Consultant Fees Should Not Be a Mystery!

1. Consultant Fees Should Not Be a Mystery! FAA Eastern Region Airport Conference March 4, 2009 – Hershey, PA

2. Panelists • Courtney A. Beamon, P.E., C.M. • Vice President • Delta Airport Consultants, Inc. – Richmond, Virginia • Marc C. Champigny • Assistant Director of Aviation • The Louis Berger Group, Inc. – Albany, New York • Andy Platz • Vice President, Group Leader of Aviation Services • Mead & Hunt, Inc – Madison, Wisconsin

3. Objectives • Consultant Fees / Overhead • Developing Scope & Fees

4. CONSULTANT FEES / OVERHEAD

5. Consultant Fee Overview • Consultant Fees Consist of:

6. Overhead Costs • Defined as all costs that are not direct labor • or direct project expenses

7. General Categories of Overhead (part 1) • Indirect labor • Fringe benefits – vacation, holiday, health insurance, retirement • Facilities costs / rent • Technology costs • Marketing costs • Travel (indirect)

8. General Categories of Overhead (part 2) • Insurance – E&O, liability • Interest • Taxes • Employee training • Recruiting and relocation • Other – licenses, dues, legal/accounting fees

9. Overhead Trends • Rising Costs • Healthcare premiums • E&O insurance / claims • Recruiting • Marketing • Technology

10. Overhead Trends • Significant portion not allowed by FAR • Allowed by FAR - Proposal Costs • - Indirect Travel • Not Allowed by FAR - Advertising • - Trade Shows • General trends • When Utilization is Down, Overhead Goes Up • Costs are Rising

11. Profit • Profit Covers: • Overhead costs not allowed by FAR • Actual profit / return on investment

12. Understanding scope & fees

13. Development of a Scope and Fee THERE IS NO STANDARD SCOPE AND FEE!

14. Scoping Meeting • Include all stakeholders • Identify owner’s expectations • Identify the consultant’s expectations

15. Scope Preparation • Detailed with no hidden assumptions • Easy to follow • Identify what is not included • Identify any special circumstances – i.e. optional work items, night work, accelerated schedule, special GIS formats, etc. • Include Subconsultant Scope

16. Fee Preparation • Develop spreadsheet to match scope • Detailed – i.e. specify number of meetings, how many/who of the consultant team will attend, etc. • Clarify billing terms • Multi Year Project??

17. Independent Estimate • Use qualified firm that does this type of work • Should not be one of the non-selected firms • Furnish I.E. with the complete scope and blank spreadsheet (exclude man hours)

18. Summary • Understand what is in Overhead • Scoping/Fee process needs to be detailed and transparent • Know how to obtain a quality I.E. Educate and advise your staff and your clients

19. ADDITIONAL INFORMATION

20. Sources of Information • TheACC/FAA Best Practices Guideprovides airport consultants and FAA staff guidelines on how to improve communications and relationships, with the overall goal of enhancing the airport project delivery process. • FAA AC 150/5100-14 Architectural, Engineering and Planning Consultant Services for Airport Grant Projects provides guidance for airport sponsors in the selection and engagement of architectural, engineering, and planning consultants. It also discusses services that normally would be included in an airport grant project, types of contracts for these services, contract format and provisions, and guidelines for determining the reasonableness of consultant fees. Available at www.ACConline.org

21. ACC Excellence in Procurement Award • Recognize and reward airport sponsors among their peers for their quality procurement and contracting practices. • Improve the procurement processes that airport sponsors use and encourage sponsors to use good selection and contracting practices for all procurements. • Help educate other airport sponsors on the value of QBS selections and good procurement/contracting practices. • Facilitate efforts by consultants working with airport sponsors to improve their procurement and contracting processes.

22. QUESTIONS???