by Jeffrey C Kadlowec, Architect

Abstract

This document was created as a formal summary of plans to diversify an existing architecture & engineering practice into a new construction & management company. By engaging in cooperative collaboration between owners and contractors on design and construction we intend to reduce construction time and production costs while improving project quality, reducing waste and avoiding conflicts. Through implementation of multi-party agreements, we will better define the roles, relationships and contributions of team members in joint ventures to ensure overall success by establishing trust and transparency.

Keywords: architect & engineer, construction manager, design/build, joint venture

Construction Company

Confidentiality Agreement

These drawings, specifications, ideas, designs, and arrangements presented thereby are and shall remain the property of the Architect.  No part thereof shall be copied, disclosed to other, or used in conjunction with any work or project other than the specified project for which they have been prepared and developed without the written consent of the Architect.  Visual contact with these drawings or specification shall constitute conclusive evidence of acceptance of these restrictions.

1.0 EXECUTIVE SUMMARY

1.1 Introduction: What began as a leap of faith, has become a pursuit of passion and the start of a legacy. In just seven years of private practice, we’ve went from being start-up handyman business to a highly sought after and well respected design professional capable of delivering unique solutions and unmatched results.

1.2  Company Role: With over thirty years of work experience in design, engineering and manufacturing, we have amassed a vast array of knowledge and a wide variety of skills that will lead our company towards a successful future in construction management with long-term sustainable growth.

1.3 The Problem: As Las Vegas continues to experience unprecedented growth, there is an amazing opportunity to become a permanent fixture in this urban landscape. By further diversifying the services we offer, we will capture a greater market share while expanding our business network into related industries and trades.

1.4   Our Solution: Architects were historically viewed as the ‘master builder’ (Greek, arkhi-tekton; Latin, ‘architectus’) [Architect 2023]. By leading a design/build team we will be better positioned and more competitive against dominating companies and established contractors in and throughout construction industry.

1.5   Evidence: Overlapping design and build operations can reduce construction time and production costs [Design-Build 2006]. Integrated project delivery collaborates teams in ways not possible under the traditional design-bid-build method. Lean construction and fast tracking improve quality, reduce waste and avoid conflicts.

1.6 Resources: Building information modeling allows for better planning, while sustainable practices focus on reducing life cycle costs. Implementing new hardware and emerging technologies will differentiate us from our competition. Self-motivated, well-educated and creative & talented individuals will be greatest assets to our company.

1.7   Winning Strategy: Our current practice has grown organically over the past decade through hard work, dedication to service, and quality of craftsmanship. Repeat customers and client/contractor referrals continue to provide us with the projects we desire. Focusing on joint ventures will allow further growth through partnership agreements.

1.8   Project Teams: Multi-party agreements will be executed to create a formal organization for any business venture. Outlining the roles, relationships and contributions of all team members ensures overall success by establishing trust through transparent disclosure.

1.9   Conclusion: By creating an architect-led design/build company to handle new construction projects throughout the greater Las Vegas Valley, we will be able to provide future award-wining design, gain national recognition and lead the way for coming generations of artists, craftsman, clients, owners and patrons.

2.0   MISSION, VISION, & CULTURE

2.1   Mission: The architect-led design/build method is an improvement over the standard method of design-bid-build construction used over the past 150 years. From a historical perspective, it places the architect in a traditional role as the ‘master builder’.

2.2   Philosophy: The Model Rules of Conduct [Rules 2018] outline five areas for competence, conflict of interest, full disclosure, compliance with laws and signing/sealing documents. In practice, the primary duty of the architect is “to protect the public’s health, safety, and welfare.” He/she shall not make misleading, deceptive or false statements, nor misrepresent his/her qualifications, capabilities, or experience. An architect shall not violate U.S. laws or of any jurisdiction in his/her conduct and maintain responsible control of technical submissions.

2.3   Vision: By diversifying our current architecture & engineering practice, we will be better positioned for further growth, create opportunities to design larger, more complex projects, and provide greater control over the quality and outcome of future ventures.

2.4   Culture: Implementing single-source contracting for design and construction services offers the advantages of collaboration through mutual trust and respect with shared risk and reward. Involving key participants early provides knowledge of cost and scheduling while eliminating waste and duplication through open communication and common goals [Markku 2009].

3.0   COMPANY DESCRIPTION

3.1   Company Goals: By founding an architect-led design/build construction company, we intend to reestablish the architect/engineer as the ‘master builder’. A study conducted by Indiana University found that architecture students work the most hours out of all majors, beating engineering, science, medicine, finance, and law [Ingalls 2017]. This ethic carries over into the profession, making it one of the most demanding career fields.

3.2   Target Market: We intend to target real estate developers and government entities in order to secure funding and grow our professional network with the goal of completing a wider variety of small to large commercial and new civic projects throughout Las Vegas Valley.

3.3   Industry Segment: Realizing the need for highly trained and self-motivated individuals, we intend to focus our recruiting efforts directly from institutions of higher education and contract primarily with veteran owned/operated companies. This will provide us with better opportunities to collaborate with those organizations and individuals on training, mentoring and supervision.

3.4   Legal Structure: Operating as a limited liability corporation, we will become a single point of contact for design/build services utilizing multi-party agreements between owners and contractors. By assuming a command leadership role in future ventures, we will be able to guide those projects by sub-contracting most professional services and all construction labor.

4.0   OPPORTUNITY ANALYSIS & RESEARCH

4.1   Services Offered: The Architectural Experience Program (AXP) [AXP Guide 2022] groups tasks into six categories—practice management, project management, programming & analysis, project planning & design, project development & documentation, and construction & evaluation. We will continue to offer all of these services in varying degrees based on our client needs.

4.2   Potential Products: The most states require a minimum number of work experience hours for registration per the AXP, or former Internship Development Program (IDP). By offering career opportunities with training and mentoring through guidance and supervision, we could expand our network and generate additional revenue while fostering the next generation of design and building professionals. We also possess abilities in tutoring and can provide for test preparation to candidates planning to take the Architect Registration Examination (ARE) [ARE Guide 2020].

4.3   Competitive Advantage: Most of the established design-build construction companies are contractor-led. Although these entities are not without a vast array of skills, knowledge, and resources; most lack the creative problem-solving approach obtained through the experience of the rigorous and grueling coursework gained from a NAAB-accredited (National Architectural Accrediting Board) program [NAAB 2023].

5.0   MARKETING STRATEGY & PLAN

5.1   Market Research: Increasing material costs, current labor shortages and aggressive project timelines are forcing designers and builders to deviate from tradition in favor of alternative delivery methods [Adolphus 2022]. Collaboration through joint ventures has resulted in improved quality and project performance with reductions in production costs. 

5.2   Barriers to Entry: There will always be struggles for start-ups competing against long-established and well-staffed companies, especially when introducing new means and methods. Having single-handedly grown an architect-engineering firm from just an idea into a successful business and recognizable trademark provides confidence and a solid foundation for this next enterprise.

5.3   Threats and Opportunities: Unrealistic client demands, unresolved contract disputes and potential financing issues can jeopardize the successful completion of any project. Being able to develop creative or unconventional solutions within the fabric of local zoning/building codes and federal/state regulations will allow us to be competitive and profitable.

5.4   Strategic Positioning: The metropolitan area of Las Vegas Valley is the second largest in the Southwestern United States. As an international destination with a legacy for offering the newest, biggest and best things in the World, we are situated to expound on that idea and continue contributing to its recent and unprecedented growth cycle.

5.5   Legal Matters: Keeping in mind the outcome of civil proceeding during the anti-trust case against the American Institute of Architects (AIA) [USA v AIA 1990], we strive to offer more professional services and a better finished product at rates lower than market value. We work tirelessly to meet our client demands and resolve contract disputes for the good of our projects and their use by the public.

5.6   Fees and Pricing: According to the Royal Architectural Institute of Canada (RAIC), design and construction only account for 1-2% of the total asset life cycle cost of a building project [Appropriate Fees 2019], with maintenance & energy accounting for 10-20% and salaries of occupants at 80-85%. Using research and analysis to guide decision making early in design phases reduces expensive changes later in document production and construction stages. Design fees vary between 5% to 20% of construction cost or $2 – $15 per square foot depending on size, scope and complexity with construction price estimates calculated initial by square foot costs and later more through detailed, itemized breakdown of materials and labor. Typical hourly rates for staff are: Principal, $150 – $250; Project Manager, $125 – $150; Intern, $65 – $90 [Architect Cost 2022].

6.0   MANAGEMENT & OPERATIONS

6.1   Biographies: Growing up in Cleveland learning auto maintenance and home improvement from my father, gaining work experience in facility planning, manufacturing engineering and product design, and competing a five-year NAAB-accredited architecture program has provided me with a unique blend of trade skills and acquired knowledge that allow me see construction from every perspective.

6.2   Advisors: Through open discussions with entrepreneurs, investors, owners, clients, consultants, and contractors, along with decades of experience, only the architect is able to make the most informed decision, but must also be aware of professional liability and potential risks.

6.3   Gaps: Finding the best talent remains a major challenge as many candidates oversell their abilities due to inexperience in the broad range of design elements and complexity of commercial construction. 

6.4   Organization Chart: With the architect assuming the role of master builder, a ‘top-down’ pyramid hierarchy seems logical, though given the variable party interests a ‘multi-pointed star’ better represents the cooperative collaboration approach necessary to successful complete projects.

6.5   Production: We will continue to provide a full scope of architecture and engineering services, while growing the range of construction services through partnerships and joint ventures.

6.6   Quality Control: Maintaining a balance between production time, project cost and overall quality with an often changing scope is by far the greatest challenge, meaning that attention must be focused on managing both expectations and outcomes.

6.7   Locale: Area of operation will continue in Southern Nevada, unincorporated Clark County, the City of Las Vegas, Henderson and Boulder City, with potential to expand into neighboring states upon request.

6.8   Legal Environment: Along with local zoning laws, design and construction in Clark County primarily adheres to the 2018 International Building Code (IBC), 2018 Uniform Mechanical Code (UMC), 2018 Uniform Plumbing Code (UPC), 2017 National Electrical Code (NEC), 2018 International Energy Conservation Code (IECC), 2018 International Code Council (ICC) A117.1 and 2018 International Fire Code (IFC), all with local amendments. State agency oversight is provided by the Nevada State Board of Architecture, Interior Design & Residential Design (NSBAIDRD), the Nevada Board of Professional Engineers & Land Surveyors (NVBPELS), and the Nevada State Contractors Board (NSCB). Reviews, approvals and inspections fall under the jurisdiction of multiple agencies including the City of Las Vegas Building & Safety Department, Clark County Building & Fire Prevention, Las Vegas Valley Water District, Southern Nevada Health Department, etc.

7.0   FINANCIAL ANALYSIS & PROJECTIONS

7.1   Expenses: We are currently in the process of establishing a new private office separate from our personal residence. As a start-up business, operating from a live/work condominium was an ideal arrangement. However, this eventually created a variety of unforeseen difficulties with increased workload and needs for additional staff.

7.2   Personal & Business Financials: Following a second break-in, identity theft and credit fraud last year, we are still seeking to rebuild our practice and determine our losses. We must also new be extreme cautious when preparing and providing information, as the events of the past year put our lives and work in jeopardy—nearly collapsed our business.

7.3   Profit & Loss Projection: Unwillingness or inability of former clients to pay professional fees are currently seen as losses. We are again preparing new invoices, mechanics liens, collection notices, and small claims lawsuits in attempts to recover these funds. An overwhelming number of projects were being offered to us during the year prior to our hiatus, while new opportunities can be created through professional networks, project proposals and simple design sketches. We have no exact numbers on this, but have begun preparing a $30M proposal to kick-off a 65-acre development.

7.4   Use of Capital: The financial crimes we experienced last year had a devastating impact on our personal credit rating. Taking time off to secure our business assets resulted in decrease of revenue making the option for commercial borrowing unavailable immediately. We will be rebuilding our entire business operations from the ground up as we did at start-up with a focus on profit, security, and growth.

8.0   FUNDING REQUEST & EXIT STRATEGY

8.1   Working Capital: We are currently exploring several commercial financing options while addressing our future needs for funding. We will be completing applications with multiple lenders over the coming months.

8.2   Current Outlook: By routinely analyzing our growing list of projects, former clients, and business types, we will be able to understand our most profitable and least troublesome undertakings.  We have taken several hiatuses over the years to refocus resources and redirect our efforts to maintain forward progress and growth. Our most recent sabbatical was necessary for a complete restructuring and the relocation of our operations. In order to tackle larger and more complex ventures, we have decided to decline all future single-family residences and many small commercial tenant improvements projects.

9.0   APPENDICES

9.1   Curriculum Vitae:

Qualifications

Work Experience

• Owner/Architect     ART-IS-ZEN                      Las Vegas, NV             07/2012 – Present
• CEC Officer                US Navy Reserve          CA, OH, NV                    07/2010 – 09/2021
• Project Architect    WWCOT Architects     Santa Monica, CA    10/2007 – 2/2009
• Senior Designer       Cuningham Group       Venice, CA                    01/2006 – 09/2007
• Design Intern             Caldwell Architects    Marina del Rey, CA   11/2003 – 12/2005

Education

• Master of Const Mgmt               Everglades University, FL            01/2023 – Present
• Bachelor of Architecture           Kent State University, OH           06/1998 – 05/2002
• Associate of Science                   Cuyahoga Community, OH        01/1994 – 12/1996

Honors

• Kent State University President’s List
• Dean’s List of the College of Fine and Professional Arts

9.2   Agreements: Reference the following AIA Contracts [Contract Documents 2023].

• B101–2017, B-104-2017 & B105-2017: Agreement Between Owner and Architect
• B132-2019 & B123-2019: Agreement Between Owner and Architect / Construction Manager
• B195–2008: Agreement Between Owner and Architect for Integrated Project Delivery
• B201–2017: Architect’s Services: Design and Construction Contract Administration

9.3   Intellectual Property: This communication may contain privileged or other official information. If you are not the intended recipient or believe that you have received this communication in error, please reply to the sender indicating that fact and delete the copy you received. It is a violation of federal law to print, copy, retransmit, disseminate, or otherwise use this information.

References

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Architect Registration Examination Guidelines. (2020). National Council of Architectural Registration Boards. www.ncarb.org/sites/default/files/ARE-5-Guidelines.pdf.

Architectural Experience Program Guidelines. (2022). National Council of Architectural Registration Boards. www.ncarb.org/sites/default/files/AXP-Guidelines.pdf.

Design-Build Firms: Design-Build Continues to Grow Despite Wariness and Price Concerns. (2006). Engineering News-Record.

A Guide to Determining Appropriate Fees for the Services of an Architect. (2019). Royal Architectural Institute of Canada. raic.org/sites/raic.org/files/nov2020_2019_fee_guide_en_web_4.pdf.

How Much Does an Architect Cost? (2022). HomeAdvisor. www.homeadvisor.com/cost/architects-and-engineers/hire-an-architect/.

Ingalls, Julia. (2017). Architecture Majors Work the Hardest in College, Study reveals. Archinect: News. archinect.com/news/article/149990764/architecture-majors-work-the-hardest-in-college-study-reveals.

List of All Current AIA Contract Documents. (2023). American Institute of Architects. www.aia.org/resources/6150803-list-of-all-current-aia-contract-documents.

Markku, Allison & Downs, Betsy. (2009). Design-Build and Integrated Project Delivery: Narrowing the Gap. American Institute of Architects. Aug 21.

Model Rules of Conduct. (2018). National Council of Architectural Registration Boards. www.ncarb.org/sites/default/files/Rules_of_Conduct.pdf. 

NAAB-Accredited Architecture Programs in the United States. (2023). National Architectural Accrediting Boards. www.naab.org/wp-content/uploads/Accredited-NAAB-Programs-060223.pdf.

United States of America v The American Institute of Architects. 15 U.S.C § 16 b-h. (1990). www.justice.gov/atr/case-document/file/957541/download.