Tariff-of-fees schedules may once have served a vital purpose, but today they are little more than legal anachronisms, argues Ronnie Siphika.
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At first glance, professional bodies’ published “tariffs of fees” for engineers, architects and construction managers read like a comforting rule of thumb: simply multiply the building cost by a fixed percentage and voilà, you have your fee. Yet, beneath this veneer of simplicity lies a tangle of legal, market and ethical contradictions that render these schedules unsustainable — and, in many respects, legally questionable.
Tariffs date back decades, when professional associations sought to protect fledgling practices from cut-throat competition by recommending uniform charges. Over time, they ossified into de facto price anchors: clients and consultants alike have regarded them as a convenient shortcut to “reasonable” remuneration.
Yet, under South Africa’s Competition Act, any concerted practice or agreement that fixes prices — even in the name of “guidance” — amounts to anti-competitive conduct. By implicitly encouraging members to charge similar rates, a tariff may amount to coordinated pricing behaviour that resembles cartel conduct. In an era where competition authorities hammer home the perils of price-fixing, tariff schedules face the real prospect of being swept away as relics of a bygone era.
It is tempting to imagine that when Engineering Council of South Africa (ECSA) or South African Council for the Project and Construction Management Professions (SACPCMP) publishes a tariff, it wields the force of law.
In fact, both bodies lack the statutory powers to impose fees; their scales are merely advisory.
Should a dispute ever reach the courts, judges would look to the written contract and prevailing market rates — not an external guideline — to decide what fee is “reasonable”. Moreover, if a regulator attempted to discipline a member for deviating from the published tariff, it would risk an ultra vires challenge: acting beyond its authority and undermining its own legitimacy.
Tariffs were designed for a simpler age — when a typical suburban dwelling resembled its neighbours’, and risk profiles were uniform. Today, projects range from modest starter homes to cutting-edge mixed-use developments, each with its own blend of complexity, liability and specialist inputs. Yet, tariff percentages seldom keep pace with inflation, advances in building technology or escalating professional indemnity premiums.
The result is a widening gulf between what the tariff recommends and what consultants actually charge—especially those with reputations to protect. Far from being ceilings or floors that anchor the market, tariff rates are routinely exceeded or ignored altogether.
Modern procurement favours milestone-based, lump-sum, or even incentive-linked fee structures that align payment to performance. By contrast, a rigid percentage tariff demands a one-size-fits-all approach, forcing clients into awkward negotiations over retentions, stage payments and change orders. For smaller projects—where every rand must stretch—front-loading an inflated fee can cripple cash-flow before construction even begins.
Savvy clients and funders now insist on clearly defined deliverables, capped expenses and hourly or phase-based rates for extras. A static tariff simply cannot accommodate this level of financial precision.
Professional codes emphasise that practitioners must act with integrity, place clients’ interests first, and charge fair, market-reflective fees. Paradoxically, strict adherence to a tariff undermines these very principles. By dissuading consultants from tailoring services to a client’s needs — whether by offering a leaner design-only package or by scaling back site supervision — the tariff stifles professional autonomy and limits cost-effective innovation. Worse, it creates a moral hazard: consultants may feel compelled to deliver “tariff-scale” services even when the project warrants much less.
If tariffs are no longer tenable, what replaces them? The answer lies in transparent, negotiated agreements that list deliverables, tie payments to milestones and articulate clear “extra-scope” rates. Such an approach not only complies with competition law but also aligns with modern project-management best practice. In place of an opaque percentage, clients receive a detailed breakdown of design, documentation, procurement and contract-administration costs — each negotiated in the light of actual risk and complexity.
In practice, this means moving from tariff to tender: soliciting proposals from multiple firms, comparing tiered service-options (for example, design-only versus full turnkey), and anchoring fees to clearly defined outputs rather than arbitrary percentages.
It also means embracing technological efficiency — leveraging building information modelling, cloud-based collaboration, and automated cost-estimation tools — to drive down overheads and pass savings on to clients.
Tariff-of-fees schedules may once have served a vital purpose, but today they are little more than legal anachronisms.
They risk being interpreted as price-fixing, despite being framed as guidance; they conflict with competition law; by freezing outdated rates, they drift ever further from market reality; and by constraining professional autonomy, they work against the very public interest they are meant to protect.
The future belongs to transparent, deliverable-led fee models—negotiated, documentable and adaptable to the demands of 21st-century projects. In this new landscape, the only tariff that matters is the one the market freely agrees.
Ronnie Siphika is CEO of the Construction Management Foundation, a nonprofit organisation that advocates for alignment between industry, training, and transformation in the built environment.
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