I am increasingly often asked to ‘project manage’ a job (usually small commercial) instead of acting as General Contractor. Does anyone have ideas about a fee schedule, either a percentage or fixed amount? These jobs usually range from $40000 to $250000. Any help would be appreciated.
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Since you are working in addition? to the GC, who has negotiated prices with and pays the subs and you will basically have no direct authority over them, I would (and do on occassion is similar situations) charge on an hourly rate, $75/hr is reasonable, and provide them with an estimate of how much time that might entail. Emphasize that that time estimate might be exceded, depending on conditions beyond your control.
If the GC is good, they wouldn't ask. If the jobs are being "managed" in lieu of being GC'ed, I would politely not accept.
Be very direct, but polite, with the Client. Find out WHY they want a PM, in addition to the GC, on a job so small. It is also important to get on board when the GC is signing-on so that there is no misunderstanding of each other's role. Understand that though you are the Client's Advocate you are not the GC's anti-christ.
Much of your role will be to "distance" the Client from the stresses associated with a renovation - which they are unfamiliar and therefore uncomfortable with. You hand hold, educate, organize the Client's needs/ priorities (coordinate couple's needs if there are two involved), and sometimes take the heat - with the Client's knowledge - in order to iron out some wrinkles. You are NOT there to tell the GC how to do their job. This means no undermining the GC's credibility. The project should remain a Team Effort.
Many times on such small projects this role is split between the GC and the Arch/ Des/ Dec. So if the Client tells you they are not comfortable with the GC's buisiness and organizational skills then they should not be hiring that GC or you. Other times you are being hired as a point of continuity between multiple projects executed by one Client over a period of time. This is usually the case in commercial work. Basically the Client needs a rep there to lookout for his/her interests and handle the small s--t on a day to day basis since you are familiar with the wants and desires.
Depending on where you are, $75/hr may be right or high. Just be sure you charge for oneway of travel time or all milage, phone time, plus office and site time. If you don't charge for phone conversations or your research time - getting spec's or researching installation req's - you will soon discover this will be what you are doing the most. Keep in mind that they are hiring you for your Expertise and TIME.
I would also tie the GC's requests for payment with your approval. Authority over payment dispersment gives you the tangible authority required in case either the Client or GC is not respecting your Management.
Last note: Keep a Job Log. This is your diary/ proof of work, project understanding, and best defense/ allie if finger pointing happens.
Edited 11/2/2002 2:26:12 PM ET by Frankie
I'm not understanding references to a general here.
I will take on a project either as a manager or as a general. There is no need for both on the job. It builds in too much cost and redundancy.
But if you were to consider comparing this position to a typical architect overseeing general contractor, the archy is devoting about 5-8% of the job cost to oversight while the general is earning 3% to 15% on the job so an owner who is attempting to do away with both positions by hiring a progect manager can expect to compare the management costs to a savings of 11 to 20 percent of the job. It would be more than reasonable for a manager to charge eight percent as a fee or up to that in hourly charges.
That's my experience on it anyways.
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Excellence is its own reward!
Basing your rate on what the Client is expecting to save should NEVER be part of your equation. As for any % base rate you CANNOT use the same % for a 40K job as for a 200K job. For the begining, charge by the hour. If they meet a cost ceiling while paying you it's their problem. They approached you.
This way you will be able to guage how much work (time x effort) it took to meet the Client's expectations without risking your dinner. So, set a $/hr rate and proceed. If it's too low, you will still be compensated for each hour and you can change the rate on the next job. But by doing it for a set % of project, you are signing yourself up to be an endentured servant.
Always state at the beginning, what you are basing your billable hours/ week to be. That way when you go over, in any particular week, the Client knows. Then, through your Job Log, you can document why and how to, (or not to) do it again.
It's a part of the formulae for figuring from. At my base hourly rate, I know that they will save a mint. Knowing what they will save the alternate method gives me an idea what the market will bear. I do it by the hour but I don't want to give away the store. So it's not just based on my cost/hr but on my value to the client. That savings figure helps me ballpark what it is..
Excellence is its own reward!