The Evolution of the AIA Documents From 2007 to 2017
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1 The Evolution of the AIA Documents From 2007 to 2017 Kenneth Cobleigh, Managing Director and Counsel for AIA Robin G. Banks, Goldberg & Banks, P.C. A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
2 Agenda AIA Contract Documents History and Overview What s new in the Owner-Contractor Agreements and A201 General Conditions in 2017? What s new in the Owner-Architect Agreements in 2017? Questions? Contacts and Resources
3 Overview AIA Contract Documents Program
4 Quiz 1. When did the AIA publish its first set of standard form documents? A B C. 1987, when Howard Goldberg first became outside counsel to the Documents Committee First AIA Contract Document 1888
5 2. Who compromises the Documents Committee of the AIA? A. Architects B. Lawyers C. Insurance advisors D. Howard Goldberg s family and friends E. All of the above
6 3. What are the objectives of the Documents Committee in drafting AIA Contract Documents? A. To create fair & balanced documents B. To balance competing interests C. To put risk where it is best managed D. All of the above
7 4. True or False The Documents Committee takes all of the following steps when drafting AIA Contract Documents: Seeking industry comment Reviewing/incorporating legal decisions Investigating the impact of industry practices Drafting and revising the documents Soliciting and reviewing feedback on drafts Finalizing and publishing the documents
8 2017 Release The Documents A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
9 2017 Release What s been revised? A , Owner and Contractor where the basis of payment is a Stipulated Sum * A , Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price * A , Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee without a Guaranteed Maximum Price * A (formerly A ), Standard Abbreviated Form of Agreement Between Owner and Contractor A , Standard Short Form of Agreement Between Owner and Contractor A , General Conditions of the Contract for Construction A , Standard Form of Agreement Between Contractor and Subcontractor * with new Insurance Exhibit A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
10 2017 Release What s been revised? B , Standard Form of Agreement Between Owner and Architect B , Owner and Architect without a Predefined Scope of Architect s Services B , Standard Form of Agreement Between Owner and Architect for a Complex Project B , Standard Abbreviated Form of Agreement Between Owner and Architect B , Standard Short Form of Agreement Between Owner and Architect C , Standard Form of Agreement Between Architect and Consultant E , Sustainable Projects Exhibit A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
11 2017 Release What is new? Program
12 Sustainable Project Exhibit History Guide for Sustainable Projects AIA Document D503 (2011) SP versions of standard AIA Documents ( ) Sustainable Projects Exhibit AIA Document E E204 is attached to owner, architect and contractor agreements Same process, terminology, responsibilities and material as the SP versions, but located and coordinated within a single exhibit A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
13 Sustainable Project Exhibit Establish a clear and detailed process to achieve the Sustainable Objective Provide a clear and detailed description of the various roles and responsibilities of the parties Address key risk factors the parties might encounter (like product substitution, delayed or failed certification, and consequential damages) and the exhibit now allows us publish just one version of the key document. A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
14 Insurance Exhibit AIA Document A Exhibit A, Insurance and Bonds Also used as an Exhibit to A and A Key terms of Exhibit and Article 11 of A201 written into A104 A105 contains very basic insurance provisions A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
15 Insurance Exhibit Most, but not all, of the A Insurance and Bonds requirements (Article 11) are moved to the Exhibit: Owner s Insurance Contractor s Insurance Optional Coverages Additional Insureds Performance & Payment Bonds A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
16 Insurance: Why an Exhibit Changing range and types of coverage Flexibility in developing Project Insurance Requirements Need to allow for adaptation to changes in the insurance market w/o edits to A201 Facilitate transmission to insurance advisors/brokers Exhibit for 2014 Design-Build documents
17 Insurance: The Exhibit Requires Owner or Contractor to obtain and maintain property insurance written on builder s risk all-risk completed value or equivalent policy form Begins from premise that Owner will obtain and maintain property insurance, but allow parties to shift burden to Contractor Sufficient to cover the value of the entire Project on a replacement cost basis o And existing structure in case of renovation or remodeling Maintained until Substantial Completion and thereafter continued or replaced through the Contractor s one-year period for correction of the Work
18 Insurance: The Exhibit In addition, the parties may agree that the Owner will purchase and maintain certain optional extended property coverages: Loss of Use, Business Interruption, and Delay in Completion Insurance Ordinance or Law Insurance Expediting Cost Insurance Extra Expense Insurance Civil Authority Insurance Ingress/Egress Insurance Soft Costs Insurance
19 Insurance: The Exhibit The parties may also agree that the Owner will purchase and maintain certain other optional coverages: cyber security insurance other potential Owner coverages
20 Insurance: The Exhibit Contractor Required Coverages for all Projects: Commercial General Liability Automobile liability Worker s compensation Employer s liability
21 Insurance: The Exhibit Contractor Required Coverages depending on the nature of the Project: Jones Act and Longshore & Harbor Worker s Compensation Professional Liability Pollution liability coverage Maritime Liability Coverage for use or operation of manned or unmanned aircraft
22 Insurance: The Exhibit Other coverages the Contractor might obtain: Railroad Protective liability Asbestos Abatement liability Coverage for physical damage to property while in storage or transit Property coverage for property owned by he Contractor and used on the Project Payment and Performance Bonds
23 Insurance: The Exhibit Key Take Away: Exhibit allows parties to develop project specific owner and contractor insurance requirements If parties simply want the standard coverages historically required by A201, they simply need ignore optional coverage sections and fill in required policy limits/sub-limits and penal sums for bonds.
24 Insurance: A201 Article 11 Owner and Contractor must provide each other with notice of an impending or actual cancellation or expiration of coverage Notice provided within 3 business days of the date the party becomes aware Party receiving notice has the right to stop the Work until lapse cured unless lapse caused by that party Notice does not relieve party of the contractual obligation to provide any coverage Additional provisions protect the interest of the Contractor and Subs if the Owner fails to purchase required coverage
25 Insurance: A201 Article 11 New provisions on adjustment and settlement of loss covered by property insurance: Loss adjusted by and payable to the Owner as fiduciary Prior to settlement Owner notifies Contractor of proposed settlement and proposed allocation of proceeds Contractor has 14days to object If Contractor does not object, the Owner settles and Contractor bound by settlement and allocation If Contractor timely objects, Owner may proceed to settle the loss and dispute between Owner and Contractor is resolved per the Claims and Disputes provisions
26 2017 Release Key Terms and Concept Changes A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
27 BIM and other Digital Data 2017 Agreements require the parties to agree on protocols governing the use and transmission of digital data, and Require the use of E203, G201 and G202 to establish those protocols With respect to BIM, the 2017 agreements further provide that any use of, or reliance on, information contained in a Model, without first having established the protocols, is at the using or relying party s own risk and without liability to any other project participant
28 Termination Fee Provisions AIA documents allow Owner to terminate for convenience In 2007 documents: Contractor and Subs were entitled to reasonable overhead and profit on work not executed Architect and Consultants were entitled to anticipated profit on the value of services not performed
29 Termination Fee Provisions 2017 documents: Owner-Contractor, Owner-Architect, and Architect-Consultant agreements eliminate automatic entitlement to OH&P and prompt parties to discuss and negotiate a termination fee A401 retains entitlement to OH&P on unperformed Work Nothing prevents Contractor and Sub from negotiating a termination fee in lieu of arguing over lost OH&P calculation
30 Liquidated Damages and Incentive Provisions Earlier editions of Owner-Contractor Agreements had parenthetical note prompting parties to insert liquidated damages and incentive provisions Liquidated Damages can be used to offset waiver of consequential damages 2017 Documents have separate fill points to prompt the parties to discuss liquidated damages provisions and incentive provisions
31 Notice A Except as otherwise provided in Section 1.6.2, where the Contract Documents require one party to notify or give notice to the other party, such notice shall be provided in writing to the designated representative of the party to whom the notice is addressed and shall be deemed to have been duly served if delivered in person, by mail, by courier, or by electronic transmission if a method for electronic transmission is set forth in the Agreement. A Notice of Claims as provided in Section shall be provided in writing and shall be deemed to have been duly served only if delivered to the designated representative of the party to whom the notice is addressed by certified or registered mail, or by courier providing proof of delivery.
32 Safety of Construction Means and Methods The Contractor can object to means or methods specified and can propose alternative means and methods. Contractor not required to perform the Work in a manner it deems unsafe The Contractor then proposes alternative approach The Architect reviews it to assure it is consistent with design intent A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
33 Project Communications A Section 4.2.4: More permissive of direct communications between the owner and contractor. Owner must make Architect aware of direct communications B updated to be consistent with revisions in A A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
34 Progress Payments and Retainage Progress Payments (A ) Provisions pertaining to the calculation of progress payments clarified and simplified to clearly delineate the basis for each progress payment. Retainage (A ) Now in a new independent section Specification of retainage amount Items that should be excluded from retainage How retainage may be reduced at or before substantial completion.
35 Contractor s Construction Schedule Expansion of basic content required in the Contractor s Construction Schedule Show dates of commencement, required milestones, and Substantial Completion Apportionment of Work by construction activity Time required to complete each portion of Work Demonstrate an orderly progression of the Work Revised and updated at appropriate intervals A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
36 Claims and Disputes Clarified that claims first discovered after the warranty period are not required to go through the IDM: Claims by either the Owner or Contractor, where the condition giving rise to the Claim is first discovered after expiration of the period for correction of the Work set forth in Section , shall be initiated by notice to the other party. In such event, no decision by the Initial Decision Maker is required A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
37 Removing Lien Claims A Provided the Owner has fulfilled its payment obligations under the Contract Documents, the Contractor shall defend and indemnify the Owner from all loss, liability, damage or expense, including reasonable attorney s fees and litigation expenses, arising out of any lien claim or other claim for payment by any Subcontractor or supplier of any tier. Upon receipt of notice of a lien claim or other claim for payment, the Owner shall notify the Contractor. If approved by the applicable court, when required, the Contractor may substitute a surety bond for the property against which the lien or other claim for payment has been asserted.
38 2017 Release Key B101 Changes A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
39 B Initial Information Done Away with Optional Exhibit A Substance of 2007 Exhibit A incorporated into standard agreement Sustainable Objective to be identified, if any Digital Practice and BIM addressed A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
40 B Article 3 - Scope of Services Traditional 5 Phases of Services Remain with only minor edits/additions Clarify that Architect is not responsible for Owner s acceptance of nonconforming work. Updated approach to Sustainability Services Bidding/Negotiation Phase now Procurement Phase Substitutions During Procurement now Additional Service A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
41 B Article 3 - Scope of Services (Cont.) Traditional 5 Phases of Services Remain with only minor edits/additions Clarifies Architect s scope of review of Contractor s design submittals Consistency with Design Concept Only Architect may rely on, and is not responsible for adequacy of the submittals A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
42 B Article 4 - Supplemental and Additional Services (Cont.) B has Supplemental and Additional Services Supplemental Services services not included in Basic Services that the Architect agreed to provide at the time the contract is executed (aka that big table in Section 4.1 ) Additional Services services necessitated by circumstances as the project progresses A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
43 B Article 6 Cost of the Work Modified definition to include work/materials donated to the Owner. Revised architect s duty to redesign without compensation for budget bust. Architect can obtain Additional compensation if re-design due to market conditions the Architect could not reasonably anticipate. Approach is consistent with FAR Design Within Funding Obligation (Design Within Funding Limitations 48 CFR ) A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
44 B Article 9 Termination or Suspension Deleted Termination Expenses Replaced with negotiable Termination Fee. Paired with Licensing Fee for continued use of IOS Added automatic termination date One year from the date of Substantial Completion Explicit on provisions that survive termination A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
45 B Article 11 Compensation Added provision clarifying progress payment calculations to the Architect where overall compensation is on a percentage basis. B silent on the issue B identifies calculation method previous payments will not be subsequently adjusted based on changes to the Owner s budget. A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
46 C , Architect/Consultant Agreement Digital Practice and BIM addressed consistent with other 2017 documents Standard of Care C401 states Consultant s standard of care, but if the Prime Agreement includes a different standard, the Consultant agrees to perform consistent with the Prime Agreement standard of care. Insurance language updated consistent with other 2017 documents A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
47 C (Cont.) Termination and Licensing Fees Separate Termination and Licensing Fees for terminations not the fault of the Consultant and terminations due to the Owner terminating the Prime Agreement If the Owner Terminates the Prime Agreement for the Owner s convenience, the Consultant s Termination and Licensing fees are contingent on the Architect receiving a Termination Fee from the Owner. For all other terminations not the fault of the Consultant, the Consultant s Termination and Licensing fees are not contingent. A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
48 2017 Release Upcoming Education & Resources
49 To view comparisons between the 2007/2017 documents, please click here
50 Questions regarding this webinar? Contact: Hasti Hejazi Director of Global Innovation Education The American Institute of Architects
51 Upcoming Webinars AIA Contract Documents 2017 Webinar: Owner- Architect Agreements and New Sustainable Projects Exhibit June 1, 2-3:30pm Registration Page AIA Contract Documents 2017 Webinar: Revised General Conditions and New Sustainable Projects Exhibit June 7, 3-4:00pm Registration Page AIA Contract Documents 2017 Webinar: Owner-Contractor Agreements and New Sustainable Projects Exhibit June 15, 3-4:00pm Registration Page A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
52 Contact and Resource Information AIA Contract Documents Learn Page: AIA Contract Documents education on AIAU: aiau.aia.org/aia-contract-documents Questions about AIA document content: Tel.: (202) Questions about ACD5: Tel.: (800)
53 Thank You! A 17 AIA Conference on Architecture 2017 April 27-29, Orlando
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