Fee proposal by phase pricing builds your fee from the work in each phase, not from a percentage you remember. You estimate hours by role, phase by phase, then price them. The result holds up when a client pushes back, and you check the estimate against actual effort when the project ends.
Most owner-led firms price from memory: last year's similar job, a percentage of construction cost, or a number that feels right. That works until scope grows, a new project manager prices the next job, or a project loses money and nobody can say why.
Want help building a pricing method your staff run? Take the 7-Minute Firm Health Check, or request a meeting.
How to Calculate Architect Fees by Phase
Use six steps for every proposal:
List the deliverables in each phase. Drawings, reports, meetings and submittals.
Estimate hours by role for each phase. Principal, project manager and technical staff.
Price the hours at your billing rates.
Add consultants and reimbursable expenses as separate lines.
Write the assumptions and exclusions. Meetings included, review rounds, what counts as additional services.
Have a second person review the proposal before it goes out.
A Worked Example
A small project, priced at $200 an hour for the principal, $150 for the project manager and $110 for designers:
Phase
Principal
PM
Designer
Fee
Share
Schematic Design
10
20
40
$9,400
15%
Design Development
8
30
60
$12,700
21%
Construction Documents
10
50
140
$24,900
40%
Bidding and Procurement
4
10
6
$2,960
5%
Construction Administration
12
40
30
$11,700
19%
Total
44
150
276
$61,660
100%
The fee comes from 470 estimated hours, not a guess. Every number traces back to a role and a phase.
Check Your Architectural Fee Proposal Against the Common Split
Many architects start from a split of about 15% Schematic Design, 20% Design Development, 40% Construction Documents, 5% Bidding and 20% Construction Administration. AIA Document B101 defines the phases but sets no percentages, so treat the split as a cross-check, not a price.
The example above lands close: 15, 21, 40, 5 and 19. When your hours produce a much different split, look again. Either the scope is unusual, or a phase is underpriced.
The Engineering Fee Proposal
The same method works for an engineering fee proposal. Swap design phases for tasks: field work, analysis, design, permitting and construction support. Set a budget in hours for each task, then compare actual hours against those budgets at every billing cycle. Variances caught mid-project become change requests. Variances caught at closeout only become lessons.
Close the Loop After the Project
Compare actual hours by phase with your estimate when each project closes. After five or six projects, your estimates sharpen, and anyone on your team prices work the same way, not only the owner.
For context, the AIA 2024 Firm Survey key findings put average profitability at 13.2% of net billings for 2023. Pricing is where most of that margin gets won or lost.
A documented pricing method is one of the systems we build for an architecture firm business consultant engagement and for engineering firms. See all our A&E consulting services, and how WIP and utilization tie back to the fee.
Our own engagements run at fixed fees, agreed in writing before work starts. See how fixed-fee A&E consulting compares with other advisors.
The same method applies to every firm we serve: architecture firms, engineering firms, commercial interior design firms and specialty design consultants. See who we help.
About the author: Rodney McNabb has led an A&E firm since 2005 and founded Next Phase A&E Advisory to help owner-led design firms price, bill and staff their work.
Frequently Asked Questions
What percentage of an architect's fee goes to each phase?
A common starting split is 15% Schematic Design, 20% Design Development, 40% Construction Documents, 5% Bidding and 20% Construction Administration. AIA B101 sets no percentages, so price from hours and use the split as a check.
Should I price by percentage of construction cost?
Use it as a sanity check, not a method. A percentage ignores scope, meetings and review rounds, and it rises or falls with the construction budget instead of your effort.
How do I handle additional services?
Define them in the proposal's assumptions and exclusions, then price each request before the work starts. Approved changes become part of the fee and the WIP.
What if the client wants one lump sum?
Build the fee by phase anyway, then present the total. You keep the phase detail for billing milestones and for comparing actual hours afterward.
End-of-post box: See where your firm stands. Take the 7-Minute Firm Health Check or request a meeting.
See where your firm stands. Take the 7-Minute Firm Health Check or request a meeting.
Rodney McNabb
Founder of Next Phase A&E Advisory. He has led an A&E firm since 2005. About Rodney McNabb