Section 1
Purpose
A fee proposal is a formal offer to provide QS services at a defined cost, setting out the scope of services, methodology, programme, and commercial terms. Getting fee proposals right protects your firm commercially, legally, and professionally.
Under RICS Rule of Conduct 3 (Service), firms must agree terms of engagement before commencing services. The fee proposal forms the basis of those terms, so accuracy and clarity are paramount.
Section 2
Key Principles
- Fee structures for QS services typically take one of three forms: lump sum (fixed fee for defined scope), percentage of construction cost, or time-based (hourly/daily rates). Each carries different risk profiles.
- A lump sum fee is most common for clearly defined scopes. Percentage fees are more common on complex or phased projects where scope is difficult to define upfront.
- Always price against a clearly defined scope of services (reference RICS QS Scope of Services 2022). An insufficiently scoped proposal leads to fee erosion and scope creep.
- Include explicit assumptions and exclusions — what is NOT included is just as important as what is.
- Consider risk allowances, particularly for projects with limited information at tender stage.
- The RICS Standard Form of Consultant's Appointment (May 2022) should accompany or be referenced in the fee proposal to establish the contractual framework.
- Include your PII level, net contribution clause position, and any proposed limitations of liability in the proposal or accompanying terms.
Section 3
Practical Application
Step 1
Obtain and review the tender documentation or client brief in full. Identify any ambiguities and seek clarification before pricing.
Step 2
Map the required services against the RICS QS Scope of Services 2022 to define core and additional services precisely.
Step 3
Estimate the resource required (hours by grade) for each work stage. Apply your firm's charge rates to produce a cost model.
Step 4
Apply a risk allowance where the scope or programme is uncertain. Document the basis for this allowance.
Step 5
Draft the proposal covering: executive summary, scope of services, key assumptions and exclusions, team and CVs, programme, fee breakdown, commercial terms, and PII confirmation.
Step 6
Review for compliance — ensure your proposal does not commit to services outside your competence or for a fee that is clearly inadequate for the scope.
Step 7
Submit and retain a complete copy on file. Record in your opportunity tracker.
Section 4
Common Mistakes to Avoid
- Pricing without a clearly defined scope — this is the most common cause of fee shortfalls.
- Failing to include assumptions and exclusions, leaving the firm exposed to scope creep.
- Underpricing to win work, leading to under-resourced delivery and poor client outcomes.
- Not including a programme or resource plan, making it difficult to manage fee drawdowns against progress.
- Submitting a proposal without confirming PII adequacy for the scale of the commission.
Section 5
APC Competency & Quick Reference
This topic is relevant to: Business Development (Level 1–2), Client Care (Level 1–2), Commercial Management of Construction (Level 1), RICS Rules of Conduct.
What are the main fee structures used in QS appointments, and what are the risks of each?
The three main structures are: lump sum (fixed scope risk — if scope expands, fee remains fixed unless varied); percentage of construction cost (scope is flexible but creates a conflict of interest if the QS inflates costs to increase fee); time charge (unlimited cost to client — suitable for undefined scope but requires careful management).
What should always be included in a fee proposal to protect both parties?
A defined scope of services, key assumptions and exclusions, a programme and resource plan, the commercial terms and fee breakdown, PII confirmation, and reference to the governing appointment form. This ensures clarity and reduces the risk of later disputes.
How does the RICS Standard Form of Consultant's Appointment relate to a fee proposal?
The Standard Appointment (May 2022) provides the contractual framework — including liability clauses, dispute resolution, and insurance requirements — that sits behind the fee proposal. The proposal should either incorporate it by reference or be submitted alongside it.
Section 6
Pre-Appointment Checklist
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Tender documentation reviewed in full and clarifications sought where needed
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Scope of services defined against RICS QS Scope of Services 2022
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Resource estimate (hours by grade) completed
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Risk allowance considered and documented
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Assumptions and exclusions clearly stated in the proposal
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Programme and team structure included
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PII confirmation included or ready to provide
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Commercial terms (incl. payment terms, variation mechanism) stated
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Proposal reviewed by director/senior before submission
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Copy of final submission retained on file
Section 7
CPD Learning Outcomes
- Understand the different fee structures used in QS appointments and the risk implications of each.
- Produce a compliant, clearly scoped fee proposal that protects the firm commercially.
- Apply the RICS QS Scope of Services 2022 framework when defining and pricing services.
Section 8
Further Reading
- RICS QS Scope of Services 2022
- RICS Standard Form of Consultant's Appointment and Explanatory Notes (May 2022)
- RICS Rules of Conduct (Global, October 2021)
- RICS Risk, Liability and Insurance Guidance Note (1st edition, April 2021)
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