087. ARE Technical: Top 5 Tips for Project Management (PjM)

In Episode 87 of the ARE Podcast, David and Eric  break down the five most important strategies for passing the Project Management (PjM) division and how to think like a project manager on exam day.

We begin with discussing the top five tips for project management, focusing on the AIA Contracts B 101 and A 201, which outline the roles and responsibilities of the owner, architect, and contractor. We emphasize the importance of understanding these documents for both the ARE exam and real-world practice. We also cover accounting in project management, which involves tracking changes and staff utilization, and the nuances of project delivery methods. Additionally, we discuss the differences between owner’s consultants and architect’s consultants, the significance of bonds and insurance, quality assurance and control processes, and the distinction between billable and direct labor rates.

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Show Notes

Understanding the AIA Contracts

• David introduces the episode, focusing on the top five tips for project management, specifically the AIA Contracts B101 and A201.
• Eric emphasizes the importance of familiarizing oneself with these documents, noting that they are readily available online and through NCARB.
• David explains the B101 (Owner–Architect Agreement) and its significance in understanding architect services and roles during contract administration.
• They discuss A201 (General Conditions of the Contract for Construction) as covering applications for payment, schedule of values, and the different ways to handle changes (change orders, CCDs, ASIs).

Accounting in Project Management

• They discuss accounting in project management as different from accounting in practice management.
• Focus is on:
  • Tracking changes to contracts.
  • Tracking schedules and fees.
  • Staff allocation and hours.
• David notes it is more staff / personnel related: allocating hours, making sure the team doesn’t exceed budgeted hours.
• Eric stresses thinking like a project manager, not an employee:
  • Don’t always pick the most “qualified” staff person if their utilization is already very high.
  • Look for underutilized staff and opportunities for mentoring and growth.

Project Delivery Methods

• They review the main project delivery methods:
  • Design–Bid–Build (DBB)
  • Design–Build (DB)
  • Progressive Design–Build
  • Construction Manager at Risk (CMAR)
  • CM as Contractor and CM as Agent
  • Fast-track as a modifier to multiple methods
• Eric explains: exam questions are usually asking for the most appropriate method given a specific context, not just “a method that could work.”
• David notes that for public work, NCARB tends to see Design–Bid–Build as the default because:
  • It is traditional.
  • It supports fairness and transparency.
• Eric expands on CM at Risk:
  • Contractor is on board early.
  • Provides continuous pricing and helps maintain a GMP.
  • Good for complex projects and for controlling cost and risk.
• They briefly mention Integrated Project Delivery (IPD) as an advanced form often used for highly complex buildings (e.g., labs).

Owner vs. Architect Consultants

• Architects’ typical consultants:
  • Mechanical, electrical, plumbing engineers.
  • Structural engineer.
  • Landscape architect.
• These are architect’s consultants:
  • Their fees are included in the architect’s proposal.
  • Architect manages and coordinates them.
• Owner’s consultants (e.g., AV consultant, security consultant, drapery consultant):
  • Hired and paid directly by the owner.
  • Architect still must coordinate their work with the project, but does not manage them.
• David gives the example of a drapery consultant:
  • Architect provides floor plans, door/window schedules, head and jamb details.
  • Architect is not calling to check orders, delivery, and installation—that is the owner’s role.
• Under B101, MEP and structural are part of the architect’s basic services, even though the actual work is done via consultants.

Bonds and Insurance

• Eric frames bonds as a form of insurance for the owner.
• Key bond types to know:
  • Bid Bond – assures the contractor will honor its bid.
  • Performance Bond – assures the contractor will complete the work per contract.
  • Payment Bond – assures subs, suppliers, and labor are paid.
• Many other bond types exist, but exam focus is on the major ones.
• David notes that under B101, the architect typically carries five types of insurance:
  1. Workers’ compensation
  2. Automobile insurance
  3. Professional liability insurance
  4. General liability insurance
  5. Employers’ liability insurance (added in 2017)
• Distinction between:
  • What states require (e.g., only workers comp and auto in some states).
  • What B101 contractually requires if not amended.

Quality Assurance (QA) and Quality Control (QC)

• QA/QC processes in offices:
  • Checklists, internal reviews, “red team” reviews.
  • Standard procedures to ensure a consistent standard of care.
• For complex projects (e.g., with specialized or “wacky” equipment):
  • Extra coordination, double- and triple-checking.
  • Use of equipment/appliance schedules keyed to plans.
• Eric stresses: this is not about memorizing definitions, but about understanding what any reasonable architect would do.
• David ties QA/QC to standard of care and basic services:
  • If your firm regularly does a certain project type (e.g., labs), coordinating that complexity is part of your basic scope, not an additional service.
  • If the specialty work is unusual for the project type, it may be an additional service if not in the original scope.

Billable vs. Direct Labor

• Direct labor rate:
  • What the firm actually pays you, including salary plus benefits and employment-related costs (taxes, PTO, insurance, etc.).
• Billable rate:
  • What the firm charges the client for your time.
  • Typically a multiplier of the direct rate (often around 3x to ~3.8x, but can be higher).
  • Covers:
    • Your direct cost.
    • Overhead (office, software, marketing, legal, etc.).
    • Profit.
• Example:
  • If direct cost is $20/hour, billable might be $60/hour.
• Discussion on:
  • Exploitation risk: if multiplier is very high (e.g., 6x) without corresponding pay.
  • Importance of knowing your billable rate when negotiating raises, especially after getting licensed.
• They talk about whether employees can/should ask their boss about their billable rate:
  • It’s usually not secret, but also not posted publicly.
  • Can be approached via the lens of learning for the ARE or by reviewing proposals if accessible.
  • Firms avoid publishing everyone’s rates because it makes base salaries easy to infer and can cause internal friction.

Fee Structures and Proposals

• Common fee structures:
  • Straight hourly (pure time & materials) – less common.
  • Hourly, not-to-exceed – hourly billing capped at a maximum.
  • Fixed/scope-based fee – set fee for defined scope; firm must manage hours to stay profitable.
• Importance for project managers:
  • Understanding team members’ billable rates.
  • Estimating and tracking hours vs. fee.
  • Managing scope and changes so the project remains profitable.

Final Thoughts and Next Steps

• Emphasis throughout:
  • ARE exams are not memorization tests.
  • Goal is understanding concepts deeply enough to apply them to both the exam and real-world practice.
• Encouragement to:
  • Use the ARE study process as a reason to ask questions at work (about fees, billing, contracts, jobsite visits, etc.).
• Reinforcement of mindset:
  • Think like a project manager (or principal), not a task-level employee.
  • Always consider roles, responsibilities, risk, money, and standard of care in decision-making.