The influence of fees on the quality of professional services in South Africa

• Published in: Proceedings of the Institution of Civil Engineers. Management, procurement and law procurement and law, 2021-11, Vol.174 (4), p.163-173
• Main Authors: Laryea, Samuel, Watermeyer, Ron, Govender, Neil
• Format: Article
• Language: English
• Subjects: Biological competition; Competition; Construction industry; Councils; Experts; Markets; Professional services; Professionals; Tariffs; Urban environments
• ISSN: 1751-4304; 1751-4312
• DOI: 10.1680/jmapl.20.00022

The abolishment of the tariff of professional fees in the construction industry is a growing international trend since the late 1980s. In recent years, this has become a topical issue among built environment professionals in South Africa following a ruling by the Competition Commission in 2016 that prohibits professional councils from publishing a tariff of fees. The period following the ruling has coincided with a perceived decline in the quality of professional service outputs, which some have attributed to the lowering of fees resulting from market competition. However, this may not necessarily be true, as other factors also influence quality. This research examined the claims through the lens of professionalism theory, which asserts that professionals have a ‘standard-of-care’ obligation that is not dependent on fees. The examination of data across 15 different professional services disciplines in a new universities project demonstrates that market competition led to fee offers that were lower in comparison with the tariff of fees published by built environment professional councils. However, the professionals delivered a high standard of work, which further challenges the claims that lower fees lead to a decline in the quality of professional service outputs.