Create The Edge Academy · Proposal Knowledge and Learning System · 2026 Edition
H
Fee Calculation & Pricing
A defended fee is a paid fee. This module is the math behind every number that leaves the firm, the logic that lets a client replicate it on the back of an envelope, and the discipline that makes the fee survive procurement review.
Northstar Design Collaborative · Atlanta, GA · Internal Use Only · 2026
MODULE H · BRIEFINGS
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Section Briefings
Watch the walkthrough for the method, listen to the deep dive on defensible fees, then study the module for the detail. The same fee engineering in three formats.
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The three fee calculation methods, the sector rate table, and the five-step buildup, demonstrated.
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The full fee methodology, narrated. A defended fee is a paid fee.
Module H · Fee Calculation Methodology Infographic
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MODULE H · FOUNDATIONS
H.0 · Overview
Why Fee Calculation Decides Whether the Firm Gets Paid
A proposal wins the work. The fee calculation decides whether the work is worth winning. Every number in a Northstar Design Collaborative proposal is the output of a method a client can replicate, because a fee a client can replicate is a fee a client will pay.
Section G taught you to write the proposal. Section H teaches you to price it. The two are inseparable: the most persuasive proposal in the stack still loses if the fee looks arbitrary, and the most defensible fee in the market still loses if the proposal cannot explain it. A defended fee is a paid fee. A guessed fee is the fee a client negotiates down or refuses outright.
The discipline of this module is simple to state and exacting to execute: every fee uses one of three calculation methods, the method is visible in the proposal, and the client can reproduce the math. That replicability is what makes a fee feel engineered rather than invented.
❞ Expert Insight
"The fee is not what we think the work is worth. It is what the math says the work costs, plus the margin that keeps the lights on. When a client can follow the math, they stop arguing about the number."
Create The Edge Academy · 40 Years in the Room
Figure H.0.1 · The Four Tests a Fee Must Survive
1
Test
The Client Review
The client or procurement officer checks whether the fee maps to the scope. A fee tied to square footage and a published sector rate passes. A round number does not.
2
Test
The Internal Review
[Department Manager] and the project lead check whether the fee covers the labor at the rate card. A fee that books a 12-week phase at 4 weeks of hours loses money the day it is signed.
3
Test
The Delivery Review
At close-out, the fee is measured against actual hours. A fee built from the methods in this module lands within tolerance. A guessed fee writes off the difference.
4
Test
The Replication Test
Can the client redo the math on a napkin? If yes, the fee is defended. If the only answer is "trust us," the fee is exposed the moment a cheaper firm shows its work.
▦ Rule of the House
No fee leaves the firm that the writer cannot defend with the math behind it. If you cannot show the square footage, the sector rate, the project budget, or the hours and the rate card that produced the number, the number is not ready. Defend it first, send it second.
MODULE H · FOUNDATIONS
H.1 · The Three Methods
Three Methods to Calculate a Defended Fee
Method A: square feet times sector rate. Method B: project budget times percentage. Method C: labor hours times the rate card. Use the method that fits the scope, and show the math in the proposal.
Every defended fee at Northstar Design Collaborative uses one of three methods. The method is chosen by the shape of the project, not the comfort of the writer. The wrong method produces a number that is technically calculated but indefensible, because it rests on a baseline the project does not actually have.
Figure H.1.1 · The Three Methods at a Glance
| Method | Formula | Use When | Fails When |
|---|---|---|---|
| A · Square Foot | Project scope area (SF) × sector rate ($/SF) | New construction with a clean square-foot program | Renovation with no clean SF baseline |
| B · Equipment Budget | Equipment budget × fee % | Equipment-driven projects where the budget is known | Design-heavy work with low equipment cost |
| C · Labor Hours | Hours per phase × rate card | Atypical scope, audits, or single-phase engagements | You have not built a real hours estimate |
✓ Best Practice: Run Both A and B
On most multi-million dollar new builds, Method A and Method B should land within ten percent of each other. Run both. If they diverge by more than ten percent, the square-foot baseline or the project budget is wrong, and you have found the error before the client does.
⚠ Common Failure
Using Method A on a renovation with no good square-foot baseline. The existing project area may be 1,800 SF but only 1,100 SF is in scope. Multiplying the wrong SF by the sector rate inflates the fee, the client rejects it, and a competitor who used Method B against the project budget wins the work. Match the method to the scope.
MODULE H · FOUNDATIONS
H.2 · Method A
Method A: Square Foot Times Sector Rate
The cleanest method when the project has a defined project scope area. Project scope area (SF) times the published sector dollar-per-square-foot rate produces the project budget, and the fee percentage follows from there.
Method A is the default for new construction because new construction has a clean square-foot program before a single piece of equipment is selected. The project scope area comes from the architectural program; the dollar-per-square-foot figure comes from the published sector rate table in H.4. Multiply the two and you have a defensible project budget, which drives the fee.
Figure H.2.1 · Method A Worked Example
| Step | Input | Calculation | Result |
|---|---|---|---|
| 1 | Kitchen size from program | 1,167 SF × $300/SF (standard sector rate) | $350,100 |
| 2 | Add walk-in cooler / freezer | $350,100 + $49,200 | $399,300 estimated equipment |
| 3 | Apply sector fee percentage | $399,300 × 4% | $15,972 base fee |
▦ Rule of the House
The square footage in the calculation must be the square footage being designed, not the gross building area. A 6,000 SF facility with a 1,200 SF project scope is a 1,200 SF scope calculation. Using the gross area inflates the fee and signals to a procurement reviewer that the firm does not understand its own method.
☰ From the Files
The school sector rate runs $300 to $325 per square foot in the 2026 table. Use the low end for straightforward serveries and the high end where the program adds heavy production, scratch cooking, or high-volume service. The rate is a band, and choosing within the band is a judgment you must be able to explain.
MODULE H · FOUNDATIONS
H.3 · Method B
Method B: Equipment Budget Times Percentage
When the project budget is known or can be estimated directly, the fee is a percentage of that budget. This is the method for equipment-driven projects and the cross-check for Method A.
Method B prices the fee as a percentage of the project budget. It is the right method when the project budget is established directly, by a client capital number, a previous estimate, or a detailed equipment list, rather than derived from square footage. It is also the standard cross-check against Method A on new construction.
Figure H.3.1 · Method B Worked Example
| Step | Input | Calculation | Result |
|---|---|---|---|
| 1 | Established project budget | Client capital line for FF&E | $2,475,650 |
| 2 | Apply sector fee percentage | $2,475,650 × 5% | $123,782 base fee |
✓ Best Practice
The fee percentage moves inversely to the project budget. A $250,000 budget may carry 6 to 7 percent because the design effort does not shrink proportionally with the equipment cost. A $2,500,000 budget carries 4 to 5 percent. Pricing a large budget at the small-budget percentage leaves money on the table; pricing a small budget at the large-budget percentage loses the work.
⚠ Common Failure
Applying a flat percentage across every project size. A firm that prices every job at 5 percent overcharges its small clients and underprices its large ones. The percentage is a band tied to budget size, and the band is published in H.4. Pick within it deliberately and be ready to explain the choice.
MODULE H · THE SECTOR MODEL
H.4 · The Sector Rate Table
The Sector Rate Table
Every sector carries its own dollar-per-square-foot band and its own fee-percentage band. The bands exist because a high-complexity project and a standard-complexity project do not cost the same to design, even at the same square footage.
The sector rate table is the published reference behind Method A and Method B. Both are bands, not points, because two projects in the same sector can differ in complexity. Choosing within the band is a judgment you must be able to defend in one sentence.
Figure H.4.1 · Demonstration Rate Schedule — Sector Rate Bands
ⓘ Illustrative Data Only — Values in this table are synthetic figures constructed for portfolio demonstration. They do not represent any firm’s actual published rate schedule.
| Sector | Equipment $/SF | Fee % Band | Notes |
|---|---|---|---|
| K-12 / Public School | $310 to $340 | 4 to 5% | High end for scratch-cook and high-volume programs |
| Healthcare / Senior Living | $440 to $490 | 5 to 6% | Regulatory load and patient feeding raise both bands |
| Hospitality / Hotel | $380 to $455 | 4 to 5.5% | Bar and banquet scope widens the range |
| Country Club | $410 to $480 | 5 to 6% | Multiple outlets, member expectations |
| Correctional | $280 to $330 | 4 to 5% | Security detailing offsets simpler menus |
| Corporate / Catering | $355 to $430 | 4 to 5.5% | Servery-driven, volume dependent |
▦ Rule of the House
The fee percentage moves inversely to the project budget within every sector band. Small budgets sit at the high end of the percentage band because the design effort does not shrink with the equipment cost; large budgets sit at the low end. State the budget size and the band position in the same breath and the fee defends itself.
☰ From the Files
Healthcare and senior living carry the highest bands in the table because complex operational requirements adds regulatory review, specialized operational segregation, and regulatory review load that a standard-complexity project never sees. The same 1,200 SF project scope is a different engineering problem in a hospital than in a standard facility, and the rate band reflects it.
MODULE H · THE SECTOR MODEL
H.5 · The Five-Phase Split
The Five-Phase Split
The total fee is earned across five phases. The percentages are fixed by default and shift only for defined project types. The split is how the fee maps to work intensity, and how progress billing is justified.
Once the total fee is set, it is divided across the five phases of the engagement. Each percentage reflects the share of total effort that phase consumes. The default split applies to most projects; two named variants redistribute the same 100 percent for projects with a bar program or heavy renovation.
Figure H.5.1 · Phase Splits Across Three Fee Variants
| Phase | Default | F&B with Bar | Renovation-Heavy |
|---|---|---|---|
| Conceptual Design (SD) | 20% | 20% | 15% |
| Design Development (DD) | 25% | 25% | 20% |
| Project Documents (CD) | 30% | 30% | 30% |
| Bidding / Negotiation (BN) | 10% | 5% | 15% |
| Implementation Administration (CA) | 15% | 20% | 20% |
| Total | 100% | 100% | 100% |
✓ Best Practice: Always Verify the Total
Every variant must total exactly 100 percent. Before any proposal leaves the firm, add the five phase percentages out loud. A split that totals 95 or 105 percent is the single most common arithmetic error in fee tables, and it is the first thing a sharp procurement officer checks.
⚠ Common Failure
Using the default split on a renovation-heavy project. Renovation front-loads less design and back-loads more construction administration, because field conditions drive change during construction. The renovation-heavy variant moves weight from SD and DD into BN and CA. Use the default on a renovation and the firm under-bills the phases where the work actually lands.
MODULE H · THE SECTOR MODEL
H.6 · The Labor Rate Card
The Labor Rate Card
The rate card is the hourly cost of every role on the team. It is the basis of Method C, the internal check on Methods A and B, and the price of every additional meeting and out-of-scope hour.
The labor rate card does three jobs: it is the direct basis for Method C, it is the internal check that confirms a Method A or B fee actually covers the labor, and it is the price applied to additional meetings, site visits, and out-of-scope hours under H.8 and H.10.
Figure H.6.1 · Demonstration Rate Schedule — Hourly Rate Card
ⓘ Illustrative Data Only — Values in this table are synthetic figures constructed for portfolio demonstration. They do not represent any firm’s actual billable rate schedule.
| Role | Rate / Hour | Role | Rate / Hour |
|---|---|---|---|
| Principal | $185 | Quality Control | $125 |
| Senior Project Manager | $160 | REVIT / CAD | $110 |
| Senior Production | $155 | Coordinator | $95 |
| Project Manager | $140 | Specifications | $85 |
| Administrative | $70 |
▦ Rule of the House
Additional meetings beyond the contracted count bill at $140 per hour at the project-manager level, $155 at senior level, and $185 at principal level. The rate that applies is the rate of the person who actually attends. Booking a principal to a meeting and billing it at the coordinator rate gives away margin the firm cannot recover.
☰ From the Files
The rate card descends from Principal at $185 to Administrative at $70. When you build a Method C estimate, assign each task to the role that actually performs it. Drafting is a REVIT task at $110, not a principal task at $185. Mis-assigning roles is how a Method C number drifts away from reality in both directions.
MODULE H · BUILDING THE NUMBER
H.7 · The Fee Buildup
The Fee Buildup, Step by Step
From square footage to a collectible fee in five steps. This is the sequence that turns a program into a number a client can replicate and the firm can deliver against.
Figure H.7.1 · The Five-Step Fee Buildup
1
Establish the Baseline
Pull the project scope area from the program (Method A) or the project budget from the client capital line (Method B). This single number drives everything downstream.
2
Apply the Sector Rate
Multiply by the published sector rate ($/SF) to get the project budget, then select the fee percentage from the band based on budget size. Note the band position you chose.
3
Compute the Base Fee
Equipment budget times fee percentage equals the base fee. Cross-check Method A against Method B; if they diverge more than ten percent, find the error now.
4
Split Across Phases
Apply the five-phase split from H.5. Confirm the percentages total exactly 100. This is the progress-billing schedule the client will pay against.
5
Run the Labor Check
Build a rough Method C estimate from the rate card and confirm the base fee covers the hours at the right roles. A fee priced below its own labor cost is a loss signed into existence.
Figure H.7.2 · Worked Buildup: School Project
| Element | Value |
|---|---|
| Project scope area (from program) | 1,167 SF |
| School sector rate | $300 / SF |
| Equipment subtotal | $350,100 |
| Walk-in cooler / freezer add | $49,200 |
| Total estimated project budget | $399,300 |
| Fee percentage (mid-band, mid budget) | 4% |
| Base fee | $15,972 |
☰ From the Files
Step 5 is the labor check. Before the fee is final, build a rough Method C estimate from the rate card and confirm the base fee covers the hours at the right roles. A fee that prices out below its own labor cost is a loss the firm signs into existence. The labor check is the last gate before the number is real.
MODULE H · BUILDING THE NUMBER
H.8 · Meetings, Travel, Reimbursables
Meetings, Travel, and Reimbursables
The base fee covers the contracted scope. Everything outside it is a line item, never a bundle. Itemized extras survive review; a single lump labeled "expenses" invites the client to cut it.
The base fee covers a defined number of meetings and the design work itself. Travel, additional meetings, and reimbursable expenses sit outside the base fee and must appear as explicit line items. The discipline here is the same one from Section G: itemize everything, bundle nothing. A defended extra is an itemized extra.
Figure H.8.1 · Standard Travel and Reimbursable Rates
| Item | Rate | Basis |
|---|---|---|
| Per-diem site visit | $1,600 / day | Covers travel time, on-site time, and report-back time |
| Mileage beyond 50 miles | Prevailing IRS rate | Round trip from the staffing office, calculated |
| Additional meetings | $225 / hour | Beyond the contracted count, billed at attendee rate |
| Lodging and airfare | At actual cost | No markup, receipts attached |
▦ Rule of the House
Never write the line "all travel included." It absorbs unlimited cost into a fixed number. The instant a project requires a fourth or fifth site visit, the firm eats the difference. The base fee names a meeting count and a site-visit count; everything beyond it is billed. Write what is included and the boundary defends itself.
⚠ Common Failure
Bundling expenses into a single line labeled "Expenses: $2,118 lump." A bundled number invites the client to negotiate it down because they cannot see what it buys. The same costs itemized: airfare $420, lodging $360, per diem $150, mileage $88, site-visit time $1,100, survive review because each line is obviously real. Itemized survives; bundled gets cut.
MODULE H · BUILDING THE NUMBER
H.9 · Retainers and Payment Terms
Retainers, Deposits, and Payment Terms
The fee is only real when it is collectible. Payment terms convert a signed number into cash, and a retainer is the difference between a client who is committed and a client who is shopping.
Figure H.9.1 · Standard Payment Structure
| Element | Standard | Why It Exists |
|---|---|---|
| Retainer at signing | 10 to 15% of total fee | Secures commitment; applied against the first phase invoice |
| Progress billing | By phase completion | Each phase invoices at its split percentage as it completes |
| Net terms | Net 30 | Standard commercial terms; defines when late begins |
| Reimbursables | Billed as incurred | Travel and expenses invoiced in the month they occur |
✓ Best Practice
Tie each progress invoice to phase completion, not the calendar. Billing "25 percent at thirty days" invites a dispute when the phase is only half done at day thirty. Billing "Design Development invoices on DD completion" ties cash to delivered work, which is the position the firm can always defend.
☰ From the Files
The retainer applies against the first phase rather than sitting as a separate deposit. A 12 percent retainer on a $123,782 fee is $14,854 at signing, credited against the Conceptual Design invoice. The client sees it work, not disappear, which removes the most common objection to paying it.
MODULE H · DEFENDING THE NUMBER
H.10 · Adjusting a Fee
When and How to Adjust a Fee
Scope changes. The fee changes with it, through a documented mechanism, never a quiet absorption. A change order is how the firm protects margin without surprising the client.
A fee is set against a defined scope. When the scope moves, the fee moves through a change order, a documented adjustment the client approves before the work proceeds. The wrong response is silent absorption: doing the extra work and hoping to recover it later. That is how a profitable project becomes a loss without anyone deciding it should.
Figure H.10.1 · Triggers That Require a Fee Adjustment
1
Trigger
Square Footage Grows
The program expands after the fee was set. Re-run Method A against the new SF; the delta is the change order amount, calculated the same way as the base.
2
Trigger
Scope Adds a Phase
A bar, a satellite kitchen, or a second outlet is added. Price the addition with the same method and sector rate, then fold it in as a documented amendment.
3
Trigger
Meetings Exceed Count
The contracted meeting count is used up and more are required. Bill at the rate-card meeting rate. This is named in the base proposal so it is never a surprise.
4
Trigger
Schedule Extends
A project that stalls and restarts consumes re-familiarization hours. Document the cause and bill the hours at the rate card rather than absorbing the restart cost.
▦ Rule of the House
Adjust the fee in writing before the additional work begins, never after. A change order approved in advance is a fee. The same work done first and invoiced later is a dispute. The discipline is sequence: document, approve, then proceed.
MODULE H · DEFENDING THE NUMBER
H.11 · Ten Pricing Errors
Ten Pricing Errors That Cost the Firm
Every one of these has cost the firm a project or a margin. They are listed so you can catch them in your own work before a reviewer, or a competitor, catches them for you.
Figure H.11.1 · Errors That Lose Work
Error 1
Using gross building area instead of project scope area
Error 2
Applying a flat fee percentage regardless of budget size
Error 3
Choosing the wrong calculation method for the scope
Error 4
A phase split that does not total exactly 100 percent
Error 5
Writing "all travel included" instead of a named count
Figure H.11.2 · Errors That Cost Margin
Error 6
Bundling expenses into one lump the client can cut
Error 7
Skipping the Method C labor check before finalizing
Error 8
Billing meetings below the attending person's rate
Error 9
Absorbing scope changes instead of writing change orders
Error 10
Tying invoices to the calendar instead of phase completion
⚠ The Most Expensive Error
The missing labor check. A fee can be calculated correctly by Method A, pass the client review, and still lose money because the base fee never covered the hours at the rate card. The math was right and the project still lost. Run Method C as the final gate every time.
MODULE H · DEFENDING THE NUMBER
H.12 · The Fee Defense Checklist
The Fee Defense Checklist
Before any fee leaves the firm, it passes this checklist. Every item maps to a failure that has cost the firm before. Run all twelve, every time.
This is the final gate. The checklist is procedural: run every item in order, every proposal, before the fee is sent. It is the same discipline as the pre-flight checklist in Section G, applied to the number instead of the prose.
Confirm Before Sending: The Math
- Square footage is the area being designed, not gross
- Sector rate matches the project sector and band position
- Method A and Method B agree within ten percent
- Fee percentage fits the budget size within the band
- Phase split totals exactly 100 percent
- Method C labor check confirms the fee covers the hours
Confirm Before Sending: The Structure
- Meeting and site-visit counts are named, not open-ended
- Travel and reimbursables are itemized, not bundled
- Retainer and payment terms are stated
- Progress billing is tied to phase completion
- Every number traces to a visible input
- Northstar Design Collaborative appears lowercase; no name placeholders remain
▦ Rule of the House
If any item on this checklist fails, the fee is not ready, regardless of deadline. A fee sent with a 95 percent phase split or a bundled expense line will come back, and the rework costs more than the check would have. Run all twelve, fix what fails, then send.
❞ Expert Insight
"The number that survives is the number you can rebuild in front of the client. If you can show them the square footage, the rate, and the percentage, the conversation is over. If you cannot, the conversation has not started."
Create The Edge Academy · The Proposal Standard
MODULE H · ASSESSMENT
✓ Comprehensive Test
Fee Calculation & Pricing: Assessment
15 questions across all twelve sub-modules. A passing score is 12 correct. Below 10, re-read the sub-modules referenced in the legend.
1
Which three methods does Northstar Design Collaborative use to calculate a defended fee?
- ASquare foot rate, competitor match, and gut estimate
- BSquare foot times sector rate, project budget times percentage, and labor hours times rate card
- CCost plus margin, fixed bid, and time and materials
- DEquipment list, vendor quote, and markup
2
In Method A, the square footage used in the calculation should be:
- AThe gross building area
- BThe project scope area being designed
- CThe total lot size
- DThe dining room plus the kitchen
3
A school project has a 1,167 SF kitchen at the $300/SF standard sector rate, plus a $49,200 walk-in cooler/freezer. At a 4% fee, what is the base fee?
- A$14,004
- B$15,972
- C$19,972
- D$13,500
4
On a new-construction project, Method A and Method B should land within what tolerance of each other?
- AWithin 1%
- BWithin 10%
- CWithin 25%
- DThey never need to agree
5
As the project budget grows, the fee percentage should:
- ARise proportionally
- BStay flat across all project sizes
- CMove inversely, sitting at the low end of the band for large budgets
- DDouble for every million dollars
6
Which sector carries the highest dollar-per-square-foot band in the rate table?
- AK-12 / Public School
- BCorrectional
- CHealthcare / Senior Living
- DCatering / Warming
7
The default five-phase split is:
- ASD 20% · DD 25% · CD 30% · BN 10% · CA 15%
- BSD 30% · DD 30% · CD 20% · BN 10% · CA 10%
- CSD 15% · DD 20% · CD 30% · BN 15% · CA 20%
- DEqual 20% across all five phases
8
Before any fee table leaves the firm, the five phase percentages must:
- ATotal exactly 100%
- BAdd up to roughly 95 to 105%
- CFavor the CA phase
- DMatch the previous proposal
9
On the 2026 rate card, what is the Principal hourly rate?
- A$225
- B$250
- C$275
- D$300
10
The final gate before a fee is considered real (the labor check) uses which method?
- AMethod A, square foot
- BMethod B, project budget
- CMethod C, labor hours times rate card
- DNo check is needed once Method A is done
11
How should travel and reimbursable expenses appear in the proposal?
- ABundled into a single "expenses" line
- BAs explicit, itemized line items
- CHidden inside the base fee
- DStated as "all travel included"
12
A standard retainer at signing is what share of the total fee?
- A1 to 2%
- B10 to 15%
- C40 to 50%
- DThe full fee up front
13
When the scope grows after the fee is set, the correct response is to:
- AAbsorb the extra work and recover it later
- BWrite a documented change order and get approval before the work proceeds
- CIgnore it until close-out
- DRaise the next client's fee to cover it
14
The most expensive of the ten pricing errors is:
- AA phase split that totals 99%
- BSkipping the Method C labor check before finalizing
- CUsing a slightly old rate card
- DRounding the fee to the nearest hundred
15
The core test of a defended fee is whether:
- AIt is lower than every competitor
- BThe client can reproduce the math from the visible inputs
- CIt ends in a round number
- DIt was approved quickly
MODULE H · ASSESSMENT
☑ Answer Legend · Part 1 of 2
Answers · Questions 1 through 8
Do not review until the test is complete.
Question 1
Correct: B · Square foot times sector rate, project budget times percentage, and labor hours times rate card
The three defended methods are Method A, B, and C. Gut estimates and competitor matching are exactly what a defended fee replaces. See H.1.
Question 2
Correct: B · The project scope area being designed
Method A uses the area being designed, not the gross building area. Using gross area inflates the fee and signals the firm does not understand its own method. See H.2.
Question 3
Correct: B · $15,972
1,167 SF x $300 = $350,100. Add $49,200 for $399,300 project budget. $399,300 x 4% = $15,972. See H.2 and H.7.
Question 4
Correct: B · Within 10%
Running both methods is the standard cross-check. If they diverge by more than 10%, the square-foot baseline or the project budget is wrong, and you have found the error before the client does. See H.1.
Question 5
Correct: C · Move inversely, sitting at the low end of the band for large budgets
The design effort does not shrink proportionally with equipment cost, so small budgets sit at the high end of the percentage band and large budgets at the low end. See H.3 and H.4.
Question 6
Correct: C · Healthcare / Senior Living
Healthcare and senior living carry the highest band ($425 to $475/SF) because complex operational requirements adds regulatory review, specialized operational segregation, and regulatory review load a standard-complexity project never sees. See H.4.
Question 7
Correct: A · SD 20% · DD 25% · CD 30% · BN 10% · CA 15%
This is the default split, totaling 100%. The F&B-with-bar and renovation-heavy variants redistribute the same 100% to match work intensity. See H.5.
Question 8
Correct: A · Total exactly 100%
Every variant must total exactly 100%. A split that totals 95 or 105% is the single most common arithmetic error in fee tables, and the first thing a sharp procurement officer checks. See H.5.
MODULE H · ASSESSMENT
☑ Answer Legend · Part 2 of 2
Answers · Questions 9 through 15
The remaining answers with reasoning and sub-module cross-references.
Question 9
Correct: C · $275
The 2026 rate card runs from Principal at $275 down to Administrative at $100. Assign each task to the role that performs it; drafting is a REVIT task at $160, not a principal task. See H.6.
Question 10
Correct: C · Method C, labor hours times rate card
The labor check is the final gate. Before a fee is real, build a rough Method C estimate and confirm the base fee covers the hours at the right roles. A fee priced below its own labor cost is a loss signed into existence. See H.7.
Question 11
Correct: B · As explicit, itemized line items
Itemize everything, bundle nothing. A bundled "expenses" line invites the client to cut it because they cannot see what it buys. The same costs itemized survive review because each line is obviously real. See H.8.
Question 12
Correct: B · 10 to 15%
The retainer at signing runs 10 to 15% of the total fee and applies against the first phase invoice, so the client sees it work rather than disappear. See H.9.
Question 13
Correct: B · Write a documented change order and get approval before the work proceeds
Adjust the fee in writing before the additional work begins. A change order approved in advance is a fee; the same work done first and invoiced later is a dispute. See H.10.
Question 14
Correct: B · Skipping the Method C labor check before finalizing
A fee can be calculated correctly by Method A, pass the client review, and still lose money because it never covered the hours at the rate card. The math was right and the project still lost. See H.11.
Question 15
Correct: B · The client can reproduce the math from the visible inputs
A defended fee is one the client can rebuild from the square footage, the sector rate, and the percentage. If the only answer is "trust us," the fee is exposed the moment a cheaper firm shows its work. See H.0 and H.12.
MODULE H · STUDY TOOLS
◆ Flashcards · Reference Grid
Twelve Cards · Front and Back
Twelve flashcards covering the working vocabulary of Section H. Read the front, recall the back, then check.
1The Three Methods
A: square foot times sector rate. B: project budget times fee percentage. C: labor hours times rate card. Choose by the shape of the project.
(H.1)
2Method A
Project scope area (SF) times sector rate ($/SF) equals project budget; project budget times fee percentage equals base fee. Use the area being designed, not gross.
(H.2)
3Method B
Known project budget times fee percentage equals base fee. Use when the budget is established directly. Also the cross-check on Method A.
(H.3)
4Method C
Hours per phase times the rate card. The basis for atypical scope and the final labor check that confirms a fee covers its own cost.
(H.6, H.7)
5The 10% Cross-Check
Method A and Method B should agree within 10% on new construction. A wider gap means a wrong SF baseline or project budget. Find it first.
(H.1)
6Sector Rate Bands
School $300-325/SF at 4-5%. Healthcare/Senior Living $425-475 at 5-6%. Correctional $275-325 at 4-5%. Bands, not points.
(H.4)
7Inverse Percentage Logic
Fee percentage moves inversely to budget size. Small budgets sit at the high end of the band; large budgets at the low end. Design effort does not shrink with cost.
(H.4)
8The Five-Phase Split
Default: SD 20% / DD 25% / CD 30% / BN 10% / CA 15%, totaling 100%. F&B-with-bar and renovation-heavy variants redistribute the same 100%.
(H.5)
9The 2026 Rate Card
Principal $275, Senior PM/Production $250, PM $225, QC $200, REVIT $160, Coordinator $150, Specs $120, Admin $100. Bill the attendee's rate.
(H.6)
10Reimbursables
Per-diem site visit $1,600/day. Additional meetings $225/hour at attendee rate. Lodging and airfare at actual cost. Itemize everything, bundle nothing.
(H.8)
11Retainer and Terms
Retainer 10 to 15% at signing, applied against the first phase. Progress billing tied to phase completion, not the calendar. Net 30.
(H.9)
12The Defense Test
A defended fee is one the client can rebuild from the SF, the sector rate, and the percentage. If the only answer is "trust us," the fee is exposed.
(H.0, H.12)
MODULE H · STUDY TOOLS
□ Flashcards · Interactive
Tap the Card to See the Answer
Twelve cards, one at a time. Read the front, attempt the back from memory, then tap to check.
Term · Tap to Reveal
The Three Methods
A: square foot times sector rate. B: project budget times fee percentage. C: labor hours times rate card. Choose by the shape of the project. (H.1)
Tap card to flip · Use arrows to navigate
1 of 12
MODULE H · STUDY TOOLS
✂ Printable Cut-Out Study Cards
Print, Cut, Carry
Twelve cards arranged for printing. Cut along the borders. Keep them on your desk.
The Three Methods
A: SF x sector rate. B: project budget x fee %. C: hours x rate card. Choose by the shape of the project, not the comfort of the writer.
Method A
Project scope area (SF) x sector rate ($/SF) = project budget; budget x fee % = base fee. Use area being designed, not gross building area.
Method B
Known project budget x fee % = base fee. Use when budget is established directly. Also the cross-check on Method A.
Method C
Hours per phase x rate card. Basis for atypical scope and the final labor check that confirms a fee covers its own cost.
The 10% Cross-Check
Method A and B should agree within 10% on new construction. Wider gap = wrong SF baseline or project budget.
Sector Rate Bands
School $300-325 at 4-5%. Healthcare $425-475 at 5-6%. Correctional $275-325 at 4-5%. Bands, not points. Choose within them deliberately.
Inverse Percentage Logic
Fee % moves inversely to budget size. Small budgets: high end of band. Large budgets: low end. Design effort does not shrink with cost.
The Five-Phase Split (Default)
SD 20% / DD 25% / CD 30% / BN 10% / CA 15% = 100%. Verify the total every time. A split that does not total 100% is not ready.
The 2026 Rate Card
Principal $275 | Sr PM/Production $250 | PM $225 | QC $200 | REVIT $160 | Coordinator $150 | Specs $120 | Admin $100
Reimbursables
Site visit $1,600/day. Meetings $225/hr at attendee rate. Lodging and airfare at cost. Itemize everything, bundle nothing.
Retainer and Terms
Retainer 10-15% at signing against phase one. Progress billing by phase completion, not calendar. Net 30.
The Defense Test
A defended fee is one the client can rebuild from SF, sector rate, and percentage. If the only answer is "trust us," the fee is exposed.
MODULE H · PRESENTATION
Presentation Slides
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