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Amber Book Practice Management Test
Questions And Answers A+ Graded
What are the levels of a Corporation? CORRECT ANSWERS Stakeholders, Directors, Officers AIA B101 requires which insurances? And for what? CORRECT ANSWERS 1 - General Liability - Covers the physical office space 2 - Professional Liability - Covers errors and omissions 3 - Workers' Compensation Insurance - Covers employee injuries or illness - medical care and lost wages 4 - Automobile Liability - Covers company vehicles and personal cars used for business purposes 5 - Employers' Liability - Covers employers if they get sued for causing a workplace injury (works together with workers' compensation) - settlements, court costs, legal fees Standard of Care CORRECT ANSWERS Expected quality of service for architect by area. The standard of care often decides whether architect is at fault when Architect made an error or omission. Format types for specifications CORRECT ANSWERS Masterformat: classifies by material: concrete, masonry, metals, etc. (older format, more commonly used). Uniformat: classifies by system: substructure, shell interiors, etc. (newer format, better for BIM) Employment Practice Liability Insurance: Intellectual Property Insurance: CORRECT ANSWERS Employment Practice Liability Insurance: Insurance to protect from wrongful termination Intellectual Property Insurance: Insurance to cover claims based on copyright/ intellectual property infringement The owner is responsible for... CORRECT ANSWERS 1. Pre-existing site conditions (geological, hazardous materials, surveying)
- Paying Contractor
- Paying Owner's subs
- Change orders
- With or without cause hiring and firing of Architect Aggregate Limit, Premium, Deductible, Claim CORRECT ANSWERS Aggregate Limit - total coverage amount Premium - monthly/yearly bill Deductible - maximum paid by you, prior to coverage kicking in and paying the remainder
Claim - you think you experienced a covered event and demand payment from the insurance company Tail insurance CORRECT ANSWERS Covers the architect's projects after the architect's retirement. The insurance is liability insurance for the projects the architect has already done prior to retirement which are still within the relevant statutes of limitations/repose - so that should there be a problem resulting in a lawsuit, the retired architect is still covered. Tail insurance is much cheaper than the insurance carried by a professional, practicing architect, because the risks are more defined and limited for the insurer - since the architect has retired, no new projects will be built, and all of the projects that need to be covered by the tail insurance are know. What is the process to file an ethical complaint against an architect? CORRECT ANSWERS 1. File the complaint through AIA National
- Advisory board and chair will be chosen
- Pre-hearing, hearing, start, claim, defense, end, judgment* *Confidential, no counter-claims, can't fine or enforce behavior, but can admonish/suspend Who are the most common ethics complaints? CORRECT ANSWERS Other architects, homeowners Does the architect have a fiduciary duty to the client: a legal obligation to act in the owner's best financial interest? CORRECT ANSWERS No, architects do not serve as an owner's fiduciary. Fiduciary duty: the obligation a professional has to act in the best interests of the client. Retainer CORRECT ANSWERS Regular services for a fixed fee, more efficient than hourly over the long term... like if a university is regularly updating rooms as all projects, they might hire an architect on retainer. The architect then can bill the university for the work completed, without having to create a new contract for each door that is replaced. are architects agents of the owner? CORRECT ANSWERS architects are not agents of the owner. the agent creates a legally binding relationship between third party and principal, for instance in a CM as Agent project, the principal is the client and the Contractor is the third party. who contracts directly under the Architect and who contracts under the owner? CORRECT ANSWERS Architect: MEP, Lighting Consultant, civil engineer (utilities, land contouring, and all things related to the improvement of the land with the new building), landscape architect/ engineer, cost estimator, code consultant Owner: zoning, traffic, site, geotechnical (underground), surveyor, civil engineer (for duties related to permitting, and documenting the existing condition of the site)
post-occupancy evaluation CORRECT ANSWERS post-occupancy evaluation: surveys used to see how well a building is performing, usually administered at least a year after occupancy contractual liability insurance CORRECT ANSWERS contractual liability insurance: covers you when something goes wrong and you, by virtue of contract you signed, are held responsible for it. Contractual liability coverage typically is included in your general liability insurance (the one that covers your business for non-professional incidents) subrogation CORRECT ANSWERS subrogation: process of the insurance company assuming agency for an insured party in order to sue another party. BUT the AIA A requires a WAIVER of subrogation by all the relevant parties. meaning by contract, the insurance company must still pay the insured, but may not go after the others in the group to recover what the insurance company paid out.
- utilization rate
- revenue factor CORRECT ANSWERS 1. utilization rate: direct salary expense/base salary (also known as billable or chargeable rate). if amber earns $100,000 peryear and 70% of her hours are charged to the client, her utilization rate is 70%.
- revenue factor: utilization rate x direct salary expense ratio. if the firm charges the client $3 for each dollar it pays amber, expense ratio is 3.0. revenue factor is .7x3.0 =
how do you decide how much to charge a client? CORRECT ANSWERS 1. value pricing - based on quality
- effort pricing - based on time spent (this is the ARE's assumption in the exams)
- % cost pricing - based on percentage of total construction cost
- fixed fee pricing - fixed cost to client typically derived based on triangulating estimates of the other three models risky contract language CORRECT ANSWERS 1. warranty
- guarantee
- indemnify/indemnifcation
- "highest" standard of care
- as required/as necessary
- hold harmless
- *anything that passes liability to the architect AIA Documents: A701; C401; A305; G701; G702; G704 CORRECT ANSWERS A701 - Instructions to Bidders C401 - Architect-Consultant Agreement A305 - Contractor's Qualification Statement G701 - Change Order G702 - Application and Certificate of Payment G704 - Certificate fo Substantial Completion
- Net Profit
- Net Billing
- Profit Earnings Ratio
- Prospect/Suspsect CORRECT ANSWERS 1. Net Profit - Profit before tax and distributions to firm owners, but after paying wages and bills
- Net Billing - Billing that only covers fees for architect's labor
- Profit Earnings Ratio - Profit/ Net Operating Revenue (defines the health of the business)
- prospect and suspect - potential projects with >51% (prospect) or <50% (suspect) chance of income generation What type of damages can be pursued in litigation? Which are called for in AIA B101? Consequential vs. liquidated vs direct damages CORRECT ANSWERS 1.consequential damages - estimated cost of lost owner profit due to project delays (planned potential profit had my lemonade stand been open in time for the summer rush). The contracts prohibit all parties from recovering consequential damages
- liquidated damages - per-day penalty for a delayed construction project completion, agreed upon at the beginning. The A101 Owner-contractor agreement allows for liquidated damages (which in construction are almost always related to per-day-late penalties); The b101 owner-architect agreement forbids claims based on liquidated damages, so the owner may not file a claim against, or withhold payment from, the architect for each day late. above all, the AIA documents hold the architects blameless.
- direct damages - actual cost of fixing unacceptable work (maximum allowed is = the architect's fee). the owner may pursue a claim for the cost of repairing the leaky foundation from either the contractor or the architect , or both. current earnings CORRECT ANSWERS profit left over after taxes and expenses are deducted from income base vs direct vs indirect salary CORRECT ANSWERS base salary: total annual compensation direct salary: salary derived from billable hours indirect salary: salary from non-billable hours balance sheets CORRECT ANSWERS at the scale of an individual, your paycheck tells you how much you are making (your income) and your bank account describes what you've saved (your wealth). similarly, at the scale of your firm, its profit-loss statement lays out what the firm is making in profit (its. income) and the balance sheet describes what the firm owns (its wealth) the balance sheet includes: solvency = current assets/ current liabilities liquidity = expected assets/ expected liabilities leverage = liabilities/equity return on equity = profit/equity assets=things your company owns
bank the day after tomorrow, than to make that hiring decision based on the $1,000 you have in the bank today. Cash basis is what you will use to calculate your taxes. If today is December 31, you pay taxes on the profit that you made this calendar year... that $100,000 that will be deposited tomorrow from your client and the $10,000 you'll pay the day after to your engineer: those go into figuring out next year's tax liabilities and don't show up on this year's "cash basis" books. net revenue per employee CORRECT ANSWERS if we charged our clients $300, this year and we had three total employees, our net revenue per employee would be $100,000 (a good goal for a healthy firm). the higher this number is, the healthier the firm is because a high number means that it is bringing in a lot fo money from clients but has few employees to pay. aged accounts receivable CORRECT ANSWERS how many days, on average, between when our firm sends a bill to its client and when we receive the payment from that same client. if its more than 90 days, you're waiting too long surety bond, bid bond, and performance bond CORRECT ANSWERS 1. surety bond: a type of insurance policy that the owner requires the contractor to purchase to be eligible to bid for, or work on, the project. it pays the owner to compete the project if the contractor walks off the job. surety bonds come in two common flavors, bid bonds and performance bonds.
- bid bond: contractor A wins the project by bidding $500,000, which is far lower than any of the others. contractor b submitted the next lowest bid, bu this bid was much higher at $800,000. as contractor A learns more about the project in preparation to build it, she discovers that she missed a passage in the specs stipulating that the ice cream factory must remain open, making product, during the entirety of the factory renovation. no wonder the next lowest bid was so much higher! realizing that she is contractually bound to conduct the renovation for only $500,000 while still maintaining a clean enough environment for food, she's sure this project will bankrupt her construction company. she thusly walks away from the project, leaving the owner-who just completed an onerous, expensive, and time-consuming bidding process- to find a new contractor. in this case, the bid bond that the owner required all the bidders to purchase will pay the owner the difference: the extra $300,000 needed to hire contractor b at the $800,000. the owner is made whole because he gets his building, as laid out in the bidding documents, for $500,000 out of pocket plus the $300,000 that the bid bond insurance policy pays out.
- performance bond: contractor B, who was required by the owner to purchase a performance bond when he signed the contract, is 90% through the ice cream factory renovation when the construction company owner dies. his children engage in a bitter struggle with one another to take control of the company that dad left behind. thi
- assets
- liabilities
- balance
- equity CORRECT ANSWERS 1. assets: everything owned by a business that is cash or easily converted to cash
- liabilities: everything owed by a business
- balance: assets-liabilities
- equity: same as balance (also known as net worth) contractor license bond CORRECT ANSWERS a surety bond (insurance) that protects against contractor breaking construction laws how long does a contractor's warrantee last? CORRECT ANSWERS contractor's warrantee typically extends one year, but can contract for longer* *or until statute of limitations/repose runs out (for work that doesn't conform to the contract) net operating revenue CORRECT ANSWERS all money we've taken in from clients, minus what we've paid out to consultants (engineers) and what we've paid out for reimbursables (our cost for travel to the site, which was charged to the client, but now we have to pay for that travel from the money we collected) net operating revenue is the money (net revenue) we have left over
- pay our architects to draw (direct expenses)
- pay our utilities (indirect expenses)
- pay our partners (profit) who pays for the bid bond? CORRECT ANSWERS owner requires the bidders to purchase their own bid bonds.
- chargeable rate
- billable revenue
- direct salary expense multiplier CORRECT ANSWERS 1. chargeable rate= what the client pays the firm for an hour of your time
- billable revenue= payment from the client for billable hours
- direct salary expense multiplier= the multiplier that determines what is charged to the client (direct salary= $50/hr., expense multiplier = 4.0, client charged $200/hr. what building typology carries the most risk? CORRECT ANSWERS condo projects and single family residential projects b/c condo board has a propensity for suing architects for noisy floors, harsh sun, landscaping, etc. schedule performance index CORRECT ANSWERS earned value/planned value. determines project schedule and efficiency. For example a project has a budgeted design cost of $100,000. that's how much the owner plans on paying the architect for the entire project in total. According to the schedule you've created. 20% of the project should have been completed after 2 months. 20% = $20,000.. that is the "planned value". ideally, you're firm has worked
efficiency: inexpensive, repeatable, routine, lots of junior staff. I suspect most of the work done by these "efficiency" firms will be outsourced abroad per the next decades because if you plan to win projects based on your low fees, it will be difficult to compete with overseas labor cost. strategic alliance CORRECT ANSWERS the temporary sharing of technology, resources, and risk to get and build a project. this uses a teaming agreement to lay out credit, copyrights, non-competition clauses, roles, etc. unlike a joint venture, two companies didn't establish a new, third, company. and unlike a partnership, the two companies haven't merged into a single company. they went into the strategic alliance as two companies and came out of it as two companies. overlay district vs. planned use development CORRECT ANSWERS Overlay district: additional zoning requirements for a defined area of town, regardless of the underlying base zoning classification. For instance, for fear of mudslides, the buildings along a bluff, whether zoned for residential, commercial, or industrial, are required to obtain a geotechnical soil report before permission to build is granted. Overlay districts might utilize additional zoning rules to establish historic districts in older parts of the city, protect wildlife in eco-corridors, or promote density along a light rail transit line. Planned use development (PUD): Change in the zoning/code for a specific plot in exchange for other good building practices or public amenities (the city council must approve the PUD). This often grants the developer more zoning flexibility in large-scale, mixed-use land development. For example, a developer interested in purchasing 175 acres currently zoned only for single-family detached homes hires your firm to design a walkable neighborhood replete with shops, schools, street trees, parks, and sidewalks. You then present the proposal to city council to allow the shops in what is currently residential-only zoning. If approved, the municipal government will allow the shops in exchange for the street trees, parks, and sidewalks. They sign off on your plan and will draw up a contract ensuring that you abide by the spirit of it, in exchange for the new zoning flexibility. what rules do you, as an employer, need to follow? name everything you can before you flip the card CORRECT ANSWERS With more employees, your firm is subject to additional regulatory hurdles to protect workers 0-15 employees: FLSA, I-9, HIPAA, ERISA, Equal Pay Act, OSHA, Worker's Compensation, Minimum Wage 16-50: add COBRA, ADEA, ADA, Civil Rights (*20+) 50+ : add FMLA, Obamacare, EEO Reporting, Affirmative Action FSLA = Fair Labor Standards Act. Minimum wage, overtime pay, child labor laws. I-9 = employment eligibility verification. are your employees legally permitted to work in the US? HIPAA= Health Insurance Portability and Accountability Act. Protects privacy of employee health information. You can't tell one employee that another employee is suffering from gout.
ERISA = Employee Retirement Income Security Act. Sets minimum standards for retirement and health plans. For instance, the person who manages the retirement plan must act as a fiduciary (puts the best interest of the plan above their own self-interest) Equal Pay Act = Prohibits wage discrimination by gender OSHA = Occupational Safety and Health Administration. Protects employees from workplace injury. Worker's compensation = gives those injured at work wage replacement and medical treatment COBRA = you lost your job that came with health insurance? you divorced your spouse or your spouse died and you were covered on her health insurance plan? COBRA allows you to temporarily pay out-of-pocket to stay with your old health insurance until you can find a new plan. ADEA = Age Discrimination in Employment Act. Prohibits age discrimination against those 40 and older. you may discriminate against someone for being too young! why? young people don't vote so congress doesn't pass laws to protect them. Civil rights = Civil Rights Act. Protects workers against discrimination on the basis of race, color, religion, gender, and national origin. As of 2020, this also includes Mediation vs. arbitration vs. lawsuit CORRECT ANSWERS Laid out in B101, either: Mediation -> Arbitration (not always cheaper, often ends in 50/50 settlements) -or- Mediation -> Court System (can be cheaper, fairer, and faster, but is also public) owner wants a new architect CORRECT ANSWERS the owner can fire architect without cause (for convenience), though has to pay work-to-date, including overhead and profit. the architect can't transfer the project to another architect because first architect got too busy to finish. each party is responsible for sharing concerns as soon as possible. LLC CORRECT ANSWERS Limited liability company -separates personal assets from company assets; protects personal assets from client lawsuits -small to medium sized company -file with state (for this and any corporation) Filing as an LLC is a good option for a new architecture firm 1.s-corp 2.c-corp 3.b-corp CORRECT ANSWERS 1.s-corporation: small or large company without public stocks - single taxed. personal property protected from client lawsuits. good option for an architecture firm.
- c-corporation: large company with public stocks - double taxed
- b-corporation: company with goals beyond profit-seeking ; environmental or social mission, as well as making money.
about the unit price of each extra room. Unit pricing works best for repetitive elements in a project (street lights, an array of barns for aging whiskey) where the owner wants to buy time before committing (to gather financing for extra landscaping that isn't yet in the budget, to determine if the public's interest in consuming bourbon is permanent or just a passing fad). It also works for elements that are easily quantifiable (earth excavation, linear feet of site-cast concrete retaining wall), also when the owner wants to buy time before committing to an amount of something. Unit pricing does not work well with contractor's "cost of work" includes CORRECT ANSWERS materials, labor, profit, overhead. this is especially important to define up front if the architect's fee is based on a percentage of cost of work. rules for unpaid interns CORRECT ANSWERS 1. similar experience to education
- must benefit intern
- intern doesn't replace anyone and is monitored closely
- no advantage or some disadvantage to firm
- no guarantee of job afterwards
- intern and firm are explicit that there is no salary note that while there is no AIA ethics rule against firms engaging unpaid interns, NCARB does maintain a stance against unpaid interns. Basic services CORRECT ANSWERS instruments of design SD, DD, Bid, CD, and CA, cost estimation, and coordination Budget and schedule management code and utilities mechanical, electrical, plumbing (MEP) engineering and structural engineering Everything else (programming, acoustical consultant, marketing materials, etc.) is considered a supplemental service or an additional service... with an additional up- charge fee. construction manager as agent CORRECT ANSWERS the owner contracts with the Construction Manager who acts as his agent and contracts with the Architect and Contractor. *this option is less risky for the owner than the cm as advisor route, gives more authority to the cm, and greater completion speed with a greater cost. types of project delivery contract structures CORRECT ANSWERS 1. design-bid-build
- design-bid
- integrated project delivery
- construction manager as agent
- construction manager as advisor
- construction manager as constructor
- bridged design-build
how do you choose whom to staff to a project? CORRECT ANSWERS 1. utilization rate (low rate means they have time to give to the project; high rate means they are already busy with another billable project)
- experience/ expertise/role
- does the architect have a license in the state? negotiated select team CORRECT ANSWERS owner hires the contractor she likes from the beginning of the project, before drawings are completed (or even started). this project style is a subset of design-bid-build. *this option allows for fabrication to start early on completion parts of a project (ie. special curtain walls) by including the contractor from the beginning. it also ensures a quality project: the contractor was selected because of her craftsmanship, integrity, professionalism, etc. not because she had the lowest price. offers greater speed and quality than basic design-bid-build but is obviously more expensive because there is no bidding. base design-bid-build contracts CORRECT ANSWERS AIA B101 - Owner-Architect Contract AIA A101 - Owner-Contractor Contract Phasing CORRECT ANSWERS phasing: construction can be planned as a series of stages, rather than as one continuous effort
- helps with complex systems: especially common if the owner needs to stay open during construction.
- helps with uncertain funding: to make sure that a portion of the project is occupiable, even if funding dries up before the whole thing is completed. pros: lower initial investment so less initial risk; income can be generated by the portion of the restaurant that is open during construction cons: the total project will take longer to complete; more expensive to bring cranes to the site twice, route construction deliveries out of sight of diners, etc.; must maintain security, cleanliness, and worksite safety to meet both the needs of the construction site and the restaurant operation who owns the drawings for a project? CORRECT ANSWERS the architect owns the instruments of service - at all phases; the architect grants the owner and contractor a "limited license" to build the project. unless the architect agrees (and typically is paid for it), the owner can't simply re-use the drawings for her next new Pilates studio*. *the architect can sell the rights, if the new architect indemnifies the old. the owner can also get the right to use the drawings if the architect is terminated for cause. types of bids CORRECT ANSWERS competitive: lowest immediate cost negotiated: owner selects a (single) trusted contractor and they negotiate a price to build the museum. greater speed and quality, but obviously more expensive because the owner has given up the option to benefit from competitive pricing invited: competitive bid with specifically qualified contractors
considers how long one system is expected to last as compared to another. boiler A costs less to install but more to operate; boiler B costs more to install but less to operate. LCCA attempts to identify which boiler choice offers a better value, accounting for inflation. useful for a fuller accounting of value beyond simple installation cost comparisons. LCCA explodes sunk costs ( like if two boilers cost the same in design fees and pipe installation, those will not come into play) *not to be confused with Life Cycle Assessment (LCA) which serves as a sustainability tool what is quality management in architecture? CORRECT ANSWERS (QM): intentional and formal process of developing and revising the instruments of service and internal firms systems. For instance, establishing how many cycles of redlining and revising drawings each project will have, or how many times per month the project architect will check in with the client by phone during design. (Also called quality control (QC).
- Stipulated Lump Sum
- fixed fee + expenses
- percentage of construction cost
- hourly to a maximum + expenses
- hourly - open-ended (no established maximum) + expenses
- fee per unit/sf + expenses CORRECT ANSWERS these 6 are the most common ways that architects will be paid. which flavor used is usually determined by that the owner wants.
- stipulated lump sum : fixed price for owner and fixed fee for architect. don't use if scope, responsibilities, or task assignments aren't clearly defined. if architect works too many hours, she loses money on the job; if she works too few, she makes more profit and owner is fleeced. everyone must trust one another
- fixed fee + expenses: with or without a cap limit on expenses
- percentage of construction costs: if labor or materials were donated to build the project, their value should be included in calculating construction cost
- hourly to a maximum + expenses: just what it sounds like
- hourly - open-ended (no established maximum) + expenses: just what is sounds like
- fee per unit (or fee per sf) + expenses: typically only used in residential design *public sector projects will almost always be stipulated lump sum or percentage of construction cost *private sector will use any of these *some of these terms are also used to describe options for how the owner pays the contractor examples of supplementary services CORRECT ANSWERS These go beyond the standard owner-architect contract, so you'll charge an additional design fee. They can be enumerated and a fee may be estimated BEFORE design and are therefore we call these SUPPLEMENTAL services.
Offering more than one design option Certified designs (LEED, etc) Fast-track BIM coordination Interior design, or furniture, fixtures & equipment (FFE) Post occupancy evaluations Existing facilities survey A/V or security design More than anything, the list above (and more similar items listed in the contract) let the owner know what the architect will not be doing under a standard agreement without compensatory extra fees. That way, when an owner asks later for LEED or a post- occupancy survey, all parties will understand that this is an extra topping on the pizza, and as such, requires an extra fee. Separately, the list below also goes beyond the standard owner-architect contract, so we'll also charge an additional design fee. But this list CANNOT be enumerated or anticipated so a fee may NOT be estimated BEFORE design and are therefore we call these (and charge for these hourly as) ADDITIONAL services. For instance, Amazon initiated same-day delivery to our area, changing the retail market midway through the design process, and the owner asked for a re-design to accommodate smaller retail shopping mall. Or the municipal body that green-lights the project is requiring unforeseen convincing that necessitates slick renderings of the project that weren't part of the contract. Or a new CEO is hired and she wants to see a physical basswood model of the project before construction begins. Or other unforeseen events that require an architect, who has already signed the B101, to put in more effort than reasonably expected relative to the contract. Typically the hourly fee for additional services-whatever the design-bid-build CORRECT ANSWERS owner contracts with the architect to draw, and then the contractor who bids a fixed price based on those drawings. *this project type is linear and clearly defined, with the lowest immediate cost, a longer schedule, and a higher chance of large change orders. due to the change orders risk, the drawings need to be more complete earlier in the process *this was, for a long time, the most common type of contract and serves as the default option assumed in the ARE unless otherwise specified bridged design-build CORRECT ANSWERS owner contracts with a design architect ("bridging consultant") to design the project through SD, then a "reduction architect- contractor team" bids to develop the documents and build the project. this contract retains some fo the adversarial relationship between the architect and contractor because the bridging consultant (design architect) works for the owner and has her best interest in mind; and it retains some fo the speed and expediency associated with design-build projects because the production architect and contractor work for a single entity and ostensibly trust one another without the blame-shifting or cover-your-ass
an architecture Billings index (ABI) of 48 in "inquiries" means CORRECT ANSWERS the financial future outlook for architects ticked down last month by a very small amount. the ABI is a running monthly number: an economic indicator for construction activity. A number more than 50 means the financial outlook improved over last month; a number below 50 means the financial outlook declined relative to last month. there are separate ABI numbers for Billings, new design contracts, and inquiries... for residential, industrial, public, and commercial sectors.. and for the Midwest, northeast, south and west regions of the US. if the owner-architect contract stipulates that the architect's fee will be 7% of construction costs, and the project is abandoned after CDs (and therefore has a construction cost of $0), is the architect entitled to payment? CORRECT ANSWERS the architect is paid, even if the project isn't constructed, because the contract is based on the "owner's budget for the cost of work" not the "cost of work" from the contract: 'the architect shall be entitled to compensation in accordance with this agreement for all services performed whether or not the construction phase is commenced" you own a firm and provide life insurance to your staff as a benefit of employment. is that benefit taxable? CORRECT ANSWERS the premium (monthly cost) of the first $50,000 of life insurance is not-taxable, but after that, the rest is subject to tax. the employee will then pay some tax on large life insurance plans. wages, salaries, and bonuses are considered taxable income. many benefits, like child care nd contributions employees make to health insurance plans may to be subject to taxes. what do yo duo if an exam question asks you which firm employee to assign to a project? CORRECT ANSWERS 1. look for a staff member who has experience in the building program type.
- then, from those, find ones with the lowest utilization rates.
- from there, which makes more sense based on experience and the task at hand. the building structure fails. why doesn't the owner sue the structural engineer? CORRECT ANSWERS the owner doesn't have a contract with the structural engineer. the owner has a contract with the architect and the architect, has a contract with the structural engineer. there is a "chain of command" for liability, accountability, and communication. owner sues architect for damages, architect sues structural engineer to recover those damages. do business as a sole proprietor or as a limited liability corporation? CORRECT ANSWERS for someone with the liability exposure of an architect, an LLC or S-corp is almost certainly the best option for operating a business. as a sole proprietor or partnership, and you get sued, the winner can take your personal assets. what is "responsible control"? CORRECT ANSWERS As the licensed architect, you can stamp the work if you achieved responsible control; and you have achieved "responsible
control" over a drawing set (including specs, reports, etc.) if you possess a knowledge of, or maintain supervision over, that set consistent with the standard of care. In other words, you can stamp plans that you didn't create, but you can't stamp plans you know little about. How much do you have to know about the set before you can ethically stamp them? Enough to be consistent with what other architects in your area are doing for similar projects (that's the "standard of care" part). can you, as the architect, stamp the work of consultants? CORRECT ANSWERS you may stamp the work of a licensed consultant, if you have, "reviewed it, coordinated its preparation, or intend to be responsible for its adequacy" AIA Code of Ethics CORRECT ANSWERS review code of ethics. is it unethical for an architect to offer free services? CORRECT ANSWERS it is not unethical for an architect to offer free services. the aia used to be in the business of establishing fees, outlawing discounts, and regulating when an architect could submit a bid to undercut the fee established by another firm. they took this role to protect the profession from a "race to the bottom" whereby architects would undercut one another on price ad infinitum - but those protectionist policies ran afoul of antitrust laws. the federal gov. deemed that practice to be too much like a cartel, and contrary to the free- market tradition of competitive bidding. how many times does an architect need to goof before they are disciplined by the profession? CORRECT ANSWERS there is no hard minimum number of lapses. instead, trouble arises after failing to "demonstrate a consistent pattern of reasonable care and competence" and like so much else in an architects liability portfolio, that bar to clear is established by "standard of care" norms: other architects practicing in the same locality at the same time. can you fire an employee because you don't like the color of their shoelaces? CORRECT ANSWERS yes, you can fire for any reason provided it is not the employee's race, gender, national origin, disability, religion, or genetic information, or sexual orientation. or for age (if over 40). harassment is both illegal and subject to discipline within the profession, and includes offensive slurs, offensive jokes, unwanted physical contact, insults, petty slights, and interference with work performance. can an architect contribute to a campaign of a local politician in the hope of winning a contract to design a new firehouse, should that politician become elected? CORRECT ANSWERS tough call.. but probably okay. architects are prohibited from offering payments or gifts to public officials with the intent of influencing the official's judgement related to a juicy building project. but that rule does not apply when making legal campaign contributions! is an architect who is working with a developer allowed to stand up in a city council meeting and speak in support of the developer's project? CORRECT ANSWERS
