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Number six: "Your hotel client is looking for you to provide a very preliminary estimate for the construction cost in order to have a number to use in the fee negotiations. Which system would you likely use? Statutory method, unit based pricing, square foot pricing, assemblies method?" I'm going to tell you right off, something you're not really supposed to do in these things, I just made up statutory method. That's not a real thing.

Marc: Good. I was worried that that was a real thing that I never heard of.

Mike: I had Marc worried that it was something he'd never heard before. The potential answers are B, C, or D. And again, this is one of those ones where you want to look through the question and see what are the key pieces of information. So, it may not seem like it's that key, but one of them is hotel, because the hotels a very particular kind of typeology.

The other thing you're noticing here is the word preliminary. This means nothing has been designed yet. You're not in a situation where you have a lot of drawings to think about. You have a hotel, very repetitive. There's a whole bunch of similar rooms. The construction system is probably pretty much based on the fact that it's a hotel.

There's this very specific set of ways of building and ways of thinking about how hotels work that are ingrained in the way that these things tend to move forward, and we haven't designed anything yet. We're at the preliminary spot. So, the answer to this question is likely to be unit-based. What the unit is, is a hotel room. So, the kinds of places this might show up would be, say, a school, or have a school with 30 classrooms, or a hotel with 500 beds, or anything that has that very repetitive element and that there's a very clear set of relationships.

If I have a hotel with 30 beds, I'm going to have a much smaller admin area, I'm going to have a much smaller laundry area, I'm going to have a much smaller restaurant that goes with that. If I'm going to have a hotel with 500 or 1,000 beds, I'm going to have a much bigger restaurant, I'm going to have a much bigger laundry room, I'm going to have a whole wing that's admin. So there's going to be a very clear relationship of the things that aren't rooms to the number of rooms.

So, you can fairly easily look up in the various books and say, "Typical construction of a hotel room is X amount, and that would include the room, plus its percentage of the other stuff." Same with schools, same with any of those repetitive elements. Now, if this was not a hotel, then I very likely would be saying square foot pricing. Because typically in that situation, I'd be making my best guess as to how big I thought something would be in the preliminary and that I'd be multiplying it by a square footage cost that seems reasonable, like $200 a square foot or $250 a square foot for new construction.

I'd have to come up with what I thought the square footage was, even though we haven't designed it yet, in order to then multiply it by a known set of numbers that seem reasonable out in the world. So, square foot pricing would be a totally reasonable answer. It's just that because of the hotel, I would go with unit-based pricing as it makes more sense for this specific situation.

Assemblies method, that's farther down the road. That's when you're in the situation where you've got a design, you're going through design development, you know that it's going to be CMU backup with insulation and an air gap and then a four-inch brick in front of it. You know enough about the building that you can actually figure out what the assemblies are basically like, and then you can do linear foot calculations per assembly and then add it all together. But there's no way you could do that at a preliminary moment, you just don't have enough information.