APWA / CASC. Fall 2015 Seminar Series CLAIMS AVOIDANCE AND MANAGEMENT WORKSHOP. Improving the Owner Architect Agreement

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1 APWA / CASC Fall 2015 Seminar Series CLAIMS AVOIDANCE AND MANAGEMENT WORKSHOP Improving the Owner Architect Agreement Contract Provisions That Will Make for Better Construction Projects Bryan Caditz Bryan is a member of the law firm of Hedeen & Caditz, PLLC where he specializes in construction and employment law and general litigation. Bryan represents public owners, general and specialty contractors, material suppliers, and design professionals throughout the Northwest. He is Past Chair of the Construction Law Section of the Washington State Bar Association and a co-author of the AGC of Washington Lien and Bond Claims Handbook and the Washington Real Property Deskbook. Bryan is a frequent speaker at industry seminars involving construction-related topics. 1

2 Review and Revise AIA Agreement American Institute of Architect (AIA) form contracts not as comprehensive and are slanted toward the Architect Consider revising the following provisions: Construction Contract Administration Insurance Indemnification Dispute Resolution Copyright Clarify the Architect s Role in Administering the Construction Contract What should be the Architect s Role in: Reviewing Submittals Interpreting the Contract Documents for Owner Responding to RFIs from Contractor Reviewing Schedules Evaluating the Work (how often, when) Reviewing Progress Billings Revising the Contract Documents Reviewing and Administering Change Order Proposals 2

3 Role in Administering Construction Contract, (cont d) Maintaining the Project Record Reviewing and making recommendations on Claims Determining if the Work is substantially and finally complete Reviewing as-built documents Note that under AIA B101( ) the Architect may claim that administration is extra work unless you use the A201. Require Insurance Under some agreements, e.g. pre-2007 AIA forms, the Architect is not obligated to maintain insurance. Under the AIA B the Architect is entitled to reimbursement if required to provide more than what the Architect normally maintains: 2.5 The Architect shall maintain the following insurance for the duration of this Agreement. If any of the requirements set forth below exceed the types and limits the Architect normally maintains, the Owner shall reimburse the Architect for any additional cost:.1 General Liability.2 Automobile Liability.3 Workers Compensation.4 Professional Liability 3

4 Insurance Considerations Limits E & O policies, including for sub consultants Completed operations coverage for Contractor Additional insureds/obligees Extended reporting periods or tails REQUIRE INDMENFICATION The AIA B lacks an indemnity provision. Use an indemnity provision that complies with RCW Indemnify only to the extent of negligence or fault Waive immunity under industrial insurance, Mutually negotiate 4

5 Protect the Owner s Right to Use the Design Under the 2007 B101 Agreement, Architects and Architect s consultants are deemed authors and owners of their respective Instruments of Service, and they retain all common law and statutory rights, including copyright. The Owner is granted a nonexclusive license to use the Instruments of Service. What is an Instrument of Service? Instruments of Service are broadly defined in the AIA documents as the product of Architect s work: representations, in any medium of expression now known or later developed, of the tangible creative work performed by the Architect and the Architect's consultants under their respective professional services agreements. Instruments of Service may include, without limitation, studies, surveys, models, sketches, drawings, specifications, and other similar materials. A

6 What rights does the Owner have to the Architect s work? Under the 2007 Owner/Architect agreement, the Owner is granted a nonexclusive license to use the Instruments of Service solely and exclusively for purposes of constructing, using, maintaining, altering and adding to the Project. See B Possible Violations of Architect s Rights Future additions/alterations to the building? Future similar buildings? Liability for damages, profits, costs and attorney s fees injunction prohibiting use 6

7 When Can the Architect Terminate the License to Use Instruments of Service? Under the 2007 version of the Owner/Architect agreement, the Architect may terminate the license if the Architect rightfully terminates the agreement due to project suspension or the Owner s default. See B The Owner may continue to use Instruments of Service for a project if it rightfully terminates the Architect for cause and has substantially performed its obligations. If the Owner terminates for convenience, the Owner is required to pay a licensing fee, as pre negotiated by the parties, if it wants to use the Instruments of Service on the project. Consider Making the Architect s Work for Hire Revise agreement to provide that the Architect s work shall be works made for hire and the Owner shall own all common law statutory and other intellectual property rights therein, including copyrights. 7

8 Thank you! Bryan D. Caditz Hedeen & Caditz, PLLC 600 University Street, Suite 2100 Seattle, WA T: (206) F: (206)