Oostewald van Niekerk
9th Jan, 2024
It should be stated that the guideline tariff of professional fees for the QS profession is exactly that, a Guideline, and that it provides the professional and client an equitable basis for determining the scope of work required for a building project including a suggested suitable fee and disbursement. The guideline tariff opens the door for healthy competition within the QS profession for both the professional and the client. It does remain the prerogative of the professional and the client to negotiate and agree on a suitable fee and service to be rendered, taking full cognizance of the risk associated with too low or too high fee for a specific service.
The guideline fee is calculated using the tables and the principle of a basic fee calculated on the value for fee purposes and a secondary fee using the percentage as described. For purposes of this blog, I will not explain this basic calculation, however I need to highlight clause 10.49 on how to determine the value for fee purposes and remind the QS to make an adjustment for mechanical and electrical installations ancillary to building works and civil engineering works ancillary to building works in terms of clause 10.10 and 10.24.
As Quantity Surveyors we prefer to work with Bills of Quantities (BoQ) and the commentary will focus on a project where a BoQ is applicable.
It is suggested to add the following to your standard fee calculation:
25% for alteration works.
60% for redecoration works.
10% for multiple procurement if a principal contractor is appointed.
20% for multiple procurement if a principal contractor is not appointed.
45% if the QS is to be the principal agent.
30% if the QS is to be the principal consultant.
25% if the QS provides project monitoring.
15% if the QS does quality inspections.
Services at risk
It is often expected that professionals perform services at risk. It is recommended that, should the project proceed within two years of completing such services at risk, that the QS be appointed for the project and invoice the stages that was rendered at risk. Or that the QS can charge a fee of 20% of the QS fee for the project.
Should more than 10% of the work be omitted then the QS will be eligible to charge an additional fee of 50% of the marginal percentage (refer to table 2.2.1 [Basic fee] column 3 in the 2015 Guideline Tariff of Professional fees).
Should the BoQ be varied to such an extent that a section of the BoQ is omitted then an additional fee of 30% of the marginal percentage (refer to table 2.2.1 [Basic fee] column 3 in the 2015 Guideline Tariff of Professional fees).
Should the construction period be extended by more than 15% (not taking into account Extension of time for additional work or if the site was abandoned for more than 28 days) then the QS may charge an additional 80% of the original stage 5 fees. Such duration is calculated in calendar days without deducting days for builder’s holidays. Abandoned is defined if no or very little work was performed by the contractor during the period and the QS was not required to perform any service during that period.
The fee for the services completed is calculated as per the guidelines. And the fee for services partially completed is pro-rated. Should the QS’ services be cancelled after commencement of stage 4, then a 10% surcharge is payable on the agreed/appointed fee. If the project/services are reinstated or resumed within a period of one year from date of termination, the surcharge will be considered to be a partial payment of the fee. Cancellation/termination is defined as services being suspended for a period of more than 180 calendar days.
Extraordinary Contract Provisions
The QS is permitted to charge an additional time-based fee for extraordinary contract provisions. Examples include multiple direct payment to subcontractors or suppliers, or more than one payment certificate per month or anything else that may cause additional work for the QS (work not covered elsewhere in the Guideline Tariff).
The National and Provincial Government Departments guideline of rate per hour is followed for the following categories of professionals:
Principals/Directors – 18.75 cents for each R100 of the annual remuneration package.
Registered Professionals – 17.5 cents for each R100 of the annual remuneration package.
Salaried Professionals – 16.5 cents for R100 of his/her gross annual remuneration.
Time charges are deemed to include overheads as well as work done by clerical personnel. The time charge for Principals/Directors are limited to 5% of the total time spend on the project, any time spend by Principals/Directors that exceeds 5% of the project time is charged at the same rate as Registered Professionals or Salaried Professionals.
It should be noted that the Guideline Tariff of professional fees is a schedule and a guideline at best. It provides a fair platform for the professional and client to start negotiations on remuneration. It is up to the professional and client to determine discounts and the basis on which discounts will be applied. Should the professional elect to render a limited service to the client, it remains the professional’s responsibility to highlight the risk of a limited service to the client, and it remains the client's responsibility to accept such a discount given the risk.