How can we modify the AE contract for additional design services without exceeding the 6%? I have discussed the possibility of recovering some of that percentage through lost design, but there does not appear to be a formal process.
There are at least two options available to remain within the 6% statutory limitation for project design after A&E contract award or start of construction. When modifying an A&E contract or task order, consider the following options:
Open full Question Details
1) If the design contract is modified and additional design services are required, the total design fee must remain below the 6% statutory fee limitation.
The six percent limit also applies to contract modifications, including modifications involving -
(1) Work not initially included in the contract. Apply the six percent limit to the revised total estimated construction cost.
(2) Redesign. Apply the six percent limit as follows -
(i) Add the estimate construction cost of the redesign features to the original estimated construction cost;
(ii) Add the contract cost for the original design to the contract cost for redesign; and
(iii) Divide the total contract design cost by the total estimated construction cost. The resulting percentage may not exceed the six percent statutory limitation.
2) DFARS 236.606-70 Lost Design
“Lost Design” would be design services which the A-E firm has performed but, because of changes to the project, the design is no longer of any use for the project. For example, a specific control system was originally designed for a project and later determined the control system was too expensive and was deleted. All the design associated with that control system would have been performed by the A-E firm but now to be deleted. That design is no longer valid (because the control system will not be a part of the construction) and is an example of “lost design.” Lost design must be subtracted from the design fees for the purpose of calculating the 6% statutory fee limitation.
A-E firm’s total effort for the project can never exceed 6% of the total estimated cost of construction. During A-E modifications processing, the KO must determine if the changed effort affects the design and does it increase or decrease the estimated construction cost and subsequently, how will the constrained design fee be affected.
In either situation, the 6% fee limitation is calculated using the estimated cost of construction.