Fee Structure
How BUKHARIN Charges and Why the Structure Matters
BUKHARIN charges a fixed lump sum per project phase. The fee is determined by scope, not by what the project costs. That is how it works. Here is why it matters.
Most people hiring an owner's representative for the first time don't know what to expect on fees. That is understandable. It isn't a commodity service with a posted price list. But it's a question worth answering clearly, because how your OR charges directly affects whose interests they're actually serving.
There are three common fee models in the industry. BUKHARIN uses one of them. Below is an honest assessment of all three.
Industry Models
The Three Fee Models, and What Each One Incentivizes
Percentage of Construction Cost
How it works
Fee is a percentage of the total construction budget. Grows automatically when project costs grow.
Who uses it
Many OR firms
The incentive
Fee grows with project cost. Subtle pressure to allow budget increases.
Hourly Rate
How it works
Billed per hour of time spent. Total cost unknown until project completes.
Who uses it
Some ORs, typically for limited scope
The incentive
More hours mean more revenue. Delays and complexity increase income.
Lump Sum per Phase
How it works
Fixed fee agreed upfront for each project phase. Does not change as the project cost changes.
Who uses it
BUKHARIN
The incentive
Save the client money. That's the only incentive.
Industry Standard, Owner Cost
The Problem with Percentage-Based Fees
Percentage-based fees are the most common model in the industry. They are also the most problematic for owners.
Contractor selection.
One of the highest-value things an owner's representative does is vet, bid, and recommend a general contractor. In a percentage-based model, the OR has a financial incentive, even a subtle and unconscious one, to recommend contractors who bid higher. A more expensive GC means a larger project budget. A larger budget means a larger OR fee. The OR's financial interest and the owner's financial interest are pointing in opposite directions at exactly the moment when alignment matters most.
Change order management.
When a GC submits a change order and the project budget grows, a percentage-based OR earns more. There is no financial reason for them to push back hard. Every dollar added to the project adds to their compensation. The owner loses twice: once on the change order itself, and again on the OR fee that grows with it.
Value engineering.
When BUKHARIN identifies a way to deliver the same outcome for less, whether through a smarter material spec, a revised sequence, or a better procurement approach, that savings goes entirely to the client. In a percentage model, every dollar saved is a dollar out of the OR's pocket. The incentive to find savings simply isn't there.
This is not an accusation. Many OR professionals using percentage-based fees operate with complete integrity. But the structure creates a misalignment that owners should understand before signing an engagement letter, especially at the $1M+ project tier where the numbers are significant.
When Time Becomes the Product
The Problem with Hourly Fees
Hourly billing is sometimes presented as the most transparent model. You pay only for time spent. In practice, it creates its own set of problems.
Perverse incentives on time.
An OR billing hourly earns more when a project takes longer. Delays, extended negotiations, additional meetings, and slow GC performance all increase billable hours. The OR has no financial incentive to drive resolution and keep the project moving efficiently.
Owner reluctance to call.
One of the most consistent findings in how owners experience hourly OR engagements: they start avoiding calls. A question that costs $300 to ask becomes a question owners try to answer themselves. That hesitancy is completely rational from a cost management standpoint, and yet it defeats the entire purpose of having an advisor.
Unpredictable total cost.
Hourly billing makes it structurally impossible to know what you'll spend until the project ends. For owners managing capital budgets, that uncertainty is a real planning problem.
A lump sum eliminates all of this. The fee is fixed. You can call as often as you need to. And there is no ambiguity about what you're spending on advisory services.
The BUKHARIN Approach
What a Lump Sum Means in Practice
When BUKHARIN quotes a lump sum for a phase, that number is fixed at the start of the engagement. It does not change because the GC submitted additional change orders, because material costs increased mid-project, or because the project ran longer than originally scheduled due to normal construction complexity.
More importantly, BUKHARIN's financial interest is completely aligned with yours. The goal at every decision point is to bring your project in at the best possible quality for the lowest possible cost, because there is no other incentive at play.
Scope by Phase
What Each Phase Covers
Each phase is priced and engaged independently, with a defined scope and timing.
Pre-Construction
Before the GC is hired or breaking ground
- Constructibility review
- Value engineering
- Bid leveling
- Contractor vetting and recommendation
- Contract review
- Schedule and budget validation
- Team assembly
Construction Oversight
GC mobilization through substantial completion
- Owner's single point of contact
- Site visits per agreed schedule
- AIA pay application and invoice review
- Change order analysis
- Lien waiver tracking
- RFI and submittal review
- Budget reporting
- Meeting documentation
- Vendor coordination
Closeout
Substantial completion through final sign-off
- Punch list creation and management
- Final walkthrough
- Retainage release strategy
- Warranty documentation
- Certificate of Occupancy coordination
Pricing Inputs
How the Fee Is Determined
Because every project is different, there is no single posted fee. The lump sum for each phase is determined after an initial conversation covering:
Project scope
Total square footage, number of rooms, finish level, and complexity.
Project location
Regulatory complexity varies significantly by market. Manhattan co-op boards, Hamptons permitting, and Florida coastal codes each add distinct layers.
Team in place
Engaging with no architect or GC selected is different from stepping into an existing team mid-project.
Project status
Pre-design, mid-design, or already under construction each require a different engagement structure.
Timeline
Compressed schedules require more intensive oversight and are priced accordingly.
After that conversation, BUKHARIN provides a clear, written engagement proposal with a fixed fee per phase, a defined scope of services, and a project duration assumption, so there is no ambiguity about what's included or what the boundaries of the engagement are.
Schedule Overruns
What Happens If the Project Runs Long
The construction oversight lump sum is quoted based on an assumed project duration, which is established in the engagement agreement before work begins. That assumption is based on the agreed construction schedule.
If the project extends materially beyond the agreed duration for reasons outside normal construction complexity, such as owner-directed scope additions, GC performance failures, permit delays beyond the original schedule, or force majeure, the engagement agreement specifies how that is handled. Typically this takes the form of a monthly continuation fee that activates if the construction phase exceeds the agreed timeline.
The engagement agreement spells this out explicitly before the first invoice. There are no surprises mid-project.
The initial consultation is always complimentary. Ruslan will tell you directly whether an engagement makes sense for your project, and how the fee would be structured, before any agreement is signed.
FAQ
Frequently Asked Questions
Do you charge for the initial consultation?
No. The first conversation is always complimentary. It's an opportunity for both parties to understand the project and decide whether an engagement makes sense.
Can I engage BUKHARIN for just one phase?
Yes. Each phase is a separate engagement with its own lump sum. Some clients engage BUKHARIN only for pre-construction, to get contractor selection and contract negotiation right, and then manage construction themselves. Others engage for all three phases. The structure is flexible.
Why don't you publish fee ranges?
Because a number without context is misleading. A $5M pre-war co-op renovation in Manhattan and a $5M new construction in Palm Beach are completely different engagements in terms of regulatory complexity, team management, and time commitment. The fee reflects the actual scope, not a formula applied to a budget number.
What happens if the GC delivers over budget? Does your fee increase?
No. The lump sum is fixed at the start of each phase. BUKHARIN's fee does not change if the project budget grows due to change orders, material cost increases, or scope additions by the owner. That is precisely the point of the lump-sum model.
How does the fee compare to percentage-based OR fees?
On larger projects, the lump sum is often meaningfully lower than what a percentage-based OR would charge. The more important distinction is alignment. BUKHARIN's fee does not grow when your costs grow. On that dimension, there is no comparison.
Do you work on projects outside NYC and Florida?
Yes, for the right project. BUKHARIN serves clients in the Hamptons, Miami, Palm Beach, and select national markets including Aspen, Greenwich, and Malibu. Projects outside the primary service areas are evaluated on scope, fee, and logistics. The initial conversation is the place to discuss that.