Business Practices, Project Management, and Contract Administration
This domain tests the paperwork that protects both designer and client: scope, fee, schedule, procurement, changes, and closeout.
Core rules
- Contract in writing: parties, scope, deliverables, number of schemes and revisions, fee and reimbursables, schedule, client responsibilities, termination, and dispute resolution. Standard agreements such as AIA B101 or an ID-specific form are a starting point, not a substitute for scope language.
- Fee structures: hourly with a not-to-exceed cap, fixed fee, or percentage of construction cost. State inclusions and exclusions. FF&E budgets should carry freight, tax, receiving, and installation - often 20-30% above net product cost.
- Changes: any shift in scope, budget, or schedule gets a written change order with cost and time impact before work proceeds. Verbal approval is not approval.
- Procurement: purchase orders with deposits, a tracking log, confirmed lead times, and clear designation of client-owned versus designer-purchased goods. Retainage 5-10%; conditional lien waivers with each payment.
- Closeout: substantial completion, punch list, final payment, warranties, as-builts, and care instructions.
Worked example
A $180,000 construction budget at a 12% fee yields $21,600. The client then requests a second full kitchen scheme after the design was approved. That is a change order: 12 hours at $150 = $1,800 plus a two-week schedule extension. Issuing it in writing before the drawing begins protects the fee and keeps the relationship transparent, because the client chooses with full information rather than discovering the cost later.
Traps
- No cap on revisions or number of schemes.
- Paying a vendor before the client deposit clears.
- Promising a delivery date the vendor never confirmed.
- Signing a contractor's subcontract on the client's behalf without written authority.