The American Institute of Architect’s (“AIA”) Contract Documents are among the most widely used form agreements in construction. For purposes of keeping up with critical court decisions and industry trends, the AIA reviews and amends its core documents every ten years. 2017 marked a decade since the last updates, and like clockwork the AIA has released revised versions of its documents over the course of this year. Several months ago, the AIA released new versions of 14 documents, including its flagship agreements for the design-bid-build delivery model. And just recently, the AIA has released 20 additional new documents relating primarily to the scope of architects’ services.
The following are some of the key changes found within the first set of new documents rolled out by the AIA this year:
- Insurance Exhibit –Nearly all the insurance and bond requirements of Article 11 of the A201-2007 have been moved to a separate Exhibit. The Exhibit is designed to allow the owner and contractor to: (1) address changing amounts and types of coverage; (2) develop project specific insurance requirements; and (3) facilitate the delivery of the insurance terms to brokers.
- BIM and Digital Data – The parties are now required to agree on protocols for using and transmitting digital information. Further, Sections 1.7 and 1.8 of the A201-2017 now require the parties to use the E2013-2013 Exhibit and/or the G202-2013 Form to establish those protocols. Finally, with respect to Building Information Models (“BIM”), Section 1.8 of the A201-2017 provides that “any use of, or reliance on” information set forth in a BIM, without first having established protocols, is done at the risk of the using or relying party.
- Termination for Convenience – Whereas the 2007 Documents provided that contractors were entitled to “reasonable overhead and profit on work not executed” in termination for convenience scenarios, the 2017 Documents eliminate this automatic entitlement. Instead, the new documents encourage the parties to negotiate a “termination fee” and allow for recovery of “costs attributable to termination of Subcontracts.”
- Incentives and Liquidated Damages – The 2007 editions of the owner-contractor agreements contained only a parenthetical reminder for the parties to insert liquidated damage and/or incentive provisions, which was located in the “Date of Commencement and Substantial Completion” article of the agreements. By contrast, the 2017 editions have separate “fill points” for liquidated damages and incentive provisions in the “Contract Sum” article of the agreements.
- Construction Means and Methods –Revised Section 3.3.1 of the A201-2017 provides that the contractor can object to construction means or methods specified in the Contract Documents and propose alternative means and methods. As a result, contractors should no longer have to perform their work in a manner they feel is unsafe.
- Project Communications – Revised Section 4.2.4 of the A201-2017 permits more direct communications between the owner and the contractor. Previously, the parties were to “endeavor to communicate with each other through the Architect about matters arising out of or relating to the Contract.” Now: (1) the owner and contractor need only include the architect in communications that relate to the architect’s services or professional responsibilities; and (2) the owner must notify the architect of direct owner-contractor communications that otherwise relate to the project.
- Progress Payments – Section 5.1.6 of the A101-2007 has been simplified to more clearly set forth the manner in which progress payments are calculated. In addition, retainage is now addressed in the separate, newly-added Section 5.1.7 of the A101-2017.
- Construction Schedule –Section 3.10.1 of the A201 now requires more detailed construction schedules that include the following: (1) the date of commencement; (2) milestone dates; (3) the date of Substantial Completion; (4) an apportionment of the Work by activity; and (5) the time for completion of each portion of the Work.
- Indemnification from Lien Claims – The newly added Section 9.6.8 of the A201-2017 provides that, if the owner has fulfilled its payment obligations, the contractor shall defend and indemnify the owner from any lien claims or claims for payment by any subcontractor or supplier.
- Claims and Disputes – The newly added Section 22.214.171.124 of the A201-2017 provides that claims by either the owner or contractor that are first discovered after the warranty period, shall be initiated by notice to the other party and need not go through the Initial Decision Maker.