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WHAT IS IN THE AIA A201 AND WHY IS IT THE KEYSTONE DOCUMENT?
Okay. Let’s just jump right into this A201 document. I want to go through it and point out the various components and why you as the owner wants them there.
Just remember that this is the general conditions document that discusses all the relationships and responsibilities during construction. It is referenced and tied back to your owner/contractor and owner/architect agreements.
Like I said in the past episode if you don’t want to hear about contracts, go back and listen to some past episodes or skip to episode 16. Because in the next episode I’m going to be discussing the B105 Owner/Architect agreement.
Don’t forget that I am not a lawyer and you will probably be able to tell once I get into this document.
AIA A201™–2007, General Conditions of the Contract for Construction. The general conditions are an integral part of the contract for construction. They spell out the responsibilities, and relationships of the owner, contractor, and architect and discuss all of their rights. The 201 loops the architect into the owner/contractor agreement because the architect prepared the contract documents and performs construction phase duties. Those duties are described in detail in the general conditions. It is often called the “keystone” document because of its impact on the other various contracts between all the various parties.
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As I mentioned earlier general conditions are an integral part of the contract for construction. It spells out the responsibilities, and relationships of the owner, contractor, and architect and discuss all of their rights.
There are 14 main sections in the contract.
- Provisions
- Owner
- Contractor
- Architect
- Subcontractors
- Construction by owner or by separate contractors
- Changes in the work
- Time
- Payments and completion
- Protection of persons and property
- Insurance and bonds
- Correction of work
- Termination of contract
- Disputes
The first is the Provisions.
In this section it explains and goes over a lot of definitions and how they impact the contract. For example they discuss the contract documents and how they are form the contract for construction. It also points out that the drawings and specifications are instruments of service.
Meaning that the architect and consultants are the authors and owners of the drawings and retain all rights including copyrights. This is important to note because typically when hiring an architect for services people typically think they are purchasing drawings. When in reality they are purchasing a service to complete drawings.
The second is the Owner.
The contract jumps right into money as it relates to the owner. The owner will typically provide the contractor with information regarding the owners financial arrangements before commencement of work.
The owner will also provide all the necessary surveys describing utility locations and legal limits of the site. The owner will also furnish the drawings and specifications to the contractor for the purpose of making necessary copies.
The owner has the right to stop work. If the contractor does not follow the drawings or fails to correct work that did not follow the drawings the owner can issue a written order to the contractor to stop work. This is a right of the owner but not a duty of the owner.
The third is the Contractor
The contractor section is really long so I will try to limit it down to just the basics. The first important item that jumps out is a change to the contract such as a change order. They need to be requested and approved before the work is completed to insure the cost of that change. So the contractor can’t just start adding change orders without approval and then at the end of the project show them to the owner and say oh and here is a bunch of extra charges.
The contractor has complete control over the means and methods, technique and sequences of construction. Slab example. The contractor is responsible for the work performed by their subcontractors. The contractor can only make substitutions with the consent of the owner after evaluation by the architect and in accordance with a change order or change directive.
The contractor warrants the work and materials furnished. Typically the contractor will pay for the permits, fees, licenses and inspections by the government agencies and they have to comply with lawful orders given by public authorities to complete the work.
Then it goes on to talk about allowances and superintendents. The construction schedules. Shop drawings.
Indemnification is also included at the end of this section saying that the owner and architect are not responsible for injury caused by work on the site. Lets say for instance that someone was walking under a scaffold and a mason drops a brick on the guys shoulder. The owner and architect are not responsible for any damages sought by that person.
The next large section is the Architect. This is the fourth section.
The architect has the roll or administration of the documents and will be the owners representative during construction. The architect will visit the site at appropriate intervals, but not required to make continuous on site inspections to check the quality of work. The architect will give updates to the owner after site visits but they are not responsible for the work performed by the contractor.
All the communication about the project between the contractor and owner as it relates to the contract documents should in every effort be communicated through the architect. Communication with the architects consultants should be through the architect. Similar to communication to the subcontractors should be through the contractor.
The architect will review pay applications from the contractor. the amounts will be certified by the architect and will issue certificates of payment. The Architect has authority to reject work that does not match up to the documents. The architect will review submittals and product data but only for the purpose of checking for conformance with the design concept of the contract documents.
This is a typically unknown section but the Architect will typically prepare change orders and construction change directives. The architect will also review and respond to requests for information regarding the documents.
The Subcontractors.
Yup they are included as well. So lets see what it says about them. Section 5. After award of bid the contractor should provide the name of the subcontractor to the owner through the architect. The owner has 14 days after receiving from contractor to object to that sub.
If the owner has objected and the contractor has to contract with another, the contract sum can be adjusted up or down depending. This difference would be issued as a change order.
Construction by owner.
The owner reserves the right to perform construction related to the project. The owner can award separate contracts in connection with other portions of the project. If the contractor claims that delay or additional costs were involved because of this then the contractor can make claim. We will look at that under the disputes section.
The contractors should meet to review schedules and come to a mutual agreement. If the owner contracted work is inadequate and the contractor is dependent on its results, then the contractor needs to notify the architect of the discrepancies. Failure to notify means that the contractor has accepted the work as complete.
If the owner has to hire another contractor to correct defective construction or correct improperly timed activities the contractor should reimburse the owner for the costs incurred.
Section 7 of the A201 is changes in the work.
This section is all about change orders and construction change directives. I am going to cover that in a whole other episode. So I will just leave that on the table.
Section 8 is Time. Our most valuable resource.
There are several terms that relate to time when it comes to construction.
- Contract time
- Date of commencement
- Date of substantial completion
If there are delays in the schedule that are either caused by the owner or architect then time can be added to the schedule in the form of a change order. Why is it so important to keep up with the time? Because of liquidated damages.
Payments and completion is covered in section 9.
When there is a project based on a fixed fee or a GMP, then the contractor will put together a schedule of values. This will be submitted to the architect before the first pay application. This will be the basis for reviewing all the future pay apps.
Pay applications. Requests for payment on % of completed work and typically a retainer is held until the end of the project. The pay app will be issued by the contractor to the Architect. The architect will certify the amount to be released and will issue a Certificate of Payment to the owner and copy the Contractor. The architect can withhold a portion of the amount in order to protect the owner if necessary.
The owner has the right to request evidence from the contractor that he/she has properly paid subs. If the owner fails to pay the contractor within 7 days of the issued certificate of payment the contractor can stop work and adjust the schedule accordingly.
The substantial completion. This is an important date for several reasons. This is the date where the work is sufficiently complete. The owner can occupy or use the building for its intended use.
Once the contractor and owner agrees that the work is substantially complete the contractor will prepare a list of corrected items prior to final payment. This is to show that the contractor has completed all the items on the punch list and the job is complete. The architect will make final inspection and if the work is fully performed the architect will issue the final certificate for payment.
Final payment and any remaining retainage is not due until the contractor provides affidavit that all payrolls, bills and other indebtedness connected with the work has been paid.
Section 10 goes into Protection of persons and property
Section 11 is all about insurance and bonds
I think i will do an episode on bonds in the future so this can become the most boring show on iTunes.
Section 12 is Correction of work
This just states that the contractor should promptly correct work rejected by the architect or work that fails to conform to the requirements of the documents.
I skipped Section 13 all the misc. stuff
Section 14 is the termination or suspension of the contract.
This goes into the rights of the contractor to stop work as well as the owner to terminate and all the requirements that go into that.
And the last section. Claims and disputes.
Finally right. If you have held on this long, I applaud you. Thank you so much for spending so much time with me going over all of the various sections and clauses.
I will just point out that there are provisions in the contract for claim related to Additional cost, Additional time, and Consequential Damages. It also states that all claims and disputes are subject to mediation as a condition precedent to a binding dispute resolution such as Arbitration.
And we did it. We made it through the entire document. Again, thank you for hanging in there. That’s awesome that you are still listening. If you want to hear more contracts stay tuned to next weeks episode on the owner/architect agreements.
I wanted to provide you with another resource out there. There is a complete book that the AIA put together that goes over each section in detail if you are interested.
The American Institute of Architects Official Guide to the 2007 AIA Contract Documents
The American Institute of Architects Official Guide to the 2007 AIA Contract Documents
No other contracts are more widely used in the construction industry than the American Institute of Architects’ standard forms. The American Institute of Architects Official Guide to the 2007 AIA Contract Documents offers unparalleled insight into the AIA’s extensive portfolio of cont…
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So, just like I always do on each episode, I wanted to end with one final take away for you. Like I said in the previous episode. Contracts are boring but necessary to the success of a project. If everyone can get on board and understand their role and responsibility in the project it will an even smoother process than I try to make it. If you are an owner and about to enter into a construction agreement, I highly suggest that you look to the AIA documents to be the foundation of your contract.
I wanted to end this episode with a quote from David Allen Coe:
“It is not the beauty of a building you should look at; its the construction of the foundation that will stand the test of time.”
The design of the building is important, but the process and experience of building it that might be even more. That one is from me.
