Summary: Pursuant to a congressional request, GAO reviewed the: (1) interpretations and applications by federal agencies of the statutory 6-percent fee limitations on architect-engineer (A-E) fees under government contracts and of certain related statutory and regulatory requirements; and (2) methods used by agencies to determine and negotiate A-E fees.
GAO noted that: (1) the major construction agencies contracted for architect-engineer services at fees in excess of the statutory provisions which limit the fees payable to architect-engineers to 6 percent of the estimated cost of construction; (2) generally, agencies have interpreted the limitation as applying only to that portion of the total fee relating to the production and delivery of designs, plans, drawings, and specifications; (3) under this interpretation, most of the architect-engineer contracts under which the total fee exceeded 6 percent would be in compliance with the limitation; (4) although the Federal Property and Administrative Services Act of 1949 has not been amended to require cost or pricing data, the General Services Administration (GSA) has included a requirement for furnishing such data in the Federal Procurement Regulations (FPR) similar to the requirement in Public Law 87-653; (5) GSA has determined, however, that the requirement should not be applied to architect-engineer contracts because of their special characteristics; (6) representatives of the Department of Defense (DOD) have advised GAO that the cost or pricing data requirements of Public Law 87-653 are being applied without distinction as to whether or not architect-engineer services are involved; (7) a representative of the GSA has advised GAO that consideration will be given to revising the FPR to provide for such application; (8) GSA has included a requirement similar to Public Law 87-653 in the Federal Procurement Regulations; (9) although most of the construction agencies of the government are subject to this requirement, they generally solicit a proposal only from the architect-engineer firm selected on the basis of technical ability; (10) agency representatives advised GAO that they are opposed to the concept of soliciting multiple competitive proposals; (11) representatives of the architect-engineer professional societies have advised GAO of their belief that the legislative history of Public Law 87-653 constitutes substantial ground for concluding that the competitive negotiation requirements of the act were not intended to apply to architect-engineer services; and (12) the most commonly used methods employed by federal agencies to compute an estimate of the architect-engineer fee for purposes of negotiation are the detailed analysis method and the percentage-of-estimated-construction-cost method.
