MEREDITH Strategy + Design

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Why do Owner's Representatives do this?

Beware: Loose Raptors An architect I know declined to propose on an opportunity for a new project this week.

He had received a Request for Proposal from a non-profit who sought the services of architects to complete a design for a new facility to serve the needs of a community with a high level of a specific type of social and cultural problem. The architect's team had the appropriate experience including a studio of professionals committed to delivering the power of design to improve the quality of services provided by organizations like this and to enhance the lives of people they serve.

In many cases, in between architects and their clients is an agent who manages the process of getting the project done. This agent, an "owner's representative," is frequently from a segment of the real estate profession, but many times from construction, accounting, or other professions. The Owner's Rep guides a client who otherwise has very little experience doing projects, or clients who build frequently but do not want to dedicate internal resources to project management. He organizes the client's team; manages the selection of architects, contractors, furniture vendors and others; and generally coordinates the work of these various contributors toward a successful conclusion for the client.

Very frequently, the value proposition of these agents is to deliver the project at a lower cost and to keep the client from the unpleasant and unexpected increases in cost that come from changes in scope as the project progresses, and from some of the clutter that can arise in any project of some complexity. In the best of cases, the other professionals participating in the project appreciate this professional manager. Processes are smoother, communications are more efficient, expectations are better defined, and the clutter is anticipated and eliminated. Everybody has a better experience.

There are times, however, when the Owner's Rep introduces processes at the front end of the project that open the risk of significant unhappiness for everybody involved. This was one of those.

The Owner's Rep, donating his own services for the benefit of the client, had engaged an architect and others to meet with the client, develop a statement of their requirements, develop plans that met their objectives, and generate an initial design that reflected the intentions of the client and satisfied the goals of the community in its site plan approval process.

Now it was time to move forward with the detailed development and documentation of the project. The Owner's Rep developed a request for proposals and invited at least ten other architects to propose on the project – to take the work developed by the architect who had served and satisfied the client up to this point, and complete it. The original architect was also one of the invited proposers and would, of course, also submit a proposal.

What is the intention here? Again, this is a project for a non-profit serving a disadvantaged population. The organization has sufficiently motivated certain members of the project team to donate their time and services. The architect selected in an earlier process has completed a schematic design concept that satisfies the client and the regulatory bodies. Why not continue with this team and on this path?

I assume that a promised value proposition of the Owner's Rep is to bring the project in at the lowest cost. So, regardless of the value that the original architect has already brought to the project, the Owner's Rep has set up a competitive context in a market where every architect is looking for any opportunity they can get, and has asked the competing architects to propose alternative compensation methods including pro-bono services.

I do not know the original architect, but I can imagine that he/they might be trying to suppress some challenging emotions. I imagine that he must have approached this project with great generosity. Certainly he understood that the client's resources were spare. Certainly he was aware that working with non-profits usually takes a higher level of attention in recognition of its constituencies and the generosity they all bring to the project themselves. Certainly he was aware of the need to develop submissions and satisfy the needs not just of zoning and building officials, but also of several layers of regulatory and licensing bodies. Why, if he was willing and wanting to take the project forward, and if the client was fully pleased with his work and intending to develop it and deliver it as designed, would the Owner's Rep lead his client to put him into a competitive situation? Do they mistrust his intentions? Do they suspect that he will not propose a fee in good faith and understanding of their needs? Did the agent promise that through competition he could force his fee expense to the lowest level the market would bear? How will the original architect feel if he does not win the contract? How will he feel if he does?

And what about those other architects who might actually propose in this context? Certainly they are aware of the previous work and the client's satisfaction with that work and with the architect's performance. Certainly they are aware that their value will primarily be in proposing a bottom dollar fee. Certainly they are aware that if they win the project in this way, they start the project with the client's clear expression that they are only there instead of their preferred architect because they proposed a disruptive and disrespectful fee. What will the quality of this relationship be? What will be the perception the client has of the quality of this new architect's work?

And what of the client? Is the client awakening to the implications of this process? Is the client aware of the actual costs, and the emotional and professional costs, and the value diverted from other endeavors that will be incurred by ten architectural firms spending time and resources over a month to think through  the project, pore over the contract, prepare work plans and schedules, prepare statements of qualifications, estimate costs to design and deliver the project, and defend their proposal in presentations in front of the client? Has the client estimated the margin over (under) the original architect's proposed fee to complete the work that they may gain in this process? Have they estimated that this process may cost them and the community many times more than they would save in the process, both in actual costs as well as in good will? Will another architect, squeezed to minimum fee and chosen for it, contribute anything to this organization's purpose and goals?

And what of the Owner's Rep? What is the measure of his satisfaction when all is done? Why do Owner's Representatives do this?

In light of all this and more, at least one of the firms invited to propose has declined.