Tender sum we received turned out to be £1m lower than estimated. At the outset of the project, we agreed percentage fee based. I am a bit worried that the client would come back to us for reducing the professional fees for the service that we prepared. Can you tell me what sort of action that I need to take for this? I found the following article from the RIBA published book called RIBA fee management but it is not really clear which RIBA standard conditions they are referring to. I looked SFA/99 and the latest standard agreement as well but didn't come across the clause either. Please tell me where I can find this.
Deflation Predetermined fees – percentages or lump sums – are based on the assumption that the fee will cover the cost of providing the Services. But in times of deflation, interim estimates or tender prices may be lower than predicted, although the input required does not change. Only time charges escape this trap. To cover this situation, RIBA Standard Conditions provide at clause 5.8.2: [The Basic Fee] shall not be adjusted for any reduction of the Construction Cost arising solely from deflationary market conditions not prevailing at the Effective Date. The Basic Fee shall continue to be based on the Construction Cost current prior to the date of such reduction.
