If you’ve been around for a while, you probably remember a TV game show that was resurrected 
several times called, Name That Tune.  The premise of the game was that two contestants keep 
lowering their bid against each other as to how few notes it will take to recognize and name that 
tune.  The low bidder, of course, must then make good on his or her bid by correctly naming the 
tune in the specified number of notes.  If they were incorrect, the opponent wins.  The lowest bid 
would be one note.  Many tried the one-note-bid, but few completed the second half of the task… 
naming the tune.
If this sounds familiar, it should.  It’s the same way that most construction contracts are awarded.  Unlike the game show, however, most savvy architects and specifiers know their competition, know the price of the time involved in designing and overseeing a project, overhead and a fair profit, and don’t let their bid spiral downward beyond a certain point.  Most architects and specifiers prepare in this way, but not all.
In the past, the design community has been fairly insulated against bidding wars by setting a fair price for their services and maintaining a take-it-or-leave-it attitude.  Lately, however, we’ve heard stories of architects and specifiers lowering their fees to get the job to keep their staff busy, even if it’s costing them in the end.  This is not setting a good precedent.
If you’ve been exposed to high school economics, or just have a pretty good grasp on how the economy works, you realize that the lowest bid for any given project will be even lower in a bad economy and be higher in a good economy.
With only a few exceptions, the economy in the West is picking up.  So overall, the design community shouldn’t go into a job thinking only about their bottom line and charging low fees for project design that will put them in the red.  We’ve heard that some design firms are taking less than normal fees for a project just to keep its office staff busy, even though they will be losing money on the job.  It seems that some have forgotten how to make a profit.
When the economy is poor, there’s a good chance that if the cost of building is too high for the current market, the project won’t get built and all facets of the construction industry will suffer.  The overriding factor is the cost of construction.  That doesn’t mean that prices should be dropped so low that no profit can be made.  When the economy is good, the cost of design and construction are secondary.  The building will be built and completed in as little time as possible, whether you’re involved or not.  They’ll find someone to design the project in a timely manner.  If you have to bid so low that it will be costing you money, don’t take the job.
Now, I’m in no way suggesting getting together with other architects and specifiers to establish fees.  Besides being unethical, it’s against the law.  Your own reputation and experience should set your fees.  The design community is providing a valuable service and if proper compensation isn’t forthcoming, it’s partially their own fault.  Remember, profit is not a dirty word. 

Marcus Dodson
editor & publisher
Name Your Price
There’s Nothing Wrong with Making a Fair Profit