Earlier this week (11/5/07), the American Institute of Architects (AIA) introduced its 2007 Update to AIA Contract Documents. The AIA prepared the 2007 Update, which consists primarily of agreements in the popular A201 family of documents, with input from owners, contractors, attorneys, architects, and engineers. The 2007 Update includes 40 revised, updated, or new documents, including new owner/architect agreements.
The AIA updates the A201 family on a 10 year cycle to reflect changes in industry trends and practices. The revision process began in 2004, when the AIA solicited industry feedback on the 1997 A201 family of documents from more than a dozen industry groups, including the Associated General Contractors, the Associated Specialty Contractors, the American Subcontractors Association, the Associated Builders and Contractors, the Council of American Structural Engineers, the National Association of State Facilities Administrators, the Commercial Owners Association of America, the American Council of Construction Lawyers, and attorneys from Division 2, and 12 of the American Bar Association’s Forum on the Construction Industry.
The AIA Documents Committee and AIA staff attorneys met with most of the industry groups while working to address their concerns, which included dispute resolution, financial matters, the right to obtain payment information, insurance, the architect’s standard of care, and sustainable design. The first drafts of the 2007 agreements were completed in 2005. The AIA sent the drafts out to the industry for review, made revisions to respond to the comments received, and sent out additional drafts in 2006 before finalizing the agreements for the November 2007 release.
“We are very grateful to the industry for candidly sharing hundreds of comments—these provided the feedback we needed to address all parties’ concerns,” said Suzanne Harness, managing director and counsel, AIA Contract Documents, American Institute of Architects. “AIA documents are the most respected and widely used in the design and construction industry. We think that’s because we provide a winning combination: agreements that fairly balance the interests of contracting parties, and easy-to-use software that delivers documents in Microsoft Word®.”
Significant changes were made to A201, the “backbone” of the A201 family of documents, because it forms the relationship between the owner, contractor, and architect.
Removal of Mandatory Arbitration – Parties are no longer required to resolve disputes through arbitration. The 2007 Update now offers arbitration as an option; however, if no option is specifically selected, the default procedure is litigation.
Consolidation of Arbitrations – New provisions allow for the architect and his or her consultants, the owner, the contractor, and subcontractors to participate in one multi-party arbitration, as long as certain conditions are met.
Initial Decision Maker – Previous versions of the documents assigned the architect the role of serving as a neutral party to decide disputes between the owner and contractor. The 2007 Update provides the owner and contractor with the opportunity to hire a third-party initial decision maker (IDM) for dispute resolution. The architect remains as the default, if an IDM is not identified in the contract.
Statute of Limitations – The revised A201 designates that the time limit for commencing claims is determined by state law; however, this time limit cannot be longer than ten years after substantial completion of the project.
Additional Insured Provisions – Project Management Protective Liability Insurance is deleted and substituted with a practice that has become common in the industry, naming the owner, architect and the architect’s consultants as additional insureds under the contractor’s general liability policy.
Right to Financial Information – The 2007 Update limits the contractor’s right to request financial information from the owner after work commences and events occur that would lead to concern about the owner’s ability to pay. The revisions also allow the owner a greater opportunity to learn of contractor/subcontractor payment problems, and address a contractor’s failure to pay a subcontractor by allowing the owner to write joint checks.
New Owner/Architect Agreements: The 2007 Update retires B141™–1997, Standard Form of Agreement Between Owner and Architect, and B151™–1997, Abbreviated Standard Form of Agreement Between Owner and Architect, and merges their content to create B101™–2007, a one-part document for traditional design and construction contract administration services. B101–2007 returns to the concept of “basic” and “additional” services, clearly laying out the architect’s services during five phases:
Schematic design
Design development
Construction documents
Bidding/negotiations
Construction contract administration
B101 also requires the architect to discuss with the owner the use of environmentally responsible design approaches (sustainable design) in the project, and to incorporate approaches, such as building orientation and material choices, when creating the design. While the level of sustainable design that will be incorporated into the project is ultimately the owner’s decision, B101–2007 provides a platform for architects to introduce the option of environmentally responsible design to the owner.
The 2007 Update also includes two other new owner/architect agreements: B103™–2007, an owner/architect agreement for large, complex projects, and B104™–2007, for projects of a limited scope. These agreements follow the model B101–2007, but add to, or subtract from, B101’s terms to create agreements that are tailored to different project sizes. Both B101–2007 and B103–2007 incorporate A201–2007, General Conditions of the Contract for Construction. B104–2007 incorporates A107™–2007, an owner/contractor agreement for a project of limited scope. A107–2007 is now modified for use with three types of payment: stipulated sum, cost-plus-a-fee, and cost-plus-a-fee with a Guaranteed Maximum Price (GMP).
New Numbering System: A noticeable change is the new numbering system, which provides consistency in document numbering and establishes a meaning for each number. While the documents maintain a letter to denote the agreement parties, the first letter indicates the type of agreement or form (e.g, prime or subcontract), the second number identifies the family, and the third number indicates sequence. For example, A141™ –2004, is a prime agreement in the design-build family and is the first document in the sequence.
Digital Practice Documents: E201™–2007, Digital Data Protocol Exhibit, which allows parties to establish project-specific protocols for data transfer, and C106™–2007, Digital Data Licensing Agreement were introduced in early 2007. These documents allow parties to manage their digital data as the use of paper construction documents continues to decrease.
AIA Contract Documents are available in paper form and electronically in AIA Contract Documents software. The software generates customizable, Microsoft Word files. The existing 1997 documents will continue to be available until May 31, 2009 to allow contracting parties to transition to the 2007 versions.
AIA Contract Documents software can be purchased at the following link.
