ABC Architects and XYZ Partners are part of a mixed-use affordable housing project with a 10% total design fee; the architectural portion equals 35% of the total design fee. If minority-owned business allocation requires ABC Architects to receive 20% of the design fee, what is the maximum fee XYZ Partners can earn?

• A. $180,000
• B. $360,000
• C. $540,000
• D. $270,000

Answer: (D)

Allocating a fixed design fee among firms under a minority-owned business requirement. The total design fee is 10% of the project cost, and the architectural portion is 35% of that total design fee. The MOB rule says ABC Architects must receive 20% of the total design fee. Since 20% is less than the 35% architectural portion, there is room for XYZ Partners to take the remainder within that architectural share.

Within the architectural portion, ABC takes 20% of the total design fee, leaving 15% of the total design fee available for XYZ (because 35% minus 20% equals 15%). To express this in dollars, use a total design fee amount that makes the numbers clean. If the total design fee is 1,800,000, ABC would receive 360,000 (20% of 1,800,000), the architectural portion would total 630,000 (35% of 1,800,000), and XYZ could earn up to 270,000 (the remaining 15% of 1,800,000) within the architectural portion.

Therefore, the maximum XYZ Partners can earn is 270,000.