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American Institute of Architects Settles U.S. Suit on Pricing Policy : Antitrust: The association signed a consent decree promising not to prohibit its members from bidding competitively.

July 06, 1990|SHARON WALSH | THE WASHINGTON POST

The American Institute of Architects on Thursday settled an antitrust suit filed by the Justice Department alleging that the association tried to discourage price competition for architects' services.

Representatives of the 55,000-member association signed a consent decree in which they agreed not to adopt policies dictating pricing practices to members. They also agreed to educate their members about antitrust laws.

The settlement ends a nationwide investigation of the pricing practices of architects that lasted 4 1/2 years. It is the second time that the AIA has been accused of violating antitrust law. In 1972, the AIA signed a consent decree that alleged violation of the pricing statutes.

The association did not admit guilt in either instance. "We take the position that we did not violate antitrust laws," said David K. Perdue, associate general counsel of the association.

(Raymond L. Gaio, president of the Los Angeles AIA chapter, said he did not expect the settlement to have much effect on how architects conduct business because "I don't think it (the lawsuit) really dealt with anything the profession was actually doing.")

The complaint alleged that the AIA entered into an unlawful agreement to prohibit architects from bidding competitively for work, offering discounted fees or providing free services. The Justice Department complaint cites a written policy that was adopted by the association's Chicago chapter in 1984 that prohibited such practices.

Washington architect Hugh Newell Jacobsen said Thursday that architects have traditionally felt that they should be chosen for characteristics other than price.

"It's a thing in the rules . . . that you never discuss fees," Jacobsen said matter-of-factly. "If you interview us, select us for our ability, our experience or our necktie, but never talk about fees. Don't come in and have us tell you our design philosophy and then ask us our fee.

"Of the men and women whose work I admire, we'll never do it," he said of the practice of quoting fees for a building when there is a competition for architects.

("I don't respond to a client who asks me to match a competitor's price," said Patrick J. Killen, principal of the Los Angeles firm Architrave and a director of the Cabrillo chapter of the AIA. "It comes down to a question of ego: People should be coming to me for all the right reasons--that I'm the man for the job, and not that I can shave 2% off the price."

("You don't go to a doctor and say, 'Give me a price on an appendectomy,' " agreed Gaio of Los Angeles chapter.)

The Justice Department consent decree does not require architects to engage in competitive bidding, according to Perdue. It simply says the institute may not take actions or adopt policies that restrain them from giving price quotations if they choose to.

Architects charge for their services in a number of ways. Some charge a percentage of the total value of the project. Others charge a lump sum for their work, an hourly fee or a combination.

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