ARE 5.0: PcM key terms

The level of skill, diligence, and judgment that a reasonably competent architect, practicing in the same community and under similar conditions, would provide on a comparable project.

A written description of the work an architect will perform for a client, including deliverables, exclusions, schedule, and the responsibilities of each party.

The core architectural services normally provided through each project phase, such as schematic design, design development, construction documents, bidding, and construction contract administration.

Services outside the defined basic scope that are billed separately, often requiring written authorization, such as special studies, renderings, or extended construction administration.

The architect who holds the direct contract with the owner and is responsible for coordinating all architectural work and subconsultants on the project.

A firm or individual hired by the prime architect to provide specialized services, such as structural, mechanical, or landscape design, under the prime's direction and contract.

The licensed architect or firm whose seal and signature appear on the construction documents and who assumes legal responsibility for those documents.

The contractual and organizational framework that defines how design and construction services are procured, contracted, and coordinated among owner, architect, and builder.

A delivery method in which a single entity contracts with the owner to provide both design and construction, often using a team that includes an architect.

The architect's services during construction, including reviewing submittals, observing progress, processing pay applications, and interpreting contract documents.

The stage when the work is sufficiently complete, in accordance with contract documents, that the owner can occupy or use it for its intended purpose.

A contractual promise by one party to protect and reimburse another party against specified losses, claims, or liabilities, often limited by insurance and negotiation.

A collaborative delivery approach that aligns owner, architect, and builder through shared risk and reward, early involvement, and multiparty agreements.

Planned firm-wide procedures that prevent errors, plus the project-level checks that detect and correct defects before documents are issued.

A financial statement showing a firm's assets, liabilities, and owners' equity at a specific date, revealing financial position and solvency.

A financial statement summarizing revenue, expenses, and profit or loss over a period, showing whether the firm operated at a gain.

A financial statement tracking cash received and spent during a period, helping the firm anticipate shortages even when profitable on paper.

Payroll costs for staff whose time is charged directly to specific projects, excluding overhead, benefits, and nonbillable administrative work.

Indirect costs of running the firm that cannot be charged to a single project, such as rent, insurance, administrative salaries, and marketing.

The percentage of total paid staff hours that are billable to projects, a key measure of how effectively the firm uses its labor.

A ratio of net revenue to direct labor that indicates how much revenue each direct labor dollar generates after deductions, used to set billing rates.

The percentage of the firm's standard value of time that is actually invoiced, reflecting write-offs, discounts, and unapproved charges.

Money owed to the firm by clients for services already invoiced but not yet paid, tracked by age to manage collection risk.

The value of services performed but not yet billed or collected, which firms track to understand unbilled revenue and project profitability.

The hourly billing rate, or total revenue level, at which a project or firm covers all direct and indirect costs without profit.

A lump-sum compensation agreed at the outset for a defined scope, placing cost-overrun risk largely on the architect unless scope changes.

A compensation method that reimburses allowable costs plus a set fee, reducing the architect's risk from unpredictable project costs.

Professional liability coverage protecting the architect against claims of negligent design, specification, or professional services, subject to policy limits and exclusions.

Coverage for third-party claims of bodily injury or property damage arising from the firm's premises, operations, or completed work, separate from professional liability.

A contract clause capping the architect's potential damages, often at the fee amount or a specified sum, to control catastrophic risk.

A reserve of money or time set aside to cover unforeseen conditions and changes without requiring new client approval for every overrun.

A written document defining the firm's services, target clients, organization, financial goals, and operating strategy for a defined period.

A longer-range plan that sets the firm's direction, priorities, and growth objectives, and guides decisions about markets, services, and investments.

A plan describing target markets, messages, channels, budgets, and activities the firm will use to generate leads and win work.

A structured assessment of a firm's internal strengths and weaknesses plus external opportunities and threats, used to inform strategy and positioning.

A formal review that decides whether to pursue a specific project opportunity based on fit, competition, fees, and firm capacity.

An owner's formal solicitation asking design firms to submit qualifications, approach, schedule, and fees for a described project, often through a competitive process.

A pursuit strategy that identifies the client's priorities, competitors, team roles, key messages, and steps needed to win a specific opportunity.

A system for tracking contacts, interactions, and commitments with clients and prospects to strengthen repeat business and informed pursuit decisions.

A written arrangement between firms to jointly pursue or deliver a project, defining roles, responsibilities, and how fees will be shared.