Design fee versus construction bid cost: a conceptual model and empirical examination

摘要

Most studies on the relationship between design fees and construction costs suggested that the higher the fees, the lower the construction costs. Such conclusions have been based on the underlying assumption that the grade of project is given. However, normally, this assumption does not hold, a conceptual decision-making model in property development is developed to illustrate the management choice of projects types and grades. The hypothesised result would be that the higher the grade of project, the higher the design fees, and hence, the higher the construction costs. This is tested with real project data from BCIS database compiled by the RICS. The results of multiple regressions confirm our hypothesis.