Project Phase Fee Distribution Guide

Standard AIA Phase Breakdown

The American Institute of Architects has established a standard five-phase project delivery model that forms the basis for most A/E fee structures. These phases represent distinct stages of design development, each with specific deliverables, decision points, and effort requirements that justify uneven fee distribution.

The industry-standard distribution is: Schematic Design (15%), Design Development (35%), Construction Documents (30%), Bidding/Negotiation (5%), and Construction Administration (15%). This distribution reflects the reality that design effort is not evenly distributed across phases, with peak effort occurring during Design Development and Construction Documents.

Schematic Design Phase (15%)

Schematic Design establishes the basic project concept, scale, and relationship between project elements. This phase involves extensive client consultation, site analysis, programming verification, and initial design concepts. While representing only 15% of total fees, SD is critical for project success as it establishes the foundation for all subsequent design work.

The relatively low percentage reflects that SD work is primarily conceptual, requiring fewer technical details and coordination efforts compared to later phases. However, the decisions made during SD have profound impacts on project cost, schedule, and performance, making this phase essential despite its lower fee allocation.

Deliverables typically include site plans, floor plans, building sections, basic elevations, and outline specifications. The level of detail is intentionally limited to allow flexibility for refinement in subsequent phases while establishing clear project direction.

Design Development Phase (35%)

Design Development represents the highest fee allocation because this phase involves the most intensive design work, system coordination, and technical development. DD takes the approved schematic design and develops all building systems, establishes final room layouts, selects major materials and systems, and coordinates between all design disciplines.

The 35% allocation reflects the complexity of this phase, which requires extensive coordination between architectural, structural, mechanical, electrical, and specialty consultants. All major building systems must be sized, selected, and coordinated during DD, requiring iterative design development and multiple coordination cycles.

DD also involves extensive client coordination as final material selections, system choices, and spatial arrangements are confirmed. Cost estimating and value engineering often occur during this phase, requiring additional design iterations to align project scope with budget constraints.

Deliverables include detailed floor plans, building sections and elevations, system diagrams, material selections, and preliminary specifications. The goal is to establish all major project decisions while maintaining some flexibility for final refinement during Construction Documents.

Construction Documents Phase (30%)

Construction Documents involves creating the detailed drawings and specifications necessary for construction and permitting. While the major design decisions are made during DD, CD requires extensive technical documentation, detailing, and coordination to ensure constructability and code compliance.

The 30% allocation reflects the intensive documentation effort required to translate design concepts into precise construction instructions. This includes detailed dimensions, material specifications, construction details, and coordination between all building systems. Quality control and checking represent significant efforts during this phase.

Permit coordination often occurs during CD, requiring drawings and documentation that meet specific regulatory requirements. This may involve multiple submission cycles and coordination with various approval agencies, adding complexity to the documentation process.

Deliverables include complete construction drawings, detailed specifications, permit application materials, and bidding documents. The goal is comprehensive documentation that enables accurate pricing and successful construction without significant design changes.

Bidding and Negotiation Phase (5%)

Bidding services involve managing the contractor selection process, responding to bidder questions, evaluating proposals, and assisting with contractor selection. The 5% allocation reflects that this phase involves relatively limited design effort, focusing primarily on project administration and contractor coordination.

However, the bidding phase is critical for project success as it establishes the construction contract and finalizes project scope. Design teams must be available to clarify drawing and specification requirements, evaluate proposed substitutions, and assist with value engineering if bids exceed budget.

Some projects may involve negotiated selection processes rather than competitive bidding, but the design team's role remains similar: providing technical support for contractor evaluation and contract finalization.

Construction Administration Phase (15%)

Construction Administration involves ongoing design team involvement during construction to ensure project implementation matches design intent. Services include reviewing shop drawings, responding to field questions, conducting site observations, and processing change orders.

The 15% allocation reflects that CA services extend over the entire construction duration but involve periodic rather than continuous effort. The intensity of CA effort varies with construction complexity and contractor experience, but consistent design team involvement is essential for quality outcomes.

CA services are particularly important for complex projects where field conditions may require design adjustments or where new products and technologies require careful coordination. The design team's expertise helps resolve construction challenges while maintaining design integrity.

Effective CA services often prevent costly construction errors, ensure specification compliance, and maintain project schedule. The value of these services typically far exceeds their cost through reduced change orders and improved construction quality.

Cash Flow Implications for Design Firms

Understanding phase fee distribution is crucial for design firm cash flow management. The uneven distribution means that firms must carry higher staffing levels during DD and CD phases while maintaining steady involvement throughout the project duration.

Many firms structure their fee payments to align with effort requirements, requesting larger payments during peak effort phases. This helps balance cash flow with actual work effort and reduces the financing burden on design firms.

Project scheduling must account for phase fee distribution when planning staffing and workload. Firms often stagger project start dates to avoid having multiple projects in peak effort phases simultaneously.

The extended timeline of CA services requires careful planning as this work extends over many months but at relatively low intensity. Firms must maintain project knowledge and team continuity while managing other active projects.

Variations by Project Type

While the standard 15/35/30/5/15 distribution works for most projects, certain project types may warrant adjustments based on specific requirements. Complex projects with extensive engineering coordination may require higher DD allocations, while simple projects might have more even distribution.

Fast-track projects often require overlapping phases, which can affect fee distribution and may require higher overall fees to account for coordination complexity and compressed schedules.

Historic renovation projects may require higher SD percentages due to extensive existing condition documentation, while design-build projects might have different phase structures altogether.

Successful firms understand these variations and adjust their fee structures accordingly while maintaining clear communication with clients about how phase distribution aligns with project delivery requirements.