selection. Existing clients, referrals and promotional activity provide Negotiation opportunities. When the practice seeks work through application (OJEU notices or tender opportunities), competition or selection procedures are undertaken. An Architectural Competition is another form of selection procedure, in which a “win” may not necessarily lead to an appointment. It would be good to avoid selection processes, but the Marketing Plan may necessitate entering them. The following factors must be weighed up: the resource cost of application the chance of success and the value of the likely reward. Two-stage processes cover Pre-qualification, then a fee or performance bid. APPROACHING, BIDDING AND PRESENTING

11. 11 Dunstrathtosh short course 2011 BASIC REQUIREMENTS FOR CLIENT ACCEPTANCE Meeting the Pre-qualification Conditions It is absolutely necessary that the conditions are met, in terms of insurance, resources, deadlines etc. Practices should also consider the best presentation methods to show that they are “better and different”. Putting Together the Team The team should have a track record and preferably have worked together before. Experienced individuals are sought out for special mention. Large scale organisations have an advantage. Some clients discriminate against small practices through setting prohibitive requirements. Pre-qualification procedures often seek a team leader. The most effective team leader may be the architect, but not always. Preparing a bid can be a management process in itself. APPROACHING, BIDDING AND PRESENTING

12. 12 Dunstrathtosh short course 2011 ASSESSMENT CRITERIA If the pre-qualification stage is passed successfully, at the next stage a bid will be sought. There are various forms of bidding process dependent upon the priorities of the client. They are as follows: A performance tender A straight fee bid A quality/experience bid A combination of fee and quality to a set formula The finalists may not be remunerated for entering the competition. Practices must monitor ownership of any design created, especially if unsuccessful. OJEU notices comply with European Law on Public Procurement. However the application of the assessment criteria is not covered by law. There is no obligation to accept the lowest or “best” tender. Ultimately personal preference will have a strong influence upon the decision. APPROACHING, BIDDING AND PRESENTING

13. 13 Dunstrathtosh short course 2011 PUTTING TOGETHER A PROPOSAL A proposal should only be undertaken for a project to which the practice is realistically suited in terms of resource, location and experience. The likely commitment of the client to the project should be considered. Marketing is an important and costly part of a practice’s business activities, so proposals should be taken seriously. Remember that the preparation of a proposal is a management process involving the co-ordination of input from a number of organisations. The architectural practice may only be contributing to another party’s bid, such as under PFI/PPP. The practice must consider the leading party’s chances of success. The activities should be planned in advance and the resource cost (less any remuneration) determined to ensure compliance with the marketing budget. The presentation materials and output should be of the highest quality. The bid may require a verbal or PowerPoint presentation, so REHEARSE IT. APPROACHING, BIDDING AND PRESENTING

14. 14 Dunstrathtosh short course 2011 In Summation Understand the practice’s profile. Becoming involved in marketing activity is important and potentially financially beneficial for you. Marketing is a management activity. The budget should be studied and resources allocated accordingly. Keep your present clients happy if you can. Gaining repeat business is easy marketing, because it avoids competition. Try to avoid all forms of business competition if at all possible. It is not necessary to actively compete if you can find an “inside track”. Only undertake design competitions if you have any chance of winning and you have the resources to do so - beware of the Practice Ego. If you do have to compete, then do it well, in the appropriate circumstances and throw everything at it. Concentrate on developing what makes the practice Better and Different. What is its USP? Could it be enhanced through CPD? PREPARING FOR APPOINTMENT

15. 15 Dunstrathtosh short course 2011 RIAS AND RIBA Serve the professional interests of members Nurture and promote good architectural practice Establish – by research and development – good architectural practice Educate members in good practice Provide practice support Promote architecture and architects to the community Establish Code of Good Conduct to protect public and members PROFESSIONAL BODIES

16. 16 Dunstrathtosh short course 2011 ARCHITECTS REGISTRATION BOARD is required to maintain register of suitably qualified architects is required to set and monitor standards for registration is required to establish Code of Conduct is responsible to set disciplinary procedures to enforce standards set by Code of Conduct has power of validation of educational and examination standards

17. 17 Dunstrathtosh short course 2011 ARB CODE OF CONDUCT An architect owes a duty of care to his client which is defined as follows in the codes of conduct Standard 3: An architect should carry out his professional work faithfully and conscientiously and with due regard to any technical and professional standards 3.1 An architect should perform his work with due skill, care and diligence RIBA CODE OF CONDUCT Principle One: A Member shall faithfully carry out his duties applying his knowledge and experience with efficiency and loyalty towards his client or employer, and being mindful of the interests of those who might be expected to use or enjoy the product of his work. CODES OF CONDUCT

18. 18 Dunstrathtosh short course 2011 DUTY OF CARE IMPLIES ACCOUNTABILITY An architect is liable to his client for the quality of service provided. The courts’ test of negligence is: That which the Ordinary Architect would not have done using his or her ordinary degree of skill or care. PERIOD OF LIABILITY IN SCOTLAND Law of Prescription and Limitation 5 years from the date when the Client might reasonably have discovered that he or she had suffered loss. OR 20 years from the date when the damage occurred from which the Client suffered loss. Similar principle in England and Wales but different periods. ARCHITECTS’ LIABILITY

19. 19 Dunstrathtosh short course 2011 QUESTIONS ARGUED IN COURT IN DISPUTE BETWEEN CLIENT & ARCHITECT: Can the Architect be held liable? What is the Date of Reasonable Discovery? OR When did the damage occur? In effect you can be held liable for many years since the date of reasonable discovery or the date when damage occurred can be many years after completion. ARCHITECTS’ LIABILITY

20. 20 Dunstrathtosh short course 2011 JOINT AND SEVERAL LIABILITY IF SEVERAL PARTIES ACT TOGETHER THEY CAN BE HELD LIABLE FOR THEIR ACTIONS JOINTLY AND SEVERALLY (SEPARATELY) This means that if one party makes a mistake, the other parties to the agreement can be held responsible for that mistake. IN A DEBATE IN THE HOUSE OF LORDS, THE DUKE OF ROXBURGH (WHO IS AN ARCHITECT) PROVIDED AN EXAMPLE OF THIS LAW IN ACTION. A Court found that a Contractor was 97.5% responsible for a defect and the Architect was 2.5% responsible. Under the Law of Joint and Several Liability the Architect was held 100% responsible because the builder was in liquidation.

21. 21 Dunstrathtosh short course 2011 An architect’s liability is onerous since he/she is held responsible for many years unto the grave and beyond. Can be held responsible for the mistakes of others - contractors and consultants. It is ESSENTIAL to tie down your agreement with your client at the outset as required by the ARB Code of Conduct - Standard 4. VICARIOUS LIABILITY

22. 22 Dunstrathtosh short course 2011 ARB CODE OF CONDUCT

23. 23 Dunstrathtosh short course 2011 CURRENT ARCHITECT / CLIENT AGREEMENTS Scottish Conditions of Appointment 2000 SCA/2000 (rev Jan 2003) Published by Royal Incorporation of Architects in Scotland Standard Form of Agreement (SFA/99) SFA/99 (rev Apr 2000) Published by the Royal Institute of British Architects The remainder of this lecture refers to SCA/2000

24. 24 Dunstrathtosh short course 2011 COMPONENTS OF AGREEMENT BETWEEN CLIENT & ARCHITECT Definition of service Fee charged for service Conditions under which service is provided

25. 25 Dunstrathtosh short course 2011 COMPONENTS OF SCOTTISH CONDITIONS OF ENGAGEMENT SCA/2000 Rev Jan 2003 Memorandum Of Agreement OR Letter Of Confirmation Of Agreement Definition Of Services Schedule Of Project Details Conditions Of Appointment

26. 26 Dunstrathtosh short course 2011 MEMORANDUM OF AGREEMENT

27. 27 Dunstrathtosh short course 2011 MEMORANDUM OF AGREEMENT

28. 28 Dunstrathtosh short course 2011 MEMORANDUM OF AGREEMENT

29. 29 Dunstrathtosh short course 2011 WORKED EXAMPLE

30. 30 Dunstrathtosh short course 2011 CONDITIONS OF CONTRACT SETS OUT THE OBLIGATIONS OF BOTH CLIENT AND ARCHITECT PART ONE Conditions common to all commissions. PART TWO Conditions specific to Design of Building Projects Stages A - H. PART THREE Conditions specific to contract administration Stages J - L. PART FOUR Conditions specific to appointment of Consultants and specialists where architect is lead consultant.

31. 31 Dunstrathtosh short course 2011 PART ONE

32. 32 Dunstrathtosh short course 2011 PART ONE

33. 33 Dunstrathtosh short course 2011 PART ONE

34. 34 Dunstrathtosh short course 2011 1.2.1 Duty of Care PART ONE

35. 35 Dunstrathtosh short course 2011 PART TWO

36. 36 Dunstrathtosh short course 2011 PART TWO

37. 37 Dunstrathtosh short course 2011 PART TWO

38. 38 Dunstrathtosh short course 2011 PART THREE

39. 39 Dunstrathtosh short course 2011 PART THREE

40. 40 Dunstrathtosh short course 2011 PART THREE

41. 41 Dunstrathtosh short course 2011 PART THREE

42. 42 Dunstrathtosh short course 2011 PART THREE

43. 43 Dunstrathtosh short course 2011 PART FOUR

44. 44 Dunstrathtosh short course 2011 PART FOUR - CONSULTANTS

45. 45 Dunstrathtosh short course 2011 PART FOUR - CONSULTANTS

46. 46 Dunstrathtosh short course 2011 PART FOUR - CONSULTANTS

47. 47 Dunstrathtosh short course 2011 COLLATERAL AGREEMENTS

48. 48 Dunstrathtosh short course 2011 ‘at the outset’ ‘same obligations as main agreement’ COLLATERAL AGREEMENTS

49. 49 Dunstrathtosh short course 2011 ‘contractor similarly bound contractually’ ‘consultant similarly bound contractually’ ‘specialist similarly bound contractually’ COLLATERAL AGREEMENTS

50. 50 Dunstrathtosh short course 2011 COPYRIGHT PART ONE

51. 51 Dunstrathtosh short course 2011 PART TWO COPYRIGHT

52. 52 Dunstrathtosh short course 2011 PART TWO COPYRIGHT

53. 53 Dunstrathtosh short course 2011 Provision is made under Clauses 1.8.1, 1.8.2 and 1.8.3 for alternative methods of resolution in the event of a dispute between the Client and the Architect for - ARBITRATION: An arbiter to be appointed by the President of the Royal Incorporation of Architects in Scotland - arbitration to be carried out in accordance with the Scottish Arbitration Code for Domestic and International Arbitration 1999 ADJUDICATION: An Adjudicator to be appointed by the President of the Royal Incorporation of Architects in Scotland - the decision shall be made with 28 days (extendable by 14 days) and binding on the parties until the matter is settled by arbitration DISPUTE RESOLUTION

54. 54 Dunstrathtosh short course 2011 PAYMENT

55. 55 Dunstrathtosh short course 2011 PAYMENT

56. 56 Dunstrathtosh short course 2011 PAYMENT

57. 57 Dunstrathtosh short course 2011 PAYMENT

58. 58 Dunstrathtosh short course 2011 PAYMENT

59. 59 Dunstrathtosh short course 2011 SUSPENSION & TERMINATION

60. 60 Dunstrathtosh short course 2011 FEE PROPOSALS METHODS OF PRESENTING FEES PERCENTAGE FEE An agreed percentage applied to the final Total Construction Cost. Has the advantage that Client is aware of cost of fees in relation to cost of works. LUMP SUM FEE May be used when the scope of the work can be clearly defined and adhered to. Has the advantage that the cost is clear to Client – has the disadvantage that the system cannot accommodate changes. TIME CHARGE FEE May be used when scope of works is cannot be clearly defined at outset. Has advantage that Architect is paid for time expended – has disadvantage that the Client has no knowledge of the likely final account.

61. 61 Dunstrathtosh short course 2011 FEE APPORTIONMENT An approximation of the fee apportionment over the RIBA Plan of Work Stages is as follows

62. 62 Dunstrathtosh short course 2011 Any questions ? Gordon Gibb Director of Professional Studies The Mackintosh School of Architecture 177 Renfrew Street Glasgow G3 6RQ tel:0141-353 4662 fax:0141-353 4703 ADMINISTRATION ASSISTANT TO PROFESSIONAL STUDIES: Lorraine Garner tel:0141 353 4662 Ext: 4656 email:l.garner@gsa.ac.uk CONCLUSION

63. 63 Dunstrathtosh short course 2011 Any questions ? Gordon Gibb Director of Professional Studies The Mackintosh School of Architecture 177 Renfrew Street Glasgow G3 6RQ tel:0141 353 4662 fax:0141 353 4703 ADMINISTRATION ASSISTANT TO PROFESSIONAL STUDIES: Lorraine Garner tel:0141 353 4656 email: l.garner@gsa.ac.uk or Nick Anderson tel:0141 353 4654 email : n.anderson@gsa.ac.uk CONCLUSION