Congress Loosens Fee Limitation for Design Services on Federal Projects

Long deemed a “major concern” for the American Institute of Architects (AIA) and the design and construction industries at large, the longstanding 6 percent fee limitation on design and construction contracts for federal projects completed under the purview of the Department of Defense has been increased by 10 percent as part of the Congressional National Defense Authorization Act for fiscal year 2024. The bipartisan bill, which authorizes $886 billion in defense spending, was formally signed into law by President Joe Biden late last year after it passed the U.S. House of Representatives and Senate.

As noted by the AIA, which acknowledged the tireless advocacy regarding the issue by past AIA presidents—namely Chu Richter, Dan Hart, and, most recently, Emily Grandstaff-Rice—alongside partnering groups including the Society of American Military Engineers, the 6 percent fee limit was deemed a burden on architects working within the federal sector. The “limitation on fees does not reflect the growing complexity of design projects, the additional services that need to be provided to complete a successful 21st-century project, and the growing amount of upfront work and extensive management requirements that firms must perform to complete a project,” wrote the AIA in a statement. Applauding the move, the AIA added that it will “continue to work towards a future where fair and reasonable fees are unfettered by fee limitations across all agencies on all federal design and construction projects.”

Additionally, newly instated AIA president Kimberly Dowdell heralded the increase as a “step in the right direction to ensuring that architects are adequately compensated for the specialized skills and training that encompasses their services provided to the federal government.”