What is the correct percent cap for architect-engineer services for public works or utilities under a cost-plus-fixed-fee contract?

• A. 15 percent
• B. 10 percent
• C. 6 percent
• D. 5 percent

Answer: (C)

The amount paid to architect-engineer services in public works or utilities contracts that use a cost-plus-fixed-fee arrangement is limited by a cap expressed as a percentage of the construction cost. The standard ceiling for this scenario is six percent. This rule helps keep compensation reasonable and proportional to the size of the project, while still allowing the government to cover the needed design effort. For example, if the estimated construction cost is $4 million, the maximum fixed fee would be $240,000 under this cap. While the fee can be negotiated lower based on complexity and risk, it should not exceed six percent of the construction cost. Other percentages like fifteen, ten, or five percent do not align with this widely used limit.