Introduction 

Establishing a budget early in the design process (programming phase) is one of the most important aspects of design because it influences many design decisions and can help determine whether a project is even feasible. Once a budget is set, RAAW design will work within it and keep the client(s) advised about any changes that might influence final costs. 

Budgeting & Initial Considerations

Initial budgets can be set in several ways. In most cases, the client has already estimated the amount of money available and simply gives this figure to the interior designer. Corporate clients or organizations with ongoing building programs usually have a good idea of what new or remodelled facilities cost, and their budgets are usually realistic. Residential clients or people who are contracting for our interior design services (and construction general contractors) for the first time may have a very poor idea of the costs involved. Either cases, we conduct initial project interviews with the client(s) to establish an early understanding of the scope/ extent of work needed and provide early-on advises on the anticipated project costs. From this preliminary figure,  the client(s) and interior designer can determine if there is enough money to do the job, or whether the budget must be increased or the scope of work must be decreased to suit. 

There is always a relationship among quantity (the extent of project), quality (the finishes, materials and other features) and costs (money). Changing one affects the others. 

Cost Influences

Many factors affect the final project cost. The client must budget for more than construction costs and furnishings expenses. The following sections describe some of the possible expenses that can occur in an interior design—construction build project. Of course, not all of them will apply on every project. However, RAAW design discloses potential factors to our prospective client(s). 

1. Construction Costs

Construction costs are the moneys required to build or remodel the interior, including such things as demolition, partitions, ceilings, millwork, and finishes; and plumbing, electrical, and mechanical work —generally anything that is attached to and becomes part of the structure. 

2. Furniture, Fixture and Equipment (FF&E) 

This category can include many things. On most projects, furniture, fixtures and equipments are separate budget items because of the way they are specified, purchased and installed is different from the way construction items are handled. Furnishings are either purchased directly by RAAW design, with delivery and installation arrangements included, or specified by RAAW design for purchase with delivery and installation arrangements to be coordinated by the client(s). Due to the fact designer discounts are only honoured when RAAW design makes the purchase, and taxes are different for our B2B arrangements, RAAW design usually asks our client(s) to choose one method or the other, without mixing the two practices unless international items are involved, or specific equipments are involved requiring a special method of purchasing and transportation. 

Clients who wish to purchase and coordinate FF&E may do so, at the risk of coordination-error which RAAW design is not liable for. Should delays in coordination of FF&E items occur and delay construction schedule, neither the general contractor or interior designer are held responsible when the items are purchased directly by the client(s). Clients who are comfortable purchasing and coordination delivery of FF&E items may do so, and save management/ additional fees involved with contractor or interior designer’s handling (see FF&E purchasing terms and conditions doc. for interior designer). Items considered part of FF&E include: 

• Furniture

• Appliances

• Free standing equipments such as vending machines, office equipments, medical equipments, wall-mounted TV, reception desks that are not built-in, and others

• Window coverings

• Rugs and mats

• Interior plants and planters

• Lamps

• Artworks

• Accessories/ decor

3. Contractor’s Construction Cost Proposal, Overhead and Profit

NOTE THAT ALL NEW PROJECTS COMMENCING ONWARDS FROM JULY 2019 SHALL ADOPT TO OUR NEW INTEGRATED PROJECT DESIGN (IPD) MODEL.

For most residential and commercial projects, a General Contractor (GC) is on-boarded as concept design stage comes to a close, and tendering stage is reached. This is usually arranged prior to BP  “Building Permit” submission to the City’s Building Department as BP paperwork involves filling out a General Contractor’s information section. Any change of GC after BP-approval involves an additional cost of administration paid to the City, however, it is not uncommon to change GC before and after the BP process. During the BP-review time frame (varying between 4 weeks to up to but not limited to 16 weeks depending on the municipality, and the type of project, project complexity), the primary GC works with RAAW design and the client(s) to establish a firm Contractor’s Construction Cost Proposal based on the issuance of construction documents (IFC) RAAW design issues shortly after BP submission. Any changes in design (value engineering) to lower costs projected during the tendering stage is reflected in the construction documentation stage. The GC will adjust the Contractor’s Construction Cost Proposal based on these changes. A document is signed between the client(s) and General Contractor to formalize this process, rewarding the project construction to the GC. The GC will then provide the client(s) with their WCB, Construction Insurance (up to 5 million dollar) and other documents required by the client(s) or the Strata. The duration of construction (without CO “Change Order”) is also encouraged to be part of the contract documents.

RAAW design will be participating in site-visits per Interior Design Fee Proposal and contractual terms during the construction of the project. Quality and finishing details is verified and controlled by the interior designer through communication with the GC.

General Contractors will usually build a 5%-10% contingency allowance or overhead into the Contractor’s Construction Cost Proposal to ensure defects and out-of-ordinary site conditions are covered in the anticipated cost of the project. CO “Change Orders” are active changes in the established design (Construction Drawings issued at IFC, approved and signed off by the client(s)) that the client(s) voluntarily wishes to add to the original construction scope of work. All CO requests must be reviewed by the interior designer, before the GC quotes additional costs. Client(s) can choose to accept the additional costs associated with each CO, whether or not to proceed with each CO.

Note that as part of the Interior Design Services, RAAW design’s scope of work under the fixed-design fee does not cover CO requests made during the construction stage. Any changes requested to design after IFC and commencement of construction is also subjected to an addition in design fee costs, which are to be evaluated as they occur. Any CO requests involving the approval of CP “Certified Professionals” such as engineers (mechanical ,structural and electrical; or the signing Architect) are also subjected to additional design fee costs for these CP’s respectively based on the situation and extent of CO. For this reason, client(s) are highly encouraged to minimize any CO requests and ensure each stage of design sign off’s and confirmations are reviewed thoroughly and in depth prior to signing off on them. 

4. Professional Fees 

Professional fees include the charges for the interior designer’s services as well as fees for other professionals such as architects, mechanical engineers, electrical and structural engineers. In additional, costs for special consultants, legal fees and testing/ inspection fees may be included here. For the purpose of all RAAW design project QUOTES, only the mechanical engineer’s fee (plumbing and HVAC drawings) are shown for the client’s reference in correspondence to RAAW design’s interior design services fee. 

Clients always have the option to hire their own CP, however, client(s) will have the responsibility of coordinating the CP "Certified Professionals” with RAAW design, and ensure third-party CP do not delay professional drawings required. For this reason, RAAW design will quote additional CP fees for the client(s) review and approval under the fee umbrella of RAAW design’s professional fees for all commercial projects involving BP. 

5. Other Costs to Factor-in

For commercial and residential design client(s), additional cable, phone line installation and smart-control may be an add-on component to the construction process. Although interior designers are not responsible for coordinating these third-party services, RAAW design consults on the involvement of these services based on our experiences upon client’s or sub-trade inquiries to ensure a smooth integrated design-construction-operation process. It is important to understand that the interior designer is not a professional consultant in these areas, and are not responsible for advanced or highly-specialized needs the client(s) may have.

Smart home consultants, alarm systems, third-party alarm (including verification of fire pulsations, strata-based fire alarms), cable installers, hydro meters and landscapes outside of the interior parameters are to be coordinated and on-boarded by the client(s) when possible, as early on in the design and planning stages as possible. 

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