Managing Consultant Fee Analysis Process Effectively
This detailed guide covers the process of fee analysis for consultants in the context of architectural/engineering contracts. It outlines the requirements for contracts under and over $100,000, including comparative analysis, preparation of Independent Fee Estimates (IFE), negotiations, and submission of cost reasonableness documentation. Essential for sponsors and project managers in ensuring fair and reasonable fees.
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Presentation Transcript
Sponsor Fee Analysis - Post 2020 MAP Sponsor must perform a price or cost analysis for every Architectural/Engineering contract. Contracts less than $100,000 - Comparative analysis can be done with similar projects or a detailed fee analysis Contracts anticipated to be greater than $100,000 - A detailed fee/cost analysis is required.
Contracts under $100,000 Comparative analysis of similar work at your airport Comparative analysis of similar work at another airport
Contracts over $100,000 Preparation of an Independent Fee Estimate (IFE) can be completed by: A sponsor having staff with experience in estimating the professional services. 2. An independent engineering, architecture, or planning consultant retained to prepare an IFE, provided this consultant was not on the pre- selection short-list. 1. IFE is required prior to receiving the consultant s proposal to properly evaluate the cost of professional services. The IFE is intended to be used as a negotiation tool by the sponsor. The IFE must address direct labor work hours, labor rates, general and administrative overhead, non-salary expenses and a reasonable profit. A IFE is an AIP eligible and reimbursable cost. Sponsors must present IFE reimbursement requests to their AERO Project Manager at same time we fund the project or phase.
Negotiations After developing a detailed scope of services, and after the IFE requirements have been satisfied, the sponsor may enter into negotiations with the consultant. A general review standard used within the FAA/industry is whether the total fee proposal, as well as individual tasks within the proposal, is within 10% of the IFE. When differences exceed 10%, the sponsor and IFE preparer should review those areas with the consultant to determine if there is a misunderstanding of the scope of services or level of effort required to complete the work.
After Negotiations Submit letter of cost reasonableness with supporting documentation to your MDOT Project Manager The MDOT Office of Aeronautics retains the right to disallow negotiated fees that are determined to be unreasonable Reference FAA 150/5100-14E and SOP 11.0 for more information If you have any questions, please reach out to your Project Manager or Elyse Lower at LowerE1@michigan.gov
