Cutting costs lower fees not the answer
Fong Ying Leong
When Malaysia's Minister of Finance, Tun Tan Siew Sin, address- ed members of the Malaysian Institute of Architects at their annual dinner he called upon them to do all in their power to help the Government reduce building costs. A means of achiev- ing this he suggested was for architects to reduce their own fees. Not unnaturally the Institute views the idea of deleting the practice of minimum scales of professional fees as one of 'vital concern to the architectural profession'. The suggestion is 'not feasible', says Mr. Fong Ying Leong, president of the Institute. In a letter to the Minister, on behalf of the Institute, he points out that the minimum level of fees was not designed to ensure a high level of income for architects.
The text of Mr. Fong's letter is published here:
Dear Tun Tan Siew Sin,
At the Institute's Annual General Meeting held in Kuala Lumpur our members welcomed your call to the architectural profession to find ways. and means of reducing costs in the building industry. However, we did not consider the suggestion of reduc- ing architects' fees as a feasible one.
The present minimum level of pro- fessional charges cannot be lowered further and still allow the architect a fee adequate to meet the cost of pro- viding essential professional services plus a reasonable level of remuneration commensurate with the extent of work and responsibility involved.
It is the standard practice for archi- tects (and other professional people such as doctors, engineers, lawyers etc.) to fix and agree with their clients a fee which varies from job to job. This fee takes into account the com- plexity and size of the works involved as well as the staff and overhead costs of the architect's office.
Fees are not mandatory, but are subject to agreement with the client. Fees are therefore open to variation but are always related in the particular project and the particular architect's office involved.
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However, there is a certain 'mini-
mum' level below which fees cannot go. Contrary to common belief, this 'minimum' level is not designed to en- sure a high level of income for archi- tects.
This 'minimum' level of profes- sional fees in the architectural as well as other professions has been laid down primarily to ensure the provision of a 'minimum' level of professional service essential for the protection and safety of clients as well as the public.
The application of a 'minimum' level of fees does not prevent the normal process of negotiation and ad- justment to supply and demand from being exercised in the employment of an architect or any other skilled pro- fessional man.
This system has been evolved through years and years of experience in many different countries. The prin- ciple involved is universal although 'minimum' levels vary from place to place on account of local conditions. We wish to clarify that architects' fees are gross fees out of which they have to pay salaries and other over- head expenses. These fees are often misunderstood and considered by the public to mean 'net profit' thus giving rise to the false impression that archi- tects enjoy a high level of income be-
cause their gross fees seem to be very high.
The amount of architectural work and professional responsibility involv ed, even in the building of a small house, is tremendous, and on the aver- age takes anything from 10 to 12 months to completion of the building plus another 6 months for the main- tenance period. All these factors norm- ally increase with the size and com- plexity of the project.
The actual net income of the archi- tect from a project spread over a period of 16 to 18 months can be very poor indeed in spite of the apparent size of the gross fee.
Our Institute, in all sincerety, con- siders that it is wrong to do away with a 'minimum' level of professional fees.
We suggest that the proper ap- proach to the problem of reducing the cost of buildings should be to examine thoroughly all factors affecting the physical cost of construction and cur- rent cost of land.
The Malaysian Institute of Archi- tects recommend that the following major causes of high building costs be studied, and effective measures be taken as soon as possible to achieve lower costs:
High land costs
In private housing and other build- ing development, land forms one of the biggest single cost components. In a property costing M$50,000, the land often costs M$20,000 or more. Con- sideration should be given to increas- ing allowable building density to more realistic and economical levels. Land cost is subject to supply and demand, and utilization potential.
Building research
There is very little building re- search into building materials and building methods best suited to this country. Our own minimum standards
Far East BUILDER, April 1971
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of space, strength, safety and other re- quirements can be established scienti- fically if a national building research organisation is established. Locally abundant and cheap building materials could be tested and analysed.
Local manufacture
Special incentives should be given to encourage the manufacture of building materials and components locally.
However, until such industries have been established and their products are in full supply, import controls such as tariffs and quotas should be applied sparingly to ensure continuous avail- ability of essential materials at low prices.
Steps would also be taken to en- sure that local products are up to mini- mum standards.
Human resources
Government should establish more facilities throughout the country for the training of technical and profes- sional personnel at all levels to serve the building industry. There is hardly any formal system of training available for draughtsmen.
Malaysia is the only country in South East Asia which does not train its own architects.
There is a grave shortage of educat- ed and trained tradesmen. All training should be orientated towards national aspirations, and national socio-econo- mic objectives.
In closing, I wish to reiterate that the Malaysian Institute of Architects is ready and willing to assist the Govern. ment in exploring ways and means of lowering costs in the building industry for the benefit of the public and the country. I wish also to mention that our members, in general meeting, also considered that the principle of 'mini- mum' professional fees is not well un- derstood by the public. We consider that this situation can have grave and injurious effect on the integrity and good image of the profession.
We are therefore taking this op- portunity to clarify this important aspect of professional service through the medium of the press to the public for whose protection 'minimum' scales have been drawn up in the first place.
Fong Ying Leong President Malaysian Institute of Architects