Chapter Fourteen
Types of Building Contract Agreements
Abstract
This chapter essentially consists of clarification of the Bidding Process and Types of Building Contracts, such as Design-bid-build and Design-Build, Construction Manager as Constructor and Bid Solicitation types of building contracts. Advantages and disadvantages of the Lump Sum (or Fixed Fee) contract are examined including the Lump Sum Contract with Price Adjustment. Likewise, various other types of contract are examined such as the Cost-Plus Contract (including advantages and disadvantages), Guaranteed Maximum Price contract, Labor contract and the Unit Price Contract are examined (including advantages and disadvantages), as well as the Project Management Contract, and the Negotiated Contract. Also provided is a detailed list of American Institute of Architects Contract Documents, ConsensusDOCS Contract Documents, and Engineers Joint Contract Documents Committee Contract Documents. Likewise, various forms, applications, certificates, etc. are explained such as performance bond, payment bond, Owner/Architect Agreements, Standard Forms of Agreement, and Integrated Project Delivery.
Keywords
Bid solicitation; Certificate for payment; ConsensusDOCS; Cost-plus contract; Design-bid-build; Field report; Lump sum contract; Request for proposal; Scope of work; Shop drawing
14.1. Introduction
The most effective way to mitigate risk in a sustainable project is having a properly drafted contract. Today, there are several very good contracts in the marketplace. For example, the AIA released “sustainable project” versions of key AIA Contract Documents in 2012 which have been expanded and updated. Today, those AIA Sustainable Project Contract Documents are among the most popular in the industry. Another example of a popular contract document is the Associated General Contractors of America ConsensusDOCS “Green Building Addendum” where the parties designate a Green Building Facilitator (GBF) to coordinate or implement acknowledged goals, which can be a project contributor or consultant. This is discussed below. Also, in some cases the Owner or Lender may prefer to use their own contract. But whatever the case, this contract basically sets up the terms for the parties and outlines the role of the architect in the project. When the architect’s association drafts the AIA contract, it will most likely be more favorable to reflect the interests of architects compared to the other parties to the contract, which is why some Owners and Contractors consider the need for alternative contracts such as ConsensusDOCS or the EJCDC contract. Choosing the most appropriate type of contract that serves your purpose is important as the construction process is often governed by such complicated contracts that involve complex relationships in several tiers. Thus as indicated, there are many forms of Contracts, with some favoring the client, others the builder. But whatever the contract type, it should be taken seriously and carefully scrutinized. Contracts are usually categorized according to the type of payment but can be tailored to incorporate common elements from several different Contract types.
As just mentioned, one alternative to the AIA contracts are the ConsensusDOCS contracts which were developed by a group of construction industry organizations that represent the interests of building owners, contractors, and surety providers. Organizations that represent the interests of design professionals did not play a major role in developing the ConsensusDOCS contracts. Furthermore, a ConsensusDOCS contract does not set any specific standards for the quality of work to be done by design professionals. Another difference between ConsensusDOCS and the AIA standards is that the role of the architect in the communication between the building owner and the contractor is reduced.
Another alternative contract is the EJCDC contract documents. The EJCDC has a suite of contracts relating to construction projects. Like the ConsensusDOCS, the EJCDC contracts also downplay the role of the architect in managing the project.
In addition to the above, it is of great importance in this industry for the contractor to know how to bid a construction job if there is any chance at ever turning a profit. In today’s competitive marketplace, the most effect approach to bidding a construction job is to have an experienced estimator on hand who can utilize an estimating computer program to come up with the best (and lowest) possible cost. Construction bid software can be readily purchased by a general contractor and installed on the computers, or, increasingly, it can be web based. The use of construction bid software is no longer a luxury but has become an absolute necessity for successful bidding, and the benefits of its use are very substantial. The software programs can develop budgets and establish cost baselines, as well as allow general contractors to keep track of the financial status of a project on a daily or hourly basis as opposed to, far less frequently, when done manually by an employee. Furthermore, all budgetary information is stored in one location and is easily accessed as opposed to using the traditional filing system, and the likelihood of errors and omissions is far less than it would be if the computations were done by hand.
14.2. Bidding Process and Types of Building Contracts
Since each construction project is different, the project delivery system should be tailored to the individual requirements of that unique project. Typically the owner chooses the project delivery system that will be employed but may rely on the professional input of architect and construction consultants to determine which project delivery system will best fit the project. With public funded projects, the method of construction delivery may be specified by the local or state jurisdiction. Although there is no set way on how to bid construction jobs, a tried and true method is developing the lowest bid based on an accurate cost estimate. It is obviously important to know how to bid construction jobs as it can often make the difference between success and bankruptcy for a construction contractor. Normally, construction bidding consists of submitting a proposal to carry out a described residential or commercial construction project for an agreed sum and within certain parameters (generally according to the contract documents). Bidding for a project can occur at the construction manager (CM), general contractor, or subcontractor level. Contractors can submit their bids for the total cost of a construction tender to the project owner, developer, or consultant. A decision can then made to award the contract taking into account various factors such as price, contractor qualifications, time to complete the project, etc. Moreover, construction contracts need to be carefully drafted and managed to avoid possible exposure to financial penalties and turning a potentially profitable project into an unprofitable one. As for bidding on Federal projects, the Federal Acquisition Regulation (FAR) 28.102 stipulates that all construction projects over $100,000 are subject to the Miller Act which requires performance and payment bonds. Performance bonds represent a promise of surety to the government that once the contract is awarded, the contractor will perform its obligations under the contract. But whether Federal or private, for the contract to be lucrative, it must minimize or eliminate risk factors as much as possible.
There are a number of project delivery systems, the most common methods of which are discussed in greater detail in Chapter 3. The three primary delivery systems are:
• the traditional design-bid-build (DBB)—Fig. 14.1
• the design-build (DB)—Fig. 14.2
• the construction management (as advisor CM or at-risk CM)—Fig. 14.3
Each of these delivery systems have distinct advantages and disadvantages depending on the project in hand, and all can be used to successfully plan, design, and undertake a given construction project.
14.2.1. Design-Bid-Build
In Design/Bid/Build, also known as the general contracting project delivery method, the process is linear, where one phase is completed before another phase is begun with no overlap. This is the traditional method of project delivery and has been the most widely used construction delivery method since ancient times. It is also the one with which most Owners are familiar. Under the design/bid/build example, the architect is selected under a separate contract that is based on a negotiated professional fee. It therefore commences with an owner selecting an architect to prepare construction documents. Most often the architect will release these construction documents publicly, or to a select group of invited prequalified general contractors, who will be asked to bid on the project which reflects what they believe the total cost of construction will be. This bid is inclusive of various other bids from subcontractor for each specific trade. The general contractor’s fee is generally built into the bid cost. The majority of government contracts are required to bid competitively using this method. Contractors bid the project exactly as it is designed with the lowest responsible, responsive bidder awarded the work. The design consultant team is selected separately and reports directly to the owner. This type of contract is most suited for less complicated projects that are budget sensitive but not necessarily schedule sensitive and not subject to change. The Owner can define and control the design through the Architectural Consultant.
Figure 14.1 Diagram illustrating the structure and schedule of the traditional design-bid-build delivery system.
14.2.2. Design-Build
The trademark of a DB project is that a single entity, either the architect or the construction firm, is solely responsible to the owner for both design and construction of the facility. In the design/build project delivery method, a single point of contact has been proven to foster better communication, lessen confrontational roles between design and construction, and accelerate project delivery which is perhaps its biggest advantage. On this, Mark Cladny of On Site Systems opines, “The design/build approach has been touted as the contracting method of choice for the future, eliminating construction disputes and hastening the design and construction process.” This may be so; the system essentially focuses on combining the design, permit, and construction schedules in a manner that allows the streamlining of the traditional DBB environment. A guaranteed maximum price (GMP) is typically provided by the DBer entity early in the project, based upon design criteria prepared by the Owner and a moderately developed design by the architect. The design-builder is typically either the general contractor or design professional (architect or engineer). This system minimizes the project risk for an owner and reduces the delivery schedule by overlapping the design and construction phases of a project. Where the design-builder is the contractor, any required design professionals will typically be retained directly by the contractor.
As outlined in Chapter 3, there are potential problems associated with the DB delivery system. As an example, cost estimating for a DB project can be difficult say when design documents are preliminary and liable to change over the course of the project. To address this situation, DB contracts are often written to allow for unexpected situations without penalizing either the design-builder or the owner. Organizations such as the Design/Build Institute of America can provide standardized form contracts for design-builders to use, although it is not unusual for the design-builder to provide its own contractual documents, particularly for well-established firms and firms that have previously constructed similar projects.
14.2.3. Construction Manager as Constructor
Using this delivery method, a CM is hired prior to completion of the design phase to act as a project coordinator and general contractor. As discussed in Chapter 3, hiring a CM during the design phase, allows the CM to work directly with the architect or project team and circumvent any potential design issues prior to completion of the construction documents. Once the tender documents have been completed, the CM-adviser invites contractors or subcontractors to bid for the various divisions of work for the project.
14.3. Bid Solicitation and Types of Building Contracts
Bid solicitation is the process of making published construction data (tender documents) readily available to interested parties, such as CMs, contractors, and the public.
Project owners release prepared project details including contract documents and specifications in the form of tender documents (normally for a fee) to interested general contractors, subcontractors, and other interested parties in an attempt to solicit bids. These services are usually subscription based, or a flat fee is charged for a copy of the tender documents. It is difficult to structure a formula for quoting an exact fee largely because it is highly uncommon for two properties to be exactly alike in terms of all the variables that need to be considered. Moreover, it becomes a guessing game trying to quote a fee on a cost per square foot basis without having all the information up front.
The owner is the person responsible for determining the type of contract to be used on a particular project. This will be partly determined by several factors such as the type of project and the amount of risk the owner is willing to accept. There are several basic types of construction contracts currently in use. They are:
• Lump Sum
• Cost-Plus
• GMP
• Unit Price
• Project Management
• Labor
• Negotiated
14.3.1. Lump Sum (or Fixed Fee)
Typically used with DBB method of project procurement, and often in Building Contracts where the contractor agrees to supply all labor and materials for a fixed sum. This type of Contract (also sometimes called “Stipulated Sum” contract) is suitable if the scope and schedule of the project are sufficiently defined to allow the estimation of the project costs. Should the building contractor miscalculate, there is nowhere to go except to absorb the cost. It is the most widely used form of contract in building construction and is generally a more favorable type of building contract for the owner because cost of the project is known from the outset. The cost of management is placed squarely on the shoulders of the contractor. It also adds responsibility in the precontract assessment carried out by the contractor to ensure that all potential contingencies are covered off as agreed extras. This type of Contract provides a degree of certainty for both parties because the Contract clearly spells out what is involved. Once the contract is signed, both parties (the owner and contractor) must live up to the terms of the contract and any modifications that follow will be considered “change orders” which will add to the cost and possible delays. A lump sum agreement normally protects the project owner from unethical contractors hoping to take advantage of an owner.
According to Mark Cladny of On Site Systems, there are many factors which determine if the Lump Sum method is suited to a project. They include:
1. Is there a requirement to have lump sum competitive bidding due to public or internal policy concerns? Do these policies preclude other contracting methods?
2. Have plans and specifications been developed by an Architect and related consultants that exactly depict the project requirements? With the competitive nature of the architectural industry, many architects and designers have come to rely on previously generated details and “canned” specifications, without thoroughly modifying them to depict the current project.
3. Has sufficient time and resources been allocated to produce and final design prior to the start of construction?
4. Does the owner or architect possess the expertise to issue partial documents and coordinate the design and construction process to allow concurrency of design and construction activities by the issuance of bid packages?
5. Have the budgets and financing allowed consideration for the expected amount of scope and nonscope changes? Scope changes are ones regarded as different from the bidding documents due to any number of issues, including:
a. Unexpected or nondepicted site conditions.
i. Changes to the building’s characteristic due to program changes or user requirements.
ii. Changes in technology from the design phase to building turn over.
b. Nonscope changes could include:
i. Claims for delay due to lack of design coordination, inadequate, or nondescript documents.
ii. Ambiguity regarding subsystem design responsibility.
iii. Interference with other contractors or public agencies.
iv. Interference with existing tenants or occupants.
Advantages of Lump Sum Contract
• Low financial risk to Owner. The lump sum Contract price is not subject to any adjustment on the basis of the Contractor’s cost experience in performing the Contract (unless agreed by both parties). This Contract type places the maximum risk and full responsibility for all costs and resulting profit or loss upon the Contractor.
• As the price is fixed, unforeseen contingencies or variations in material or labor prices will not affect the Owner.
• Costs are known at the outset.
• Contractor selection is relatively easy.
• Provides a degree of certainty for both parties because the Contract clearly spells out the expectations and what is involved in the Contract.
• A maximum incentive is provided for the Contractor to control costs and perform effectively and impose a minimum administrative burden upon the Contracting parties.
Disadvantages of a Lump Sum Contract
• The Architect is not involved as this Contract is an agreement between the Owner and the Contractor for a final fixed price sum. As the Architect does exercise his/her traditional role, the quality of work cannot be checked and controlled by an expert.
• It is difficult and costly to make changes.
• Because the specifications may not be clear, the Contractor can use alternative/inferior brands of materials. Only minimum specifications are usually provided.
• Early project start not possible due to need to complete design prior to bidding process.
• Likewise there, one can expect considerable ambiguity in the specifications, measurements, mode of payment, etc.
• Even though the Contract is executed on a fixed price basis, the Contractor may nevertheless claim extras by giving different reasons, since the specifications, measurements, etc. are not precise.
• The Contractor requests money in advance from the Owner and then he proceeds with the work at his own pace. In some cases, the Contractors may deliberately hold up the work toward the end, so as to extract maximum money from the Owner, leaving the Owner feeling helpless as his money is tied up with the Contractor.
Building contractors normally add 10 to 15% to the expected cost of the project to account for unforeseen contingencies. This amount may be increased based on the builder’s assessment of risk and partly depends on the type of project and special circumstances surrounding the project and can either be agreed to be included in the total cost of the contract or agreed as a maximum contingency fund. This means, that provided no surprises eventuate, the owner will not be liable to pay this sum. However, if there are cost overruns associated with the work but which are not due to errors or omissions in the design, but instead are the result of the contractor’s poor performance, or even the weather, then the contractor must absorb the loss with no additional requests for compensation from the owner. However, in practice, sometimes when costs exceed the estimates, disputes may arise over the scope of work or attempts to substitute less expensive materials for those specified. Also, if the contractor is able through superior performance achieve cost savings, these benefits will go solely to the builder. A lump sum contract can also be used in conjunction with an award-fee incentive and performance incentives, providing that the award fee or incentive is based solely on factors other than cost. As for the Stipulated Sum contract, this may contain a section that stipulates certain unit price items. Unit Price is often used for those items that have indefinite quantities, such as pier depth. A fixed price is established for each unit of work.
A Lump Sum Contract With Price Adjustment
This provides for an upward or downward revision of the stated Contract price upon the occurrence of specified contingencies. A lump sum Contract with economic price adjustment can be used when there is serious doubt regarding the market’s stability or regarding labor conditions that may exist during an extended period of Contract performance, and contingency allowances that would otherwise be included in the Contract price can be identified and covered separately in the Contract. It is important here to ensure that contingency allowances are not duplicated by inclusion in both the base price and the adjustment requested by the Contractor under economic price adjustment clause.
14.3.2. Cost-Plus Contract
This is a Contract agreement wherein the Owner agrees to pay the cost of all labor and materials on a cost-plus basis, i.e., the owner reimburses the contractor for all costs associated with the contract in addition to a fee covering the contractor’s profit and nonreimbursable overhead costs. It is therefore somewhat like a Labor Contract, except that here the Contractor buys the materials and provides the labor and is reimbursed accordingly. Cost-plus contracts can be either cost-plus a percentage of costs, under which the fee is an agreed-upon percentage of the “costs” or costs plus a fixed fee where the fee is independent of the contractor’s “costs.” With this type of contract, it is important to define exactly what is included in the “costs” (e.g., are soft costs such as supervision and overhead reimbursable?). Because of the discretionary and subjective nature of a cost-plus building contract—it ends up being the best for the contractor and the riskiest type of contract for the investor or building owner. The owner may suddenly discover that the projects end up being twice what was initially agreed to. Care must therefore be applied when using this type of agreement as it is frequently open to abuse.
This is the most beneficial contract for the contractor, since any additional costs will be covered, thus guaranteeing them a profit regardless of project cost. However, this bid model must not be allowed to be used by building contractors as a haven for poor estimating. The various types of additional costs should be discussed with the contractor at the time the bid is being reviewed. Although surprises are not uncommon in construction, they can be kept to a minimum by a careful drafting of the contract. This type of contract is usually used for projects where the scope of the work is indeterminate or very uncertain and the kinds of labor, material, and equipment needed are also difficult to ascertain. It is also used for very specialized and where the scope is difficult to define or when time to execute the project is the most important factor and construction is required to start before the completion of the contract documents. Under this arrangement, complete records of all time and materials spent by the Contractor on the work must be accurately maintained.
Advantages of the Cost Plus Contract
• Because it provides the Contractor with an additional amount at the end of the project, it maximizes the incentive for the Contractor to control costs and perform effectively and on schedule.
• It has similar advantages to that of Labor Contracts.
Disadvantages of the Cost Plus Contract
• In this Contract the quality of work cannot be checked or controlled by an expert because the Architect no longer has a role to play.
• It is difficult to verify if the Contractor’s records are accurate which is vital since the Contractor’s reimbursement is based on the records of the workers he has employed and the materials purchased.
14.3.3. Guaranteed Maximum Price
GMP contracts are becoming more popular as a vehicle to minimize risk, avoid claims, and integrate the diverse interests of a complex project. The GMP contract is essentially the same as the cost-plus-fee, except there is a set price so the total cost and fee cannot exceed. This type of contract is based on competitive bids for each trade subcontract, but the Contractor/Administrator charges an additional fee for taking on the risk of the guarantee. This type of contract is essentially a variation of the cost-plus contract but should not be confused with it. It is more suited for projects where the scope is well defined and that is especially suited for turn-key projects. With this type of contract, the contractor is reimbursed for actual costs incurred for labor, materials, equipment, subcontractors, overhead, and profit up to an agreed maximum fixed price amount. The contractor also warrants that the project will be constructed in accordance with the contract documents and that the cost of the project to the owner will not exceed the agreed total maximum price. Costs over the maximum price shall be borne by the contractor and any savings below the maximum price will revert to the owner.
It is important that the owner from the outset clearly states whether this maximum price reflects the total costs (fee excluded) or the total costs the owner pays including the fee. Normally the owner pays the fee, and the contractor pays for costs in excess of the maximum. The Contractor is typically allocated contingency amount to pay for construction changes that are within the design intent of the project. However, changes that exceed the design intent require approval by all stakeholders. Here the owner tends to play an active role throughout the entire process. The whole issue of cost is manageable when the savings are shared rather than negotiated from an adversarial position. Another advantage of GMP occurs when work must start ahead of final drawings. There are often issues that delay completion of the drawings and therefore start of construction. The GMP format allows owners to minimize risk when proceeding with work ahead of final drawings. Penalty and incentive clauses are often included in the agreement relating to costs, schedule, and quality performance. This type of contract is sometimes preferred when a design is less than 100% complete.
14.3.4. Unit Price Contract
This type of contract is typically chosen when both parties are unable to determine the cost ahead of time. Here, the owner provides specific unit price to limit spending. In this type of contract, the work to be performed is broken into various segments, usually by construction trade, and a fixed price is established for each unit of work. The contractor is paid as the contract proceeds by requiring that the actual quantities of work completed is measured, and these quantities multiplied by the preagreed per-unit price. The final price of the project depends on the final quantities of the items used to carry out the work, which may eventually vary from what was initially estimated. This allows the terms of this type of Contract to accommodate some flexibility for price adjustment. This means that the agreed to value may be subject to amendment if the actual volume is reduced or exceeds the original negotiated terms and price. Tender estimates provided by contractors are based on specifications and estimated quantities supplied by the owner. However, during and after the work, the price is now based on actual quantities completed and not estimated quantities. For the contractor, this removes some of the risk in the bidding process because payment is based on actual quantities and not lump sum. The contractor’s unit price must cover both direct and indirect costs, overheads, contingencies, and profit. For this reason, the owner usually provides fixed quantities for contractors to use as the basis of their unit price costing. For example, painting is typically done on a square foot basis. However, when additional work is required, a separate invoice should be presented (Fig. 14.4).
Unit price contracts are seldom used for an entire major construction project, but they are frequently used for agreements with subcontractors and for maintenance and repair work. This type of contract is also typically suitable for projects where the quantities are ill defined and therefore cannot be accurately measured before the project starts such as highway type projects. Thus, the owner could provide quantities for excavation, pipe laying, and backfill. The contractor would quote a dollar amount per cubic yard for soil excavation, a dollar amount per linear foot of piping laid, and a dollar amount per cubic yard of backfill installed and come up with a total bid based upon the quantities that the owner provided. The project’s final price will not be known with certainty until the project is completed. Additionally, it is prudent for the owner or the owner’s representative to “track” actual quantities by some method of measuring—counting truckloads of materials, weighing steel, etc.
Advantages of a Unit Price Contract
• The Architect is involved because it is he/she who provides the quantities of each item (in the Bill of quantities) and negotiates the unit prices with the Contractor. Moreover, with the Unit Price Contract, the Owner makes payments to the Contractor only after the Architect has verified the measurements at Site and certified the Contractor’s bills for payment. This provides additional safety to the Owner who pays only for the volume of work done at site and not for anything extra. Additionally, there is the assurance (because the Architect is involved), that the quality of the work will be according to the specifications and contract documents.
• “Typical” drawings can be used for competitive bidding.
• The Contractor has to initially invest his own money for starting the work, and so the Owner does not have to give the Contractor a large advance.
• With the Unit Price type of Contract, selection of a contractor is generally easier because it is generally considered to be the most scientific and most suitable for construction projects where the different types of items, but not their numbers, can be accurately identified in the Contract documents.
• The Contractor is also safeguarded against any potential contingencies or variations in labor or material rates.
• There is a degree of built-in flexibility in that the scope and quantities are easily adjustable.
Disadvantages of a Unit Price Contract
The main disadvantage for the Contractor is that initially he has to invest his own money. And while this is one of the most preferred Contracts in building construction, it is not unusual to combine a Unit Price Contract for parts of the project with other types of Contracts such as a Lump Sum Contract. Other disadvantages are not knowing the final cost at the outset (because bills of quantities at bid time are only estimates), and additional site staff is needed to measure, control, and report on completed units.
14.3.5. Project Management Contract
Most construction projects have one individual in charge coordinating the various trades to make sure no step is missed and to make sure the work is properly executed. This requires a considerable amount of expertise. In this type of Contract the Architect agrees to manage the Contract, as defined by the scope of the agreement, for a specified duration of time for monetary consideration. To complete a project successfully requires good communication between client and project manager. The Project Management Contract addresses many of the most common causes of conflict in this type of agreement. This type of Contract can be short term or long term.
Advantages of Project Management
• Clients can focus on their core objectives while the Architect (Project Manager) looks after the management of the Project and related issues, ensuring that deadlines are met, quality is maintained, and costs are controlled and within the budget.
• The Project Manager’s duties include coordination with all the agencies, including the Consultants, the Contractor, and the Suppliers to ensure that the construction of the project proceeds as planned.
Disadvantages of Project Management
Many Clients hesitate to go in for Project Management Contract partly because they have to pay extra for project management, in addition to the fees paid to the Architect. On the other hand, there are also many of Clients who will opt for Project management because it saves them from a lot of headache and because it allows them to concentrate on their work as the project proceeds forward. In the long run, the Client actually saves since the project is completed on time, and costs are controlled within the budget.
14.3.6. Labor
In this type of Contract, the Contractor only supplies the labor while the Owner buys and supplies all the material required for the execution of the project. The system of employing Contract labor is prevalent in many industries including Construction, involving skilled and semiskilled jobs. The workman is considered to be employed as Contract Labor when he is hired in connection with the work by or through a Contractor. Contract workmen are classified as indirect employees; persons who are hired, supervised, and remunerated by a Contractor who, in turn, is compensated by the Owner of the project. Contract labor has to be employed for work which is specific and for definite duration.
Advantages of a Labor Contract
• Some Owners prefer this kind of Contract because by buying all the material himself, he is able to pocket much of the Contractor’s profit.
• This type of Contract ensures that the Owner can buy the materials of his choice and can be sure of the brand and quality that will be used in the construction.
Disadvantages of a Labor Contract
• Labor Contracts dismisses the role of the Architect who no longer has a role to play, and so quality of work cannot be checked or controlled by an expert.
• Not being schooled in material quality, it is easy for the Owner to be misled on the quality of sand, bricks etc.
• There is a lot of stress and tension involved in running around and organizing for the supply of materials, etc. on time as the work progresses.
• Often, casual nature of employment, inferior labor status, lack of job security, and poor economic conditions are some of the major attributes of Contract labor.
• The Contractor can often strike a better bargain when negotiating with suppliers and vendors because the Owner is a onetime Client, whereas the Contractor normally has the advantage of being a regular.
• Often some laborers, masons etc. fail to turn up to site as they may be lured for a day to some other site and hence the work gets delayed.
• As workers are generally paid on a daily basis, an unscrupulous labor Contractor may purposely go slow to take longer to complete the job with the hope of getting paid more.
14.3.7. Negotiated Contract
This type of contract is not dissimilar to the DBB method in that the project’s design and construction are performed by different firms. Sometimes a negotiated contract is used in lieu of the tendering process, especially when an owner has had previous experience with a particular contractor. That contractor may be invited to submit a proposal or offer to the owner or the owner’s representative based on the contract documents. This is then followed by negotiations regarding price, scope of work, time to execute the project, and other contractual issues. Once an agreement is reached, a contract is signed for constructing the project. Negotiations may also form part of a tendering process. Upon evaluating the submitted tenders, a short list of top ranking firms is created, which is then followed by negotiations regarding work content, risk, liability issues, and contract-related issues. If the owner decides on negotiating with the top ranking firms after the tenders are opened and analyzed, this must be made clear to all via the invitation to tender to ensure impartiality.
The latest DB documents use one agreement for both design and construction, with three possible methods of payment available to the parties. These are:
• Stipulated Sum Cost Plus a Fee with a GMP
• Cost Plus a Fee Without a GMP
14.4. American Institute of Architects Contract Documents
The AIA website states that there are more than 100 forms and contracts that comprise AIA Contract Documents. According to the AIA, “These forms and contracts define the relationships and terms involved in design and construction projects.” The AIA prepared and developed these contracts with the consensus of owners, contractors, attorneys, architects, engineers, design professionals, and others. The result is a comprehensive collection of contracts and forms that are widely recognized as the industry standard. The AIA organizes contract documents using two basic methods, these are by: (1) Families which are based on types of projects or particular project delivery methods or (2) by Series which is based on the use of the document. For the series method, the AIA Contract Documents are divided into six alphanumeric series according to document use or purpose. The AIA advises users to exercise independent judgment and may require the advice of legal counsel on deciding which documents are appropriate for a particular project. Current AIA Documents by Series are shown below:
| Series | Document type | Document numbers |
| A | Owner/Contractor Agreements | A101, A102, A103, A105, A107, A132, A133, A134, A141, A142, A151, A195, A201, A232, A251, A295, A305, A310, A312, A401, A441, A503, A533, A701, A751 |
| B | Owner/Architect Agreements | B101, B102, B103, B104, B105, B106, B107, B108, B109, B132, B142, B143, B144ARCH-CM, B152, B153, B161, B162, B188, B195, B201, B202, B203, B204, B205, B206, B207, B209, B210, B211, B212, B214, B252, B253, B305, B503, B509, B727, |
| C | Other Agreements | C101, C106, C132, C191, C195, C196, C197, C198, C199, C401, C441, C727 |
| D | Miscellaneous Documents | D101, D200, D503 |
| E | Exhibits | E201, E202 |
| F | [Reserved] | [Reserved] |
| G | Contract Administration and Project Management Forms | G601, G602, G612, G701, G701S, G701CMa, G702, G702S, G703, G703S, G704, G704CMa, G704DB, G705, G706, G706A, G707, G707A, G709, G710, G711, G712, G714, G714CMa, G715, G716, G732, G736, G737, G801, G802, G803, G804, G806, G807, G808, G808A, G809, G810 |
14.4.1. A-Series: Owner/Contractor Agreements
A101–2007, Standard Form of Agreement Between Owner and Contractor Where the Basis of Payment is a Stipulated Sum
AIA Document A101–2007 is a standard form of agreement between owner and contractor for use where the basis of payment is a stipulated sum (fixed price). A101 adopts by reference, and is designed for use with, AIA Document A201–2007, General Conditions of the Contract for Construction. A101 is suitable for large or complex projects. For projects of a more limited scope, use of AIA Document A107–2007, Agreement Between Owner and Contractor for a Project of Limited Scope, should be considered. For even smaller projects, consider AIA Document A105–2007, Agreement Between Owner and Contractor for a Residential or Small Commercial Project. NOTE: A101–2007 replaces A101–1997 (expired 2009).
A102–2007 (formerly A111–1997), Standard Form of Agreement Between Owner and Contractor Where the Basis of Payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price
This standard form of agreement between owner and contractor is appropriate for use on large projects requiring a GMP, when the basis of payment to the contractor is the cost of the work plus a fee. AIA Document A102–2007 is not intended for use in competitive bidding. AIA Document A102–2007 adopts by reference and is intended for use with AIA Document A201–2007, General Conditions of the Contract for Construction. NOTE: A102–2007 replaces A111–1997 (expired 2009).
A103–2007 (formerly A114–2001), Standard Form of Agreement Between Owner and Contractor Where the Basis of Payment is the Cost of the Work Plus a Fee without a Guaranteed Maximum Price
AIA Document A103–2007 is appropriate for use on large projects when the basis of payment to the contractor is the cost of the work plus a fee, and the cost is not fully known at the commencement of construction. AIA Document A103–2007 is not intended for use in competitive bidding. A103–2007 adopts by reference, and is intended for use with, AIA Document A201–2007, General Conditions of the Contract for Construction. NOTE: A103–2007 replaces A114–2001 (expired 2009).
A105–2007 (formerly A105–1993 and A205–1993), Standard Form of Agreement Between Owner and Contractor for a Residential or Small Commercial Project
AIA Document A105–2007 is a stand-alone agreement with its own general conditions; it replaces A105–1993 and A205–1993 (expired 2009). AIA Document A105–2007 is for use on a project that is modest in size and brief in duration and where payment to the contractor is based on a stipulated sum (fixed price). For larger and more complex projects, other AIA agreements are more suitable, such as AIA Document A107–2007, Standard Form of Agreement Between Owner and Contractor for a Project of Limited Scope. AIA Documents A105–2007 and B105–2007, Standard Form of Agreement Between Owner and Architect for a Residential or Small Commercial Project, comprise the Small Projects family of documents. Although A105 and B105 share some similarities with other agreements, the Small Projects family should NOT be used in tandem with agreements in other document families without careful side-by-side comparison of contents.
A107–2007, Standard Form of Agreement Between Owner and Contractor for a Project of Limited Scope
AIA Document A107–2007 is a stand-alone agreement with its own internal general conditions and is intended for use on construction projects of limited scope. It is intended for use on medium-to-large sized projects where payment is based on either a stipulated sum or the cost of the work plus a fee, with or without a GMP. Parties using AIA Document A107–2007 will also use A107 Exhibit A, if using a cost-plus payment method. AIA Document B104–2007, Standard Form of Agreement Between Owner and Architect for a Project of Limited Scope, coordinates with A107–2007 and incorporates it by reference.
For more complex projects, parties should consider using one of the following other owner/contractor agreements: AIA Document A101–2007, A102–2007, or A103–2007. These agreements are written for a stipulated sum, cost of the work with a GMP, and cost of the work without a GMP, respectively. Each of them incorporates by reference AIA Document A201–2007, General Conditions of the Contract for Construction. For single family residential projects, or smaller and less complex commercial projects, parties may wish to consider AIA Document A105–2007, Agreement Between Owner and Contractor for a Residential or Small Commercial Project. NOTE: A107–2007 replaces A107–1997 (expired 2009).
A132–2009 (formerly A101CMa–1992), Standard Form of Agreement Between Owner and Contractor, Construction Manager as Adviser Edition
AIA Document A132–2009 is a standard form of agreement between owner and contractor for use on projects where the basis of payment is either a stipulated sum (fixed price) or cost of the work plus a fee, with or without a GMP. In addition to the contractor and the architect, a CM assists the owner in an advisory capacity during design and construction.
The document has been prepared for use with AIA Documents A232–2009, General Conditions of the Contract for Construction, CM as Adviser Edition; B132–2009, Standard Form of Agreement Between Owner and Architect, CM as Adviser Edition; and C132–2009, Standard Form of Agreement Between Owner and CM as Adviser. This integrated set of documents is appropriate for use on projects where the CM only serves in the capacity of an adviser to the owner, rather than as constructor (the latter relationship being represented in AIA Documents A133–2009 and A134–2009). NOTE: A132–2009 replaces A101CMa–1992 (expired 2010).
A133–2009 (formerly A121CMc–2003), Standard Form of Agreement Between Owner and Construction Manager as Constructor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price
AIA Document A133–2009 is intended for use on projects where a CM, in addition to serving as adviser to the owner, assumes financial responsibility for construction of the project. The CM provides the owner with a GMP proposal, which the owner may accept, reject, or negotiate. Upon the owner’s acceptance of the proposal by execution of an amendment, the CM becomes contractually bound to provide labor and materials for the project and to complete construction at or below the GMP. The document divides the CM’s services into two phases: the preconstruction phase and the construction phase, portions of which may proceed concurrently to fast track the process. AIA Document A133–2009 is coordinated for use with AIA Documents A201–2007, General Conditions of the Contract for Construction, and B103–2007, Standard Form of Agreement Between Owner and Architect for a Large or Complex Project. A133–2009 replaces A121CMc–2003 (expired 2010).
CAUTION: To avoid confusion and ambiguity, do not use this construction management document with any other AIA construction management document.
A134–2009 (formerly A131CMc–2003), Standard Form of Agreement Between Owner and Construction Manager as Constructor where the basis of payment is the Cost of the Work Plus a Fee without a Guarantee Maximum Price
Similar to AIA Document A133–2009, AIA Document A134–2009 is intended for use when the owner seeks a CM who will take on responsibility for providing the means and methods of construction. However, in AIA Document A134–2009 the CM does not provide a GMP. A134–2009 employs the cost-plus-a-fee method, wherein the owner can monitor cost through periodic review of a control estimate that is revised as the project proceeds.
The agreement divides the CM’s services into two phases: the preconstruction phase and the construction phase, portions of which may proceed concurrently to fast track the process. A134–2009 is coordinated for use with AIA Documents A201–2007, General Conditions of the Contract for Construction, and B103–2007, Standard Form of Agreement Between Owner and Architect for a Large or Complex Project. A134–2009 replaces A131CMc–2003 (expired 2010).
CAUTION: To avoid confusion and ambiguity, do not use this construction management document with any other AIA construction management document.
A141–2004, Agreement Between Owner and Design-Builder
AIA Document A141–2004 replaces A191–1996 (expired) and consists of the agreement and three exhibits: Exhibit A, Terms and Conditions; Exhibit B, Determination of the Cost of the Work; and Exhibit C, Insurance and Bonds. Exhibit B is not applicable if the parties select to use a stipulated sum. AIA Document A141–2004 obligates the design-builder to execute fully the work required by the DB documents, which include A141 with its attached exhibits, the project criteria and the design-builder’s proposal, including any revisions to those documents accepted by the owner, supplementary, and other conditions, addenda and modifications. The Agreement requires the parties to select the payment type from three choices: (1) Stipulated Sum, (2) cost of the work plus design-builder’s fee, and (3) cost of the work plus design-builder’s fee with a GMP. A141–2004 with its attached exhibits forms the nucleus of the DB contract. Because A141 includes its own terms and conditions, it does not use AIA Document A201.
A142–2004, Agreement Between Design-Builder and Contractor
AIA Document A142–2004 replaces AIA Document A491–1996 (expired) and consists of the agreement and five exhibits: Exhibit A, Terms and Conditions; Exhibit B, Preconstruction Services; Exhibit C, Contractor’s Scope of Work; Exhibit D, Determination of the Cost of the Work; and Exhibit E, Insurance and Bonds. Unlike AIA Document B491–1996, AIA Document A142–2004 does not rely on AIA Document A201 for its general conditions of the contract. A142–2004 contains its own terms and conditions.
A142–2004 obligates the contractor to perform the work in accordance with the contract documents, which include A142 with its attached exhibits, supplementary and other conditions, drawings, specifications, addenda, and modifications. Like AIA Document A141–2004, AIA Document A142–2004 requires the parties to select the payment type from three choices: (1) Stipulated Sum, (2) Cost of the Work Plus Design-Builder’s Fee, and (3) Cost of the Work Plus Design-Builder’s Fee with a GMP.
A151–2007 (formerly A175ID–2003), Standard Form of Agreement Between Owner and Vendor for Furniture, Furnishings and Equipment where the basis of payment is a Stipulated Sum
AIA Document A151–2007 is intended for use as the contract between owner and vendor for furniture, furnishings, and equipment (FF&E) where the basis of payment is a stipulated sum (fixed price) agreed to at the time of contracting. AIA Document A151–2007 adopts by reference and is intended for use with AIA Document A251–2007, General Conditions of the Contract for Furniture, Furnishings, and Equipment. It may be used in any arrangement between the owner and the contractor where the cost of FF&E has been determined in advance, either through bidding or negotiation. NOTE: A151–2007 replaces A175ID–2003 (expired 2009).
A195–2008, Standard Form of Agreement Between Owner and Contractor for Integrated Project Delivery
AIA Document A195–2008 is a standard form of agreement between owner and contractor for a project that utilizes integrated project delivery (IPD). AIA Document A195–2008 primarily provides only the business terms and conditions unique to the agreement between the owner and contractor, such as compensation details and licensing of instruments of service. A195 does not include the specific scope of the contractor’s work; rather, it incorporates by reference AIA Document A295–2008, General Conditions of the Contract for IPD, which sets forth the contractor’s duties and obligations for each of the six phases of the project, along with the duties and obligations of the owner and architect. Under A195–2008, the contractor provides a GMP. For that purpose, the agreement includes a GMP amendment at Exhibit A.
A201–2007, General Conditions of the Contract for Construction
The general conditions are an integral part of the contract for construction for a large project, and they are incorporated by reference into the owner/contractor agreement. They set forth the rights, responsibilities, and relationships of the owner, contractor, and architect. Though not a party to the contract for construction between owner and contractor, the architect participates in the preparation of the contract documents and performs construction phase duties and responsibilities described in detail in the general conditions. AIA Document A201–2007 is adopted by reference in owner/architect, owner/contractor, and contractor/subcontractor agreements in the Conventional (A201) family of documents; thus, it is often called the “keystone” document. NOTE: A201–2007 replaces A201–1997 (expired 2009).
A232–2009 (formerly A201CMa–1992), General Conditions of the Contract for Construction, Construction Manager as Adviser Edition
AIA Document A232–2009 sets forth the rights, responsibilities, and relationships of the owner, contractor, CM, and architect. A232–2009 is adopted by reference in owner/architect, owner/contractor, and owner/CM agreements in the CMa family of documents. Under A232–2009, the CM serves as an independent adviser to the owner, who enters into a contract with a general contractor or multiple contracts with prime trade contractors. NOTE: A232–2009 replaces A201CMa–1992 (expired 2010).
CAUTION: Do not use A232–2009 in combination with agreements where the CM takes on the role of constructor, such as in AIA Document A133–2009 or A134–2009.
A251–2007 (formerly A275ID–2003), General Conditions of the Contract for Furniture, Furnishings and Equipment
AIA Document A251–2007 provides general conditions for the AIA Document A151–2007, Standard Form Agreement between Owner and Vendor for Furniture, Furnishings, and Equipment where the basis of payment is a Stipulated Sum. AIA Document A251–2007 sets forth the duties of the owner, architect, and vendor, just as AIA Document A201–2007, General Conditions of the Contract for Construction, does for building construction projects. Because the Uniform Commercial Code (UCC) governs the sale of goods and has been adopted in nearly every jurisdiction, A251–2007 recognizes the commercial standards set forth in Article 2 of the UCC and uses certain standard UCC terms and definitions. A251 was renumbered in 2007 and was modified, as applicable, to coordinate with AIA Document A201–2007. NOTE: A251–2007 replaces A275ID–2003 (expired 2009).
A295–2008, General Conditions of the Contract for Integrated Project Delivery
AIA Document A295–2008, provides the terms and conditions for AIA Documents A195–2008 Standard Form of Agreement Between Owner and Contractor for IPD, and B195–2008, Standard Form of Agreement Between Owner and Architect for IPD, both of which incorporate AIA Document A295–2008 by reference. Those agreements provide primarily only business terms and rely upon A295–2008 for the architect’s services, the contractor’s preconstruction services, and the conditions of construction. A295 not only establishes the duties of the owner, architect, and contractor, but also sets forth in detail how they will work together through each phase of the project: conceptualization, criteria design, detailed design, implementation documents, construction, and closeout. A295 requires that the parties utilize building information modeling (BIM).
A305–1986, Contractor’s Qualification Statement
An owner preparing to request bids or to award a contract for a construction project often requires a means of verifying the background, references, and financial stability of any contractor being considered. These factors, along with the time frame for construction, are important for an owner to investigate. Using AIA Document A305–1986, the contractor may provide a sworn, notarized statement and appropriate attachments to elaborate on important aspects of the contractor’s qualifications.
A310–2010, Bid Bond
AIA Document A310–2010, a simple, one-page form, establishes the maximum penal amount that may be due to the owner if the selected bidder fails to execute the contract or fails to provide any required performance and payment bonds. NOTE: A310–2010 replaces AIA Document A310–1970, which expires on December 31, 2011.
A312–2010, Performance Bond and Payment Bond
AIA Document A312–2010 incorporates two bonds—one covering the contractor’s performance and the other covering the contractor’s obligations to pay subcontractors and others for material and labor. In addition, AIA Document A312–2010 obligates the surety to act responsively to the owner’s requests for discussions aimed at anticipating or preventing a contractor’s default. NOTE: A312–2010 replaces AIA Document A312–1984, which expires on December 31, 2011.
A401–2007, Standard Form of Agreement Between Contractor and Subcontractor
AIA Document A401–2007 establishes the contractual relationship between the contractor and subcontractor. It sets forth the responsibilities of both parties and lists their respective obligations, which are written to parallel AIA Document A201–2007, General Conditions of the Contract for Construction, which A401–2007 incorporates by reference. AIA Document A401 may be modified for use as an agreement between the subcontractor and a subsubcontractor and must be modified if used where AIA Document A107–2007 or A105–2007 serves as the owner/contractor agreement. NOTE: A401–1997 replaces A401–1997 (expires 2009).
A441–2008, Standard Form of Agreement Between Contractor and Subcontractor for a Design-Build Project
AIA Document A441–2008 is a fixed price agreement that establishes the contractual relationship between the contractor and subcontractor in a DB project. AIA Document A441–2008 incorporates by reference the terms and conditions of AIA Document A142–2004, Standard Form of Agreement Between Design-Builder and Contractor and was written to ensure consistency with the AIA 2004 DB family of documents. Because subcontractors are often required to provide professional services on a DB project, A441 provides for that possibility.
A503–2007 (formerly A511–1999), Guide for Supplementary Conditions
AIA Document A503–2007 is not an agreement but is a guide containing model provisions for modifying and supplementing AIA Document A201–2007, General Conditions of the Contract for Construction. It provides model language with explanatory notes to assist users in adapting AIA Document A201–2007 to specific circumstances. A201–2007, as a standard form document, cannot cover all the particulars of a project. Thus, AIA Document A503–2007 is provided to assist A201–2007 users either in modifying it or developing a separate supplementary conditions document to attach to it. NOTE: A503–2007 replaces A511–1999 (expired 2009).
A533–2009 (formerly A511CMa–1993), Guide for Supplementary Conditions, Construction Manager as Adviser Edition
Similar to AIA Document A503–2007, AIA Document A533–2009 is a guide for amending or supplementing the general conditions document, AIA Document A232–2009. AIA Documents A533–2009 and A232–2009 should only be employed on projects where the CM is serving in the capacity of adviser to the owner and not in situations where the CM is also the constructor (CMc document-based relationships). Like A503–2007, this document contains suggested language for supplementary conditions, along with notes on appropriate usage. NOTE: A533–2009 replaces A511CMa–1993 (expired 2010).
A701–1997, Instructions to Bidders
AIA Document A701–1997 is used when competitive bids are to be solicited for construction of the project. Coordinated with AIA Document A201, General Conditions of the Contract for Construction, and its related documents, AIA Document A701–1997 provides instructions on procedures, including bonding requirements, for bidders to follow in preparing and submitting their bids. Specific instructions or special requirements, such as the amount and type of bonding, are to be attached to, or inserted into, A701.
A751–2007 (formerly A775ID–2003), Invitation and Instructions for Quotation for Furniture, Furnishings and Equipment
AIA Document A751–2007 provides (1) the Invitation for Quotation for Furniture, Furnishings, and Equipment (FF&E) and (2) Instructions for Quotation for Furniture, Furnishings, and Equipment. These two documents define the owner’s requirements for a vendor to provide a complete quotation for the work. The purchase of FF&E is governed by the UCC, and AIA Document A751–2007 was developed to coordinate with the provisions of the UCC. NOTE: A751–2007 replaces A775ID–2003 (expired 2009).
14.4.2. B-Series: Owner/Architect Agreements
B101–2007 Standard Form of Agreement Between Owner and Architect
B102–2007 Standard Form of Agreement Between Owner and Architect without a Predefined Scope of Architect’s Services
B103–2007 Standard Form of Agreement Between Owner and Architect for a Large or Complex Project
B104–2007 Standard Form of Agreement Between Owner and Architect for a Project of Limited Scope
B105–2007 Standard Form of Agreement Between Owner and Architect for a Residential or Small Commercial Project
B106–2010 Standard Form of Agreement Between Owner and Architect for Pro Bono Services
B107–2010 Standard Form of Agreement Between Developer-Builder and Architect for Prototype(s) for Single Family Residential Project
B108–2009 Standard Form of Agreement Between Owner and Architect for a Federally Funded or Federally Insured Project
B109–2010 Standard Form of Agreement Between Owner and Architect for a Multi-Family Residential or Mixed Use Residential Project
B132–2009 Standard Form of Agreement Between Owner and Architect, Construction Manager as Adviser Edition
B142–2004 Standard Form of Agreement Between Owner and Consultant
where the Owner contemplates using the DB method of project delivery
B143–2004 Standard Form of Agreement Between Design-Builder and Architect
B144ARCH-CM–1993 Standard Form of Amendment for the Agreement Between Owner and Architect where the Architect Provides CONSTRUCTION MANAGEMENT Services as an Adviser to the Owner
B152–2007 Standard Form of Agreement Between Owner and Architect for Architectural Interior Design Services
B153–2007 Standard Form of Agreement Between Owner and Architect for Furniture, Furnishings and Equipment Design Services
B161–2002 Standard Form of Agreement Between Client and Consultant for use where the Project is located outside the United States
B162–2002 Abbreviated Form of Agreement Between Client and Consultant for use where the Project is located outside the United States
B188–1996 ∗ Standard Form of Agreement Between Owner and Architect for Limited Architectural Services for Housing Projects
B195–2008 Standard Form of Agreement Between Owner and Architect for Integrated Project Delivery
B201–2007 Standard Form of Architect’s Services: Design and Construction Contract Administration
B202–2009 Standard Form of Architect’s Services: Programming
B203–2007 Standard Form of Architect’s Services: Site Evaluation and Planning
B204–2007 Standard Form of Architect’s Services: Value Analysis, for use where the Owner employs a Value Analysis Consultant
B205–2007 Standard Form of Architect’s Services: Historic Preservation
B206–2007 Standard Form of Architect’s Services: Security Evaluation and Planning
B209–2007 Standard Form of Architect’s Services: Construction Contract Administration, for use where the Owner has retained another Architect for Design Services
∗ AIA Documents B188–1986 and B727–1988 expire on April 30, 2012.
B210–2007 Standard Form of Architect’s Services: Facility Support
B211–2007 Standard Form of Architect’s Services: Commissioning
B212–2010 Standard Form of Architect’s Services: Regional or Urban Planning
B214–2007 Standard Form of Architect’s Services: LEED Certification
B252–2007 Standard Form of Architect’s Services: Architectural Interior Design
B253–2007 Standard Form of Architect’s Services: Furniture, Furnishings and Equipment Design
B305–1993 Architect’s Qualification Statement
B503–2007 Guide for Amendments to AIA Owner-Architect Agreements
B509–2010 Guide for Supplementary Conditions to AIA Document B109–2010 for use on Condominium Projects
B727–1988 ∗ Standard Form of Agreement Between Owner and Architect for Special Services
14.4.3. C-Series: Other Agreements
C101–1993 (formerly C801–1993), Joint Venture Agreement for Professional Services
AIA Document C101–1993 is intended for use by two or more parties to provide for their mutual rights and obligations in forming a joint venture. It is intended that the joint venture, once established, will enter into an agreement with the owner to provide professional services. The parties may be all architects, all engineers, a combination of architects and engineers, or another combination of professionals. The document provides a choice between two methods of joint venture operation. The “division of compensation” method assumes that services provided and the compensation received will be divided among the parties in the proportions agreed to at the outset of the project. Each party’s profitability is then dependent on individual performance of preassigned tasks and is not directly tied to that of the other parties. The “division of profit and loss” method is based on each party performing work and billing the joint venture at cost plus a nominal amount for overhead. The ultimate profit or loss of the joint venture is divided between or among the parties at completion of the project, based on their respective interests. NOTE: AIA Document C101–1993 was renumbered in 2007, but its content remains the same as C801–1993 (expired May 2009).
C106–2007, Digital Data Licensing Agreement
AIA Document C106–2007 serves as a licensing agreement between two parties who otherwise have no existing licensing agreement for the use and transmission of digital data, including instruments of service. AIA Document C106–2007 defines digital data as information, communications, drawings, or designs created or stored for a specific project in digital form. AIA C106 allows one party to: (1) grant another party a limited nonexclusive license to use digital data on a specific project, (2) set forth procedures for transmitting the digital data, and (3) place restrictions on the license granted. In addition, C106 allows the party transmitting digital data to collect a licensing fee for the recipient’s use of the digital data.
C132–2009 (formerly B801CMa–1992), Standard Form of Agreement Between Owner and Construction Manager as Adviser
AIA Document C132–2009 provides the agreement between the owner and the CM, a single entity who is separate and independent from the architect and the contractor and who acts solely as an adviser (CMa) to the owner throughout the course of the project. AIA Document C132–2009 is coordinated for use with AIA Document B132–2009, Standard Form of Agreement Between Owner and Architect, CM as Adviser Edition.
Both C132–2009 and B132–2009 are based on the premise that there will be a separate construction contractor or multiple prime contractors whose contract(s) with the owner will be jointly administered by the architect and the CM under AIA Document A232–2009. AIA Document C132–2009 is not coordinated with, and should not be used with, documents where the CM acts as the constructor for the project, such as in AIA Document A133–2009 or A134–2009. NOTE: C132–2009 replaces B801CMa–1992 (expired December 2010).
C191–2009, Standard Form Multi-Party Agreement for Integrated Project Delivery
AIA Document C191–2009 is a standard form multiparty agreement through which the owner, architect, contractor, and perhaps other key project participants execute a single agreement for the design, construction, and commissioning of a Project. AIA Document C191–2009 provides the framework for a collaborative environment in which the parties operate in furtherance of cost and performance goals that the parties jointly establish. The nonowner parties are compensated on a cost-of-the-work basis. The compensation model is also goal oriented and provides incentives for collaboration in design and construction of the project. Primary management of the project is the responsibility of the Project Management Team, comprised of one representative from each of the parties. The Project Executive Team, also comprised of one representative from each of the parties, provides a second level of project oversight and issue resolution. The conflict resolution process is intended to foster quick and effective resolution of problems as they arise. This collaborative process has the potential to result in a high-quality project for the owner, and substantial monetary and intangible rewards for the other parties.
C195–2008, Standard Form Single Purpose Entity Agreement for Integrated Project Delivery AIA Document C195–2008 is a standard form single purpose entity (SPE) agreement through which the owner, architect, CM, and perhaps other key project participants, each become members of a limited liability company. The sole purpose of the company is to design and construct a project utilizing the principles of IPD established in IPD: A Guide. AIA Document C195–2008 provides the framework for a collaborative environment in which the company operates in furtherance of cost and performance goals that the members jointly establish. To obtain project funding, the company enters into a separate agreement with the owner. To design and construct the project, the company enters into separate agreements with the architect, CM, other non-owner members, and with non-member consultants and contractors. The compensation model in the non-owner member agreements is goal-oriented and provides incentives for collaboration in design and construction of the project, and for the quick and effective resolution of problems as they arise. This highly collaborative process has the potential to result in a high quality project for the owner, and substantial monetary and intangible rewards for the other members.
C196–2008, Standard Form of Agreement Between Single Purpose Entity and Owner for Integrated Project Delivery
AIA Document C196–2008 is a standard form of agreement between a single purpose entity (“the SPE”) and a project owner, called the owner member. AIA Document C196–2008 is intended for use on a project where the project participants have formed the SPE utilizing AIA Document C195–2008, Standard Form SPE Agreement for IPD. AIA Document is coordinated with AIA Document C195–2008 to implement the principles of IPD, including the accomplishment of mutually agreed goals. C196 provides the terms under which the owner member will fund the SPE in exchange for the design and construction of the project. The SPE provides for the design and construction of the project through separate agreements with other members, including an architect and CM, utilizing AIA Document C197–2008, Standard Form of Agreement Between SPE and Non-Owner Member for IPD. The SPE may also enter into agreements with non-member design consultants, specialty trade contractors, vendors and suppliers.
C197–2008, Standard Form of Agreement Between Single Purpose Entity and Non-Owner Member for Integrated Project Delivery
AIA Document C197–2008 is a standard form of agreement between a single purpose entity (“the SPE”) and members of the SPE who do not own the project, called nonowner members. AIA Document C197–2008 is intended for use on a project where the parties have formed the SPE utilizing AIA Document C195–2008, Standard Form Single Purpose Entity Agreement for IPD. C197–2008 is coordinated with C195–2008 to implement the principles of IPD, including the accomplishment of mutually agreed goals. All members of the SPE, other than the project owner, will execute C197–2008.
AIA Document C197–2008 provides the terms under which the nonowner members provide services to the SPE to complete the design and construction of the project. The specific services the nonowner members are required to perform are set forth in the Integrated Scope of Services Matrix, which is part of the C195–2008 Target Cost Amendment and is incorporated into the executed C197–2008. In exchange for the nonowner members’ services, the nonowner members are paid the direct and indirect costs they incur in providing services. Additionally, C197 allows for the nonowner members to receive profit through incentive compensation and goal achievement compensation.
C198–2010, Standard Form of Agreement Between Single Purpose Entity and Consultant for Integrated Project Delivery
AIA Document C198–2010 is a standard form of agreement between a single purpose entity (“the SPE”) and a consultant. AIA Document C198–2010 is intended for use on a project where the parties have formed the SPE utilizing AIA Document C195–2008, Standard Form Single Purpose Entity Agreement for IPD. C198–2010 is coordinated with C195–2008 to implement the principles of IPD. The specific services the consultant is required to perform are set forth within the document as well as the Integrated Scope of Services Matrix, which is part of the C195–2008 Target Cost Amendment. In addition to traditional compensation for services, C198–2010 allows for the consultant to receive additional profit through incentive compensation and goal achievement compensation.
C199–2010, Standard Form of Agreement Between Single Purpose Entity and Contractor for Integrated Project Delivery
AIA Document C199–2010 is a standard form of agreement between a single purpose entity (“the SPE”) and a contractor. AIA Document C199–2010 is intended for use on a project where the parties have formed the SPE utilizing AIA Document C195–2008, Standard Form Single Purpose Entity Agreement for IPD. C199–2010 is intended to be a flexible document. C199 can be used for a contractor that only provides construction services, or it can also be used for a contractor that will provide both preconstruction and construction services. C199 is not intended for use in competitive bidding and relies upon an agreed to contract sum, which can be either a stipulated sum (fixed price) or cost of the work plus a fee, with a GMP. In addition to compensation for the contract sum, C199 allows for the contractor to receive additional profit through incentive compensation and goal achievement compensation.
C401–2007 (formerly C141–1997), Standard Form of Agreement Between Architect and Consultant
AIA Document C401–2007 is a standard form of agreement between the architect and the consultant providing services to the architect. AIA Document C401–2007 is suitable for use with all types of consultants, including consulting architects. This document may be used with a variety of compensation methods. C401–2007 assumes and incorporates by reference a preexisting owner/architect agreement known as the “prime agreement.” AIA Documents B101–2007, B103–2007, B104–2007, B105–2007, and B152–2007 are the documents most frequently used to establish the prime agreement. C401–2007 was modified in 2007 to be shorter and more flexible by “flowing down” the provisions of the prime agreement, except as specifically stated in C401. NOTE: C401–2007 replaces C141–1997 (expired May 2009).
C441–2008, Standard Form of Agreement Between Architect and Consultant for a Design-Build Project
AIA Document C441–2008 establishes the contractual relationship between the architect and a consultant providing services to the architect on a DB project. AIA Document C441–2008 is suitable for use with all types of consultants, including consulting architects and may be used with a variety of compensation methods. C441 assumes and incorporates by reference a preexisting prime agreement between design-builder and architect. C441–2008 was written to ensure consistency with AIA Document B143–2004, Standard Form of Agreement Between Design-Builder and Architect, and with other documents in the AIA 2004 DB family of documents.
C727–1992, Standard Form of Agreement Between Architect and Consultant for Special Services
AIA Document C727–1992 provides only the terms and conditions of the agreement between the architect and the consultant—the description of services is left entirely to the parties and must be inserted in the agreement or attached in an exhibit. It is often used for planning, feasibility studies, postoccupancy studies, and other services that require specialized descriptions.
14.4.4. D-Series: Miscellaneous Documents
D101–1995, Methods of Calculating Areas and Volumes of Buildings
This document establishes definitions for methods of calculating the architectural area and volume of buildings. AIA Document D101–1995 also covers interstitial space and office, retail, and residential areas.
D200–1995, Project Checklist
The project checklist is a convenient listing of tasks a practitioner may perform on a given project. This checklist will assist the architect in recognizing required tasks and in locating the data necessary to fulfill assigned responsibilities. By providing space for notes on actions taken, assignment of tasks, and time frames for completion, AIA Document D200–1995 may also serve as a permanent record of the owner’s, contractor’s, and architect’s actions and decisions.
D503–2011, Guide for Sustainable Projects, including Agreement Amendments and Supplementary Conditions
AIA Document D503–2011 is not an agreement but is a guide that discusses the roles and responsibilities faced by Owners, Architects, and Contractors on sustainable design and construction projects. D503 also contains model provisions for modifying or supplementing the following AIA Contract Documents: A201–2007, General Conditions of the Contract for Construction; A101–2007, Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum; and B101–2007, Standard Form of Agreement Between Owner and Architect. D503 provides model language with explanatory notes to assist users in adapting those documents for use on a sustainable project. A201–2007, A101–2007, and B101–2007, as standard form documents, cannot address all of the unique requirements and risks of sustainable design and construction. Thus, AIA Document D503–2011 is provided to assist users either in modifying those documents, or developing separate supplementary conditions documents to attach to them.
14.4.5. E-Series: Exhibits
E201–2007, Digital Data Protocol Exhibit
AIA Document E201–2007 is not a stand-alone document but must be attached as an exhibit to an existing agreement, such as the AIA Document B101–2007, Standard Form of Agreement Between Owner and Architect, or A101–2007, Agreement Between Owner and Contractor. Its purpose is to establish the procedures the parties agree to follow with respect to the transmission or exchange of digital data, including instruments of service. AIA Document E201–2007 defines digital data as information, communications, drawings, or designs created or stored for a specific project in digital form. E201 does not create a separate license to use digital data, because AIA documents for design or construction, to which E201 would be attached, already include those provisions. Parties not covered under such agreements should consider executing AIA Document C106–2007, Digital Data Licensing Agreement.
E202–2008, Building Information Modeling Protocol Exhibit
AIA Document E202–2008 is a practical tool for managing the use of BIM across a project. It establishes the requirements for model content at five progressive levels of development and the authorized uses of the model content at each level of development. Through a table the parties complete for each project, AIA Document E202–2008 assigns authorship of each model element by project phase. E202 defines the extent to which model users may rely on model content, clarifies model ownership, sets forth BIM standards and file formats, and provides the scope of responsibility for model management from the beginning to the end of the project. Though written primarily to support a project using IPD, E202 may also be used on projects delivered by more traditional methods. E202 is not a stand-alone document but must be attached as an exhibit to an existing agreement for design services, construction, or material. NOTE: E202–2008 is available in AIA Contract Documents software but is not available in print.
14.4.6. G-Series: Contract Administration and Project Management Forms
G601–1994, Request for Proposal—Land Survey
AIA Document G601–1994 allows owners to request proposals from a number of surveyors based on information deemed necessary by the owner and architect. G601–1994 allows owners to create a request for proposal through checking appropriate boxes and filling in project specifics, thus avoiding the costs associated with requesting unnecessary information. G601–1994 may be executed to form the agreement between the owner and the land surveyor once an understanding is reached.
G602–1993, Request for Proposal—Geotechnical Services
Similar in structure and format to AIA Document G601–1994, AIA Document G602–1993 can form the agreement between the owner and the geotechnical engineer. It allows the owner to tailor the proposal request to address the specific needs of the project. In consultation with the architect, the owner establishes the parameters of service required and evaluates submissions based on criteria such as time, cost, and overall responsiveness to the terms set forth in the request for proposal. When an acceptable submission is selected, the owner signs the document in triplicate, returning one copy to the engineer and one to the architect, thus forming the agreement between owner and geotechnical engineer.
G612–2001, Owner’s Instructions to the Architect
AIA Document G612–2001 is a questionnaire, drafted to elicit information from the owner regarding the nature of the construction contract. AIA Document G612–2001 is divided into three parts: Part A relates to contracts, Part B relates to insurance and bonds, and Part C deals with bidding procedures. The order of the parts follows the project’s chronological sequence to match the points in time when the information will be needed. Because many of the items relating to the contract will have some bearing on the development of construction documents, it is important to place Part A in the owner’s hands at the earliest possible phase of the project. The owner’s responses to Part A will lead to a selection of the appropriate delivery method and contract forms, including the general conditions. Part B naturally follows after selection of the general conditions because insurance and bonding information is dependent upon the type of general conditions chosen. Answers to Part C will follow as the contract documents are further developed.
G701–2001, Change Order
AIA Document G701–2001 is for implementing changes in the work agreed to by the owner, contractor, and architect. Execution of a completed AIA Document G701–2001 indicates agreement upon all the terms of the change, including any changes in the contract sum (or GMP) and contract time. The form provides space for the signatures of the owner, architect, and contractor, and for a complete description of the change.
G701S–2001, Change Order, Subcontractor Variation
AIA Document G701S–2001 modifies AIA Document G701—2001 for use by subcontractors. Modifications to G701–2001 are shown as tracked changes revisions—that is, additional material is underlined; deleted material is crossed out. NOTE: G701S–2001 is not available in print but is available in AIA Contract Documents software and on the AIA Documents-on-Demand Website.
G701CMa–1992, Change Order, Construction Manager-Adviser Edition
AIA Document G701CMa–1992 is for implementing changes in the work agreed to by the owner, contractor, CM adviser, and architect. Execution of a completed AIA Document G701–2001 indicates agreement upon all the terms of the change, including any changes in the Contract Sum (or GMP) and Contract Time. It provides space for the signatures of the owner, contractor, CM adviser, and architect, and for a complete description of the change. The major difference between AIA Documents G701CMa–1992 and G701–2001 is that the signature of the CM adviser, along with those of the owner, architect, and contractor, is required to validate the change order.
G702–1992, Application and Certificate for Payment
AIA Documents G702–1992, Application and Certificate for Payment, and G703–1992, Continuation Sheet, provide convenient and complete forms on which the contractor can apply for payment, and the architect can certify that payment is due. The forms require the contractor to show the status of the contract sum to date, including the total dollar amount of the work completed and stored to date, the amount of retainage (if any), the total of previous payments, a summary of change orders, and the amount of current payment requested. AIA Document G703–1992 breaks the contract sum into portions of the work in accordance with a schedule of values prepared by the contractor as required by the general conditions. NOTE: The AIA does not publish a standard schedule of values form.
AIA Document G702–1992 serves as both the contractor’s application and the architect’s certification. Its use can expedite payment and reduce the possibility of error. If the application is properly completed and acceptable to the architect, the architect’s signature certifies to the owner that a payment in the amount indicated is due to the contractor. The form also allows the architect to certify an amount different than the amount applied for, with explanation provided by the architect.
G702S–1992, Application and Certificate for Payment, Subcontractor Variation
AIA Document G702S–1992 modifies AIA Document G702–1992 for use by subcontractors. Modifications to G702–1992 are shown as tracked changes revisions—that is, additional material is underlined; deleted material is crossed out. NOTE: G702S–1992 is not available in print, but is available in AIA Contract Documents software and on the AIA Documents-on-Demand Website.
G703–1992, Continuation Sheet
AIA Documents G702–1992, Application and Certificate for Payment, and G703–1992, Continuation Sheet, provide convenient and complete forms on which the contractor can apply for payment, and the architect can certify that payment is due. The forms require the contractor to show the status of the contract sum to date, including the total dollar amount of the work completed and stored to date, the amount of retainage (if any), the total of previous payments, a summary of change orders, and the amount of current payment requested. AIA Document G703–1992 breaks the contract sum into portions of the work in accordance with a schedule of values prepared by the contractor as required by the general conditions. NOTE: The AIA does not publish a standard schedule of values form.
G703S–1992, Continuation Sheet, Subcontractor Variation
AIA Document G703S–1992 modifies AIA Document G703—1992 for use by subcontractors. Modifications to G703—1992 are shown as tracked changes revisions—that is, additional material is underlined; deleted material is crossed out. NOTE: G701S–1992 is not available in print but is available in AIA Contract Documents software and on the AIA Documents-on-Demand Website.
G704–2000, Certificate of Substantial Completion
AIA Document G704–2000 is a standard form for recording the date of substantial completion of the work or a designated portion thereof. The contractor prepares a list of items to be completed or corrected, and the architect verifies and amends this list. If the architect finds that the work is substantially complete, the form is prepared for acceptance by the contractor and the owner, and the list of items to be completed or corrected is attached. In AIA Document G704–2000, the parties agree on the time allowed for completion or correction of the items, the date when the owner will occupy the work or designated portion thereof, and a description of responsibilities for maintenance, heat, utilities, and insurance.
G704CMa–1992, Certificate of Substantial Completion, Construction Manager-Adviser Edition
AIA Document G704CMa–1992 serves the same purpose as AIA Document G704–2000, except that this document expands responsibility for certification of substantial completion to include both the architect and the CM.
G704DB–2004, Acknowledgment of Substantial Completion of a Design-Build Project
Because of the nature of DB contracting, the project owner assumes many of the construction contract administration duties performed by the architect in a traditional project. Because there is not an architect to certify substantial completion, AIA Document G704DB–2004 requires the owner to inspect the project to determine whether the work is substantially complete in accordance with the DB documents and to acknowledge the date when it occurs. AIA Document G704DB–2004 is a variation of AIA Document G704–2000 and provides a standard form for the owner to acknowledge the date of substantial completion.
G705–2001 (formerly G805–2001), List of Subcontractors
AIA Document G705–2001 is a form for listing subcontractors and others proposed to be employed on a project as required by the bidding documents. It is to be filled out by the contractor and returned to the architect for submission to the owner. NOTE: AIA Document G705–2001 was renumbered in 2007, but its content remains the same as in AIA Document G805–2001 (expired May 31, 2009).
G706–1994, Contractor’s Affidavit of Payment of Debts and Claims
The contractor submits this affidavit with the final request for payment, stating that all payrolls, bills for materials and equipment, and other indebtedness connected with the work for which the owner might be responsible has been paid or otherwise satisfied. AIA Document G706–1994 requires the contractor to list any indebtedness or known claims in connection with the construction contract that have not been paid or otherwise satisfied. The contractor may also be required to furnish a lien bond or indemnity bond to protect the owner with respect to each exception.
G706A–1994, Contractor’s Affidavit of Release of Liens
AIA Document G706 A–1994 supports AIA Document G706–1994 in the event that the owner requires a sworn statement of the contractor stating that all releases or waivers of liens have been received. In such event, it is normal for the contractor to submit AIA Documents G706–1994 and G706A–1994 along with attached releases or waivers of liens for the contractor, all subcontractors, and others who may have lien rights against the owner’s property. The contractor is required to list any exceptions to the sworn statement provided in G706A–1994 and may be required to furnish to the owner a lien bond or indemnity bond to protect the owner with respect to such exceptions.
G707–1994, Consent of Surety to Final Payment
AIA Document G707–1994 is intended for use as a companion to AIA Document G706–1994, Contractor’s Affidavit of Payment of Debts and Claims, on construction projects where the contractor is required to furnish a bond. By obtaining the surety’s approval of final payment to the contractor and its agreement that final payment will not relieve the surety of any of its obligations, the owner may preserve its rights under the bond.
G707A–1994, Consent of Surety to Final Reduction in or Partial Release of Retainage
This is a standard form for use when a surety company is involved, and the owner/contractor agreement contains a clause whereby retainage is reduced during the course of the construction project. When duly executed, AIA Document G707A–1994 assures the owner that such reduction or partial release of retainage does not relieve the surety of its obligations.
G709–2001, Work Changes Proposal Request
This form is used to obtain price quotations required in the negotiation of change orders. AIA Document G709–2001 is not a change order or a direction to proceed with the work. It is simply a request to the contractor for information related to a proposed change in the construction contract. AIA Document G709–2001 provides a clear and concise means of initiating the process for changes in the work.
G710–1992, Architect’s Supplemental Instructions
AIA Document G710–1992 is used by the architect to issue additional instructions or interpretations or to order minor changes in the work. It is intended to assist the architect in performing its obligations as interpreter of the contract documents in accordance with the owner/architect agreement and the general conditions of the contract for construction. AIA Document G710–1992 should not be used to change the contract sum or contract time. It is intended to help the architect perform its services with respect to minor changes not involving adjustment in the contract sum or contract time. Such minor changes are authorized under Section 7.4 of AIA Document A201–2007.
G711–1972, Architect’s Field Report
The architect’s project representative can use this standard form to maintain a concise record of site visits or, in the case of a full-time project representative, a daily log of construction activities.
G712–1972, Shop Drawing and Sample Record
AIA Document G712–1972 is a standard form by which the architect can log and monitor shop drawings and samples. The form allows the architect to document receipt of the contractor’s submittals, subsequent referrals of the submittals to the architect’s consultants, action taken, and the date returned to the contractor. AIA Document G712–1972 can also serve as a permanent record of the chronology of the submittal process.
G714–2007, Construction Change Directive
AIA Document G714–2007 is a directive for changes in the Work for use where the owner and contractor have not reached an agreement on proposed changes in the contract sum or contract time. AIA Document G714–2007 was developed as a directive for changes in the work which, if not expeditiously implemented, might delay the project. Upon receipt of a completed G714–2007, the contractor must promptly proceed with the change in the work described therein. NOTE: G714–2007 replaces AIA Document G714–2001 (expired May 31, 2009).
G714CMa–1992, Construction Change Directive, Construction Manager-Adviser Edition
AIA Document G714CMa–1992 serves the same purpose as AIA Document G714–2007, except that this document expands responsibility for signing construction change directives to include both the architect and the CM.
G715–1991, Supplemental Attachment for ACORD Certificate of Insurance 25-S
AIA Document G715–1997 is intended for use in adopting ACORD Form 25-S to certify the coverage required of contractors under AIA Document A201–2007, General Conditions of the Contract for Construction. Since the ACORD certificate does not have space to show all the coverages required in AIA Document A201–2007, the Supplemental Attachment form should be completed, signed by the contractor’s insurance representative, and attached to the ACORD certificate.
G716–2004, Request for Information (RFI)
AIA Document G716–2004 provides a standard form for an owner, architect, and contractor to request further information from each other during construction. The form asks the requesting party to list the relevant drawing, specification, or submittal reviewed in attempting to find the information. Neither the request nor the response received provides authorization for work that increases the cost or time of the project.
G732–2009 (formerly G702CMa–1992), Application and Certificate for Payment, Construction Manager as Adviser Edition
AIA Document G732–2009 serves the same purposes as AIA Document G702–1992. The standard form AIA Document G703–1992, Continuation Sheet, is appropriate for use with G732–2009. NOTE: G732–2009 replaces AIA Document G702CMa–1992 (expired December 31, 2010).
G736–2009 (formerly G722CMa–1992), Project Application and Project Certificate for Payment, Construction Manager as Adviser Edition
Use AIA Document G736–2009 with AIA Document G737–2009, Summary of Contractors’ Applications for Payment. These forms are designed for a project where a CM is employed as an adviser to the owner but not as a constructor, and where multiple contractors have separate, direct agreements with the owner.
Each contractor submits separate AIA Documents G732–2009 and G703–1992, payment application forms, to the CM-adviser, who collects and compiles them to complete G736–2009. AIA Document G737–2009 serves as a summary of the contractors’ applications with totals being transferred to AIA Document G736–2009. The CM-adviser can then sign G736, have it notarized, and submit it along with the G737 to the architect. Both the architect and the CM must certify the payment amount. NOTE: G736–2009 replaces AIA Document G722CMa–1992 (expired December 31, 2010).
G737–2009 (formerly G723CMa–1992), Summary of Contractors’ Applications for Payment, Construction Manager as Adviser Edition
Use AIA Document G736–2009 with AIA Document G737–2009, Summary of Contractors’ Applications for Payment. These forms are designed for a project where a CM is employed as an adviser to the owner, but not as a constructor, and where multiple contractors have separate, direct agreements with the owner.
Each contractor submits separate AIA Documents G703–1992 and G732–2009, payment application forms, to the CM-adviser, who collects and compiles them to complete AIA Document G736–2009. AIA Document G737–2009 serves as a summary of the contractors’ applications with totals being transferred to G736. The CM-adviser can then sign G736, have it notarized, and submit it along with the G737 to the architect. Both the architect and the CM must certify the payment amount. NOTE: G737–2009 replaces AIA Document G723CMa–1992 (expired December 31, 2010).
G801–2007 (formerly G605–2000), Notification of Amendment to the Professional Services Agreement
AIA Document G801–2007 is intended to be used by an architect when notifying an owner of a proposed amendment to the AIA’s owner/architect agreements, such as AIA Document B101–2007. NOTE: G801–2007 replaces AIA Document G605–2000 (expired May 31, 2009).
G802–2007 (formerly G606–2000), Amendment to the Professional Services Agreement
AIA Document G802–2007 is intended to be used by an architect when amending the professional services provisions in the AIA’s owner/architect agreements, such as AIA Document B101–2007. NOTE: G802–2007 replaces AIA Document G606–2000 (expired May 31, 2009).
G803–2007 (formerly G607–2000), Amendment to the Consultant Services Agreement
AIA Document G803–2007 is intended for use by an architect or consultant when amending the professional services provisions in the AIA’s architect–consultant agreement, AIA Document C401–2007. NOTE: G803–2007 replaces AIA Document G607–2000 (expired May 31, 2009).
G804–2001, Register of Bid Documents
AIA Document G804–2001 serves as a log for bid documents while they are in the possession of contractors, subcontractors, and suppliers during the bidding process. The form allows tracking by bidder of documents issued, deposits received, and documents and deposits returned. AIA Document G804–2001 is particularly useful as a single point of reference when parties interested in the project call for information during the bidding process.
G806–2001, Project Parameters Worksheet
AIA Document G806–2001 is an administrative form intended to help maintain a single standard list of project parameters including project objectives, owner’s program, project delivery method, legal parameters, and financial parameters.
G807–2001, Project Team Directory
AIA Document G807–2001 is used as a single point of reference for basic information about project team members including the owner, architect’s consultants, contractor, and other entities. AIA Document G807–2001 differs from AIA Document G808–2001, Project Data, which contains only data about the project and project site. G807–2001 should be carefully checked against the owner/architect agreement so that specific requirements as to personnel representing the owner and those involved with the architect in providing services are in conformance with the agreement.
G808–2001, Project Data
AIA Document G808–2001 is used for recording information about approvals and zoning and building code issues gathered in the course of providing professional services. AIA Document G808–2001 should be completed piece by piece as a project progresses and periodically reviewed to ensure information relevance. The attached worksheet, AIA Document G808A–2001, Construction Classification Worksheet, can be used to supplement the G808–2001.
G808A–2001, Construction Classification Worksheet
AIA Document G808A–2001, Construction Classification Worksheet, can be used to supplement AIA Document G808–2001, which is used for recording information about approvals and zoning and building code issues gathered in the course of providing professional services. AIA Document G808–2001 should be completed piece by piece as a project progresses and periodically reviewed to ensure information relevance. AIA Document G808A–2001 can help a design team work through the range of code compliance combinations available before choosing a final compliance strategy.
G809–2001, Project Abstract
AIA Document G809–2001 establishes a brief, uniform description of project data to be used in the tabulation of architect marketing information and firm statistics. The intent is to provide a single sheet summary where information can be sorted, compiled, and summarized to present a firm’s experience. Information compiled in AIA Document G809–2001 can support planning for similar projects and answer questions pertaining to past work.
G810–2001, Transmittal Letter
AIA Document G810–2001 allows for the orderly flow of information between parties involved in the design and construction phase of a project. It serves as a written record of the exchange of project information and acts as a checklist reminding the sender to tell the recipient what exactly is being sent, how the material is being sent, and why it is being sent.
14.5. ConsensusDOCS Contract Documents
ConsensusDOCS publishes a comprehensive catalog of 100 + documents that covers most contract document needs. ConsensusDOCS are the standard contracts written, developed, and endorsed by a diverse coalition of 40 leading associations with members from all stakeholders in the design and construction industry. By fairly allocating risk and incorporating best practices, ConsensusDOCS helps reduce costly claims and contingencies, and lessen adversarial negotiations, thus saving time and money. ConsensusDOCS contracts are continuously updated to keep pace with the latest changes in construction practices and legal updates. From agreements that address issues such as BIM, green construction, or the standardized ConsensusDOCS contracts, developed by a coalition of leading industry experts means you are assured that your projects have an excellent contractual foundation. Moreover, the ConsensusDOCS comprehensive catalog addresses all major project delivery methods and in addition to providing coordinated administrative forms.
ConsensusDOCS contract documents series include (visit website: www.consensusdocs.org).
200 Series: General Contracting Documents
300 Series: Collaborative Documents
400 Series: DB Documents
500 Series: Construction Management Contracts
700 Series: Subcontracting Documents
800 Series: Program Management Documents
Future documents scheduled include:
Schedule Specification
Purchase Agreement
CM at Risk Short Form
Land Survey Agreement
Teaming Agreement for DB Projects
Subcontractor Qualifications
Joint Venture Agreement
Joint Venture Agreement for DB
Federal Design-Builder and Design Professional Agreement
Subconsultant Agreement Between an Architect and Engineer
Owner and Geotechnical Consultant Agreement
General Contracting Documents (200 Series) from ConsensusDOCS website:
ConsensusDOCS 200: Agreement and General Conditions Between Owner and Constructor (Lump Sum)
• ConsensusDOCS 200.1: Time and Price Impacted Materials
Provides a method for establishing the market price of a construction commodity and for calculating a price adjustment for that commodity if it has an extraordinary cost increase or decrease. View 200.1 Guidebook Comments.
• ConsensusDOCS 200.2: Electronic Communications Protocol Addendum
Helps the parties determine acceptable formats and technology for electronic communications, including BIM. This ground-breaking document allows for communications management and consistency throughout the project. View 200.2 Guidebook Comments.
• ConsensusDOCS 202: Change Order
Used to formalize changes in the work and adjustments to contract time and price.
• ConsensusDOCS 203: Interim Directed Change
A unilateral order issued by the Owner in the absence of agreement on price and time for changes in the work.
• ConsensusDOCS 204: Request for Information
Used by Contractors or Subcontractors to request information or instructions.
• ConsensusDOCS 205: Short Form Agreement Between Owner and Constructor (Lump Sum)
• ConsensusDOCS 220: Contractor’s Qualification Statement for Engineered Construction
May be used as a generic prequalification statement or a contract-specific qualification statement. Includes Schedules A-C regarding current/past projects and key personnel.
• ConsensusDOCS 221: Contractor’s Statement of Qualifications for a Specific Project
Helps Owners to assess the qualifications of a Contractor. Includes Schedules A-C regarding current/past projects and key personnel.
• ConsensusDOCS 222: Architect-Engineer’s Statement of Qualifications for a Specific Project
Helps Owners to assess the qualifications of an Architect-Engineer.
• ConsensusDOCS 235: Short Form Agreement Between Owner and Contractor (Cost of Work)
This convenient, short form agreement and general conditions document is premised on concepts and language found in the ConsensusDOCS 510.
• ConsensusDOCS 240: Agreement Between Owner and Design Professional
Coordinated for use with ConsensusDOCS 200 series (Owner-Contractor documents), this agreement is used between the Owner and the Architect-Engineer performing a full range of design and administrative services for the project. View 240 Guidebook Comments. View 240 Index.
• ConsensusDOCS 245: Short Form Agreement Between Owner and Design Professional
Describes the relationship between the Owner and the Architect-Engineer and places most transaction-specific information at the front and addresses services from schematic design through construction contract administration.
• ConsensusDOCS 260: Performance Bond
Developed with the assistance of organizations representing the surety industry, this standardized performance bond form is coordinated for use with ConsensusDOCS 200 and 500 documents.
• ConsensusDOCS 261: Payment Bond
Developed with the assistance of organizations representing the surety industry, this standardized payment bond form is coordinated for use with ConsensusDOCS 200 and 500 documents.
• ConsensusDOCS 262: Bid Bond
• ConsensusDOCS 263: Warranty Bond
Used for the correction of a defect in the Work during a one-year Correction of Work period. Provisions addressing general conditions and Surety obligation are provided in this document.
• ConsensusDOCS 270: Instructions to Bidders on Private Work
Used for bid submission and award, it provides information about prebid procedure, including obtaining bidding documents and additional information prior to opening of bids and the examination of bidding documents and worksite.
• ConsensusDOCS 280: Certificate of Substantial Completion
Establishes the date of substantial completion of the work or a designated portion thereof.
• ConsensusDOCS 281: Certificate of Final Completion
Establishes the date of final completion of the work.
• ConsensusDOCS 290: Guidelines for Obtaining Financial Owner Information
Helps the Contractor identify the type of information that should be requested of the Owner, and why this information is important.
• ConsensusDOCS 290.1: Owner Financial Questionnaire
Contractors and Subcontractors use this form to request specific information about the Owner’s legal structure, ownership of the land, construction financing and insurance matters.
• ConsensusDOCS 291: Application for Payment (Guaranteed Maximum Price (GMP)
Facilitates the calculation and documentation of progress payments.
• ConsensusDOCS 292: Application for Payment (Lump Sum)
Facilitates the calculation and documentation of progress payments.
• ConsensusDOCS 293: Schedule of Values
Provides a breakdown of the cost of elements of the work and should be used with the ConsensusDOCS application for payment forms ConsensusDOCS 291 and 292.
• ConsensusDOCS 907: Equipment Lease
Offered as either a one-page agreement or two-page general conditions, this lease agreement is accompanied by an instruction sheet on assumptions in the document which may require modification on items in the standard form requiring completion.
Collaborative Documents (300 Series) from ConsensusDOCS website:
ConsensusDOCS 300: Tri-Party Collaborative Agreement
This is the first standard IPD agreement published in the United States. The Owner, Designer, and Constructor all sign the same agreement. This agreement incorporates Lean principles and is also known as a relational contract. A core team at both the project management and project development levels is created to make consensus-based project decisions to increase project efficiency and results. View 300 Guidebook Comments.| Read “IPD for Public and Private Owners.”
ConsensusDOCS 301: Building Information Modeling (BIM) Addendum
The first standard contract document that globally addresses legal issues and administration associated with utilizing BIM, it is intended to be used as an identical contract addendum for all project participants inputting information into a BIM Model. It also includes a BIM Execution Plan, which allows the parties to determine the level for which BIM model(s) may be relied upon legally. View 301 Guidebook Comments.
ConsensusDOCS 310: Green Building Addendum
Another industry first—appropriate for use on projects with green building elements, particularly those seeking a third-party green building rating certification such as LEED. It provides a contractual mechanism to identify clear objectives and assign roles and responsibilities to achieve green goals. The parties designate a GBF to coordinate or implement identified objectives, which can be a project participant or consultant. It contemplates that such services will be included in the underlying agreement with the project participant or in a separate agreement with a GBF. View 310 Guidebook Comments. |Read an article on ConsensusDOCS 310.
Design-Build Documents (400 Series) from ConsensusDOCS Website:
• ConsensusDOCS 400: Preliminary Agreement Between Owner and Designer-Builder
Intended to be used in conjunction with ConsensusDOCS 410 or 415 to take the project through schematic design only.
• ConsensusDOCS 410: Agreement and General Conditions Between Owner and Design-Builder (Cost of Work Plus Fee with Guaranteed Maximum Price (GMP))
May be used as a follow-up document to ConsensusDOCS 400 or as a stand-alone document that addresses the entire DB process. View 410 Guidebook Comments.
• ConsensusDOCS 415: Agreement and General Conditions Between Owner and Design-Builder (Lump Sum Based on the Owner’s Program Including Schematic Design Documents)
• ConsensusDOCS 420: Agreement Between Design-Builder and Design Professional
Delineates the respective rights and responsibilities of the Design-Builder and the Architect-Engineer.
• ConsensusDOCS 421: Statement of Qualifications
Provides information to Owners to assess the qualifications of a Designer-Builder.
• ConsensusDOCS 450: Agreement Between Design-Builder and Subcontractor (Design-Builder Assumes Risk of Owner Payment)
Intended for use where the Subcontractor has not been retained to provide substantial portions of the design for the project, and payment to the Subcontractor is not conditioned on the Design-Builder having received payment from the Owner.
• ConsensusDOCS 460: Agreement Between Design-Builder and Design-Build Subcontractor (Subcontractor Provides a Guaranteed Maximum Price (GMP) and Design-Builder Assumes Risk of Owner Payment)
Intended for use where the Subcontractor is retained by the Design-Builder early in the design phase, basically providing the same design and construction services as the Design-Builder provides the Owner under ConsensusDOCS 410 and 415. Construction is performed based on cost of the work, plus a fee, up to the GMP. Payment to the Subcontractor is not conditioned on the Design-Builder having received payment from the Owner for subcontract work satisfactorily performed.
• ConsensusDOCS 470: Performance Bond (Surety Is Liable for Design Costs of Work)
Bond between the Surety and the Designer-Builder where the Surety is liable for the design costs of the work. Provisions addressing Surety obligations, limited liability for design, and dispute resolution are provided in this document. Space is provided to fill in the bond sum and names of Owner (Obligee), Designer-Builder (Principal), Surety, Surety Representative, and Project.
• ConsensusDOCS 471: Performance Bond (Surety Is Not Liable for Design Services)
• ConsensusDOCS 472: Payment Bond (Surety Is Liable for Design Costs of Work)
Bond between the Surety and the Designer-Builder where the Surety is liable for the design costs of the work. Provisions addressing Surety obligations, on liability of design, and dispute resolution are included.
• ConsensusDOCS 473: Payment Bond (Surety Is Not Liable for Design Services)
Bond between the Surety and the Designer-Builder where the Surety is not liable for the design costs of the work. Provisions addressing Surety obligations, on liability of design, and dispute resolution are included.
• ConsensusDOCS 481: Certificate of Substantial Completion
Establishes the date of substantial completion of the work.
• ConsensusDOCS 482: Certificate of Final Completion
Establishes the date of final completion of the work.
• ConsensusDOCS 491: Application for Payment (Cost of Work and a Guaranteed Maximum Price (GMP) Has Been Established)
Used with the ConsensusDOCS 410 and provides for notarization.
• ConsensusDOCS 492: Application for Payment (Lump Sum)
Used with the ConsensusDOCS 415 and provides for notarization.
• ConsensusDOCS 495: Change Order for Cost-Plus With Guaranteed Maximum Price (GMP) Design-Build Contracts
Used with the ConsensusDOCS 410 and requires signatures of the Designer-Builder and the Owner.
• ConsensusDOCS 496: Change Order for Lump Sum Design-Build Contracts
Used with the ConsensusDOCS 415 and requires signatures of the Designer-Builder and the Owner.
Construction Management Contracts (500 Series) from ConsensusDOCS website:
ConsensusDOCS 500: Agreement and General Conditions Between Owner and Construction Manager (CM is At Risk)
An integrated agreement and general conditions document, the ConsensusDOCS 500 also provides an option for preconstruction services, such as providing estimates of the Project, reviewing drawings and specifications for constructability problems, creating schedules for procurement of long lead items, and developing Trade Contractor interest in the Project. It may be used in a variety of negotiated contract situations in which the Owner desires a comprehensive set of preconstruction and/or construction services from the Construction Manger and seeks the assurance of an overall project cost ceiling. View 500 Guidebook Comments.
ConsensusDOCS 510: Agreement and General Conditions Between Owner and Construction Manager (Cost of Work with Option for Preconstruction Services)
Intended to form an integrated agreement and general conditions document between the Owner and the CM performing work on a cost of the work plus a fee basis without a GMP. It also provides an option for the Contractor to provide preconstruction services similar to the ConsensusDOCS 500. It may be used in a variety of negotiated contract situations in which the Owner desires a comprehensive set of preconstruction and/or construction services from the Contractor, and it may be particularly applicable in situations where project variables, such as a well-defined scope of the work, may be unknown at the time of contract execution. With preconstruction services added, this document becomes the equivalent of a CM at Risk (CM@R) agreement.
ConsensusDOCS 525: Change Order/Construction Manager Fee Adjustment
This form is for projects built under the Construction Management method of contracting
Subcontracting Documents (700 Series) from ConsensusDOCS website:
• ConsensusDOCS 703: Purchase Agreement for Noncommodity Goods
• Standard purchase agreement between a Constructor and an equipment manufacturer for noncommodity goods, which may include some installation labor.
• ConsensusDOCS 705: Invitation to Bid/Subbid Proposal
• Used for Subcontractors to describe the scope of work covered in their bids.
• ConsensusDOCS 706: Performance Bond
• This bond can be requested by a Contractor from a Subcontractor to guarantee the Subcontractor’s performance.
• ConsensusDOCS 707: Payment Bond
• ConsensusDOCS 710: Application for Payment
Provides a standardized format for Subcontractor’s requests for payment.
• ConsensusDOCS 721: Statement of Qualifications
Used by the Subcontractor to provide information, such as personnel qualifications, industry references, performance history, and safety record, to the Contractor who is assessing the Subcontractor’s qualifications to work on a specific project.
• ConsensusDOCS 725: Agreement Between Subcontractor and Subsubcontractor
The first and only standard agreement, this simplified form, is for use between a Subcontractor and a Subsubcontractor and is suited to the generally less complex relationship between these two parties.
• Exhibit E
Insurance requirements to 725 Standard Subsubcontractor Agreement.
• ConsensusDOCS 750: Agreement Between Contractor and Subcontractor (Contractor Assumes Risk of Owner Payment)
This document is intended to be generally compatible with ConsensusDOCS 200 or other agreements. An indemnity agreement is also included. View 750 Guidebook Comments.
• ConsensusDOCS 750.1: Rider Between Contractor and Subcontractor for Material Storage at Subcontractor’s Site
Governs the storage of specific materials and equipment at a Subcontractor’s yard and sets a standard agreement for storage that will ensure the minimum precautions and coverages are agreed upon (and purchased if they are not covered in the Builder’s Risk Policy for the Project). It may be attached as a rider to ConsensusDOCS 750.
• ConsensusDOCS 751: Short Form Agreement Between Contractor and Subcontractor (Contractor Assumes Risk of Owner Payment)
This convenient subcontract form places all negotiated points and project-specific terms at the beginning of the document. The Contractor assumes the risk of Owner nonpayment. An indemnity agreement is also included.
• ConsensusDOCS 752: Subcontract for Use on Federal Construction
• ConsensusDOCS 760: Bid or Proposal Bond
Used when a bid or proposal bond is required.
• ConsensusDOCS 781: Certificate of Substantial Completion
Establishes the date of substantial completion of the work.
• ConsensusDOCS 782: Certificate of Final Completion
Establishes the date of final completion of the work.
• ConsensusDOCS 790: Subcontractor Request for Information (RFI)
Used by Subcontractors to request information or instructions.
• ConsensusDOCS 795: Change Order
Formalizes changes in the work and make adjustment to subcontract time and price.
• ConsensusDOCS 796: Interim Directed Change
A unilateral order issued by the Contractor in absence of agreement on price and time for changes in the Subcontractor’s work.
Program Management Documents (800 Series) from ConsensusDOCS website:
• ConsensusDOCS 800: Program Management Agreement and General Conditions Between Owner and Program Manager
The contractual configuration is of a “pure/agent program manager,” not at risk, either with all design and construction contracts signed by the Owner or the Program Manager signing the contracts as the agent of the Owner. The Program Manager can be seen as replacing the Owner’s facilities staff and may oversee a project delivery accomplished under a variety of methods (e.g., DBB or DB) for each discrete project or site. This contract provides a scope of services presented in a matrix to be used as a menu for the parties to assign duties.
• ConsensusDOCS 801: Construction Management Agreement Between Owner and Construction Manager (Construction Manager is Owner’s Agent and Owner Enters Into All Trade Contractor Agreements)
• May be used with the construction management process when the Owner awards all the trade contracts.
• ConsensusDOCS 802: Agreement Between Owner and Trade Contractor (Construction Manager is Owner’s Agent)
• ConsensusDOCS 803: Agreement Between Owner and Architect/Engineer (Construction Manager Acting as Agent Has Been Retained by Owner)
• Developed expressly to coordinate with ConsensusDOCS’ other Construction Management agency forms, specifically ConsensusDOCS 801 and 802.
• ConsensusDOCS 810: Agreement Between Owner and Owner’s Representative
• Agreement between an Owner and a person/entity acting as an Independent Contractor, who shall serve as the Owner’s authorized representative for a specific project, assuming that the Owner will retain both an Architect-Engineer and a Contractor.
• ConsensusDOCS 812: Interim Directed Change
• Issued by the Owner to the Trade Contractor in the absence of agreement on price and time for changes in the trade contract work.
• ConsensusDOCS 813: Change Order
• Used to formalize changes in the trade contract work and make adjustment to time and price.
• ConsensusDOCS 814: Certificate of Substantial Completion
• Establishes the date of final completion of the work.
• ConsensusDOCS 815: Certificate of Final Completion
• Establishes the date of final completion of the work.
14.6. Engineers Joint Contract Documents Committee Contract Documents
The EJCDC is the third organization that has developed standard documents that represent the latest and best thinking involved in engineering design and construction projects. EJCDC has existed since 1975 to develop and update fair and objective standard documents that are representative of the latest and best thinking in legal relations between the various parties involved in engineering design and construction projects. The EJCDC is a coalition of stakeholders in the project delivery process who develop and endorse quality contract documents. The EJCDC committee is made up of the National Society of Professional Engineers (NSPE), the American Counsel of Engineering Companies, the American Society of Civil Engineers, and the Associated General Contractors and involves the participation of more than 15 other professional engineering design, construction, owner, legal, and risk management organizations.
EJCDC Contract Documents are therefore systematically prepared, reviewed, and analyzed by various committees of experienced engineering design and construction professionals, owners, contractors, professional liability and risk management experts, with the participation and advice of legal counsel. Furthermore, it is now more than 30 years that EJCDC has been developing and endorsing quality contract documents and encouraging their use through education and promotion (visit: http://www.ejcdc.org/).
14.6.1. Engineers Joint Contract Documents Committee Documents: Construction
Standard General Conditions of the Construction Contract (C-700)
Bid Bond; Damages Form (C-435)
Bid Bond; Penal Sum Form (C-430)
Certificate of Substantial Completion (C-625)
Change Order (C-941)
Construction Payment Bond (C-615)
Construction Performance Bond (C-610)
Construction-Related Documents Set (C-990)
Construction-Related Documents Set (C-990)
Contractor’s Application for Payment (C-620)
Engineer’s Request for Instructions on Bonds and Insurance for Construction (C-051)
Field Order (C-942)
Guide to the Preparation of Supplementary Conditions (C-800)
Narrative Guide to the 2007 EJCDC Construction Documents
Notice of Award, Download (C-510)
Notice to Proceed (C-550)
Owner’s Instructions Concerning Bonds and Insurance for Construction (C-052)
Owner’s Instructions Regarding Bidding Procedures (C-050)
Suggested Bid Form for Construction Contracts (C-410)
Suggested Form of Agreement Between Owner and Contractor; Cost-Plus (C-525)
Suggested Form of Agreement Between Owner and Contractor; Stipulated Price (C-520)
Suggested Instructions to Bidders for Construction Contracts (C-200)
Work Change Directive (C-940)
14.6.2. Engineers Joint Contract Documents Committee Documents: Contract Document Sets
Owner–Engineer Documents Set, Download (E-990)
Construction-Related Documents Set (C-990)
Design/Build Document Set (D-990)
Engineer-Subconsultant Agreements Set (E-991)
Environmental Remediation Set (R-990)
Full Design/Bid/Build Document Set (A-990)
Owner–Engineer Documents Set (E-990)
Procurement Agreements Set (P-990)
For other EJCDC Documents, visit: http://www.nspe.org/ejcdc/index.html. While there are many organizations that produce their own versions of contract documents, it is always advisable to consult an attorney to ensure that a particular contract fully meets your needs.
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