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From: MICHAEL HANSEN <br />To: GWM2.M-EDISON(RCURTIS) <br />Date: 8/5/97 3:56pm <br />Subject: Architect fees -Reply <br />Randy, <br />I have no problem with your note to Kim. I mentioned earlier that I think we are on the hook for <br />the fifth floor and parking design costs. One question I would ask is whether the parking <br />design is in fact an additional cost. Frankly, it is hard to tell since the design wo~lc has changed <br />as the project has changed scope. How much of the parking design work exceeds the <br />originally contemplated scope is probably a difFcult question to resolve. <br />I think it appropriate to negotiate on the question of engineering consultants retained by the <br />architect. I can see an argument that consultants were hired and perFormed work under <br />contracts with the architect based on an expectation or understanding about the scope of the <br />project and the fee that would be generated. However, there are a number of factors to take <br />into account before agreeing to pay anything as an additional cost in this area: <br />1. to the extent the engineering services relate to the fifth floor or the parking design <br />changes....if we pay the architect "additional service" fees, haven't we already paid for the <br />extra work? Our deal is with him. He pays his own consultants. Are we committed to pay for <br />his consultants as an additional item? <br />2. if the architect has committed himself to pay for services he no longer needs in this area, <br />who's problem is that? His or ours? We'd probably like to see the contracts to assure <br />ourselves the architect has a commitment, and what it is. <br />3. we would probably like to deal with wrapping up this phase of design services and costs <br />as a package, rather than piecemeal. I have a feeling the latter will be more expensive. <br />Besides, we haven't got a formal written contract yet. I don't know if the architect has a claim <br />for more than the reasonable value of his services. <br />4. on a more general note, I'd watch the architect. The claims for additional services seem to <br />be mounting. If we were (or are) operating under the contract terms we are now negotiating, <br />Article 3.1 requires the architect to give us notice before beginning "contingent additional <br />services" in Article 3.3. This includes revisions to drawings and specs resulting from <br />inconsistent prior instructions from the owner and revisions due to significant changes to the <br />project size, qualiry, complexity or the owner's schedule. Given the nature of this project <br />design, you can see the opportunity to claim much as "contingent additional services". <br />This notice need not be in writing. The owner, however, must promptly give written notice <br />that such services are not required, in order to avoid payment for them. So, we have to watch <br />out for a word dropped here or there as being "notice". In any event, it must still be PRIOR to <br />commencing the service. In case of doubt, I'd suggest asking the architect directly whether the <br />service is a"contingent additional service". <br />5. Note that "optional additional services" in Article 3.4 shall be provided by the architect <br />only if they are authorized or confirmed in writing by the owner. These services include <br />