American Bar Association
Forum on the Construction Industry
CONTRACT PROVISIONS –
WHO READS THEM ANYWAY ?
Workshop D
Melissa A. Beutler, Esq. LEED AP
Holland & Hart LLP
9555 Hillwood Drive, Suite 200
Las Vegas, Nevada 89134
Patrick A. Genzler
Vandeventer Black LLP
101 West Main St.
500 World Trade Center
Norfolk, VA 23510
Robert J. MacPherson
Gibbons P.C.
One Gateway Center
Newark, New Jersey 07102-5310
Presented at the 2012 Annual Meeting
Advanced Project Delivery:
Improving the Odds of Success
April 26-28, 2012
Bellagio Hotel, Las Vegas, NV
©2012 American Bar Association
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The parameters of the project have been established and a Project Delivery System
chosen. While the business people tend to the commercial aspects of the deal, lawyers will be
tasked with creating the documents to govern the legal relationships among the various parties.
Whether the lawyers involved represent the Owner, the Design Professionals, the Contractor or
some combination of them, the contracting decisions will reverberate up and down the
contractual chain. This paper explores the factors that influence selecting the type of contract
documents to advance the projects goals and the often competing interests of the various
stakeholders.
Well before pen is put to paper, the construction lawyer needs to have a clear
understanding of the client’s goals and objectives. Some of the topics the lawyer should discuss
with the client very early in the engagement are set forth below.
PROJECT DELIVERY SYSTEMS
It seems like new ways to deliver projects are being developed on a regular basis, but
many packages are a variation on a few well known methods. While a detailed discussion of the
various project delivery systems is beyond the scope of this paper, the basic outlines below
provide a context for the discussion that follows. Most projects get conceived, planned and built
using one of the following systems:
Design Bid Build, where the Owner retains a Design Professional to prepare a full set of
plans and specifications that will be given to one or more Contractors who will be asked to bid a
lump sum price for building what is shown on the plans and specifications.
Design Build, where the Owner retains a single firm, which could be Design Professional
or Contractor-led, to both design and construct a project that meets the Owner’s objectives or
“Program.” The pricing is typically on a cost-plus basis, perhaps with an agreed or “guaranteed
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maximum price” or GMP.
CM At Risk, where the Owner retains a construction management (“CM”) firm to assist
in the development of the Owner’s Program, perhaps including the selection of Design
Professionals to be retained by the Owner, and overall administration of the development and
construction of the project on behalf of the Owner. The CM will be “At Risk” for the
performance of the work and will subcontract with all trades to actually build the project. The
CM will also typically be responsible to deliver the project within an agreed GMP.
CM As Agent, where the Owner retains a CM on a fee basis to perform the same
services that CM At Risk would perform. The difference being that the CM will enter into any
trade contracts as the Owner’s agent, with the Owner being responsible for paying the Trade
Contractors. The CM, with limited exceptions, has no liability for the failure of a Trade
Contractor to perform its contract.
Integrated Project Delivery/Collaborative Contracting/Alliancing, where the
contractual relationships between Owner, Design Professional and Contractor do not follow
traditional patterns, with risks and rewards of performance or “pain or gain” being shared by all
parties, not necessarily based on contractual rights and responsibilities.
The skilled practitioner knows that a careful matching of contract documents to delivery
system will save both time and money and lessen the potential for disputes based upon unclear or
conflicting contract language. The construction lawyer who understands the interplay between
contract language and project delivery will be in the best position to add value to the project.
COMPARING CONTRACT DOCUMENTS
Each set of contract documents has its own strengths and weaknesses and does not
necessarily lend itself to an apples-to-apples comparison since each set was designed to address
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project needs as perceived by the creators. Each set also reflects some professional or
organizational bias of the sponsoring organization. It is possible, however, to examine each set
based upon certain criteria and needs common to all projects.
Project Size
It would be simplistic and wrong to assume that the larger the project, the greater the
need for very sophisticated contract documents. Not unlike construction disputes, the cost of the
project may have little to do with the complexity of the issues to be addressed by the contract
documents. A very large, single-family housing project constructed on undeveloped land by an
Owner and Contractor who have previously worked together on similar projects may only need a
simple contract. In contrast, a pharmaceutical company looking both to consolidate its
operations from several locations to a single campus and to coordinate completion of the new
construction with vacating its old facilities and relocating its employees will have very different
needs.
The expansion and renovation of existing structures, especially occupied structures, may
require phased construction with detailed scheduling requirements and multiple partial
completion dates. Contracts for large civil works projects must contemplate issues such as
acquiring interests in private property, either permanently or temporarily, to facilitate
construction.
Project Team
The parties involved in building the project is as important as what they are building.
Unlike the manufacturing process where a facility produced the same product repeatedly in the
same location by the same work force, each construction project is unique. No other project has
been built at the same time, in the same location, by the same people. Managing the risk of
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adverse weather and site issues, such as access and underground conditions, can be challenging.
Most challenging is managing the conflicting interests of all project participants, from the Owner
down to the port-o-john supplier.
At one time, many large companies had full-time facility staff to manage improvement
projects. The same was true of many institutions like colleges and hospitals. Today, these inhouse management functions are frequently outsourced to architecture and engineering firms or
construction managers that an Owner can hire on an as-needed basis. When considering what
type of contract document is most appropriate, the construction lawyer needs to consider the
relative sophistication of the client and, just as importantly, the staff resources the client can
devote to the project. The client representative may be very knowledgeable about design and
construction but, if he has other full-time operational duties, he may unable to devote significant
time to the project. In that case, the documents must address who will provide the oversight and
direction to the project that would normally be expected of the Owner.
In addition to knowing what management resources the Owner can devote to the project,
the construction lawyer will need to understand the hierarchy among the design and construction
team. If the Owner has indicated a preference for the Design Professional to have a lead role in
both design and contact administration, the contract documents must reflect this. On a designbuild project where the Design Builder is a Contractor-led outfit, the Owner should retain a
contractual right to communicate directly with the Design Professional.
A good construction lawyer must match the contract documents to the project team. For
example, Design Professionals and Contractors that have spent their entire careers doing designbid-build work under AIA forms will likely be less comfortable using the ConsensusDOCS 300
“Collaborative Project Delivery” model.
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Ancillary Forms
The plethora of ancillary forms used on construction projects is perhaps best
demonstrated by the ABA Forum on the Construction Industry’s Forms and SubstanceSpecialized Agreements For The Construction Project-a book that covers everything from prebid forms through dispute resolution forms in over 600 pages. When determining what contract
documents will be necessary, the construction lawyer should know if the selected documents are
flexible enough to accommodate all project needs. These needs may be created by internal or
external forces.
Government regulations will often dictate terms that must be included in construction
contracts, even for private projects. These may take the form of prevailing wage requirements
for projects receiving tax credits or requirements that the project meet certain environmental or
“Green” standards such as achieving a LEED or other sustainable certification. Some states have
regulations specifying terms that must be included in design-build contracts when the Design
Professional is not in privity with the Owner.1 Standard form contracts must be modified to
address these issues.
An area where the form contracts do address emerging trends is in Building Information
Modeling (“BIM”) and electronic documents, in general. As discussed below, some of the form
families are more comprehensive than others, so it will be up to the construction lawyer to select
the forms that best suit all project needs.
Level of Modification Required
While forms are a helpful starting place, using a form contract off-the-shelf invites a
malpractice claim. Intended to be used nationally, no form can or does address individual state
or local laws and regulations. Each requires the inclusion of project specific information such as
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price, scope and schedule. This may be accomplished by the use of a “fill in the blank” format,
the use of exhibits or riders, or some combination. There should rarely be a need for extensive
rewriting of the basic terms of the form documents. Such a need is likely a sign the wrong
documents were selected in the first place.
Extensive modification defeats the purpose of using a form document. It also creates the
possibility of conflicting terms and conditions that could lead to disputes. It is important the
construction lawyer carefully study the proposed documents very early in the process so that the
selection of forms is well informed.
Bias/Critical Risk
One school of thought on risk allocation is that risk should be contractually placed with
the party best able to control that risk. Under that theory, an Owner is considered to be in the
best position to investigate the underground conditions of its property during the design process
and should bear the risk of increased costs if the conditions encountered are not as shown in the
contract documents. An additional reason for allocating this risk to the Owner is that, had the
actual conditions been disclosed, the bid price would have reflected the cost of addressing the
actual conditions. Contractors, considered to be knowledgeable of market forces and estimating,
are typically allocated the risk of increases in the price of labor and material during the
anticipated duration of the project.
Another school of thought is that the party in the strongest negotiating position should
allocate all risk to the other party. The City of New York has allocated almost all risk of project
delay, including that caused by the City, to its contractors in its public works contracts.2 While
many industry groups have argued that the City’s “no damage for delay” clause increases the
cost of public construction in the City, the fact is there is no shortage of contractors bidding City
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work and no hard evidence its costs are higher due to the clause.
The various industry forms discussed below all, for the most part, allocate risk based on
the “ability to control” philosophy. Policy questions aside, the construction lawyer needs to
know his client’s views on risk allocation and how that should be reflected in the construction
documents. For example, while some Owners regularly request abrasive indemnity provisions,
other Owners prefer more even-handed provisions. Of course that discussion will include the
benefits and costs of whatever approach is selected upon so that the client can make an informed
decision.
In addition to risk allocation, the various forms treat the roles of the project participants
very differently. It should be no surprise that the American Institute of Architect documents
place the Design Professional in a paramount role with regard to project administration, dispute
resolution, and other critical tasks. The Design Professional also enjoys certain contractual
protections under AIA documents that are not available under other contract forms. Similarly,
while claiming to represent the interests of all industry segments, the ConsensusDOCS form
have a decided, if slight, Contractor bias.
CHOOSING THE RIGHT DOCUMENTS
While many prefer to use manuscript forms, and at least one commentator has argued
forcefully that form contracts are “never” acceptable from the owner’s perspective,3 the authors
believe the various standard industry forms represent a depth of experience and knowledge far
exceeding that found in any manuscript form. Given today’s economy, with money tight and
projects proceeding on increasingly slim margins, it is very likely the legal fee budget will not
support the creation of a unique set of documents, no matter how large the project. For those
reasons making use of the wide selection of available industry forms seems to be the best starting
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place.
There are four organizations that publish the majority of the form design and construction
contracts in use today. It was a much more unified industry in 1888 when the American Institute
of Architects (“AIA”) and the predecessor to the Associated General Contractors of America
(“AGC”) jointly published a “Uniform Contract.” Thereafter, from 1911 until 2007, the AIA
published its standard forms with the endorsement of the AGC.4
The Engineers Joint Contract Documents Committee (“EJCDC”) has been publishing its
forms since 19755 and the Design Build Institute of America (“DBIA”) introduced its documents
in 1998.6
In 2007, for the first time since 1911, the AGC declined to endorse the 2007 editions of
the AIA forms. At the same time AGC spearheaded the formation of an organization known as
ConsensusDOCS, described as “a diverse coalition of 35 leading construction industry
associations with members from all stakeholders in the design and the construction industry.”7
With the publication of the ConsensusDOCS forms in 2007, the AGC ceased publication of form
contracts under its own name. The ConsensusDOCS forms were most recently updated in 2011.
As the oldest and most well known, the AIA forms may also be the most widely used. As
far as the depth of the various libraries, the AIA and ConsensusDOCS are the largest, followed
by EJCDC. Being focused, as its name implies, on the design-build method, the DBIA library is
much smaller.8 The AIA forms do have the benefit of having been extensively litigated over the
years and there is a considerable body of case law interpreting the AIA forms.9
While it is possible to assemble a set of contract documents for a project mixing and
matching the best of each family of forms, should an endeavor should involve extreme caution.
A practical reason is that most families, such as AIA, are built upon a core set of general
9
conditions. The amount of redrafting that would be necessary to coordinate ancillary forms to
the AIA A201 is simply not worth the effort.10 The ConsensusDOCS, however, can be more
easily mixed and matched, but still require a significant level of coordination and editing to
confirm consistency is preserved and to avoid gaps.
While nothing will substitute for a detailed study of each form family, what follows is a
graphical description of the forms available for each delivery method and a comparative
summary of those forms. This is intended as a primer for selecting forms.
FORM “FAMILIES”
For the reasons outlined above, it is helpful to the practitioner to understand both the
interplay among various forms available within the same “family” as well as the breadth of the
forms, including ancillary forms, available for the selected project delivery system. Available
forms will often dictate how many ‘manuscript’ or custom forms need to be developed for the
project, as well as ensure the consistency of the contracts between the various participants in the
project. The authors offer the following graphical representations of various form “families” to
help the practitioner quickly assess the offerings from the various organizations for each project
delivery system. Note that not all organizations offer documents for all delivery systems:
DBIA, for obvious reasons, does not offer design-bid-build forms.
FACTORS IN ASSESSING FORM FAMILIES.
As discussed in the introductory comments to this paper, a practitioner should consider
various ‘factors’ that the practitioner in addition to the breadth of the form offerings from each
organization. While a complete discussion of all factors would be voluminous and beyond the
scope of this paper, the following tables offer a summary view the critical factors and an –
admittedly subjective – evaluation of each organizations offerings for each project delivery
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method.
11
DESIGN-BID-BUILD CONTRACT DOCUMENTS.
The primary industry forms for a design-bid-build project delivery method include form
families published by the following:
•
American Institute of Architects (AIA)
•
ConsensusDOCS
•
Engineer’s Joint Contract Document Committee (EJCDC)
The forms published by each of these entities are explained further below. First, the diagram
depicts the forms that are available. Second, text chart identifies some key elements of the forms
that a party should consider when evaluating those forms.
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PROJECT TYPE: DESIGN-BID-BUILD
ORGANIZATION AIA
A101
A102
A103
A107
A201
A401
A310
A312
B101
B103
B104
C401
Standard Form of Agreement Between Owner and Contractor where
the basis of payment is a Stipulated Sum
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
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
Standard Form of Agreement Between Owner and Contractor for a Project of Limited
Scope
General Conditions of the Contract for Construction
Standard Form of Agreement Between Contractor and Subcontractor
Bid Bond
Performance Bond and Payment Bond
Standard Form of Agreement Between Owner and Architect
Standard Form of Agreement Between Owner and Architect for a Large or Complex
Project
Standard Form of Agreement Between Owner and Architect for a Project of Limited
Scope
Standard Form of Agreement Between Architect and Consultant
13
Delivery Method: Design-Bid-Build
Organization: AIA
1
Project Type
More tailored toward vertical (architect/not engineer)
2
Project Size
3
Project Team
4
Ancillary Forms
5
Level of
Modification
Required
6
Bias/Critical Risk
7
Misc. Notes
• Works better for large projects than smaller projects
because general conditions are long and robust
• Project where architect is substantially involved in
construction administration
• Initial Decision Maker—Is there one?11
• See chart for D/B family of forms12
• Electronic Service Addendum13
• No green addendum—but sustainable guide with draft
language edits (B214 is services schedule, does not
address risk)
• Initial Decision Maker—make sure the process works
for the team
• A201 requires modifications if: architect is not
involved, engineer instead of architect, owner wants
more control
• Two-form system puts commercial terms in shorter
commercial term document
• Ownership of documents: Owner has non-exclusive
license.14
• Owner financial information: Limited access15
• Consequential Damages (CD): Full waiver of CDs,
including CDs arising from termination for
convenience.16
• Dispute Resolution: Option for arbitration v. litigation.
Consolidation contemplated for arbitration.17
• Owner-Directed Means & Methods: Contractor
responsible even if contract documents specify method
(shift from old rule)18
• Hazardous Materials: Each responsible for own fault
(shift in sole responsibility for party bringing hazardous
materials).19
• Payment: right to joint check for Owner on
withholding to Contractor and Owner can require proof
of payment to subs or have right to contact them
directly.
• Cumbersome two-part form
• Tested in court/ recognized in industry
14
PROJECT TYPE: DESIGN-BID-BUILD
ORGANIZATION: CONSENSUSDOCS
200
200.1
200.2
202
203
204
205
222
235
240
245
260
261
Agreement and General Conditions Between Owner and Contractor (Lump Sum)
Time and Price Impacted Materials
Electronic Communications Protocol Addendum
Change Order
Interim Directed Change
Request for Information
Short Form Agreement Between Owner and Contractor (Lump Sum)
Architect-Engineer’s Statement of Qualifications
Short Form Agreement Between Owner and Contractor (Cost of Work)
Agreement Between Owner and Architect-Engineer
Short Form Agreement Between Owner and Architect-Engineer
Performance Bond
Payment Bond
15
262
263
703
725
750
750.1
751
752
810
Bid Bond
Warranty Bond
Purchase Agreement for Noncommodity Goods
Agreement Between Subcontractor and Subsubcontractor
Exhibit E Insurance Requirements to 725 Standard Subsubcontract Agreement
Agreement Between Contractor and Subcontractor
Rider Between Contractor and Subcontractor for Material Storage at Subcontractor’s Site
Short Form Agreement Between Contractor and Subcontractor
Subcontract for Use on Federal Construction
Agreement Between Owner an Owner’s Representative
Delivery Method No. 1: Design-Bid-Build
Form: ConsensusDOCS
1
Project Type
• Works well for both civil and vertical projects
• Not immediately set up for multiple phases or phased occupancy
• Family has a subcontract specific for federal projects20
2
Project Size
• Design forms are one-size and one-phase: See CD 240
• Family has series of “short-form” agreements.21
• Overview of family structure.22
3
Project Team
• Places Owner in more active role than AIA documents: less
communication through the architects23
• Works well for sophisticated Owners with seasoned project and
facilities teams24
• Defined term is “Design Professional” not “Architect”: See CD
240
4
Ancillary
• Forms don’t depend on standard general conditions (like AIA) and
Forms
can be used with or without other forms in the family.25
• Separate addendums for Green,26 BIM27, and Insurance28
• Forms are standard with respect to treatment—all forms treat same
issue same way: (e.g., indemnity, additional insured endorsements,
retention withholding, warranty)
• Number of new forms: geotech, teaming agreement, joint venture
agreement
5
Level of
• Project-specific fields that need to be negotiated/discussed—
Modification
cannot be used “off-the-shelf” without preparation (footnote
Required
references to specific CD200 fields that need to be negotiated).
• Old software difficult to use; new software is Word-based and
easier
• Roadmap for Contract Documents to populate29
6
Bias/Critical
• Insurance: Additional insured endorsements are not required30
Risk
• Payment: Contains pay-when-paid clause but not pay-if-paid
clause
• Retainage reduced at 50 %31
• Fifty percent payment required on constructive change directives32
16
Delivery Method No. 1: Design-Bid-Build
Form: ConsensusDOCS
• Warranty: Contractor-friendly warranty language33
• Damages: Mutual waiver of consequential damages is not
blanket—requires project-specific discussion and negotiation34
• Liquidated damages clause is standard in form35
• Indemnity: Robust indemnity provisions (AIA doesn’t have one)
• Changes: Cost of the Work definition for change orders when
price not agreed36
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Misc. Notes
• Plain English approach—easy to read and understand
• Shorter in length than AIA
• Uses 1-form contracts rather than 2 form contracts
• Updated more regularly than AIA: 5 years v. 10 years plus rolling
revisions
17
PROJECT TYPE: DESIGN-BID-BUILD
ORGANIZATION EJCDC
C700
C-430
C-435
C-520
C-525
C-550
C-610
C-615
C-940
C-941
C-942
E-500
Standard General Conditions of the Construction Contract
Bid Bond, Penal Sum Form
Bid Bond, Damages Form
Suggested Form of Agreement Between owner & Contractor, Stipulated Price
Standard Form of Agreement Between Owner & Contractor, Cost-Plus
Notice to Proceed
Construction Performance Bond
Construction Payment Bond
Work Change Directive
Change Order
Field Order
Standard Form of Agreement Between owner & Engineer for Professional Services
18
E-520
E-530
E-525
E-505
E-582
E-991
E-568
E-570
E-564
E-560
E562
Short Form of Agreement Between Owner & Engineer for Professional Services
Standard Form of Agreement Between owner & Geotechnical Engineer
Standard Form of Agreement Between Owner & Engineer for Study & Report Phase
Professional Services
Standard Form of Agreement between Owner & Engineer for Professional Services;
Task Order Edition
Form of Agreement Between Owner & Program Manager
Engineer - Subconsultant Documents
Standard Form of Agreement Between Engineer & Architect for Professional
Services
Standard Form of Agreement Between Engineer & Consultant for Professional
Services
Standard Form of Agreement Between Engineer & Geotechnical Engineer for
Professional Services
Standard Form of Agreement Between Engineer & Land Surveyor for Professional
Services
Agreement Between Engineer and Engineer’s Subcontractor
Delivery Method No. 1: Design-Bid-Build
Form: EJCDC (www.ejecdc.org)
Principal
• C-520 – Owner-Contractor Agreement for Construction –
Documents
Stipulated Price
• C-525 – Owner-Contractor Agreement for Construction – Cost Plus
• C-700 – Standard General Conditions
• E-500 – Standard Form of Agreement Between Owner & Engineer
• E-520 – Short Form of Agreement Between Owner & Engineer
• E-505 – Agreement between Owner & Engineer (Task Order Ed.)
• E-582 – Agreement between Owner, Engineer, and Peer Reviewer
1
Project Type
• Suitable for vertical and infrastructure projects; Includes provisions
for unit-priced work.
• Not suitable for Owners with in-house project inspection and
management capabilities; contemplates an independent “Engineer”;
2
Project Size
• Single Phase construction
• No “short form” construction contract; but there is a “short form”
Owner-Engineer agreement (E-520)
3
Project Team
• Engineer serves in prominent role directing work and is conduit for
all communications between Owner and Contractor, similar to
architect in AIA documents (e.g. see C-700 para 4.03.B, 4.04, 9.0)
with protection from liability;
4
Ancillary
• Construction contracts use standard general conditions C-700 (like
19
Delivery Method No. 1: Design-Bid-Build
Form: EJCDC (www.ejecdc.org)
Forms
AIA)
• Family has specific contracts for several types of
engineering/professional services including Geotechnical
engineering, Peer review, joint ventures for engineering teams &
Independent Project Review
5
Level of
Modification
Required
• Minor modification required to conform to project specific details
and business agreement between Owner and Contractor
• Narrative guide to Contract Documents available for purchase.
6
Bias/Critical
Risk
• Engineer serves initial arbiter of all Claims by Contractor or
Owner;
• Contains both Owner-Contractor, and Owner-Engineer mutual
indemnification obligations for negligent acts and omissions of
party, with “comparative negligence” principle; no indemnification
of Contractor by Engineer;
• No attorney’s fees provision in disputes.
• Owner may suspend performance for up to 90 days, but must pay
costs.
• Contractor may terminate if not paid within 30 days of due date
(with 7 days notice and cure period).
• Retainage held until Substantial Completion
• Contractor represents that no further investigations, studies, or
engineering reports are necessary for performance of the work.
• Separate Liquidated damages for both delayed Substantial
Completion and Final Completion.
7
Misc. Notes
• Engineering reports (geotech, environmental, etc.) are not “contract
documents” on which Contractor can rely and for which contractor
can make a claim if inaccurate. (See C-700 para. 4.04)
• Documents downloaded in MS Word format; easy to edit.
20
DESIGN-BUILD CONTRACT DOCUMENTS
The primary industry forms for a design -build project delivery method include form families
published for the following:
•
American Institute of Architects (AIA)
•
ConsensusDOCS
•
Design-Build Institute of America (DBIA)
•
Engineer’s Joint Contract Documents Committee (EJCDC)
The forms published by each of these entities are explained further below. First, the diagram
depicts the forms that are available. Second, text chart identifies some key elements of the forms
that a party should consider when selecting those forms.
21
PROJECT TYPE: DESIGN-BUILD
ORGANIZATION AIA
A142
A142
A441
B142
B143
C441
Standard Form of Agreement Between Owner and Design-Builder
Standard Form of Agreement Between Design-Builder and Contractor
Standard Form of Agreement Between Contractor and Subcontractor for a DesignBuild Project
Standard Form of Agreement Between Owner and Consultant where the Owner
contemplates using the design-build method of project delivery
Standard Form of Agreement Between Design-Builder and Architect
Standard Form of Agreement Between Architect and Consultant for a Design-Build
Project
22
Delivery Method No. 2: Design-Build
Form: AIA
1
Project Type
• More tailored toward vertical (architect/not engineer)
• Flexible for whether project criteria/ schematic docs exist at the
time of contracting
2
Project Size
• Works better for large projects than smaller projects because
general conditions are long and robust
3
Project Team
• Flexible for which portion of the D/B entity is in privity with the
Owner
• If contractor, then contractor contracts with architect entity and
trade contractors directly
• If architect, then architect contracts with general contractor and
design consultants directly
4
Ancillary
• Commercial terms document is contract with general conditions
Forms
(Exhibit A), cost of the work (Exhibit B) and insurance and bonds
(Exhibit C) as the exhibits.
• Green: AIA D503 does not address D/B projects
• Forms to address variations of D/B entity that is in privity
5
Level of
• Significant number of blanks allows for substantial flexibility but
Modification
requires significant completion—blanks seem cumbersome and are
Required
not user friendly
• Project criteria—does not assume level of completeness in criteria
and offers Owner protection that design submittals will be
consistent with Project criteria unless noted37
6
Bias/Critical
Ownership of documents:
Risk
• Provides that Arch38 or the DB39 owns design docs.
• Nonexclusive license is provided to the Owner if complies with
agreement and makes payments.40
• If DB terminates the Arch for cause, arch assigns rights to
documents to DB.41
• Owner financial information: Limited access42
• Consequential Damages: Full waiver of CDs, including CDs
arising from termination for convenience.43
Dispute Resolution:
• Check the box dispute res44, mandatory mediation45
• Parties can design a “project neutral” to be the initial advisor on
disputed issues.46
• Neutral’s decision can be appealed to mediation or dispute res.47
• If no project neutral appointed, the Owner files the role of the
initial decision maker48
7
Misc. Notes
Cumbersome exhibit and fill-in-blank format
Tested in court/ recognized in industry
23
PROJECT TYPE: DESIGN-BUILD
ORGANIZATION: CONSENSUSDOCS
400
410
415
420
421
450
460
470
471
472
473
Preliminary Agreement Between Owner and Design-Builder
Agreement and General Conditions Between Owner and Design-Builder (Cost of Work
Plus Fee with GMP)
Agreement and General Conditions Between owner and Design-Builder (Lump Sum
Bsed on the Owner’s Program Including Schematic Design Documents)
Agreement Between Design-Builder and Architect-Engineer
Statement of Qualifications
Agreement Between Design-Builder and Subcontractor
Agreement Between Design-Builder and Design-Build Subcontractor (Subcontractor
Provides a GMP)
Performance Bond (Surety is Liable for Design Costs of Work
Performance Bond (Surety is Not Liable for Design Services)
Payment Bond (Surety is Liable for Design Costs of Work)
Payment bond (Surety is Not Liable for Design Services)
24
Delivery Method No. 2: Design-Build
Form: ConsensusDOCS
1
Project Type
• Works well for both civil and vertical projects
• Does not contain sophisticated methods for:
(a) phased construction
(b) rolling approvals, phases
2
Project Size
• Separate forms for lump sum49 and GMP50
• Requires modification for phased projects or phased occupancy
3
Project Team
Contemplates Owner and Design-Builder/ not third-party CM
4
Ancillary
• See chart:51
Forms
• Works with green, BIM, insurance, other forms
5
Level of
• Need to carefully craft definition of contract documents to reflect
Modification
the phase in which project is starting and design goals52
Required
• Make sure that exhibits define expectation
• Need to fold in requirements for green or sustainable goal
(consider carefully whether additional or basic services)
• Need to address phasing or rolling starts
• Need to address other parties or multiple-prime
6
Bias/Critical
• Similar risk issues as Delivery Method No. 1
Risk
• Design-phase approvals (30/60/90 submittals) become contract
documents
7
Misc. Notes
A preferred form for standard vertical design-build project
25
PROJECT TYPE: DESIGN-BUILD
ORGANIZATION DBIA
501
520
525
530
535
540
550
555
Contract for Design-Build Consultant Services
Standard Form of Preliminary Agreement Between Owner and Design-Builder
Standard Form of Agreement Between Owner & Design-Builder - Lump Sum
Standard Form of Agreement Between Owner & Design-Builder-Cost+Fee with
Option for GMP-530
Standard Form of General Conditions of Contract Between Owner & Design-Builder
Standard Form of Agreement Between Design-Builder and Design Consultant
Standard Form of Agreement Between Design-Builder and General Contractor – Cost
+ Fee w/Guaranteed Maximum Price
Standard Form of Agreement Between Design-Builder and General Contractor –
Lump Sum
26
560
Standard Form of Agreement Between Design-Builder & Design-Build Subcontractor
– Cost + Fee w/GMP
565
Standard Form of Agreement Between Design-Builder and Design-Build
Subcontractor – Lump Sum
570
Standard Form of Agreement Between Design-Builder and Subcontractor
DBIA Ancillary Forms
Building Information Modeling (BIM) Exhibit
Insurance Exhibit – Complete Set
Design-Builder’s Insurance Requirements
Owner’s Insurance Requirements
Design Consultant’s Insurance Requirements
Design-Build Subcontractor’s Insurance Requirements
General Contractor’s and Subcontractor’s Insurance Requirements
Sustainable Projects Goal Exhibit (with Provisions on LEED Certification)
Project Schedule of Values & Design-Builder’s Application for Payment Form
Design-Build Change Order Form
Design-Builder’s Affidavit of Final Release
Certificate of Substantial Completion
Design-Build Work Change Directive
Delivery Method No. 2: Design-Build
Form: DBIA
1
Project Type
• Vertical, industrial, and renewable projects
2
Project Size
• Works well for large and phased projects (with some
modifications)
• General conditions are thorough and robust
3
Project Team
• Contemplates Owner working directly with the Owner
• Design-Builder is set as a single entity and not separated out
design.53
• Very simple explanation of project delivery.54
4
Ancillary
Many. See list above.
Forms
5
Level of
• Clear, well organized, easy to follow and understand55
Modification
• Better than pre-2007 form versions
Required
• Scope of Work: New language ensures framework for scope
agreement: basis of design docs/resolution of conflicts
• Commercial Issues Require Negotiation/Modification: Contract
price, schedule and LDs, Confidentiality, Insurance, Dispute
Resolution
• Performance Incentive
• Menu of Options for delay damages
• Requires extensive choices and fill-in-the blank (maybe too many
choices)
6
Bias/Critical
• Reasonably balanced by favors D-B slightly
27
Delivery Method No. 2: Design-Build
Form: DBIA
Risk
• Instruments of Service: D-B owns work product/ Owner has a
limited license. Owner pays for license and indemnifies D/B for
use of license.
• Constructive change directives: Owner is required to pay 50%
pending dispute
• Standard of care: standards are not different for design and
construction portions of work; warrants design as well as work?
• Indemnity: require D-B to defend from claims
• Stop Work: right to financial assurances, make payments, 7 day
notice required.
• Dispute Resolution: five-step process: (1) claim, (2) discussion at
“field level”, (3) senior rep level, (4) mediation, (5)
arbitration/litigation
• Design-Responsibility: D-B entitled to rely on Owner project
criteria
• Termination: Owner is given limited license to use work product
to complete project; indemnity and payment for use (same
remedy if D-B terminates for Owner default)
• Payment: Release at completion (1998 ver. was 50% of the Work
being complete), Owner consider releasing for early
subcontractors
• Damages: Correlate LDs with corresponding incentive bonus
(may not be appropriate)
28
PROJECT TYPE: DESIGN-BUILD
ORGANIZATION EJCDC
D-700
D-750
D-500
D-505
D-510
D-520
D-521
D-525
D-526
D-610
D-615
Standard General Conditions of the Contract Between Owner & Design/Builder
Standard General Conditions of the Subcontract Between Design/builder &
Subcontractor
Standard Form of Agreement Between Owner & owner’s Consultant for Design
Professional Services on Design/build Projects
Standard Form of Subagreement Between Design/Builder & Engineer for Design
Professional Services
Standard Form of Agreement Between Owner & Design/Builder for Preliminary
Services
Standard Form of Agreement Between Owner & Design/Builder, Stipulated Price
Suggested Form of Subagreement Between Design/Builder & Subcontractor,
Stipulated Price
Suggested Form of Agreement Between owner & Design/Builder on the Basis of
Cost-Plus
Suggested Form of Subagreement Between Design/Builder & Subconstrctor, Cost
Plus
Design/Build Contract Performance Bond
Design/Build Contract Payment Bond
29
Delivery Method No. 2: Design-Build
Form: EJCDC (www.ejcdc.org)
Principal
• D-001 – Guide to EJCDC Design-Build Documents
Documents
• D-500 – Owner – Owner’s Consultant Agreement
• D-700 – Standard General Conditions –Owner-Design/Builder
• D-505 – Design-Builder – Design Subconsultant Agreement
• D-510 – Owner – Design/Builder Agreement for Preliminary
Services
• D-520 – Owner – Design/Builder Agreement – Stipulated Price
• D-525 – Owner-Design/Builder Agreement – Cost Plus Basis
• D-750 – Standard General Conditions – Design/Builder Subcontractor
• D-521 – Design/Builder – Subcontractor Agreement – Stipulated
Price
• D-526 – Design/Builder – Subcontractor Agreement – Cost-Plus
Basis
1
Project Type
• Applicable to civil and vertical projects.
• Does not contain sophisticated methods for:
(a) phased construction
(b) rolling approvals, phases
2
Project Size
• Separate forms for lump sum and cost-plus fee with GMP
3
Project Team
• Contemplates Owner and Design-Builder/ not third-party CM
4
Ancillary
• D-610 – Design-Build Performance Bond
Forms
• D-615 – Design-Build Payment Bond
5
Level of
• Design/Builder obligated to assist with commissioning and
Modification
training of Owner’s staff.
Required
• Standard contract calls for cash flow projection for each month
of project, Schedule of Values and cost data within 10 days of
commencement of Contract Time; potentially unrealistic
requirement.
• Need to fold in requirements for green or sustainable goal
(consider carefully whether additional or basic services)
• Need to address phasing or rolling starts
6
Bias/Critical
• Design/Builder does not assume risk of subsurface or hazardous
Risk
environmental site conditions.
• Design/Builder retains ownership of all drawings and
specifications; Owner may only use for the contracted Project.
• Standard provisions allow for Owner “approval” of Preliminary
Design documents but no other participation in design process.
• Default is that Owner purchases Builder’s Risk policy covering
Design/Builder’s work.
• Design/Builder’s warranty is only for compliance with Contract
Documents.
30
Delivery Method No. 2: Design-Build
Form: EJCDC (www.ejcdc.org)
• Separate Liquidated damages for both delayed Substantial
Completion and Final Completion.
• Option for no retainage after 50% of work completed.
• Owner’s Conceptual Design Documents from RFP are Contract
Documents
7
Misc. Notes
• D-510 Agreement for Design/Builder’s Preliminary Services
contemplates Phases of work including: (1) Study and Report
Phase, (2) Technical Exhibit Phase, and (3) Proposal Phase.
• Design/Builder does not assume risk of subsurface or hazardous
environmental site conditions.
31
CONSTRUCTION MANAGER – ADVISOR CONTRACT DOCUMENTS
Each the AIA and the ConsensusDOCS offer forms tailored to a situation where the
Owner contracts with one or more Contractors directly and then retains a CM to supervise the
project and act as the Owner’s agent. The risk allocation between the Owner and the Contractor
(s) is consistent within each family with the manner in which the design-bid-build forms are
tailored. Yet, the additional of an additional party—the CM—and the possibility of multiple
prime trade Contractors working on the project add a few noteworthy twists necessary to
consider.
The diagrams below depict the forms available for Construction Manager-Advisor
projects. Below each diagram is a brief explanation of items to consider in these forms, focusing
on issues that differ for the risk allocation highlighted in Project Delivery Method No. 1 (DesignBid-Build) above.
AIA CMa Documents
AIA’s suite of Construction Manager Agency agreements functions as outlined in the
chart above. These forms were updated in 2009—superseding the 1992 versions of the CM
agency forms and incorporating the changes made to the AIA A201 General Conditions
document in the 2007 edits.
Owner/Contractor Agreement. The commercial terms document between the Owner
and Contractor(s), the AIA 132-2009, attempts to combine too many pricing alternatives into a
single document. The A132 provides a series of boxes to select for pricing mechanism: (1) lump
sum, (2) cost plus a fee (no GMP), and (3) cost-plus with a GMP. While the attempt to create a
single form is understandable for simplicity purposes, the effect is a cumbersome document that
contains a series of extraneous provisions that will not apply depending on the pricing
32
mechanism selected. To avoid confusing the project team, a construction lawyer should consider
deleting provisions that will not apply to the selected pricing method.
Construction Manager/Construction Relationship. The general conditions, the A232,
outline the interaction between the Contractor(s), the Design Professional, and the CM. As
between the Owner and the Contractor, the risk allocation is consistent between the A232 and
A201. The addition of the fourth party—the CM—to the equation, however, appears to create
duplication and overlap in responsibilities. Sometimes the CM acts as an intermediary between
the Contractor(s) and the Owner. Yet, other times, the CM seems to act as a second set of eyes
on the Design Professional decisions.
Particularly cumbersome is the payment application approval process: the Contractor(s)
submits a payment application for review,56 the CM has 7 days to issue a certification and then
passes the payment application to the Design Professional, who also has 7 days to approve. The
document is silent on what happens if the CM and the Design Professional disagree on amount of
payment due. This cumbersome payment application process raises interesting issues, especially
in states with strict and streamlined prompt payment statutes. A construction lawyer must
consider which tasks are actually going to be performed by each party and mirror the A232
provisions to the applicable scope.
In 2007, the AIA introduced the concept of an Initial Decision Maker who will adjudicate
disputes between the parties. While the IDM concept appears to make little practical sense in
projects without a CM, the IDM process is much more viable in a situation where an agency CM
is involved in the project and makes an ideal candidate to serve in that role (and lacks the
inherent pro-design bias that Design Professional would brings to a project neutral role).
33
34
PROJECT TYPE: CONSTRUCTION MANAGER - ADVISOR
ORGANIZATION: AIA
A132
A232
A401
B132
C132
C401
G732
G736
G737
Standard Form of Agreement Between Owner and Contractor, Construction Manager
as Advisor
General Conditions of the Contract for Construction, Construction Manager as
Advisor Edition
Standard Form of Agreement Between Contractor and Subcontractor
Standard Form of Agreement Between Owner and Architect, Construction Manager as
Advisor Edition
Standard Form of Agreement Between Owner and Construction Manager as Advisor
Standard Form of Agreement Between Architect and Consultant
Application and Certificate for Payment, Construction Manager as Advisor Edition
Project Application and Project Certificate for Payment, Construction Manager as
Advisor Edition
Summary of Contractors' Applications for Payment, Construction Manager as Advisor
Edition
35
ConsensusDOCS Program Manager Documents.
The Owner’s Agent documents in the ConsensusDOCS family preserve the risk
allocation and language established in the Owner/Contractor agreements within the context of a
CM added to the mix and with potentially multiple prime Trade Contractors. In addition,
ConsensusDOCS offers additional forms to a program manager and an Owner’s representative.
An overview of these forms is as follows:
ConsensusDOCS 800 (Owner and Program Manager). The ConsensusDOCS 800 is a
form whereby the Owner can retain a Program Manager on an agency basis. The Program
Manager essentially is designed to replace any need for Owner’s facilities staff. The Program
Manager can oversee construction under either (i) a design-bid-build or a (ii) design-build
project delivery method. A matrix sets for a scope of services to be used as a menu for the
parties to assign. Because each Owner may have its Program Manager involved at a slightly
different stage of the Project or have a unique interplay between Program Manager and Owner’s
staff, this form should be used carefully.
ConsensusDOCS 801 (Owner and Construction Manager). This agreement is a form
for when the Owner awards all of the Trade contracts directly to the Trade Contractor and the
CM serves as an advisor role. Construction administration responsibilities are primarily
performed by the CM but the CM and the Design Professional must each cooperate with the
other.57 The form contains the option for the CM to provide general conditions items.58 There is
overlap or ambiguity between items that are classified as reimbursable expenses59 that the Owner
may expect to provide as general condition items.60 While the Owner is responsible to pay for
both general conditions items and reimbursable items, the vague provisions do not clearly
identify which item falls into which bucket—giving rise to a risk of double-billing or scope
36
disputes.61
ConsensusDOCS 802 (Owner and Trade Contractor). This agreement provides for
the Owner to directly retain multiple Trade Contractors to be overseen by the CM. All
significant risk shifting issues between the Owner and the Contractor(s) track the remainder of
the ConsensusDOCS forms.
37
PROJECT TYPE:
PROGRAM MANAGER AND PROGRAM MANAGER /
OWNER’S AGENT
ORGANIZATION: CONSENSUSDOCS
800
801
802
803
Program Management Agreement and General Conditions Between Owner and
Program Manager
Construction Management Agreement Between Owner and Construction Manager
(CM is Owner’s Agent and Owner Enters Into all Trade Contractor Agreements)
Agreement Between Owner and Trade Contractor 9CM is Owner’s Agent
Agreement Between owner and Architect-Engineer (CM Acting as Agent Has Been
Retained by Owner)
38
CONSTRUCTION MANAGER AT-RISK CONTRACT DOCUMENTS
Each the AIA and the ConsensusDOCS offer forms tailored to “Construction Manager
At-Risk” situations. The risk allocation between the Owner and the Contractor is consistent
within each family with the manner in which the design-bid-build forms are tailored but adds the
element that the CM is performing preconstruction services prior to the time in which it becomes
a CM At-Risk.
The diagrams below depict the forms available for CM At-Risk projects. Below each
diagram is a brief explanation of items to consider in these forms, focusing on issues that differ
for the risk allocation highlighted in Project Delivery Method No. 1 (Design-Bid-Build) above.
AIA CM at Risk Documents
The AIA refers to its Construction Manager At-Risk forms in the heading as Construction
Manager as Contractor. There are two different commercial terms documents, the A133-2009
(Cost of the Work with a GMP) and the A132-2009 (Cost of the Work without a GMP).
CMAR with a GMP. The A133-2009 (formerly the A121 Cmc-2003) is essentially the
same as the A102-2007 agreement and provides that the CM is compensated on the basis of
“Cost of the Work plus a Contractor’s Fee with a Guaranteed Maximum Price.” This agreement
incorporates preconstruction services.
The Owner retains the CM during the design phase and the CM provides services to the
Owner necessary to develop a GMP, then proposes a GMP, and then the GMP is set by an
amendment to the contract. This provides a mechanism for the CM to become the “at risk”
Contractor on the Project.
CMAR without a GMP. The A134-2009 (formerly the A131CMc-2003) is the same as
the A133-2009, except that there is no Guaranteed Maximum Price. Under the A134, the CM
39
prepares a Control Estimate and provides the Owner undated estimates as project proceeds. The
Control Estimate does not include any contractual limitations on amounts the Owner is required
to pay for the work.
Construction Manager Form. The C132-2009 (formerly the B801) is the agreement
between the Owner and the CM. The Agreement provides extensive provisions discussing the
CM’s responsibilities during each phase of the Project. In particular, the pre-construction
services provide two full pages of detail regarding interaction between the CM and the Design
Professional and the CM’s preconstruction services including cost and schedule.62 The
Agreement also contains a termination for convenience provision under which the Owner is only
required to compensate the CM for fee earned and reimbursables incurred.63
In contrast to the ConsensusDOCS 801 that provides a one-way indemnity provision in
favor of the CM, the C132-2009 contains a one-way indemnity provision in favor of the Owner
(but limited to available insurance coverage).64 The C132-2009 also contains a mutual waiver of
consequential damages.65
40
PROJECT TYPE: CONSTRUCTION MANAGER – AT-RISK
ORGANIZATION: AIA
A133
A134
A401
B103
C401
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 Guaranteed Maximum Price
Standard Form of Agreement Between Owner and Construction Manager
Where the Construction Manager is also the Constructor and Where the Basis
of Payment is the Cost Plus a Fee and there is no Guarantee of Cost
Standard Form of Agreement Between Contractor and Subcontractor
Standard Form of Agreement Between Owner and Architect, Construction
Manager as Advisor Edition
Standard Form of Agreement Between Architect and Consultant
41
INTEGRATED PROJECT DELIVERY CONTRACT DOCUMENTS
Each AIA and the ConsensusDOCS now offer form documents for Integrated Project
Delivery (or IPD projects). The AIA form offers a total integration method where a single
purpose entity (SPE) is created between the parties in the form of a Limited Liability Company.
ConsensusDOCS offers a tri-party agreement where the Owner, the Design-Professional,
and the Contractor are all in privity of contract and identify risk allocation and responsibility for
cost overruns.
Each set of forms is depicted in a diagram below and further explained in a text chart.
While the contact of integrated project delivery forms is broad and complicated enough for an
entire program itself, these charts aim to highlight general areas to consider when selecting
forms.
42
PROJECT TYPE: INTEGRATED PROJECT DELIVERY
ORGANIZATION: AIA
A195
A295
A401
B195
C401
Standard Form of Agreement Between Owner and Contractor for Integrated
Project Delivery
General Conditions of the Contract for Integrated Project Delivery
Standard Form of Agreement Between Contractor and Subcontractor
Standard Form of Agreement Between Owner and Architect for
Integrated Project Delivery
Standard Form of Agreement Between Architect and Consultant
43
PROJECT TYPE: INTEGRATED PROJECT DELIVERY
ORGANIZATION: AIA
1
Project Type
Full Integration IPD (uses the SPE model, with an LLC as the designated
entity)
2
Project Size
3
Project Team
Management Group
• Owner
• Designer
• Constructor
May invite other participants to join.66
AIA SPE entity is LLC
• Available in all jurisdictions
4
5
Ancillary
Forms
Level of
Modification
Required
Bias/Critical
Risk
•
Provides benefits of limited liability
•
Avoid partnership effect of tri-party agreement (and joint and several
liability)
Management Group’s functions:
• Assist Owner to develop program (if not in existence)67
• Establish project communications protocol68
• Develop preconstruction site investigation plan69
• Manage budget to “further project objectives”70
• Oversee development of design documents71
•
Establish design document standards72
• Establishment of BIM parameters: standards and technological
requirements73
• Development of detailed Target Value Design methods74
• Review and approve preliminary evaluation of project criteria and
requirements75
• Review and approve milestone schedule76 and construction schedule77
Assist to establish the Construction Budget78
• Review and approve cost models79 Approve use of contingency80
• Develop financial incentive program81
Decisions:
All decisions require unanimity unless specified
Liability:
• To Owner: Limit to required and available insurance82
• To Other Members: Limit to required and available insurance members
assign claims to company83
44
PROJECT TYPE: INTEGRATED PROJECT DELIVERY
ORGANIZATION: AIA
• To Company: company indemnifies members against uninsured claims84
• To Nonmembers: members assign claims to non-members to
company85
Compensation:
• Limited to the Target Cost Estimate86
7
Misc. Notes
45
PROJECT TYPE: INTEGRATED PROJECT DELIVERY
ORGANIZATION: CONSENSUSDOCS
300
Tri-Party Agreement for Integrated Project Delivery
PROJECT TYPE: INTEGRATED PROJECT DELIVERY
ORGANIZATION: CONSENSUSDOCS
1
Project Type
Tri-Party IPD Situation (using Lean Construction principles)
2
Project Size
Given requirements for documents and team to be premise,
likely more appropriate for larger projects
3
Project Team
“Tri-Party” Agreement: Owner, Designer, and Constructor
Does not create a partnership or joint venture87
4
Ancillary
See chart
Forms
5
Level of
Detailed form—over 50 pages
Modification
Required
6
Bias/Critical
Risk Allocation: Two options to allocate risk among parties88
Risk
• “Safe harbor” decisions and “no blame” environment89
•
“Traditional risk allocation”: each party responsible for own
negligence and beaches90
Incentives:
• Creation of a financial incentive program91
• Reward superior performance in specified areas such as cost,
quality, safety, schedule, etc.
Model: Target cost approach92 with provisions to allocate
responsibility for cost overruns93
Misc. Notes
Susceptible to potential misinterpretation because IPD is different
than other delivery methods and other contract forms.
46
CONCLUSION.
The choice of contract documents can have a significant impact not only on the cost of
legal services to prepare the documents, but also on the allocation of risks and responsibilities
among the project participants. Thus, it is a critical decision to be made early in the project
planning. There are many choices in the market today for such documents for each project
delivery method, including competing offerings from organizations with differing biases or
structures for the project team and project administration. Therefore, a lawyer advising an owner,
contractor, designer or any other member of a project team should have a thorough
understanding of the structure of the various document families, and when they are appropriate
for a particular project and for a particular project team.
See N.J.A.C. 13:27-7A.1 et. seq; Charbesbois v. J. M. Weller Associates, 72 N.Y. 2d 587
(1988); N.Y. Education Law § 7200 et seq, 7300 et seq and 6500 et. seq.
2
see Corrino Civetta Construction Corp. v City of New York, 67 N.Y. 2d 297 (1980); KalischJarcho, Inc. v City of New York, 58 N.Y. 2d 377 (1983).
3
"Getting The Most for Owners in Construction Contracting", Slieverman, A.; The Voice, Fall
2009
4
"Construction Law" Allensworth, et al ed. ,Bruner, P., Chapter 1, page 5 ABA Publishing 2009
5
See ejcdc.org at About EJCDC.
6
“Contracts: In the Owner’s Best Interest,” Owner’s Contract at page 2; ‘What Should We
Teach About Design-Build Contracts? A Learning Module,” Lee A. Ellingson, Journal of
Construction Education Vol. 7, No. 3, pages 122-123 (Fall 2002).
7
www.ConsensusDOCS.org
8
DIBA’s document library consist of only 20 forms, inclusive of both contracts and exhibits and
addenda. See DBIA Model Contract List, available at
http://dbiabooks.com/shopdisplayproducts.asp?id=303.
9
"The American Institute of Architects Legal Citator", Stein,S.M. ed.; LexisNexis 2012;
"Construction Law" Bruner & O'Connor, Vol. 2, Chapter 5 Section 5:21 - 5:272.
10
since 2011 the ConsensusDOCS don’t use the term “Contractor” referring instead to the
“Constructor”.
11
AIA A201-2007, Section 1.1.8 (Initial Decision Maker); Section 15 (Claims and Disputes)
12
AIA Design-Build Contracts
13
AIA C-806 and AIA E-201 (2007) (provides non-exclusive license for Project use only)
1
47
14
AIA A201-2007, Sections 1.5-1.6 (Instruments of Service).
AIA A201-2007, Section 2.2 (Owner Financial Information).
16
AIA A201-2007, Section 15.1.6 (Mutual Waiver of Consequential Damages).
17
AIA A101-2007, Dispute Resolution Menu; AIA A201-2007, Section 15 (Claims and
Disputes) and 15.4.4 (Consolidation of Arbitrations).
18
AIA A201-2007, Section 3.3.1 (Owner Directed Means & Methods).
19
AIA A201-2007, Section 10.3.3 and Section 10.3.5 (Hazardous Materials).
20
ConsensusDOCS 752: Subcontract for Use on Federal Construction
21
There also are short form agreements that address the Owner-Contractor (205), the OwnerDesign Professional (245), and the Contractor-Subcontractor (751) contractual relationships in a
more abbreviated manner than do the standard agreements (ConsensusDOCS 200, 240 and 750
respectively).
22
The documents are structured in numerical series by project delivery method as follows:
200-series is for traditional contracting or design-build-build
300-series is for integrated project delivery
400-series is for design-build
500-series is for construction management at-risk
700-series is for subcontracting
800-series is for program management and construction management (agency)
Within each series there is some inter-relation. For example, the administrative forms in the
200-series can be used for the 500 and 800 series. New documents that have been added since
the original release include the 301 BIM Addendum; 310 Green Building Addendum; 725
Subsubcontract; and the 752 Federal Subcontract (and FAR Exhibit).
23
Tallies for references are as follows:
ConsensusDOCS
ConsensusDOCS
AIA A201 + AIA
2007
2011
A114
Architect/Design
37
42
312
Professional
Owner
398
392
413
Contractor/Constructor 520
474
729
Subcontractor
55
58
96
15
24
ConsensusDOCS Brochure for Owners at Reason Nos. 1 and 5, available at
http://consensusdocs.org/wp-content/uploads/2011/09/10reasons_Aug2011_Low.pdf.
25
See CD 200 and CD 750 comparison.
26
See ConsensusDOCS Guidebook for ConsensusDOCS 310, p.3.
The Green Building Addendum is intended to be used as an addendum to modify existing design
or construction documents whenever an owner desires green goals and/or third-party rating
recognition (i.e. LEED certification) for the project. The ConsensusDOCS Green Building
Addendum is designed to cover the various rights, roles, and liabilities of the green project
participants. In this regard, the ConsensusDOCS 310:
• Identifies the role and responsibilities of the various participants;
• Is compatible with the other ConsensusDOCS forms;
• Creates a "Green Building Facilitator" ("GBF") responsible for compiling and/or coordinating
the submittal documentation needed to achieve the green certification or other goals.
48
• Defines the green scope, allocates green building responsibilities and risks, apportions liability,
and calls out changes to the design and construction to accommodate green-building goals. See
also ConsensusDOCS Brochure for Owners, at Reason Nos. 8, available at
http://consensusdocs.org/wp-content/uploads/2011/09/10reasons_Aug2011_Low.pdf.
27
The ConsensusDOCS 301 BIM Addendum, published in 2008, addresses contractual risk
allocation issues as well as implementation issues in using BIM. The document is well suited for
all projects using BIM that include early involvement of contractors. The BIM Addendum
creates a framework to help guide users. Principally, the addendum assigns one entity to serve as
the Information Manager. Importantly, the parties are required to execute a detailed execution
plan. A checklist of the execution plan is given to determine the roles, requirements and
processes the parties are going to chose and provide more details for a project specific basis.
Significantly, the document gives “check-the-box” options for the level of detail for which the
model can be relied upon. Initially, there are expectations that parties will attempt to limit the
amount of reliance of others by saying that a BIM model is only given for informational
purposes, but as owner’s demands and expectations grow, it is likely that they will want to rely
on the model. See also ConsensusDOCS Brochure for Owners, at Reason Nos. 8, available at
http://consensusdocs.org/wp-content/uploads/2011/09/10reasons_Aug2011_Low.pdf.
28
A new insurance exhibit for the ConsensusDOCS 725 has just been released. It provides a list
of commonly required insurance, with blanks for the parties to insert the required limits of
insurance. Among the key elements are:
•
Commercial General Liability Insurance coverage, leaving blanks for the parties to insert
limits for bodily injury and property damage – per occurrence; a general aggregate limit,
Completed Operations coverage, Contactors Protective for Subsubcontractor's/Vendor’s liability
arising out of the hire of Sub-subcontractors, per Project Aggregate, and similar clauses.
ConsensusDOCS 725 Subsubcontract Exhibit E - Insurance Requirements, Paragraph 1.
•
Blanks for the parties to check if the Subcontractor will or will not require the
subsubcontractor to purchase and maintain additional liability coverage on either an additional
insured or Owners' and Contractors' Protective Liability Insurance ("OCP") policy.
ConsensusDOCS 725 Subsubcontract Exhibit E - Insurance Requirements, Paragraph 2.
• A provision requiring the subcontractor to pay or reimburse the subsubcontractor for "any
documented additional cost" the subsubcontractor incurs to procure the additional general
liability coverage. ConsensusDOCS 725 Subsubcontract Exhibit E - Insurance Requirements,
Paragraph 2.
• Clauses providing for the parties to list whether coverage will be required, and the liability
limits of such insurance, for: Business Automobile Liability Coverage, Workers Compensation,
Excess Liability (in form or umbrella), and Professional Liability insurance. ConsensusDOCS
725 Subsubcontract Exhibit E - Insurance Requirements, Paragraphs 3-6.
• A provision that (a) requires the subsubcontractor to deliver to subcontractor certificates of
insurance evidencing that the required insurance has been obtained, and (b) allows the
subcontractor to (i) terminate the subsubcontract if the required insurance is not obtained or (ii)
purchase such coverage and charge the expense to the subsubcontractor. ConsensusDOCS 725
Subsubcontract Exhibit E - Insurance Requirements, Paragraphs 8.
29
See ConsensusDOCS 200 (2011), Section 14.1. In the 2007 version of ConsensusDOCS 200,
“Contract Documents” is defined as the documents listed specifically in Section 14.1. Section
14.1 now provides a template for the parties to specifically identify the Contract Documents,
49
including specifically identifying any “Owner Provided Information” that is to be included as a
Contract Document (as opposed to owner-provided information being for “information only”).
30
ConsensusDOCS 200 (2011), Section 10.2.
31
ConsensusDOCS 200 (2011), Section 9.2.4.1.
32
ConsensusDOCS 200 (2011), Section 8.2.2.
33
ConsensusDOCS 200 (2011), Section 3.8.1 and 2 and Section 3.9 (Correction of Work within
1 year).
34
ConsensusDOCS 200 (2011), Section 6.6 (Limited Mutual Waiver of Consequential Damages)
35
ConsensusDOCS 200 (2011), Section 6.5.2.1 and 6.5.3.
36
ConsensusDOCS 8.3
37
Provisions to ensure compliance with the Project Criteria through the life of the Project
include the following:
• Section 1.1—includes project criteria and proposed changes into the definition of DesignBuild Documents
• A3.2.6—Requires that construction documents will be consistent with approved design
documents, including project criteria
• A3.2.5—requires DB to disclose to Owner in writing any deviations by which the design
documents differ from the design-build documents, including the project criteria
• A3.2.9—arch has to certify that documents are consistent with the Project Criteria
38
B143, 3.2.1
39
A141 A.6.1
40
B143, 3.2
41
B143, 3.2.3.2
42
AIA A201-2007, Section 2.2 (Owner Financial Information).
43
AIA A201-2007, Section 15.1.6 (Mutual Waiver of Consequential Damages).
44
A141, 6.2
45
A141, A4.3
46
A141, 6.1
47
A141, A.4.4.2.3
48
A141, A.4.4.2.2
49
(CD 410)
50
(CD 415)
51
ConsensusDOCS Design-Build forms:
52
The design-build agreements were modified to specifically identify the individual contract
documents, including expressly designating design documents as Contract Documents, after they
are approved by the owner at the schematic design, design development, and construction
document phases respectively. See ConsensusDOCS 410 (2011), Section 15.1. In addition,
information provided by the owner is only a Contract Document if it is specifically identified as
such. See ConsensusDOCS 410 (2011), Section 15.1, Section 3.6.4. Each of the identified
documents are also included within the Order of Precedence clause. See ConsensusDOCS 410
(2011), Section 15.2.
53
“Contracts in the Owner’s Best Interest,” Owner’s Contract. Available at:
54
“What Should We Teach About Design-Build Contracts? A Learning Module,” Journal of
Construction Education, Lee A. Ellingson (Fall 2002, Vol 7, No. 3, pp. 117-136).
50
55
“Contract Documents of the Design-Build Institute of America,” J. Kent Holland, Jr.
IRMI.com (May 2002) available at:
http://www.irmi.com/expert/articles/2002/holland05.aspx?cmd=print.
56
AIA A232-2009, General Conditions for Construction, Construction Manager as Advisor
Edition, at Sec. 9.4.1.
57
ConsensusDOCS 801, 2.1.1.
58
ConsensusDOCS 801, 3.2.11.
59
ConsensusDOCS 801, Article 8 (specifically 8.1.6, 8.1.10, 8.1.12, 8.1.13).
60
Compare provisions regarding Reimbursable Expenses (specifically Article 8 and Section
7.3.2) with provisions regarding General Conditions Items (specifically Sections 2.3.11; 3.2.11;
and 7.5).
61
ConsensusDOCS 801, 4.5.4.
62
AIA C132-2009, Section 3.2 (Preconstruction Services)
63
AIA C132-2009, Section 9.5 to 9.7.
64
AIA C132-2009, Section 8.1.3.
65
AIA C132-2009, Section 8.1.4.
66
ConsensusDOCS 300, 4.1
67
AIA A195, 4.7.1
68
AIA A195, 4.9.1
69
AIA A195, 5.1
70
AIA A195, 5.2
71
AIA A195, 6.2
72
AIA A195, 6.8
73
AIA A195, 6.9
74
AIA A195, 6.13.2
75
AIA A195, 7.1
76
AIA A195, 7.3.1
77
AIA A195, 7.3.2
78
AIA A195, 8.1.3
79
AIA A195, 8.2
80
AIA A195, 8.3
81
AIA A195, 11.2
82
AIA 195, 9.3
83
AIA 195, 9.4
84
AIA 195, 9.5
85
AIA 195, 9.6
86
AIA 195, Article 9 and 10
87
ConsensusDOCS 300, 2.4.5.
88
ConsensusDOCS 300, 3.8.
89
ConsensusDOCS 300, 3.8.2.1
90
ConsensusDOCS 300, 3.8.2.2
91
ConsensusDOCS 300, 11.2
92
ConsensusDOCS 300, Article 8
93
ConsensusDOCS 300, Article 11
51