The capacity of professional services in the built environment to produce revenue and employment has contributed to the significant impact of the built environment on socio-economic development [1,2]^[1][2]. When an individual of professional standing presents themselves as possessing the necessary qualifications in a specific professional field, they are thereby implying their ability to provide services related to said profession at the requisite level of proficiency and knowledge. In the built environment, most professions are characterized by a client-centric approach, where practitioners are required to be responsive to client demands and actively engage in self-initiated professional development. The primary focus in the upcoming decade will be on the imperative of accurately predicting and effectively meeting evolving client demands. The implication of that is that professionals and firms can be affected by changes in client payment agreements.

However, while there are value-adding services and development, few studies have focused on challenges associated with the operationalization of firms from this standpoint. The effectiveness of construction or built environment consultants has a significant impact on the overall quality of infrastructure facilities as well as the sustainability of the project ^[3]. Project performance and the success of infrastructure delivery have been strongly linked to an enabling environment for professionals involved in a project to deliver effectively. As previously indicated by existing studies, the construction industry is globally known to be unfriendly to professionals ^[2].

Therefore, conflicts arising from financial disagreements over payment and the scale of professional fees have been found to be a critical factor influencing project success in sub-Saharan Africa [4,5]^[4][5].

Harsh economic realities and the shrinking pool of profit from taxation and overhead costs have further brought payment issues to the limelight on how professionals involved in a project are [2,6]^[2][6] remunerated. Because of the market’s competitiveness, it is common practice in the South African construction industry for professionals to provide heavily discounted professional fees on building projects. This is owing to the fact that the market is so competitive. This decrease in costs typically offered by professionals lies somewhere in the middle of the suggested rates published by the regulatory body and a fee far lower than what would be considered reasonable compensation for the services being provided [7,8]^[7][8]. The level of profitability, expansion, and, to a significant extent, reputation that construction companies enjoy is directly proportional to the degree to which the projects in which they are involved are effectively remunerated. However, as stated by Okonkwo & Wium ^[9], the scale of fees for professional remuneration has declined over the years for some professions while others have increased. This uneven distribution of fees has attracted challenges within the South African built environment. The ability to provide professional services that are of such high quality that they fulfill the expectations of the client as well as professional and ethical requirements while working for modest fees is one of the greatest obstacles that consulting professionals face in the modern era. This is of utmost importance, given that the commitment of professionals to ensuring the success of the project is strongly linked to incentives. The practice of discounting professional fees benchmarked against the stated professional fee guidelines is partially responsible for the drop in professional fees seen in the country over the years. Another contributing factor is the use of competitive tendering ^[9]. This problem is well identified in the South African built environment. As stated by Adendorff et al. ^[2], the challenge with fee variability is that professionals are remunerated far less than anticipated, and this knowledge can influence how professionals perceive their commitment and contribution to the project.

Understanding fee variability in the built environment sector in South Africa is significant because of its profound impact on the socioeconomic development of the nation. The sector is prominent for its contribution to revenue generation and employment opportunities. Professions in the built environment are characterized by a client-centric approach, emphasizing responsiveness to client demands. The unintended consequence of this is downplaying the needs of the professionals to be motivated to execute the project effectively. It is, therefore, not surprising that the effectiveness of construction consultants directly impacts infrastructure quality and project sustainability. Fee-related conflicts have been identified as critical factors influencing project success in sub-Saharan Africa, emphasizing the need for a comprehensive assessment.

2. Assessment of Fee Variability among Built Environment Professionals in South Africa

2.1. Overview of the Built Environment Sector in South Africa

The built environment sector in South Africa is a complex and dynamic ecosystem that brings together various disciplines. The South African built environment has had a decade marked by significant expansion and success, particularly as a direct result of the significant infrastructure spending undertaken by the South African government [2,10,11]^[2][10][11]. The government has further maintained the need for a strategic framework to guide the growth of the built environment sector, emphasizing sustainable development, infrastructure investment, and improved service delivery. The built environment sector in South Africa is a critical driver of economic and social development. However, the challenge of fee variability among construction professionals presents a significant obstacle to achieving optimal sector performance. Addressing this challenge requires collaboration among professional bodies, regulatory authorities, industry stakeholders, and clients. Standardizing fee structures, enhancing transparency, improving professional education, and fostering ethical practices are crucial steps toward creating a more equitable and sustainable built environment sector in South Africa [4,12]^[4][12]. In the South African built environment, it is commonly believed that the construction sector is plagued by hostile relationships between project stakeholders, ultimately leading to conflicts. This has been largely attributed, amongst other things, to issues over fees between the professionals and the clients ^[9]. South African consultants working in the built environment are exposed to potential financial risks as a result of customers’ expectations that some elements of their work will be completed at risk. Therefore, consultants would finish high-risk projects in exchange for the potential of receiving compensation further down the line [2,13]^[2][13]. A contact between a practitioner and a client that allows the client to assess the quality of the services delivered is considered the definition of professional service ^[1]. In addition to this, professional services are distinguished by a significant emphasis placed on in-depth industry knowledge. As a result, businesses that provide professional services need to staff their teams with individuals who are knowledgeable in their respective professions [14,15,16]^[14][15][16]. However, while clients largely understand the essence of professionalism, there is a huge reluctance to appropriately compensate for this expertise. In spite of the fact that there are a variety of pricing strategies, one of the most common approaches for determining the cost of professional services is the percentage fee determination method, which involves allocating percentages to services rendered at a number of different stages of the construction project [1,14]^[1][14]. As a result, the variety of client requirements and expectations in the sector could be prone to subjectivity, imprecision, inexhaustibility, and complexity ^[17]. The authors further stated that, unfortunately, the selection of contractors in the construction sector is mostly driven by cost rather than value, most of the time. This may be because of the recent economic downturn and the limited economic power of clients. Enhancing transparency in fee negotiations and educating both clients and professionals about the intricate facets of construction projects would aid in aligning expectations and fostering a more cooperative environment. Ethical practices within the industry would mitigate instances of fee undercutting and bribery, ensuring a level playing field for all professionals involved.

2.2. Fee Variability in the Built Environment

One of the enduring challenges within the South African built environment sector is the variability of fees among construction professionals. Fee variability refers to the disparities in the charges and remuneration demanded by different professionals for similar services. This challenge has deep-rooted causes and far-reaching consequences that impact the sector’s efficiency, equity, and overall performance ^[18]. The economic incentive that is connected with having good fees is directly tied to project performance, and as a result, it is a critical determinant in determining whether or not construction projects are successful [4,19]^[4][19]. This has been considered essential as it is intricately linked to motivation. While professional bodies have stated that consulting services are not a commodity and, as such, the use of competitive tendering procurement procedures that are based on price is inappropriate, it is important to note that these bodies have also maintained that consulting services are not a commodity. This argument is predicated on the fact that while it is possible to draft specifications against which the quality of commodities (physical things) will be evaluated, such specifications cannot be easily written up for consulting services. While it is possible to draft specifications against which the quality of commodities (physical goods) will be evaluated ^[20]. Low professional fees have been indicated as a source of risk to the success of a project [9,21]^[9][21]. This is because professionals will be inclined to give less consideration to discharging expertise, produce simpler project information, bid low with the intention of doing less than in the enquiry, and make up fees with claims and variations. Consequently, there will be a decline in the quality of professional services, which will pose a risk to the practice of consultants. Problems with quality frequently lead to “unsafe structures, delays, cost overruns, and disputes in construction contracts”. However, extant studies by Hoxley ^[6] in the U.K. also revealed that differences in fee levels cannot be empirically linked to a low quality of professionalism. In describing the South African built environment, Adendorff et al. ^[2] stated that certain phases of the economic cycle put professional consultants in the built environment in a position where they have no choice but to take risks in their work. There is not yet a well-defined compensation mechanism for consultants working in high-risk environments in South Africa. The expectation that professionals should put their time and the products of their intellectual labor at risk is growing. The inclination among developers and employers is to use this situation to some degree for their own financial gain. Several reasons have been attributed to the disparities in how professionals are remunerated and their fee variability. For instance, Cruywagen & Snyman ^[7], in an evaluation of quantity surveyors’ affordability in South Africa, discovered that quantity surveying services can be made affordable; nevertheless, the quantity surveyor is more vulnerable to the risk of not being able to make the service affordable on certain types of projects, and the risk further increases when the value of the project decreases. It also implied that clients’ contractual offer of a largely reduced remuneration often decreases their willingness to give their total effort to the project’s success as the professionals are given to sourcing for other means of income. In light of these complexities, bridging the gap in fee variability necessitates a multifaceted approach. Collaboration among industry stakeholders, including professional bodies, regulatory authorities, and clients, is vital. By fostering a deeper understanding of the intricate nature of professional services and their value, clients can be encouraged to prioritize fair compensation over cost considerations alone. In essence, recognizing the nuanced relationship between fees and project outcomes is pivotal for the evolution of the South African built environment sector. Addressing fee variability is not just about equitable compensation; it is about elevating the entire sector’s performance, fostering professionalism, and ensuring that consultants can deliver their expertise without compromising on quality. Through concerted efforts to establish transparent fee structures and educate stakeholders, South Africa’s built environment can thrive sustainably, benefiting professionals, clients, and the nation.

Current Fee Levels

The Association of South African Quantity Surveyors (ASAQS) publishes a suggested tariff of professional fees at regular intervals. This recommended tariff is the foundation for deriving a fee proposal for a building project for private clients. When work is carried out for government departments, the fee scale is used unconditionally almost all of the time. This is under the condition that the most recent tariff of fees that was approved by the National Department of Public Works and published in a government gazette is used (it typically takes some time between the publication by the ASAQS and the approval by the government) ^[7]. Two main challenges have arisen from this: although the tariff of fees is being used as a basis for fee negotiation, quantity surveyors are being forced by the market’s competitiveness to submit discounted fee proposals. These proposals usually fall somewhere between the recommended fees as published and a fee significantly lower than what would be considered a fair remuneration for the services being provided. This is not unique to the profession of quantity surveying or even to South Africa. Secondly, bodies such as ASAQS have recently not developed a more updated scale of fees to compete favorably with other professional bodies. These circumstances often lead to desperation, which affects the success of a project. Current studies have advanced the need for the introduction of innovative approaches in project delivery through digitalization [22,23,24]^[22][23][24]. However, other issues, such as fee variability, are still relevant in broadening the insights on critical factors influencing project failure. To this end, it is neither in the client’s interest nor in the project’s interest for the consulting professional to be selected based on the lowest charge rather than the quality of service. It neither benefits the client nor the project [25,26]^[25][26]. The significant degree of disparities across consulting businesses suggested that while some consulting firms could claim an increase in earnings, most consulting firms reported a reduction in earnings. This was the case, despite the fact that some consulting firms were able to report an increase. Even though there was a significant increase in the number of consulting companies unhappy with their profit margins, the vast majority of consulting businesses continued to believe that their profit margins were either sufficient or good ^[18].

2.3. Fee Variability and Project Performance

It is possible that different construction companies, each of which is subject to a unique combination of dynamic institutional and task environment influences, will come to different conclusions regarding the factors that determine the success of a certain project ^[4]. It is, however, unanimously agreed that the satisfaction of project stakeholders is imperative to project performance and the success of infrastructure delivery. Previous studies have attributed motivation and effort on projects by professionals to be linked with the satisfaction of professionals, as fee reduction invariably affects quality [26,27]^[26][27]. However, beyond mostly anecdotal and descriptive reporting on the fundamental role that fee structure plays in determining project success, nothing has been carried out to explore the extent to which project performance and fee structure are empirically associated. This is something that has been carried out relatively little in construction management research. Even the limited body of material that is now available lacks a conceptual framework to explain how the performance of a construction project is affected by economic incentives such as fee scales in connection to other significant contextual factors that are part of the larger construction environment. The current understanding of the dynamic interplay between the many factors that determine the success of a project is incomplete and, at best, uncertain. This is because there is a dearth of theory and study in this particular field. Companies are typically founded to offer a certain product or service to a specified demographic for an extended period of time. However, there are a few obstacles that could be in the way of the consistent delivery of services to customers by the organization. An example of this would be the incorrect administration of the fee scale. Hoxley ^[6] investigated fee tendering services in the U.K. and discovered no relation between varying fee levels and professionalism; however, Okonkwo and Wiam ^[9] brought to the limelight the impact of discounted fees on project performance in the South African industry. In recent years, there has been a rising controversy in the South African construction industry about the influence of discounted rates on a perceived deterioration in the quality of professional services offered by professionals in the built environment. This argument has been sparked by the perception that the quality of professional services provided by professionals in the built environment has been declining ^[28]. This is not only peculiar to the South African construction industry, as other studies such as Adesi et al. ^[1] have identified challenges in fee variability and remuneration as critical in influencing the ability of professional firms to respond to contractual arrangements. A significant amount of variance among consulting firms suggested that some firms were able to claim an increase in earnings, while the majority of consulting firms reported a reduction in earnings ^[2]. In conclusion, the intricate relationship between fee variability and project performance remains a critical enigma in the realm of construction. While it is universally acknowledged that stakeholder satisfaction is vital, the tangible connection between fee structures, professional motivation, and project outcomes demands comprehensive exploration. Bridging this knowledge gap enriches the understanding of project success determinants and empowers professionals, clients, and stakeholders to shape a more effective and thriving construction landscape. The industry can only shed light on the multifaceted interplay governing project performance in fee variability through sustained research, theoretical development, and empirical investigations.

2.4. Overview of Professional Fees in Africa

Regulations surrounding fees for construction professionals can vary widely across African countries due to differing legal systems, levels of development, and economic structures ^[29]. Many countries in Africa have a specific body or council that regulates the construction industry, such as the National Construction Authority in Kenya or the Construction Industry Development Board in South Africa ^[30]. These bodies often set standards, qualifications, and guidelines for fees for construction professionals. Also, the built environment profession is structured differently across the continent; for instance, while building is a professional discipline in Nigeria recognized by the constitution with its own professional bodies, the discipline is not recognized in South Africa. Hence, while there are fee provisions for Builders in Nigeria, they are nonexistent in South Africa. Fees can be determined by various factors, such as project complexity, location, professional experience, and scope of work ^[31]. Some countries have stipulated fixed fee structures, while others allow market forces to determine fee levels ^[32]. The fee structure across Africa is different for consulting services, project management, construction, and post-construction services [33,34]^[33][34]. In Nigeria, for instance, the Council for the Regulation of Engineering in Nigeria (COREN) regulates engineering professionals and services. The professional fee is set by these regulatory bodies and subject to statutory approvals. The fees are also sectioned based on the total contract amount and type of project. Fees for other professional bodies are also often influenced by stipulations from various professional bodies managing each discipline, such as the Nigerian Institute of Architects (NIA), the Nigerian Institute of Building (NIOB), the Nigerian Institute of Quantity Surveyors (NIQS), and the Nigerian Society of Engineers (NSE), among others. In Kenya, the National Construction Authority (NCA) and the Board of Registration of Architects and Quantity Surveyors (BORAQS) regulate construction professionals and their fees. They establish standard scales of fees and provide guidelines for professional conduct in the construction industry. This is also similar to Ghana, where regulatory bodies such as the Ghana Institution of Engineers (GhIE) and the Architects Registration Council (ARC) may provide guidelines and standards for fees. Payment for construction professionals often follows a structured format, usually involving a percentage of the total project cost. Progress payments, milestone-based payments, and upfront payments are commonly used payment structures across the continent.