S8Ch50_The Primary Contractual Documents

Question 1

Project Delivery_Single Prime Contract

Answer 1

Most common type: Owner- GC agreement. Subcontractors under GC.Advantage: Owner has a single source of responsibility, which also makes the project easier for the Arch to administer.

Question 2

Project Delivery_Multiple Prime Contract

Answer 2

Major portions (eg. MEP) are in contract w Owner. Specialty contractors favor this, but more diff for Arch.

Question 3

Project Delivery_Many Prime Contract

Answer 3

Usually applied in Fast Track construction. Much more difficult to manage, often requires CM for coordination.

Question 4

Project Delivery_Design-Award-Build

Answer 4

Traditional method where Owner has separate contracts w Arch and GC. Pro: all roles are well defined, straightforward method. Con: One phase must be completely finished before proceeding to the next. If Owner needs the building quickly or if extended design result in higher financing costs.

Question 5

Project Delivery_Fast-Track

Answer 5

Overlapping some of the design and construction process to reduce total time of project delivery. This method requires many prime contracts and much more coordination, often requires a CM.

Question 6

Project Delivery_Construction Manager (CM)

Answer 6

Third party overseeing (pros): early advice on constructability of design, early cost estimation and value analysis, project scheduling, professional mngmnt of contracts, and sometimes, a guaranteed price and completion date.Cons:Extra costs and more complicated mngmnt structure. This can be minimized if GC acts as CM. However, when this occurs, advantage of competitive bidding among GCs is lost.

Question 7

Project Delivery_Fixed Price (aka Stipulated Sum or Lump Sum) Method

Answer 7

Contractor gives owner a set price for project. Owner is not responsible for cost overruns nor shares in any savings.

Question 8

Project Delivery_Guaranteed Maximum Price (GMP) Method

Answer 8

The Owner has a fixed, max price that the contractor or CM guarantees. If the project is completed for less, the client receives the cost savings.

Question 9

Project Delivery_Cost-Plus-Fee Method

Answer 9

Owner pays the actual cost of construction (direct plus indirect costs) plus a fee that is agreed to before construction begins.

Question 10

Project Delivery_Design-Build Method

Answer 10

Owner contracts with one entity to provide both design and construction services. Typically used by Owners who have building experience w multiple facilities and who have clearly defined needs that can be precisely stated in performance requirements.

Question 11

Project Delivery_Design-Build Pros and Cons

Answer 11

Pros: A single source of responsibility. The owner has a fixed price early in the process. Total time of design and construction is usually reduced over more traditional approaches. Cons: Owner does not have much control over design as w other methods, once the contract is signed/There can be disagreements concerning what was supposed to be included in the design/The design-build firm has control over the quality of the materials and construction methods/In order to get what is needed, the client must develop a specific set of performance requirements.

Question 12

Project Delivery_Bridging

Answer 12

A variation of the design-build approach combining the advantages of the traditional design-bid-build. The owner hires an Arch/Eng (AE) to be PM. This AE/PM acts as an advisor and works w owner to develop the project. The AE/PM also works w public and private groups to pain necessary approvals and develops scope drawings and specs. The owner then makes documents available for bidding by design-build firms. The selected DB firm takes over the responsibilities of the AE and the firm produces the final, detailed CD. The AE/PM reviews but is not responsible for the final documents. The DB firm uses the final docs to secure the necessary permits, review submittals and construction.

Question 13

Project Delivery_Advantages of Bridging

Answer 13

This approach is best to construct the project at the lowest cost while meeting requirements of the owner. For the Owner, bridging combines an important advantage of design-build, having someone to represent the owner’s interests throughout the process, w the advantages of competitive bidding, a fixed cost, and single source responsibility for construction.

Question 14

Project Delivery_Integrated Project Delivery (IPD)

Answer 14

A method of completing a project in which all participants collaborate closely from the project’s earliest conceptualization to move-in.IPD depends heavily on tech, communication, and having an integrated BIM that everyone has access to.

Question 15

Project Delivery_Phases of IPD

Answer 15

Conceptualization (pre-design), Criteria design(SD), Detail design (DD), Implementation Documents (CD), Agency Review, Buyout (bidding from participants not incl. in the integrated team), Construction (CA), and Closeout. The early design phases may take slightly longer, but the implementation docs and agency review/buyout phases will take less time, and total project delivery time will be shorter overall. Pros: Better design, shorter project delivery time, lower cost, quality construction, and fewer problems during construction. Although there are many details that are unique to this delivery method, such as compensation, legal responsibilities, and tech standards, IPD has a potential to improve how projects are designed and built.

Question 16

O-A Agreements AIA Doc B101_Article 1: Initial Information

Answer 16

The architect and owner to itemize the information and assumptions about the project, if known at the time of contract execution. Such as: the project’s objective; site information; the owner’s program; the physical, legal, financial, and time parameters; and the key personnel for both the owner and the architect. The information may materially change and if it does the owner and architect shall adjust the schedule, the architect’s services, and the architect’s compensation.

Question 17

O-A Agreements AIA Doc B101_Article 2: The Architect’s Responsibilities

Answer 17

A standard of care paragraph requires the architect to perform services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality, same or similar circumstances, etc.
The architect must not engage in any activity or accept any employment or interest that would compromise the architect’s judgment. Art 2 further requires the architect and owner to list the types and amounts of insurance the architect is requires to carry for the project. including: general liability, automobile liability, workers’ comp, and professional liability. If any insurance are in excess, the owner is required to reimburse the architect for addtnl cost.

Question 18

O-A Agreements AIA Doc B101_Article 3: Scope of Architect’s basic services

Answer 18

These include usual and customary structural, mechanical, and electrical engineering services.
-Project administration services: The architect must coordinate the arch’s services w those provided by the owner and owner’s consultants/The arch must submit, for the owner’s approval, a schedule for the performance of the arch’s services/The arch is also expected to consider environmentally responsible design alternatives during the schematic design phase.
-Evaluation of budget and cost of work
-Evaluation and planning services: the arch should notify the owner of any impact that the budget, schedule, site or method of contracting may have on the project.
-Design Services: Incl. the bulk of arch’s standard services, incl. SD, DD, and CD. At the end of each phase,the owner’s approval is a precondition that must be received before the arch can begin work on the next phase.
-Construction procurement services: The arch ASSISTS in obtaining competitive bids or negotiated proposals and must assist in awarding the contract and preparing contracts for construction. The arch only acts as an agent for the owner and is not a party to the Owner Contractor Agreement.
-Contract Administration services: The arch must make site visits at intervals to determine whether the project will be in accordance w the CDs. Must keep owner informed of the progress and defects. Not required to make exhaustive or continuous onsite inspections.
The arch is not (contractor is) responsible for the means of construction, building techniques or safety precautions unless the arch has actually specified means and methods of construction.
Owner and contractor are supposed to communicate through the arch. Same goes for consultants.

Question 19

O-A Agreements AIA Doc B101_The Owner’s Responsibilities

Answer 19

Owner must provide the architect with: program, schedule and budget/ services of consultants/tests, inspections, and reports required by law or cds suchs as structural, mechanical, and chemical tests, along w pollution or hazardous materials/ all legal, insurance, and accounting services/program that gives the owner’s objectives, schedule, constraints, and design criteria, incl. space requirements, special equip, systems and site requirements/land surveys/location of utilities, right-of-way, etc/geotechnical engineer for test borings, determination of soil bearing values, percolation tests, evaluation of hazardous materials, etc.
The arch may assist the owner in procuring these services and coordination the necessary information.

Question 20

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Instruments of Service:

Answer 20

The drawings, specs, and other docs, incl electronic files, are considered instruments of service whose authors and owners are the architect and its consultants. If the arch rightfully terminates the agreement for cause as provided for elsewhere in the agreement, this license is terminated. If the Arch does not terminate, the owner retains the license to use the instruments of service after completion of the project or the owner’s termination of the agreement. If the owner later uses the instruments of service without the arch, the owner agrees to release and indemnify the arch and its consultants for all claims and causes of action arising from such uses.

Question 21

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Waiver of consequential damages

Answer 21

Both the Arch and owner waive consequential damages, which limits claims to damages resulting directly from a breach of the agreement.

Question 22

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Hazardous material

Answer 22

The Arch and arch’s consultants have no responsibility for the discovery, presence, handling, removal, or disposal of or for the exposure of persons to hazardous materials such as asbestos, PCBs, or other toxic substances.

Question 23

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Third-Party claims

Answer 23

One provision states that nothing in the agreement shall create a contractual relationship with a third party against either the arch or the owner. This is to reinforce the idea of privity, which states that one party to a contract is protected from claims from other parties with whom there is no direct contractual relationship.

Question 24

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Causes of Action

Answer 24

Any claim or cause of action taken by either the arch or owner must be initiated within a time period prescribed by applicable law, and in any case not more than 10yrs after the date of substantial completion of the work. Each state defines its own statute of limitations and it generally begins at the time the problem or injury is first discovered.

Question 25

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Waiver of Rights

Answer 25

This clause provides for a waiver of damages that are covered by property insurance during construction. The Owner/Arch cannot sue each other for damages if they are covered by property insurance that is required by the Owner-Contractor Agreement. This is also known as a waiver of subrogation, which prevents the insurance company from suing any of the principal participants in the project to recover what has been paid out for an insured loss.

Question 26

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Right to Photograph

Answer 26

The arch has the right to photograph the project and include photographs or other artistic representations of the design in the architect’s promotional materials unless the owner has specifically notified the architect in writing that some or all of the portions the arch wants to photograph are confidential or proprietary info. Unless such notice has been given, the owner must give reasonable access to the completed project for photography.

Question 27

O-A Agreements AIA Doc B101_Terms and Conditions of the Contract_Termination

Answer 27

Either party can terminate the agreement in no less than 7 days written notice if the other party fails substantially to perform, or make fee payments, etc. If the owner suspends work or terminates the agreement, the arch must be compensated for services performed prior to termination. A new clause allows the owner to terminate the contract without cause for the owner’s convenience as long as the owner gives 7 days’ written notice.

Question 28

O-A Agreements AIA Doc B101_Cost of Work

Answer 28

The cost at current market rates of labor and materials, incl. cost of mngmnt provided by a separate CM or GC, plus reasonable allowance for OH + P. Construction cost does not incl. professional fees, land cost, financing costs, or other (eg. land surveys) that are the responsibility of the owner.
The arch does not warrant that bids will not vary from the owner’s budget. However, the arch must adhere to it. If the budget is exceeded by the lowest bid , the owner has five choices: increase the budget/authorize rebidding/terminate/cooperate in revising the project scope and quality/implement mutually acceptable alternative. However, if the owner chooses to revive the scope and quality, the arch must modify docs for which arch is responsible WITHOUT any further comp.

Question 29

O-A Agreements AIA Doc B101_Addtn’l Services Not in Agreement

Answer 29

The arch must notify the owner w reasonable promptness and explain why it’s needed. Cannot proceed without written authorization. Services incl: changes in initial info, previous instructions or approvals given by owner/a material change which may include the owner’s schedule, budget, delivery method, size, quality, or complexity of the project/owner’s request for extensive environmentally responsible design alternatives, incl. LEED cert/changes to previously prepared instruments of service made necessary by the enactment or revision of codes, laws or regulations/services made necessary by untimely decisions of the owner or its consultants/prep of digital data for transmission to the owner’s consultant or contractor/prep of design and docs for alternate bid proposed by the owner/prep for attendance at a public presentation, meeting or hearing/prep for and attendance at a dispute resolution or legal proceeding, except one to which the arch is a party/evaluation of the qualification of bidders/consultation concerning replacement of work resulting from fire or other cause during construction/assistance to the initial decision maker, if this is not the arch.

Question 30

O-A Agreements AIA Doc B101_Addtn’l Services Not in Agreement_Services needed to avoid delay in construction

Answer 30

Services incl: reviewing a contractor’s submittal out of sequence from the orig. submittal schedule/responding to the contractor’s requests for info, when the requests are not prepared according to the CDs or when the info requested is available to the GC from CDs or other info provided by owner or prior project corres. or documentation/preparing COs and construction change directives that require evaluation of the GCs proposal/evaluating the extensive number of claims/evaluating substitutions proposed by owner or GC and making subsequent revisions to the instruments of service/providing construction phase services 60 days or more after substantial completion.
If the Owner determines these services unnecessary, the owner must provide written notification without any addtnl compensation to the arch.

Question 31

O-A Agreements AIA Doc B101_Addtn’l Services Not in Agreement_Article 4

Answer 31

For each service, the arch can indicate whether it is or is not provided by arch or the owner. Addtn’l services include programming, measured drawings, BIM, landscape design, interior design, on-site project representation, post-occupancy evaluation, security evaluation and planning, LEED cert, and historic preservation.

Question 32

O-A Agreements AIA Doc B101_Owner-Architect Dispute Resolution_Mediation

Answer 32

When one party begins a claim or cause of action, mediation must be tried first, and other forms of binding dispute resolution may not be sought unless mediation fails. Mediation is a process in which a neutral third party assists the disputing parties in negotiating a settlement, using preset rules established by the American Arbitration Association (AAA). Any binding dispute resolution proceedings are postponed for a period of 60 days from the date of filing of the request for mediation. The parties split costs involved.

Question 33

O-A Agreements AIA Doc B101_Owner-Architect Dispute Resolution_Arbitration

Answer 33

A formal, legally binding process for resolving disputes without litigation. One or more arbiters w experience in the construction industry hear the arguments of both parties and render a decision, which is binding. These proceedings are conducted according to the rules and guidelines established by the AAA. It must be requested no earlier than the time of filing of mediation and no later than the applicable statue of limitations.

Question 34

O-A Agreements AIA Doc B101_Compensation Methods_Stipulated sum (fixed fee)

Answer 34

Monthly payment according to the proportion of the 5 basic phases. Addtn’l reimbursable expenses incl. postage, reproduction, transportation, long-distance communication, computer aided design and drafting equipment time, renderings and models.

Question 35

O-A Agreements AIA Doc B101_Compensation Methods_Cost plus fee (Variations: Multiple of direct personnel expense/ Multiple of direct salary expense/ Hourly billing rates)

Answer 35

The arch is compensated for the actual expenses of doing the job plus a reasonable fee for profit. The actual expenses incl. salaries, employee benefits, direct expenses, and office OH. Several variations of the cost-plus fee approach are used:

• Multiple of direct personnel expense: the direct salary of employees is determined and multiplied by a factor to account for normal and required personnel expenses such as taxes, sick leave, health care, etc. This is then increased by a multiplier to incl. OH+P.
• Multiple of direct salary expense is similar, except that the multiplier is larger, to provide for employee benefits.
• Hourly billing rates simply building in the multiplier to the hourly rate so that the client only sees one number for each of the types of people working on the project.

Question 36

O-A Agreements AIA Doc B101_Compensation Methods_Percentage of construction cost

Answer 36

The professional fee is tied to the cost of construction as a fixed percentage. This method is not used as much as it once was. From the client’s standpoint, the arch may be encouraged to increase the cost of construction to increase fee or conversely, may lose any incentive to reduce construction cost. From the arch’s point of view, this method may not be good because a low-cost project may require just a much work, or more work than, an expensive project.

Question 37

O-A Agreements AIA Doc B101_Compensation Methods_Unit cost method

Answer 37

Based on a definable unit, such as a sq footage, for such work as a tenant planning in a leased building or on a per-house basis in a large residential project.

Question 38

O-A Agreements AIA Doc B101_Factors that affect Compensation Methods

Answer 38

• It should fairly compensate the arch for the actual work required and value of the professional service.
• Allow for the rising cost of providing services, which is esp important when the project will be of long duration.
• The client should be comfortable w the method and understand where the money is being spent.

Question 39

Gen. Cond. AIA Doc A201_Contract Documents

Answer 39

Consists of the agreement between owner and contractor, conditions of the contracts (general, supplementary, and special conditions), the drawings, the specifications, addenda issued prior to execution of the contract, other documents listed in the agreement, and modifications issued after execution of the contract. The CDs do not include other documents such as the bidding documents. The CDs clearly states that it does not create a contractual relationship between any other persons other than the owner and the contractor.

Question 40

Gen. Cond. AIA Doc A201_Work

Answer 40

The contractor’s obligations to provide improvements to the project. It’s important to distinguish what is the contractor’s responsibility and what the property insurance covers.

Question 41

Gen. Cond. AIA Doc A201_Article 1: Instruments of Service

Answer 41

This defines the initial decision maker. IoS are representations, in any medium, of the tangible and intangible creative work of the A and As consultants. These may incl. studies, surveys, models, sketches, drawings, specifications, and similar materials. Art. 1 also adds a new req’ that if the parties intend to transmit info in digital form, they shall establish protocols for the transmission of data.

Question 42

Gen. Cond. AIA Doc A201_Record Documents

Answer 42

Marked-up construction drawings, specifications and other documents that record exactly how the project was built, noting any changes or deviations from the original contract docs. The A should incl. the exact req’ for record documents in Div 01 of the specs.

Question 43

Gen. Cond. AIA Doc A201_Design Delegation

Answer 43

It is a legal form of design allocation by the owner (bc there is no contractual relationship btwn the A and C). Even though the A may specify all performance and design criteria for the C, and the C can be req’d to provide professional services or certs if specifically req’d by the contract docs. Design delegation allows the use of performance specs for products and bldg assemblies or allows the C to select the best approach to completing the work.

Question 44

Gen. Cond. AIA Doc A201_Construction Change Directive

Answer 44

Instructs the C to proceed w the required changes in the work even if the C does not agree w the basis for adjustment in the contract sum or contract time. When final cost and time changes is made through submit by the C and review by the A and O, a CO is issued.In the interim, the C may request payment for work completed in and app for payment.

Question 45

Gen. Cond. AIA Doc A201_Mechanic’s Lien

Answer 45

A claim by one party against the property of another party for the satisfaction of a debt and is a common method for an A, C, or material supplier to gain payment. If a property carries a mechanic’s lien, it cannot be sold or transferred until the lien is disposed of (or bonded), except through foreclosure. If a sub files a lien on the property against the C, the O is still responsible for payment. If the lien is not paid, the property can be foreclosed by the lien holder, the lender, or a taxing entity.To protect the O from this, the C must submit a release or waiver of liens to the O before final payment is made. The C must also furnish the o and A an affidavit of payment of all debts and claims, and an affidavit of release of liens stating that all obligations have been satisfied.

Question 46

Gen. Cond. AIA Doc A201_Protections of Persons and Property

Answer 46

Contractor is exclusively responsible for on-site safety and precautions against damages to persons and property.
The O is responsible for materials brought to the site, except to the extent of the C’s fault or negligence in the use and handling of such materials. The C is req’d to indemnify the O for any costs incurred for remediating material or substance that the C brings to the site and negligently handles, or bc the C fails to fulfill its obligations in handling hazardous materials. If any damage to the work is sustained due to inadequate protection, the C must repair or correct it. However, this does not incl. damages caused by acts of O or A.

Question 47

Gen. Cond. AIA Doc A201_Bond (aka Surety Bond)

Answer 47

An agreement by which one party, call the surety (the bonding company), agrees to be responsible to another party, called the obligee (the owner), for the default or debts of a third party, called the principal (the contractor). Bonds are simply a protection for the owner against default by the contractor.

Question 48

Gen. Cond. AIA Doc A201_Termination or Suspension of the Contract

Answer 48

The C may terminate the contract if work has stopped for more than 30 days, through no fault of the C, for any of the following: court order, act of gvmnt, failure by the A to issue a certificate of payment w/o giving a reason, repeated suspensions by the O, or failure of the O to provide proper evidence that financial arrangements have been made to fulfill the O’s obligations. Seven days written notice is req’d.
If A certifies that sufficient cause exists, the O can give 7 days written notice and terminate the contract if the C fails to supply enough propoerly skilled workers or materials, paymt to subs, disregards laws and ordinances, or is guilty of substantial breach of a provision of the CD.
The owner may suspend or terminate the work for convenience, w/o any cause.

Question 49

Gen. Cond. AIA Doc A201_Claims

Answer 49

A demand or assertion by one of the parties that seeks, as a matter of right, the payment of money or another forms of relief w respect to the terms of the contract. They must be initiated by written notice, made both to the other party and to the IDM within 21 days after the occurence of the event.
Claims can only be made for direct damages, incl. the cost of repairing defective work or completing unfinished work.
A clause in Art. 15 req’s both O and C to waive claims for consequential damages. These are not directly and immediately caused by the act of the party but from the consequences or results of such and act.

Question 50

Gen. Cond. AIA Doc A201_Supplementary Conditions of the Contract to be included in one of four areas:

Answer 50

• Bidding requirements (if info relates to bidding)
• O-C Agreement
• Supplementary Conditions (if info modifies the Gen. Cond)
• Division 01 (Gen Req’mnts)

Question 51

Gen. Cond. AIA Doc A201_Supplementary Conditions examples(not excluded to):

Answer 51

• permission for the A to furnish the C w instruments of service in electronic form
• addtnl info and services provided by the O
• cost for the A to review the C’s requests for substitutions
• provisions for the O, instead of the C, to pay for utilities
• req’mnt that the C employ a super to coordinate mech and elec work
• provisions for fast-track scheduling
• reimbursement by the C for extra site visits by the A that are made necessary by the fault of the C
• addtnl protection for the O against claims for the addtnl time or for consequential damages
• req’mnts for more detailed info on costs and OH
• addtnl req’mnts for payment procedures
• req’mnts for liquidated damages and bonuses
• addtnl req’mnts for bonding and insurance

Question 52

Gen. Cond. AIA Doc A201_Special Conditions

Answer 52

Form a separate section of the conditions of the contract and are written as a separate doc. Special conditions differ from supplementary conditions in that they would be written only once for unique conditions. Supplementary conditions, on the other hand, accommodate different clients, govnmntl regulations, and local laws, and could be used several times for the same client on different projects.

Question 53

O-C Agreements AIA Doc A101_Contract time

Answer 53

Construction completion time

Question 54

O-C Agreements AIA Doc A101_Substantial complete

Answer 54

The stage in the progress of work when the work or designated portion thereof is sufficiently complete in accordance w the CDs so that the owner can occupy or utilize the work for its intended use.

Question 55

O-C Agreements AIA Doc A101_Liquidated damages

Answer 55

Monies paid by the contractor to the owner for every day the project is late. They represent actual anticipated losses the owner will incur if the project is not completed on time. In many cases, Liquidated damages provision is accompanied by a bonus provision so that the contractor receives a payment for early completion.

*If a penalty clause is included (which is different from liquidated damages), a bonus provision MUST also be included.

Question 56

O-C Agreements AIA Doc A101_Contract sum

Answer 56

The compensation the contractor will receive for the work.

Question 57

O-C Agreements AIA Doc A101_Progress Payments

Answer 57

The owner makes periodic payments, usually monthly, based on the percentage of completed work and any materials purchased and stored on site. Materials stored off site also require payment but only if approved in advanced by owner in writing. GC submits application for payment to the arch, arch reviews then verifies, and recommends payment to the owner, who then makes payment. A certain percentage of each payment, called the retainage, usually 10%, is withheld until final completion of the work.

Question 58

O-C Agreements AIA Doc A101_Owner-Contractor Dispute Resolution

Answer 58

Dispute resolution between the owner and the contractor is handled by the IDM and, if not resolved, by mandatory mediation which is precedent to binding resolution of arbitration, litigation, or other means.

• Unlike previous editions of the AIA agreements, arbitration is not mandatory, but is now an option.
• The agreement indicates the arch as IDM, but the owner and contractor can appoint someone else.