PROJECT MANAGER’S MANUAL
FOR PREPARING AGREEMENTS USING AIA DOCUMENT B101-2007
Standard Form of Agreement Between Owner and Architect WITH GWWO,
INC./ARCHITECTS’ RECOMMENDED MODIFICATIONS
UPDATE MAY 15, 2014
This manual is prepared for the use of Grieves Worrall Wright & O’Hatnick,
Inc./Architects’ employees to aid them in the preparation and negotiation of
agreements with clients. This document is considered proprietary and confidential
and remains the property of Grieves Worrall Wright & O’Hatnick, Inc./Architects.
In the event of termination of employment, this document and all copies shall be
returned to an officer of the corporation. Any unauthorized reproduction or
copying of this document is prohibited.
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AIA B101-2007
Standard Modifications
The following is a presentation of how GWWO wants you to prepare an AIA Form
B101-2007 Owner Architect Agreement. B101-2007 is our preferred form of
agreement, although most issues presented are applicable to any form of an agreement.
The most important part of preparing an agreement form is that you have a dialog with
the Owner about countless important things that are either assumed or ignored when you
first get a job. B101 assists in this process because it has an attached Exhibit A that
forces you to think about and fill-in many blanks about important issues. The AIA
publishes 4 other Owner/Architect Agreement forms as follows:
B102 Terms and Conditions Only (No Scope of Work)
B103 For Large or Complex Projects
B104 For Projects of Limited Scope
B105 For Residential or Small commercial Projects
Typically, we will not use any of the other versions of the AIA Owner/Architect
Agreement Forms.
The sole purpose of a written agreement is to lay down common understandings so that if
the Project goes south, there are rules that guide a reasonable resolution. Two parties can
agree to do anything they want that is legal. It is when they don’t agree that things get a
little sticky and a written agreement brings some order into the matter.
Probably the single most common reason an Owner and Architect go to court or
arbitration is lack of a common understanding or failing to have a meeting of the minds.
In order to get the Project we tend to emphasize the good and ignore the bad or ugly.
Owners are willing accomplices in this charade because they are hot to get going too.
We don’t talk about errors or omissions, budget shortfalls, time limitations, etc. We just
got the ego boost of our lives getting the job and we are all “can-do.” We want to get
into the design right away. Do that and you and the firm will rue the day you did.
The agreement negotiation process is our guide as to how we will execute and administer
the Project. A low fee Project with onerous terms against GWWO means that we have to
be spending most of the limited resources covering our butts in lieu of doing the best
design for our clients. It is sad but true. Also, low fee clients usually are exquisite at
extracting uncompensated services from architects. If you cannot accept defensive
design, expedited design or limited services, don’t accept low fees or onerous terms.
Some of our best work can be projects that we don’t accept.
Some information about B101 first:
1. Words used in the AIA B101-2007 document have taken on a meaning beyond their
common usage. Words you add in editing need to be carefully chosen and consistent
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with the established meanings. For instance, don’t use the word “client” in an agreement
when the word “Owner” is the proper term.
2. Capitalized words are defined within the AIA family of documents and have that
specific meaning only. These include Architect, Owner, Contractor, Contract
Documents, Drawings, Specifications, Paragraph, Substantial Completion, etc. When
using those words within the prescribed meaning they should always be capitalized.
3. Know the difference between “shall” and “will.” “Shall” is imperative and imposes a
duty to perform. “Will” is informative and lets the other party know how you will
behave. So if you say, “The Owner will make payments to the Architect for services
completed on a monthly basis,” the Owner has no duty to do so.
4. The defined word “Work” means the construction and services required by the
Contract Documents. Generally use the word “Work” when referring to what one thinks
of as construction. Do not use terms such as “job,” “construction,” “building” or other
new terms when you are talking about that which the Contractor is required to do by the
Contract Documents. We should not refer to our services as “work.” They should only
be referred to as “services.”
5. B101-2007 is a single comprehensive document for design and construction services.
We should always use this document with its attached Exhibit A. A sophisticated user in
our firm could conceivably use a custom scope of work for the AIA B102-2007 Form
part but this gets tricky. However, the AIA has separate scope documents to attach to the
B102-2007 Form that can be used for specialized work such as programming, interior
design, design-build, etc. If you elect to use B102-2007 or one of the other agreement
forms, the language recommended below can be applied to tha6t form as well.
6. The B101 numbering system sequence starts uses a whole number for Articles in the
text. Sections under the articles are identified by the second number in the sequence
separated by a decimal (i.e. 3.4, 11.3, etc.). Thereafter the third decimal separated
number designates the Paragraphs, the fourth is the Subparagraph, the fifth is the Clause
and the sixth is the Subclause. Note that each sequence descriptor is capitalized since
they are defined.
7. Each printed copy of B101 comes with an instructions jacket that explains a lot about
the use of the B101. You should review it when you prepare an agreement as well as
other times to keep abreast of our contractual milieu.
8. Do not use the words “and/or” either the situation requires “and” meaning both or all
apply and the word “or” means one of several applies.
9. Even though the AIA documents write out a number and then express it in numeric
form in parenthesis after the written words [i.e. “five hundred dollars ($500.00)”], it is
unnecessary to do so and potentially contradictory to do so. GWWO’s policy is to not do
both, either write it out or use the number.
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10. Word consistency is critical in agreement because the courts will assume you mean
something different if you use a different term for the same thing. So as an example, if
you start out calling a consultant’s services “civil engineering” don’t later refer to the
services as “site engineering.”
11. Specifically excluding services is not politically the best thing to do (i.e. tell a client
what you are not going to do). It also begins to beg the question if it is not excluded it
must be included. However, there are many times where the Owner’s expectations are
unbounded and need to be clarified. This is particularly true if in the negotiation process
you have to cut out items of work to reduce the fee. In such instances it is very important
to clearly document the excluded services.
12. Deal breaker issues are difficult to codify. Usually deal breakers are a culmination of
issues that in aggregate make the deal so unpalatable that we are happy to walk away.
The more issues you encounter, the more scrutiny you should apply to the client and
project. We seldom want to enter an agreement that make it impossible for us to meet
our costs such as an hourly not-to-exceed with restricted rates is an example of
something we should run away from. Another deal breaker red light is provisions that
void our insurance coverage such as warranties and indemnifications. The bottom line
is a risk/reward analysis. Issues with a client who pays lavishly can be tolerated a lot
more than a penny-pincher. When in doubt get the collective input of the firm’s
management before you make any commitments.
13. All proposal, agreements and fees must be reviewed by at least two Principals before
they are tendered to Owners or before they are signed by us if tendered by others.
Typically we have Howard G. Goldberg at Goldberg, Pike & Besche, PC, telephone 410468-1360, our corporate lawyer review all contracts we receive from Owners (required
by our PL insurance carrier). See information on this at the end of this manual. You
should routinely send a copy to Howard and elicit his comments when we receive a new
contract. If we are preparing the contract form and it generally complies with this manual
on AIA B101-2007, we do not need a legal review.
14. Similarly, insurance terms and conditions should be reviewed by our insurance
agents:
Professional Liability (XLDP)
Arthur Ebersberger
C-biz
7160 Columbia Gateway Drive, Suite 303
Columbia, Maryland 21046-2103
Tel: 443-259-3270
Fax: 443-285-0855
General Liability, Auto & Workers’ Compensation (Fireman’s Fund)
Justin R. Klein
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Klein Agency, LLC
10751 Falls Road, Suite 261
P. O. Box 219
Timonium, Maryland 21094
Tel: 410-832-7600
Fax: 410-832-1849
Because an agreement between an owner and an architect is so integrated with the scope
of services, performance, management, administration and control of a Project, the
Project Manager is the only appropriate person to prepare an agreement. This
commentary is meant to help Project Managers in the preparation process.
Generally all referenced documents related to the agreement should be attached to the
agreement as exhibits. Only reference documents that are of limited concern, commonly
available or too bulky can be omitted with the consent of the Principals.
In the new electronic contract documents program, the text recommended herein can be
copied directly into the draft AIA document with appropriate format changes. Simply
copy from this document and paste the text into the AIA draft.
Also, we generally send our client an electronically produced “clean” final AIA
Documents in “.pdf” format to sign without the errata sheet appended. However, if the
Owner specifically requests a copy of the errata sheet we should send it to them without
hesitation.
The text of AIA B101-2007 in red10-point pica precedes or follows the commentary
presented below it in 12-point pica. All original B101-2007 titles are in Arial font and are
bolded in large pica. Original B101-2007 text of instructions is in italicized 10-point
pica.
Commentary and suggested language changes.
ARTICLE 1 INITIAL INFORMATION
§ 1.1 This Agreement is based on the Initial Information set forth in this Article 1 and in optional Exhibit A,
Initial Information:
(Complete Exhibit A, Initial Information, and incorporate it into the Agreement at Section 13.2, or state
below Initial Information such as details of the Project’s site and program, Owner’s contractors and
consultants, Architect’s consultants, Owner’s budget for the Cost of the Work, authorized representatives,
anticipated procurement method, and other information relevant to the Project.)
Revise this to read:
Ҥ 1.1 This Agreement is based on the Initial Information set forth in this Article 1 and in
Exhibit A attached hereto.”
Describe all of the known particulars of the Project. As an example:
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“§ 1.1.1 “The Project purpose is to renovate and adaptively reuse an existing church
building for use as a museum for mortuary arts, working with the museum board’s
Building Committee and the Friends of the Dead. The intent for the design of the facility
is to reflect the macabre aspects of the field of mortuary arts. Visitation will be by
invitation only. The design should express the new highly technical characteristics of the
field in a contemporary style.” (key information is italicized)
Then proceed to complete Exhibit A as follows and insert into the form of the
Agreement:
EXHIBIT A
ARTICLE A.1 PROJECT INFORMATION
§ A.1.1 The Owner’s program for the Project:
(Identify documentation or state the manner in which the program will be developed.)
This item is critically important to be expressly described. Examples include:
“The Project program is to be developed as a part of this agreement as described
in the proposal letter prepared by GWWO, Inc. dated July 1, 2008.”
or
“The Project program has been prepared by XYZ Programmers, Inc. dated April
1, 2008 and amended by an addendum dated June 1, 2008.”
or
“The Project program is as written on a cocktail napkin, a copy of which is
attached hereto as Exhibit B.”
§ A.1.2 The Project’s physical characteristics:
(Identify or describe, if appropriate, size, location, dimensions, or other pertinent information, such as
geotechnical reports; site, boundary and topographic surveys; traffic and utility studies; availability of
public and private utilities and services; legal description of the site; etc.)
Describe all of the hard data on the building and site made available or to be generated as
a part of the agreement. As an example:
“The Project site’s physical characteristics are as identified in the site topographic
survey by DMW Inc. dated April 1, 2008; site Master Plan prepared by Crozier
Associates, Inc. dated May 1, 2008, as-built building plans prepared by
Implementation, Inc. dated February 15, 2007. A geotechnical study is to be
provided under this agreement as described in the proposal letter prepared by
GWWO, Inc. dated July 1, 2008.”
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Describe all of the site legal information made available or to be generated as a part of
the agreement. As an example:
“The site legal description is as described in the property line survey prepared by
Dollenberg Associates, Inc. dated May 1, 2008.”
or
“The site legal description is to be established by a topographic and property line
survey preformed under this agreement and as further described in the attached
proposal letter dated May 25, 2008.”
§ A.1.3 The Owner’s budget for the Cost of the Work, as defined in Section 6.1:
(Provide total, and if known, a line item break down.)
Describe the Owner’s budget. Make sure that the “budget” number used here is for the
construction Cost of the Work (see definition in §6.1) for which we are responsible to
design only (exclude land cost, fees, etc.). By signing the agreement, we are saying
that we agree that the program and budget are in parity. If we do not agree that the
program can be met within the constraints of the budget, the agreement should not be
signed until this issue is resolved.
If we are awarded a project where the Owner desires to have us develop the Owner’s
budget, we should add language similar to the following: “to be determined under the
scope of work of this agreement.” Presumably, the scope of work would not be for full
Architectural services at the time of the agreement since not enough information would
be available to give the Owner a reasonable fee proposal.
§ A.1.4 The Owner’s other anticipated scheduling information, if any, not provided in Section 1.2:
Any other pertinent schedule information should be set forth here. The best way to
address this item is to attach a bar chart or tabular schedule showing critical milestone
events in time for the performance of our work. The two dates in Section 1.2 of B1012007 below must agree with whatever dates you set forth here.
§ A.1.5 The Owner intends the following procurement or delivery method for the Project:
(Identify method such as competitive bid, negotiated contract, or construction management.)
This space must be filled in even if we make an assumption. Our preferred method is
“The Project procurement or delivery method shall be by competitive bidding by selected
Contractors,” and should be so entered into this space. Thereafter, in descending order of
preference are “negotiated Contractor,” “CM at-risk,” “open competitive bidding,” “CM
advisor,” “fast-track,” and least favorite, “design-build.” There are other versions of the
AIA Owner/Architect agreement forms for CM advisor and Design/Build that can be
used for those specific applications. Similar changes to the language of those forms
parallel to these changes should be undertaken.
§ A.1.6 Other Project information:
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(Identify special characteristics or needs of the Project not provided elsewhere, such as environmentally
responsible design or historic preservation requirements.)
While this is a catch-all to cover any other relevant service issue including LEED®
services, Value Engineering, etc. There should at least be the words, “none” if there is
nothing else special applies to the Project. The AIA has just come out with new Scopes
of Work, for instance B214-2004 is the Scope of Work for LEED® Certification. Citing a
reference to such an attachment document would appropriately be here. It does not hurt
to add as much explanatory information as you can to limit our exposure to risks here in
this blank.
ARTICLE A.2 PROJECT TEAM
These Subparagraphs below are self-explanatory but should have some
acknowledgement, especially if the entry should be “none,” particularly in Subparagraph
A.2.2 where we are often confronted with a “new” entity half way through the Project. In
A.2.4, the person named here should be a Principal of GWWO unless there are
compelling reasons otherwise (i.e. the Owner insists on someone else).
§ A.2.1 The Owner identifies the following representative in accordance with Section 5.3:
(List name, address and other information.)
Note that the address, facsimile number and e-mail address are critical here as to the
delivery of “written notices.”
§ A.2.2 The persons or entities, in addition to the Owner’s representative, who are required to review the
Architect’s submittals to the Owner are as follows:
(List name, address and other information.)
This item becomes important when the Owner later determines that five other reviewing
steps are needed
§ A.2.3 The Owner will retain the following consultants and contractors:
(List discipline and, if known, identify them by name and address.)
These entities a critical to being identified at the outset since we often are responsible for
coordinating their work.
§ A.2.4 The Architect identifies the following representative in accordance with Section 2.3:
(List name, address and other information.)
Note that the address, facsimile number and e-mail address are critical here as to the
delivery of “written notices.” The representative is unusually a principal of GWWO.
This person should be the same as is indicated in A101-2007 Section 2.3 below.
§ A.2.5 The Architect will retain the consultants identified in Sections A.2.5.1 and A.2.5.2.
(List discipline and, if known, identify them by name and address.)
§ A.2.5.1 Consultants retained under Basic Services:
.1
Structural Engineer
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.2
Mechanical Engineer
.3
Electrical Engineer
§ A.2.5.2 Consultants retained under Additional Services:
In this version of the Agreement, Additional Service means services that are not part of
Basic Services (e.g. Civil Engineering, Landscape Architecture, etc.), so do not add
consultants to the “Basic Services” list, add them below under Additional Services
Consultants. We are probably going to drive Owners batty with these two types of
Additional Services.
§ A.2.6 Other Initial Information on which the Agreement is based:
(Provide other Initial Information.)
Here is the place to enter any other “limiting” information such as, “Contract
Administration services are not included under this agreement,” or “Storm Water
Management design services are assumed to not be required because the Owner expects
to receive a waiver.”
Also, when the services under this Agreement include contract administration services,
add the following:
“The General Conditions of the Contract for Construction for the Project shall be
the edition of AIA Document A201-2007 as an amended and attached as Exhibit
C.”
Then prepare an amended version of A201-2007 for inclusion with the agreement.
If an Owner allows us to use B101-2007 for the Owner/Architect agreement and does not
want use A201-2007 for the General Conditions for the Contract, there is a good chance
that there will not be parity between the two documents (i.e. the non-AIA General
Condition may tell a Contractor that the Architect will do something that the Architect is
not required to do under the Architect’s agreement with the Owner or vice-versa). You
should discuss this prospect with the Owner and encourage the use of A201-2007. The
Owner is free to amend the crap out it, although we should be cognizant of what they are
doing, particularly as it may affect our services. If amended, it is very important that a
copy be attached to this Agreement and the amendments coordinated with this agreement.
This is the end of the text for the attached Exhibit A Initial Information.
§ 1.2 The Owner’s anticipated dates for commencement of construction and Substantial Completion of the
Work are set forth below:
.1
Commencement of construction date:
.2
Substantial Completion date:
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These two dates must be filled-in even if we have to make an assumption. Absent any
schedule, there must be some date for some completion event filled into this space;
otherwise we are offering our services over an indefinite timeframe.
§ 1.3 The Owner and Architect may rely on the Initial Information. Both parties, however, recognize that
such information may materially change and, in that event, the Owner and the Architect shall appropriately
adjust the schedule, the Architect’s services and the Architect’s compensation.
Read this Paragraph carefully and don’t forget this sword cuts both ways. However, if
you complete the blanks properly, this will prevent the Owner from making unilateral
changes and then expecting the Architect to “absorb” the change. However, if the Owner
makes changes that delete services, be ready to give back some fee.
All information requested in Article A.1 Initial Information and Exhibit A should be
filled-in with something. We should strive to get the correct information from Owners
but if not available, fill-in the assumptions we use to develop our fee. If possible, attach
such items as exhibits to the agreement. If there is no requirement or nothing to fillin, the word “none” should be inserted.
Generally the language below is left intact and is reasonably benign. If the Owner wants
to change any of this be sure you understand why the Owner wants the change and that
the reason given is acceptable.
ARTICLE 2 ARCHITECT’S RESPONSIBILITIES
§ 2.1 The Architect shall provide the professional services as set forth in this Agreement.
§ 2.2 The Architect shall perform its services consistent with the professional skill and care ordinarily
provided by architects practicing in the same or similar locality under the same or similar circumstances.
The Architect shall perform its services as expeditiously as is consistent with such professional skill and
care and the orderly progress of the Project.
Be very careful that an Owner does not suggest that the word “…ordinarily…” get
changed to “…that is the best…” Often the Owner argues that we were selected because
we sold ourselves as the best (something we should never do).
§ 2.3 The Architect shall identify a representative authorized to act on behalf of the Architect with respect
to the Project.
See Section A.2.4 above. Be sure the information is the same in both places or delete one
Section or the other.
§ 2.4 Except with the Owner’s knowledge and consent, the Architect shall not engage in any activity, or
accept any employment, interest or contribution that would reasonably appear to compromise the
Architect’s professional judgment with respect to this Project.
We should never be engaged in any conflict of interest activity mentioned above.
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To fill-in the insurance amounts below, see the Financial Officer and our insurance
agents to obtain the proper information and coverage amounts to insert. This is very
important that you not represent coverage that we do not have.
§ 2.5 The Architect shall maintain the following insurance for the duration of this Agreement. If any of the
requirements set forth below exceed the types and limits the Architect normally maintains, the Owner shall
reimburse the Architect for any additional cost:
(Identify types and limits of insurance coverage, and other insurance requirements applicable to the
Agreement, if any.)
.1
General Liability
.2
Automobile Liability
.3
Workers’ Compensation
.4
Professional Liability
As of the date of this document, our coverages are as follows:
.1
General Liability
Base Policy: $2 million each occurrence, $4 million aggregate
Umbrella: $1 million each occurrence, $2 million aggregate
.2
Automobile Liability
$1 million combine single limit
.3
Workers’ Compensation: Statutory
$100,000 each accident, $100,000 each disease, $500,000 disease limit
.4
Professional Liability
$2 million combine single limit
ARTICLE 3 SCOPE OF ARCHITECT’S BASIC SERVICES
§ 3.1 The Architect’s Basic Services consist of those described in Article 3 and include usual and customary
structural, mechanical, and electrical engineering services. Services not set forth in Article 3 are Additional
Services.
The concept of “Basic Services” obviates the editing this Section to reflect the actual
services we are to provide. So, for instance, normally we would have inserted the words
“…civil…” after the word “…structural…” where we are providing such services, but
that erodes the concept of Basic Services that the AIA is trying to restore. This gets us
into some very tortured language at times.
§ 3.1.1 The Architect shall manage the Architect’s services, consult with the Owner, research applicable
design criteria, attend Project meetings, communicate with members of the Project team and report
progress to the Owner.
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Two issues of concern are (1) issuing progress reports and (2) coordinating the Owner’s
consultants. These are two things we don’t usually do. Edit this as appropriate for the
Project. Note the “reporting” obligation above. Below, note the “coordination”
responsibility. Also, it is very important to preserve the second sentence below intact.
§ 3.1.2 The Architect shall coordinate its services with those services provided by the Owner and the
Owner’s consultants. The Architect shall be entitled to rely on the accuracy and completeness of services
and information furnished by the Owner and the Owner’s consultants. The Architect shall provide prompt
written notice to the Owner if the Architect becomes aware of any error, omission or inconsistency in such
services or information.
§ 3.1.3 As soon as practicable after the date of this Agreement, the Architect shall submit for the Owner’s
approval a schedule for the performance of the Architect’s services. The schedule initially shall include
anticipated dates for the commencement of construction and for Substantial Completion of the Work as set
forth in the Initial Information. The schedule shall include allowances for periods of time required for the
Owner’s review, for the performance of the Owner’s consultants, and for approval of submissions by
authorities having jurisdiction over the Project. Once approved by the Owner, time limits established by the
schedule shall not, except for reasonable cause, be exceeded by the Architect or Owner. With the Owner’s
approval, the Architect shall adjust the schedule, if necessary as the Project proceeds until the
commencement of construction.
The Paragraph above doesn’t comport with the Initial Information we should be
establishing during the fee negotiation period where a schedule should be a part of our
proposal. We want the schedule to be locked-in as part of our proposed work plan and
not subject to further “negotiations” after the fact. Obviously our Initial Information
schedule has to provide reasonable time for the Owner’s review, for the performance of
the Owner’s consultants, and for approval of submissions by authorities having
jurisdiction over the Project. If a completed schedule is part of our negotiations, then
revise this Paragraph to read as follows:
Ҥ 3.1.3 The Project schedule and time limits established under the Section 1.1,
Initial Information above shall not, except for reasonable cause, be exceeded by
the Architect or Owner. When reasonable causes impact the Project schedule, the
Architect shall adjust the schedule, if necessary as the Project proceeds until the
commencement of construction with the Owner’s consent, which shall not be
unreasonably withheld. Substantial delays from the Project schedule due to
causes beyond the Architect’s control shall entitle the Architect to an adjustment
in the Architect’s compensation.”
If a schedule is to be part of the services we are to provide as we negotiated, then the
Subparagraph above is OK as is.
The three Subparagraphs below are fairly benign and are seldom edited further.
Obviously any Owner mandated changes to these Subparagraphs begs the question of
why.
§ 3.1.4 The Architect shall not be responsible for an Owner’s directive or substitution made without the
Architect’s approval.
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§ 3.1.5 The Architect shall, at appropriate times, contact the governmental authorities required to approve
the Construction Documents and the entities providing utility services to the Project. In designing the
Project, the Architect shall respond to applicable design requirements imposed by such governmental
authorities and by such entities providing utility services.
The Paragraph above is amazing since it requires us to perform a civil engineering
service yet civil engineering is not a Basic Service. Be sure to delete the two references
to utilities in Paragraph 3.1.5 above if we are not responsible for civil engineering.
§ 3.1.6 The Architect shall assist the Owner in connection with the Owner’s responsibility for filing
documents required for the approval of governmental authorities having jurisdiction over the Project.
During the following three design phases described below, language is included as that
the Architect shall submit to the Owner [or update] an estimate of the Cost of the Work
prepared in accordance with Section 6.3. Sometimes the Owner’s do not want us to
estimate the Cost of the Work and they hire their own consultant, such as when the
Owner engages a CM.
If the Owner does not want us to provide cost estimating services, all three cost estimate
Subparagraphs in Schematic design, Design development and Construction Documents
below must be replaced with new language such as:
“The Architect shall submit documents to the Owner’s cost estimating consultant
for the preparation [updating] of the Owner’s consultant’s cost estimate.”
In addition, if cost estimating is excluded from our services you should add language here
or in Article 6 as follows:
“§ 3.1.7 COST ESTIMATING BY OWNER’S CONSULTANT
“3.1.7.1 Cost estimating services of the Cost of the Work shall be provided by the
Owner’s consultant. The Architect shall cooperate with the Owner’s consultant
and provide drawings and other descriptive project information to the Owner’s
consultant at appropriate intervals when estimates are to be prepared.
“3.1.7.2 The Architect may review the Owner’s consultant’s estimate of the Cost
of the Work for errors and omissions. If the Architect finds errors and omissions
in the Owner’s consultant’s estimate of the Cost of the Work, the Architect shall
notify the Owner in writing identifying such errors and omissions. The Owner
shall reconcile the Architect’s findings with the Owner’s consultant and issue a
revised estimate of the Cost of the Work. The Architect’s review of the Owner’s
estimate shall not constitute an acceptance or approval of the Owner’s
consultant’s estimate of the Cost of the Work.
“3.1.7.3 If the Owner’s consultant’s estimate of the Cost of the Work exceeds the
Owner’s budget for the Cost of the Work, the Architect shall cooperate with the
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Owner and the Owner’s consultant to reduce the Cost of the Work and make
appropriate recommendations to the Owner to adjust the Project’s size, quality or
budget, and the Owner shall cooperate with the Architect in making such
adjustments.
“3.1.7.4 If the Owner proceeds with bidding or negotiating the Cost of the Work
for the construction of the Project and the low bid or the negotiations result in a
Cost of the Work that exceeds the Owner’s budget and the Owner desires to
redesign the Project to be within the Owner’s budget, the Architect shall redesign
the Project with an appropriate adjustment in the Architect’s compensation. The
Owner shall cooperate with the Architect to adjust the Project’s size and quality to
reduce the Cost of the Work.”
§ 3.2 SCHEMATIC DESIGN PHASE SERVICES
§ 3.2.1 The Architect shall review the program and other information furnished by the Owner, and shall
review laws, codes, and regulations applicable to the Architect’s services.
§ 3.2.2 The Architect shall prepare a preliminary evaluation of the Owner’s program, schedule, budget for
the Cost of the Work, Project site, and the proposed procurement or delivery method and other Initial
Information, each in terms of the other, to ascertain the requirements of the Project. The Architect shall
notify the Owner of (1) any inconsistencies discovered in the information, and (2) other information or
consulting services that may be reasonably needed for the Project.
The Paragraph above seems to defy the “common understanding” implied by the Initial
Information Article above. However, we may want to leave this in to give us another
“bite-of-the-apple” if the Project budget does not comport with the Project program.
Also, the Owner may have problems with this Subparagraph part (2) because it leaves the
door open for an unexpected project cost that could be very significant. Typically
Owner’s want us to identify such consultants at the outset of the Project. You can try and
explain that one needs to know more before one can definitively say what skills are going
to be required.
§ 3.2.3 The Architect shall present its preliminary evaluation to the Owner and shall discuss with the Owner
alternative approaches to design and construction of the Project, including the feasibility of incorporating
environmentally responsible design approaches. The Architect shall reach an understanding with the Owner
regarding the requirements of the Project.
It’s not clear how an Architect can perform the imperative of “…reach and understanding
with the Owner…” The better language would be to change the last sentence to read:
“The Architect’s preliminary evaluation and the ascertained requirements of the
Project shall serve as the basis for the development of the preliminary design
along with any other considerations requested by the Owner.”
§ 3.2.4 Based on the Project’s requirements agreed upon with the Owner, the Architect shall prepare and
present for the Owner’s approval a preliminary design illustrating the scale and relationship of the Project
components.
Page 14 of 57
Note that the above Paragraph requires a “preliminary design” presentation. Preliminary
design is undefined as to whether it is an initial schematic design, multiple schemes or
sketches, so you may want to flesh this out a bit such as:
“The preliminary design shall consist of three options for locating the project on
the site.”
§ 3.2.5 Based on the Owner’s approval of the preliminary design, the Architect shall prepare Schematic
Design Documents for the Owner’s approval. The Schematic Design Documents shall consist of drawings
and other documents including a site plan, if appropriate, and preliminary building plans, sections and
elevations; and may include some combination of study models, perspective sketches, or digital modeling.
Preliminary selections of major building systems and construction materials shall be noted on the drawings
or described in writing.
§ 3.2.5.1 The Architect shall consider environmentally responsible design alternatives, such as material
choices and building orientation, together with other considerations based on program and aesthetics, in
developing a design that is consistent with the Owner’s program, schedule and budget for the Cost of the
Work. The Owner may obtain other environmentally responsible design services under Article 4.
The gratuitous last sentence above probably begs revision by the Owner to require all
environmentally responsible design services be included. This last sentence is best
omitted since Article 4 Additional Services speaks for itself.
§ 3.2.5.2 The Architect shall consider the value of alternative materials, building systems and equipment,
together with other considerations based on program and aesthetics in developing a design for the Project
that is consistent with the Owner’s program, schedule and budget for the Cost of the Work.
§ 3.2.6 The Architect shall submit to the Owner an estimate of the Cost of the Work prepared in accordance
with Section 6.3.
Revise per 3.1.7 above if no cost estimating services as follows:
“§ 3.2.6 The Architect shall submit documents to the Owner’s cost estimating
consultant for the preparation [updating] of the Owner’s consultant’s cost
estimate.”
§ 3.2.7 The Architect shall submit the Schematic Design Documents to the Owner, and request the Owner’s
approval.
Note that we must “request” the Owner’s approval. It is very important that we
obtain the Owner’s express (written) approval of the Schematic Design Documents
approval before proceeding into the Design Development phase. Try and get the Owner
to be very specific in approving the Schematic Design Documents submission.
§ 3.3 DESIGN DEVELOPMENT PHASE SERVICES
§ 3.3.1 Based on the Owner’s approval of the Schematic Design Documents, and on the Owner’s
authorization of any adjustments in the Project requirements and the budget for the Cost of the Work, the
Architect shall prepare Design Development Documents for the Owner’s approval. The Design
Development Documents shall illustrate and describe the development of the approved Schematic Design
Documents and shall consist of drawings and other documents including plans, sections, elevations, typical
construction details, and diagrammatic layouts of building systems to fix and describe the size and
character of the Project as to architectural, structural, mechanical and electrical systems, and such other
Page 15 of 57
elements as may be appropriate. The Design Development Documents shall also include outline
specifications that identify major materials and systems and establish in general their quality levels.
§ 3.3.2 The Architect shall update the estimate of the Cost of the Work.
Revise per 3.1.7 above if no cost estimating services as follows:
“§ 3.3.2 The Architect shall submit documents to the Owner’s cost estimating
consultant for the preparation [updating] of the Owner’s consultant’s cost
estimate.”
§ 3.3.3 The Architect shall submit the Design Development documents to the Owner, advise the Owner of
any adjustments to the estimate of the Cost of the Work, and request the Owner’s approval.
Note, again, that we must “request” the Owner’s approval. It is very important that we
obtain the Owner’s express (written) approval of the Design Development Documents
approval before proceeding into the Construction Documents phase. Try and get the
Owner to be very specific in approving the Design Development Documents submission.
§ 3.4 CONSTRUCTION DOCUMENTS PHASE SERVICES
§ 3.4.1 Based on the Owner’s approval of the Design Development Documents, and on the Owner’s
authorization of any adjustments in the Project requirements and the budget for the Cost of the Work, the
Architect shall prepare Construction Documents for the Owner’s approval. The Construction Documents
shall illustrate and describe the further development of the approved Design Development Documents and
shall consist of Drawings and Specifications setting forth in detail the quality levels of materials and
systems and other requirements for the construction of the Work. The Owner and Architect acknowledge
that in order to construct the Work the Contractor will provide additional information, including Shop
Drawings, Product Data, Samples and other similar submittals, which the Architect shall review in
accordance with Section 3.6.4.
The last sentence above is a bit gratuitous but I guess it is needed so the Owner cannot accuse us
of omissions when we require Shop Drawings to address an issue that is not in the Contract
Documents.
§ 3.4.2 The Architect shall incorporate into the Construction Documents the design requirements of
governmental authorities having jurisdiction over the Project.
§ 3.4.3 During the development of the Construction Documents, the Architect shall assist the Owner in the
development and preparation of (1) bidding and procurement information that describes the time, place and
conditions of bidding, including bidding or proposal forms; (2) the form of agreement between the Owner
and Contractor; and (3) the Conditions of the Contract for Construction (General, Supplementary and other
Conditions). The Architect shall also compile a project manual that includes the Conditions of the Contract
for Construction and Specifications and may include bidding requirements and sample forms.
Revise the above Paragraph to reflect the selected Owner’s construction procurement
process in item (1).
§ 3.4.4 The Architect shall update the estimate for the Cost of the Work.
Revise per 3.1.7 above if no cost estimating services as follows:
Page 16 of 57
“§ 3.4.4 The Architect shall submit documents to the Owner’s cost estimating
consultant for the preparation [updating] of the Owner’s consultant’s cost
estimate.”
§ 3.4.5 The Architect shall submit the Construction Documents to the Owner, advise the Owner of any
adjustments to the estimate of the Cost of the Work, take any action required under Section 6.5, and request
the Owner’s approval.
Revise per 3.1.7 above if no cost estimating services as follows:
§ 3.4.5 The Architect shall submit the Construction Documents to the Owner, take
any action required under Section 6.5, and request the Owner’s approval.
Note, again, that we must “request” the Owner’s approval. The following sentence
should be added at the end of this Paragraph:
“If the Owner elects to change the method of contracting construction services
from the method identified under A.1.5 of Exhibit A attached to this agreement,
the Architect’s compensation shall be appropriately adjusted.”
The entire Section of Bidding Or Negotiation Services below should be edited to reflect
the procurement or delivery method identified under the Initial Information.
§ 3.5 BIDDING OR NEGOTIATION PHASE SERVICES
§ 3.5.1 GENERAL
The Architect shall assist the Owner in establishing a list of prospective contractors. Following the Owner’s
approval of the Construction Documents, the Architect shall assist the Owner in (1) obtaining either
competitive bids or negotiated proposals; (2) confirming responsiveness of bids or proposals; (3)
determining the successful bid or proposal, if any; and, (4) awarding and preparing contracts for
construction.
§ 3.5.2 COMPETITIVE BIDDING
§ 3.5.2.1 Bidding Documents shall consist of bidding requirements and proposed Contract Documents.
§ 3.5.2.2 The Architect shall assist the Owner in bidding the Project by
.1
procuring the reproduction of Bidding Documents for distribution to prospective bidders;
.2
distributing the Bidding Documents to prospective bidders, requesting their return upon
completion of the bidding process, and maintaining a log of distribution and retrieval and of
the amounts of deposits, if any, received from and returned to prospective bidders;
.3
organizing and conducting a pre-bid conference for prospective bidders;
.4
preparing responses to questions from prospective bidders and providing clarifications and
interpretations of the Bidding Documents to all prospective bidders in the form of addenda;
and
.5
organizing and conducting the opening of the bids, and subsequently documenting and
distributing the bidding results, as directed by the Owner.
§ 3.5.2.3 The Architect shall consider requests for substitutions, if the Bidding Documents permit
substitutions, and shall prepare and distribute addenda identifying approved substitutions to all prospective
bidders.
Page 17 of 57
§ 3.5.3 NEGOTIATED PROPOSALS
§ 3.5.3.1 Proposal Documents shall consist of proposal requirements and proposed Contract Documents.
§ 3.5.3.2 The Architect shall assist the Owner in obtaining proposals by
.1
procuring the reproduction of Proposal Documents for distribution to prospective
contractors, and requesting their return upon completion of the negotiation process;
.2
organizing and participating in selection interviews with prospective contractors; and
.3
participating in negotiations with prospective contractors, and subsequently preparing a
summary report of the negotiation results, as directed by the Owner.
Revise the Subparagraph below as to how we will handle substitutions. Usually we do
not permit substitutions as long as we have specified a minimum of three viable
manufacturers
§ 3.5.3.3 The Architect shall consider requests for substitutions, if the Proposal Documents permit
substitutions, and shall prepare and distribute addenda identifying approved substitutions to all prospective
contractors.
Note: Below, the new Construction Phase Services language requires that the Architect
“maintain records” of submittals, change orders, RFI, requisitions, etc. This is something
we always do but now it is specifically required. Fortunately, the “maintain records”
requirement is bereft of requirements as to form, time, access, etc. Watch out for future
modification of this that expand our responsibilities.
§ 3.6 CONSTRUCTION PHASE SERVICES
§ 3.6.1 GENERAL
§ 3.6.1.1 The Architect shall provide administration of the Contract between the Owner and the Contractor
as set forth below and in AIA Document A201™–2007, General Conditions of the Contract for
Construction. If the Owner and Contractor modify AIA Document A201–2007, those modifications shall
not affect the Architect’s services under this Agreement unless the Owner and the Architect amend this
Agreement.
The above Subparagraph is exactly what the Initial Information was meant to avert, an
incompatibility between A201 and B101. If the parties (Owner & Architect) agree to
using an amended version of A201-2007 identified under A2.6 in Exhibit A, that fact
should be reflected here and no further changes are called for. Any subsequent changes
to the Architect’s responsibilities of the A201 by the Owner and Contractor would not
have any binding affect on the Architect. It is OK to warn Owners of this situation, but it
probably should burden this agreement. Thus the Clause should be edited to read:
Ҥ 3.6.1.1 The Architect shall provide administration of the Contract between the
Owner and the Contractor as set forth below and in AIA Document A201™–
2007, General Conditions of the Contract for Construction as amended and
attached hereto as Exhibit C.”
§ 3.6.1.2 The Architect shall advise and consult with the Owner during the Construction Phase Services.
The Architect shall have authority to act on behalf of the Owner only to the extent provided in this
Agreement. The Architect shall not have control over, charge of, or responsibility for the construction
means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection
with the Work, nor shall the Architect be responsible for the Contractor’s failure to perform the Work in
accordance with the requirements of the Contract Documents. The Architect shall be responsible for the
Architect’s negligent acts or omissions, but shall not have control over or charge of, and shall not be
Page 18 of 57
responsible for, acts or omissions of the Contractor or of any other persons or entities performing portions
of the Work.
The above Subparagraph is magic language we need to keep in the agreement.
The third sentence above is very important to preserve intact. The last sentence is
similarly important and contains the magic language we use when our neck is in the
noose, “We are responsible for the Owner’s losses due to our negligent acts or
omissions.”
§ 3.6.1.3 Subject to Section 4.3, the Architect’s responsibility to provide Construction Phase Services
commences with the award of the Contract for Construction and terminates on the date the Architect issues
the final Certificate for Payment.
§ 3.6.2 EVALUATIONS OF THE WORK
§ 3.6.2.1 The Architect shall visit the site at intervals appropriate to the stage of construction, or as
otherwise required in Section 4.3.3, to become generally familiar with the progress and quality of the
portion of the Work completed, and to determine, in general, if the Work observed is being performed in a
manner indicating that the Work, when fully completed, will be in accordance with the Contract
Documents. However, the Architect shall not be required to make exhaustive or continuous on-site
inspections to check the quality or quantity of the Work. On the basis of the site visits, the Architect shall
keep the Owner reasonably informed about the progress and quality of the portion of the Work completed,
and report to the Owner (1) known deviations from the Contract Documents and from the most recent
construction schedule submitted by the Contractor, and (2) defects and deficiencies observed in the Work.
The first sentence above should be revised to read:
“The Architect shall visit the site as required in Section 4.3.3, to become generally
familiar with the progress and quality of the portion of the Work completed, and
to determine, in general, if the Work observed is being performed in a manner
indicating that the Work, when fully completed, will be in accordance with the
Contract Documents.”
Then be sure to fill in the blanks in Subparagraph 4.3.3. Note that the rest of the sentence
has some sacrosanct language that should be preserved since it speaks to what we do for
processing requisitions.
§ 3.6.2.2 The Architect has the authority to reject Work that does not conform to the Contract Documents.
Whenever the Architect considers it necessary or advisable, the Architect shall have the authority to require
inspection or testing of the Work in accordance with the provisions of the Contract Documents, whether or
not such Work is fabricated, installed or completed. However, neither this authority of the Architect nor a
decision made in good faith either to exercise or not to exercise such authority shall give rise to a duty or
responsibility of the Architect to the Contractor, Subcontractors, material and equipment suppliers, their
agents or employees or other persons or entities performing portions of the Work.
The language in the Subparagraph above is sacred and essential to keep in our agreement
intact. Again, the Owners may have problems with second sentence above because it
leaves the door open for an unexpected project cost that could be very significant.
Typically Owner’s want us to identify such inspections or testing at the outset of the
Project. You can try and explain that there is no way one can definitively say what is
going to be required before the fact.
Page 19 of 57
§ 3.6.2.3 The Architect shall interpret and decide matters concerning performance under, and requirements
of, the Contract Documents on written request of either the Owner or Contractor. The Architect’s response
to such requests shall be made in writing within any time limits agreed upon or otherwise with reasonable
promptness.
Owners love to change the above and below Clauses to be one-way against the
Contractor. We should resist.
§ 3.6.2.4 Interpretations and decisions of the Architect shall be consistent with the intent of and reasonably
inferable from the Contract Documents and shall be in writing or in the form of drawings. When making
such interpretations and decisions, the Architect shall endeavor to secure faithful performance by both
Owner and Contractor, shall not show partiality to either, and shall not be liable for results of
interpretations or decisions rendered in good faith. The Architect’s decisions on matters relating to aesthetic
effect shall be final if consistent with the intent expressed in the Contract Documents.
Here, above in the last sentence, is our famous aesthetics Clause that regularly gets
wacked.
§ 3.6.2.5 Unless the Owner and Contractor designate another person to serve as an Initial Decision Maker,
as that term is defined in AIA Document A201–2007, the Architect shall render initial decisions on Claims
between the Owner and Contractor as provided in the Contract Documents.
We must revise the above Clause to read as follows:
Ҥ 3.6.2.5 The Architect shall render initial decisions on Claims between the
Owner and Contractor as provided in the Contract Documents.”
§ 3.6.3 CERTIFICATES FOR PAYMENT TO CONTRACTOR
§ 3.6.3.1 The Architect shall review and certify the amounts due the Contractor and shall issue certificates in
such amounts. The Architect’s certification for payment shall constitute a representation to the Owner,
based on the Architect’s evaluation of the Work as provided in Section 3.6.2 and on the data comprising the
Contractor’s Application for Payment, that, to the best of the Architect’s knowledge, information and
belief, the Work has progressed to the point indicated and that the quality of the Work is in accordance with
the Contract Documents. The foregoing representations are subject (1) to an evaluation of the Work for
conformance with the Contract Documents upon Substantial Completion, (2) to results of subsequent tests
and inspections, (3) to correction of minor deviations from the Contract Documents prior to completion,
and (4) to specific qualifications expressed by the Architect.
It is very important to note that the Contractors Application for Payment is to be
“certified” by us under the Certificate for Payment section of AIA G702-1992. Our
certification has substantial consequences and therefore must be signed by a registered
architect in the firm. We should never be intimidated or pressured into certifying
anything we are not 100% comfortable with. As such, read the four caveats above,
particularly number (4) and expressly (written) set forth any reservations we may have.
Do not forget that the retainage is no excuse for accepting work that is less complete than
the percentage certified.
§ 3.6.3.2 The issuance of a Certificate for Payment shall not be a representation that the Architect has (1)
made exhaustive or continuous on-site inspections to check the quality or quantity of the Work, (2)
reviewed construction means, methods, techniques, sequences or procedures, (3) reviewed copies of
requisitions received from Subcontractors and material suppliers and other data requested by the Owner to
Page 20 of 57
substantiate the Contractor’s right to payment, or (4) ascertained how or for what purpose the Contractor
has used money previously paid on account of the Contract Sum.
Again, very important, preserve the language above intact as it limits our responsibilities
§ 3.6.3.3 The Architect shall maintain a record of the Applications and Certificates for Payment.
§ 3.6.4 SUBMITTALS
§ 3.6.4.1 The Architect shall review the Contractor’s submittal schedule and shall not unreasonably delay or
withhold approval. The Architect’s action in reviewing submittals shall be taken in accordance with the
approved submittal schedule or, in the absence of an approved submittal schedule, with reasonable
promptness while allowing sufficient time in the Architect’s professional judgment to permit adequate
review.
Depending on our commitment to requiring a submittal schedule from the Contractor, the
language above provides reasonable limitations on our obligations to act promptly in the
event we cannot get an approved submittal schedule from the Contractor.
The Clause above is critical to our operations of the CA staff. We must demand that the
Contractor provide a submittal schedule and we must review and approve it, because we
are going to live or die with it. However, there is a bit of a fail-safe here in that if the
Contractor fails to provide a submittal schedule, he forfeits any ability to make a delay
claim for tardy submittal approvals. See Subparagraph 3.10.2 in A201-2007.
Note: Remember that AIA A201-2007 General Conditions of the Contract for
Construction must be revised in parallel to any changes you make to the B141 standard
text, including those changes recommended here. For instance below, if you change shop
drawing “approval” to “review,” the same change needs to be made in Subparagraph
4.2.7 in A201.
§ 3.6.4.2 In accordance with the Architect-approved submittal schedule, the Architect shall review and
approve or take other appropriate action upon the Contractor’s submittals such as Shop Drawings, Product
Data and Samples, but only for the limited purpose of checking for conformance with information given
and the design concept expressed in the Contract Documents. Review of such submittals is not for the
purpose of determining the accuracy and completeness of other information such as dimensions, quantities,
and installation or performance of equipment or systems, which are the Contractor’s responsibility. The
Architect’s review shall not constitute approval of safety precautions or, unless otherwise specifically
stated by the Architect, of any construction means, methods, techniques, sequences or procedures. The
Architect’s approval of a specific item shall not indicate approval of an assembly of which the item is a
component.
We normally revise this Clause to delete the “approved” requirement as follows:
§ 3.6.4.2 In accordance with the Architect-approved submittal schedule, the
Architect shall review or take other appropriate action upon the Contractor’s
submittals such as Shop Drawings, Product Data and Samples, but only for the
limited purpose of checking for conformance with information given and the
design concept expressed in the Contract Documents. Review of such submittals
is not for the purpose of determining the accuracy and completeness of other
information such as dimensions, quantities, and installation or performance of
equipment or systems, which are the Contractor’s responsibility. The Architect’s
Page 21 of 57
review shall not constitute approval of safety precautions or, unless otherwise
expressly and specifically stated by the Architect, of any construction means,
methods, techniques, sequences or procedures. The Architect’s review of a
specific item shall not indicate approval of an assembly of which the item is a
component.”
§ 3.6.4.3 If the Contract Documents specifically require the Contractor to provide professional design
services or certifications by a design professional related to systems, materials or equipment, the Architect
shall specify the appropriate performance and design criteria that such services must satisfy. The Architect
shall review shop drawings and other submittals related to the Work designed or certified by the design
professional retained by the Contractor that bear such professional’s seal and signature when submitted to
the Architect. The Architect shall be entitled to rely upon the adequacy, accuracy and completeness of the
services, certifications and approvals performed or provided by such design professionals.
Delete the word “If” above Clause if appropriate. In most cases we have some
component of the project as a design/build component (metal stairs, sprinklers, etc.)
§ 3.6.4.4 Subject to the provisions of Section 4.3, the Architect shall review and respond to requests for
information about the Contract Documents. The Architect shall set forth in the Contract Documents the
requirements for requests for information. Requests for information shall include, at a minimum, a detailed
written statement that indicates the specific Drawings or Specifications in need of clarification and the
nature of the clarification requested. The Architect’s response to such requests shall be made in writing
within any time limits agreed upon, or otherwise with reasonable promptness. If appropriate, the Architect
shall prepare and issue supplemental Drawings and Specifications in response to requests for information.
This Clause above allows us to control the format of RFIs and covers us for frivolous
RFIs and should be retained intact if possible. We must resist Contractors using the RFI
process to fish for extras or badger us into doing their work for them.
§ 3.6.4.5 The Architect shall maintain a record of submittals and copies of submittals supplied by the
Contractor in accordance with the requirements of the Contract Documents.
§ 3.6.5 CHANGES IN THE WORK
§ 3.6.5.1 The Architect may authorize minor changes in the Work that are consistent with the intent of the
Contract Documents and do not involve an adjustment in the Contract Sum or an extension of the Contract
Time. Subject to the provisions of Section 4.3, the Architect shall prepare Change Orders and Construction
Change Directives for the Owner’s approval and execution in accordance with the Contract Documents.
The first sentence addresses ASIs. Sometimes Owners get nervous about this concept of
unilateral changes so do not let the situation get out of hand. Convince the Owner that
this is in Owner’s best interest to keep the Work moving. Also, these are no cost no time
change changes.
The second sentence of this Clause reaches over to Section 4.3 and covers the complex
world of Construction Changes. Do not try to edit the content of this Clause here
§ 3.6.5.2 The Architect shall maintain records relative to changes in the Work.
§ 3.6.6 PROJECT COMPLETION
§ 3.6.6.1 The Architect shall conduct inspections to determine the date or dates of Substantial Completion
and the date of final completion; issue Certificates of Substantial Completion; receive from the Contractor
and forward to the Owner, for the Owner’s review and records, written warranties and related documents
Page 22 of 57
required by the Contract Documents and assembled by the Contractor; and issue a final Certificate for
Payment based upon a final inspection indicating the Work complies with the requirements of the Contract
Documents.
Please note that there is nothing that requires the Architect to prepare a “punch list.”
Why we do one anyway is mind boggling. Note below that the Owner is now required to
inspect with us. Please make arrangements to comply. Surprisingly, In A201-2007, the
Owner is not required to conduct inspections, so our only lever to require the Owner to be
present is this agreement between us and the Owner
§ 3.6.6.2 The Architect’s inspections shall be conducted with the Owner to check conformance of the Work
with the requirements of the Contract Documents and to verify the accuracy and completeness of the list
submitted by the Contractor of Work to be completed or corrected.
The next two Clauses are usually fine as written.
§ 3.6.6.3 When the Work is found to be substantially complete, the Architect shall inform the Owner about
the balance of the Contract Sum remaining to be paid the Contractor, including the amount to be retained
from the Contract Sum, if any, for final completion or correction of the Work.
§ 3.6.6.4 The Architect shall forward to the Owner the following information received from the Contractor:
(1) consent of surety or sureties, if any, to reduction in or partial release of retainage or the making of final
payment; (2) affidavits, receipts, releases and waivers of liens or bonds indemnifying the Owner against
liens; and (3) any other documentation required of the Contractor under the Contract Documents.
§ 3.6.6.5 Upon request of the Owner, and prior to the expiration of one year from the date of Substantial
Completion, the Architect shall, without additional compensation, conduct a meeting with the Owner to
review the facility operations and performance.
Unless we (a) want to keep contact with the Owner or (b) are required to provide a post
occupancy meeting, delete this Clause in its entirety.
ARTICLE 4 ADDITIONAL SERVICES
The below Section addresses the “Additional Services” that are included in the original
agreement. Be prepared for some funky situations with the double use of the term
“Additional Services.”
§ 4.1 Additional Services listed below are not included in Basic Services but may be required for the
Project. The Architect shall provide the listed Additional Services only if specifically designated in the
table below as the Architect’s responsibility, and the Owner shall compensate the Architect as provided in
Section 11.2.
(Designate the Additional Services the Architect shall provide in the second column of the table below. In
the third column indicate whether the service description is located in Section 4.2 or in an attached exhibit.
If in an exhibit, identify the exhibit.)
Additional Services
§ 4.1.1
Responsibility
(Architect, Owner
or
Not Provided)
Programming
Page 23 of 57
Location of Service Description
(Section 4.2 below or in an exhibit
attached to this document and
identified below)
Additional Services
§ 4.1.2
§ 4.1.3
§ 4.1.4
§ 4.1.5
§ 4.1.6
§ 4.1.7
§ 4.1.8
§ 4.1.9
§ 4.1.10
§ 4.1.11
§ 4.1.12
§ 4.1.13
§ 4.1.14
§ 4.1.15
§ 4.1.16
§ 4.1.17
§ 4.1.18
§ 4.1.19
§ 4.1.20
§ 4.1.21
§ 4.1.22
§ 4.1.23
§ 4.1.24
§ 4.1.25
§ 4.1.26
§ 4.1.27
Responsibility
(Architect, Owner
or
Not Provided)
Location of Service Description
(Section 4.2 below or in an exhibit
attached to this document and
identified below)
Multiple preliminary designs
Measured drawings
Existing facilities surveys
Site Evaluation and Planning (B203™–2007)
Building information modeling
Civil engineering
Landscape design
Architectural Interior Design (B252™–2007)
Value Analysis (B204™–2007)
Detailed cost estimating
On-site project representation
Conformed construction documents
As-designed record drawings
As-constructed record drawings
Post occupancy evaluation
Facility Support Services (B210™–2007)
Tenant-related services
Coordination of Owner’s consultants
Telecommunications/data design
Security Evaluation and Planning (B206™–
2007)
Commissioning (B211™–2007)
Extensive environmentally responsible design
LEED® Certification (B214™–2007)
Fast-track design services
Historic Preservation (B205™–2007)
Furniture, Finishings, and Equipment Design
(B253™–2007)
The first column of the chart at this location must have every blank filled-in with
something. Leave a blank empty could be construed that we are to provide that service.
If the service is not applicable to this Project put “Not Provided” in the responsibility
blank. If the service is required for the Project but not to be provided by us put the word
“Owner” in the responsibility column. If we are obligated to provide the service put the
word “Architect” in the responsibility column.
If the first blank is filled with anything other than “Not Provided,” there must be a
descriptor of where the scope of work for those services is located. The location can be
by reference or as an Exhibit attached to the agreement, including consultants’ proposals.
If worse comes to worse, you can write out a description in the space below
§ 4.2 Insert a description of each Additional Service designated in Section 4.1 as the Architect’s
responsibility, if not further described in an exhibit attached to this document.
The above Section is essentially an instruction for the table in 4.1 and a blank space to
add information.
Page 24 of 57
§ 4.3 Additional Services may be provided after execution of this Agreement, without invalidating the
Agreement. Except for services required due to the fault of the Architect, any Additional Services provided
in accordance with this Section 4.3 shall entitle the Architect to compensation pursuant to Section 11.3 and
an appropriate adjustment in the Architect’s schedule.
Obviously, we want to keep the above Section at all costs!
The below Additional Services (after the fact) require the Owner’s approval in
advance. Get it!
§ 4.3.1 Upon recognizing the need to perform the following Additional Services, the Architect shall notify
the Owner with reasonable promptness and explain the facts and circumstances giving rise to the need. The
Architect shall not proceed to provide the following services until the Architect receives the Owner’s
written authorization:
.1
Services necessitated by a change in the Initial Information, previous instructions or
approvals given by the Owner, or a material change in the Project including, but not limited
to, size, quality, complexity, the Owner’s schedule or budget for Cost of the Work, or
procurement or delivery method;
.2
Services necessitated by the Owner’s request for extensive environmentally responsible
design alternatives, such as unique system designs, in-depth material research, energy
modeling, or LEED® certification;
.3
Changing or editing previously prepared Instruments of Service necessitated by the
enactment or revision of codes, laws or regulations or official interpretations;
.4
Services necessitated by decisions of the Owner not rendered in a timely manner or any
other failure of performance on the part of the Owner or the Owner’s consultants or
contractors;
.5
Preparing digital data for transmission to the Owner’s consultants and contractors, or to
other Owner authorized recipients;
.6
Preparation of design and documentation for alternate bid or proposal requests proposed by
the Owner;
.7
Preparation for, and attendance at, a public presentation, meeting or hearing;
.8
Preparation for, and attendance at a dispute resolution proceeding or legal proceeding,
except where the Architect is party thereto;
.9
Evaluation of the qualifications of bidders or persons providing proposals;
.10 Consultation concerning replacement of Work resulting from fire or other cause during
construction; or
.11 Assistance to the Initial Decision Maker, if other than the Architect.
Edit this list to delete any of these listed additional services that are included in the
original proposal or that are totally irrelevant such as item .11 (usually delete this unless
the Owner is stupid enough to fall for the IDM scam). This list of Additional Services is
for issues arising after the fact of the original Agreement.
Typically we should add language above that makes it clear that we will provide a single
cycle of Bidding/Negotiations services when such services are part of the agreement.
Example:
“.12 providing services for successive rebidding or renegotiations after a
successful bid has been received or a successful negotiation completed.”
Page 25 of 57
Below Additional Services are theoretically “emergency” items that the Owner should
understand the need to be promptly acted upon and hence there is no “prior” approval
required, just contemporaneous notification. If any of these items are deleted from this
list here, it simply means that we are under no obligation to perform. This is a half-assed
way of handling these types of Additional Services, but no one has come up with better
language. Note that even these Additional Services require notice prior to the fact.
§ 4.3.2 To avoid delay in the Construction Phase, the Architect shall provide the following Additional
Services, notify the Owner with reasonable promptness, and explain the facts and circumstances giving rise
to the need. If the Owner subsequently determines that all or parts of those services are not required, the
Owner shall give prompt written notice to the Architect, and the Owner shall have no further obligation to
compensate the Architect for those services:
.1
Reviewing a Contractor’s submittal out of sequence from the submittal schedule agreed to
by the Architect;
.2
Responding to the Contractor’s requests for information that are not prepared in accordance
with the Contract Documents or where such information is available to the Contractor from
a careful study and comparison of the Contract Documents, field conditions, other Ownerprovided information, Contractor-prepared coordination drawings, or prior Project
correspondence or documentation;
.3
Preparing Change Orders and Construction Change Directives that require evaluation of
Contractor’s proposals and supporting data, or the preparation or revision of Instruments of
Service;
.4
Evaluating an extensive number of Claims as the Initial Decision Maker;
Typically revise § 4.3.2.4 to read as follows:
.4
.5
.6
Evaluating an extensive number of Claims;
Evaluating substitutions proposed by the Owner or Contractor and making subsequent
revisions to Instruments of Service resulting therefrom; or
To the extent the Architect’s Basic Services are affected, providing Construction Phase
Services 60 days after (1) the date of Substantial Completion of the Work or (2) the
anticipated date of Substantial Completion identified in Initial Information, whichever is
earlier.
Edit the above “or” option out depending on how you have set the schedule for
Substantial Completion.
§ 4.3.3 The Architect shall provide Construction Phase Services exceeding the limits set forth below as
Additional Services. When the limits below are reached, the Architect shall notify the Owner:
.1
( ) reviews of each Shop Drawing, Product Data item, sample and similar submittal of
the Contractor
4.3.3.1 We should try and provide only one review of submittals and then get paid extra
for re-reviews. This matter should be discussed with Owner and offer to put language in
the General Conditions that require the Contractor shall pay the Owner for the extra
services of the Architect that they cause. You can use a decimal here if needed to cover
some resubmittals (i.e. “An average of one and one-half (1.5)…”)
.2
(
) visits to the site by the Architect over the duration of the Project during construction
Page 26 of 57
4.3.3.2 Here we should list the exact count of site visits we expected to perform in
developing our fee. For instance if the construction is planned to take one year and we
are to visit the site every other week, the number “26” should be inserted in the blanks, if
its bi-monthly, the number “24” should be inserted.
.3
.4
( ) inspections for any portion of the Work to determine whether such portion of the
Work is substantially complete in accordance with the requirements of the Contract
Documents
( ) inspections for any portion of the Work to determine final completion
4.3.3.3 and 4.3.3.4 Again we should try and provide only one inspection for each of the
above Clauses.
§ 4.3.4 If the services covered by this Agreement have not been completed within
( ) months of the
date of this Agreement, through no fault of the Architect, extension of the Architect’s services beyond that
time shall be compensated as Additional Services.
We should always give a specific time in this Paragraph, preferably the exact scheduled
timeframe for the Project including the 60 days after Substantial Completion set out in
4.3.2.6 above.
ARTICLE 5 OWNER’S RESPONSIBILITIES
§ 5.1 Unless otherwise provided for under this Agreement, the Owner shall provide information in a timely
manner regarding requirements for and limitations on the Project, including a written program which shall
set forth the Owner’s objectives, schedule, constraints and criteria, including space requirements and
relationships, flexibility, expandability, special equipment, systems and site requirements. Within 15 days
after receipt of a written request from the Architect, the Owner shall furnish the requested information as
necessary and relevant for the Architect to evaluate, give notice of or enforce lien rights.
The first sentence should be edited to comport with the Initial Information given earlier, for
instance, if programming is to be provided under our scope of work. The second sentence is an
in-your-face item regarding the Owner’s financial capability and collection remedies. For most
clients, this second sentence should be deleted unless we have reason to believe the Owner is a
“no-account.”
§ 5.2 The Owner shall establish and periodically update the Owner’s budget for the Project, including (1)
the budget for the Cost of the Work as defined in Section 6.1; (2) the Owner’s other costs; and, (3)
reasonable contingencies related to all of these costs. If the Owner significantly increases or decreases the
Owner’s budget for the Cost of the Work, the Owner shall notify the Architect. The Owner and the
Architect shall thereafter agree to a corresponding change in the Project’s scope and quality.
This Section above repeats what the Initial Information should have established. It is OK
to leave as-is but make sure it is coordinated with the Initial Information. Likewise, the
first sentence below is OK to leave as-is but make sure it is coordinated with the Initial
Information. Edit both above and below to conform with the Initial Information given
earlier.
§ 5.3 The Owner shall identify a representative authorized to act on the Owner’s behalf with respect to the
Project. The Owner shall render decisions and approve the Architect’s submittals in a timely manner in
order to avoid unreasonable delay in the orderly and sequential progress of the Architect’s services.
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§ 5.4 The Owner shall furnish surveys to describe physical characteristics, legal limitations and utility
locations for the site of the Project, and a written legal description of the site. The surveys and legal
information shall include, as applicable, grades and lines of streets, alleys, pavements and adjoining
property and structures; designated wetlands; adjacent drainage; rights-of-way, restrictions, easements,
encroachments, zoning, deed restrictions, boundaries and contours of the site; locations, dimensions and
necessary data with respect to existing buildings, other improvements and trees; and information
concerning available utility services and lines, both public and private, above and below grade, including
inverts and depths. All the information on the survey shall be referenced to a Project benchmark.
Note in 5.4 and 5.5 that the Sections above and below may need to be deleted or edited if
GWWO is providing either the survey or geotechnical engineering.
§ 5.5 The Owner shall furnish services of geotechnical engineers, which may include but are not limited to
test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous
materials, seismic evaluation, ground corrosion tests and resistivity tests, including necessary operations for
anticipating subsoil conditions, with written reports and appropriate recommendations.
Edit the below Section as appropriate for the Project scope of work.
§ 5.6 The Owner shall coordinate the services of its own consultants with those services provided by the
Architect. Upon the Architect’s request, the Owner shall furnish copies of the scope of services in the
contracts between the Owner and the Owner’s consultants. The Owner shall furnish the services of
consultants other than those designated in this Agreement, or authorize the Architect to furnish them as an
Additional Service, when the Architect requests such services and demonstrates that they are reasonably
required by the scope of the Project. The Owner shall require that its consultants maintain professional
liability insurance as appropriate to the services provided.
It would be wise in the last sentence to require the Owner’s consultants to maintain
professional liability insurance that is in parity with our insurance.
The next three Sections are usually left intact with no changes. Make sure they conform
with the Initial Information given earlier
§ 5.7 The Owner shall furnish tests, inspections and reports required by law or the Contract Documents,
such as structural, mechanical, and chemical tests, tests for air and water pollution, and tests for hazardous
materials.
§ 5.8 The Owner shall furnish all legal, insurance and accounting services, including auditing services, that
may be reasonably necessary at any time for the Project to meet the Owner’s needs and interests.
§ 5.9 The Owner shall provide prompt written notice to the Architect if the Owner becomes aware of any
fault or defect in the Project, including errors, omissions or inconsistencies in the Architect’s Instruments of
Service.
§ 5.10 Except as otherwise provided in this Agreement, or when direct communications have been specially
authorized, the Owner shall endeavor to communicate with the Contractor and the Architect’s consultants
through the Architect about matters arising out of or relating to the Contract Documents. The Owner shall
promptly notify the Architect of any direct communications that may affect the Architect’s services.
The above Section is often tampered with by Owners. This language has enough weasel words
that Owners should swallow it whole as-is.
§ 5.11 Before executing the Contract for Construction, the Owner shall coordinate the Architect’s duties and
responsibilities set forth in the Contract for Construction with the Architect’s services set forth in this
Page 28 of 57
Agreement. The Owner shall provide the Architect a copy of the executed agreement between the Owner
and Contractor, including the General Conditions of the Contract for Construction.
Again, this Section is redundant with the Initial Information regimen we require at the
outset. If you keep it, just make sure it coordinates with the Initial Information given
earlier.
If you have properly prepared the Initial Information above, then Section 5.1 through 5.5
and the first sentence in 5.11 can be deleted in their entirety.
§ 5.12 The Owner shall provide the Architect access to the Project site prior to commencement of the Work
and shall obligate the Contractor to provide the Architect access to the Work wherever it is in preparation
or progress.
The above is important boilerplate and should be preserved.
ARTICLE 6 COST OF THE WORK
This Article covers our responsibilities to estimate the Cost of the Work and contains
some important caveats that limit our liability (§ 6.7) for failing to design under budget to
the re-designing at no additional cost.
§ 6.1 For purposes of this Agreement, the Cost of the Work shall be the total cost to the Owner to construct
all elements of the Project designed or specified by the Architect and shall include contractors’ general
conditions costs, overhead and profit. The Cost of the Work does not include the compensation of the
Architect, the costs of the land, rights-of-way, financing, contingencies for changes in the Work or other
costs that are the responsibility of the Owner.
The above Section is a necessary definition that should not be altered.
Obviously, where the Owner is providing the cost estimating through a direct consultant,
Section 6.2 through 6.7 should be deleted and replaced with the following and coordinated
with Paragraph 3.1.7 above:
“6.2 Cost estimating services of the Cost of the Work shall be provided by the
Owner’s consultant. The Architect shall cooperate with the Owner’s consultant
and provide drawings and other descriptive project information to the Owner’s
consultant at appropriate intervals when estimates are to be prepared.
“6.3 The Architect may review the Owner’s consultant’s estimate of the Cost of
the Work for errors and omissions. If the Architect finds errors and omissions in
the Owner’s consultant’s estimate of the Cost of the Work, the Architect shall
notify the Owner in writing identifying such errors and omissions. The Owner
shall reconcile the Architect’s findings with the Owner’s consultant and issue a
revised estimate of the Cost of the Work. The Architect’s review of the Owner’s
estimate shall not constitute an acceptance or approval of the Owner’s
consultant’s estimate of the Cost of the Work.
Page 29 of 57
“6.4 If the Owner’s consultant’s estimate of the Cost of the Work exceeds the
Owner’s budget for the Cost of the Work, the Architect shall cooperate with the
Owner and the Owner’s consultant to reduce the Cost of the Work and make
appropriate recommendations to the Owner to adjust the Project’s size, quality or
budget, and the Owner shall cooperate with the Architect in making such
adjustments.
“6.5 If the Owner proceeds with bidding or negotiating the Cost of the Work for
the construction of the Project and the low bid or the negotiations result in a Cost
of the Work that exceeds the Owner’s budget and the Owner desires to redesign
the Project to be within the Owner’s budget, the Architect shall redesign the
Project with an appropriate adjustment in the Architect’s compensation. The
Owner shall cooperate with the Architect to adjust the Project’s size and quality to
reduce the Cost of the Work.”
Otherwise, the language should remain intact to describe our cost estimating services.
§ 6.2 The Owner’s budget for the Cost of the Work is provided in Initial Information, and may be adjusted
throughout the Project as required under Sections 5.2, 6.4 and 6.5. Evaluations of the Owner’s budget for
the Cost of the Work, the preliminary estimate of the Cost of the Work and updated estimates of the Cost of
the Work prepared by the Architect, represent the Architect’s judgment as a design professional. It is
recognized, however, that neither the Architect nor the Owner has control over the cost of labor, materials
or equipment; the Contractor’s methods of determining bid prices; or competitive bidding, market or
negotiating conditions. Accordingly, the Architect cannot and does not warrant or represent that bids or
negotiated prices will not vary from the Owner’s budget for the Cost of the Work or from any estimate of
the Cost of the Work or evaluation prepared or agreed to by the Architect.
§ 6.3 In preparing estimates of the Cost of Work, the Architect shall be permitted to include contingencies
for design, bidding and price escalation; to determine what materials, equipment, component systems and
types of construction are to be included in the Contract Documents; to make reasonable adjustments in the
program and scope of the Project; and to include in the Contract Documents alternate bids as may be
necessary to adjust the estimated Cost of the Work to meet the Owner’s budget for the Cost of the Work.
The Architect’s estimate of the Cost of the Work shall be based on current area, volume or similar
conceptual estimating techniques. If the Owner requests detailed cost estimating services, the Architect
shall provide such services as an Additional Service under Article 4.
§ 6.4 If the Bidding or Negotiation Phase has not commenced within 90 days after the Architect submits the
Construction Documents to the Owner, through no fault of the Architect, the Owner’s budget for the Cost
of the Work shall be adjusted to reflect changes in the general level of prices in the applicable construction
market.
§ 6.5 If at any time the Architect’s estimate of the Cost of the Work exceeds the Owner’s budget for the
Cost of the Work, the Architect shall make appropriate recommendations to the Owner to adjust the
Project’s size, quality or budget for the Cost of the Work, and the Owner shall cooperate with the Architect
in making such adjustments.
§ 6.6 If the Owner’s budget for the Cost of the Work at the conclusion of the Construction Documents
Phase Services is exceeded by the lowest bona fide bid or negotiated proposal, the Owner shall
.1
give written approval of an increase in the budget for the Cost of the Work;
.2
authorize rebidding or renegotiating of the Project within a reasonable time;
.3
terminate in accordance with Section 9.5;
.4
in consultation with the Architect, revise the Project program, scope, or quality as required
to reduce the Cost of the Work; or
Page 30 of 57
.5
implement any other mutually acceptable alternative.
§ 6.7 If the Owner chooses to proceed under Section 6.6.4, the Architect, without additional compensation,
shall modify the Construction Documents as necessary to comply with the Owner’s budget for the Cost of
the Work at the conclusion of the Construction Documents Phase Services, or the budget as adjusted under
Section 6.6.1. The Architect’s modification of the Construction Documents shall be the limit of the
Architect’s responsibility under this Article 6.
The language above is silent as to whether the Architect is entitled to an adjustment in
compensation under 6.6.1, 6.6.2 or 6.6.5, if the bids exceed the budget. Politics would
say that the Architect should leave well enough alone, but it is possible to over-design the
job and blow the budget, the Owner reluctantly elects to increase the budget and the
Architect then makes a claim under 4.3.1.1 for the Owner increasing the budget. If
Owners raise the issue of this inherent unfairness, it is reasonable to make amendments
that foreclose that option.
ARTICLE 7 COPYRIGHTS AND LICENSES
§ 7.1 The Architect and the Owner warrant that in transmitting Instruments of Service, or any other
information, the transmitting party is the copyright owner of such information or has permission from the
copyright owner to transmit such information for its use on the Project. If the Owner and Architect intend
to transmit Instruments of Service or any other information or documentation in digital form, they shall
endeavor to establish necessary protocols governing such transmissions.
Revise the last sentence above to read as follows:
“The Owner and Architect agree that documentation in digital form shall be
provided as set forth in Paragraph 7.1.1.”
Here is where we should set forth our policy on sharing electronic media. Customized
language should be developed for each Project. Some suggested examples of language
are as follows:
“§ 7.1.1 Read only “.pdf” files of the Contract Documents will be provided to the
Owner for the Owner’s use under the same license as set forth under Section 7.3,
and the delivery of these files shall occur one time after the completion of the
Contract Documents Phase of our services.”
[Note: this obligation includes our consultants who should be so bound in our agreement
with them]
or
“§ 7.1.1 After the award of the contract for Construction and with the Owner’s
consent, the Architect will provide to the Contractor electronic copies of Project
information of appropriate drawings under a license similar to that with the
Owner in AutoCAD 2000 format if the Contractor signs an agreement with the
Architect that such information is: (1) not warranted to be accurate, (2) not to be
construed to alter the requirements of the Contract Documents and (3) that use of
such electronic files shall be at the Contractor’s sole risk. Further, the Contractor
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shall pay the Architect a preparation fee of $250.00 per “.dwg” file so provided.
The electronic information will be derived from the same electronic files used to
prepare the Contract Documents with irrelevant information and the Architect’s
title block removed.”
In this last example, logical questions that arise should be answered such as (1) the need
to include a copy of the agreement form in the Project Manual, (2) what are appropriate
drawings, (3) the agreement form should restrict the Contractor’s reuse of the to only
those Subcontractors who sign a similar agreement
We must remember that the drawings in the Contract Documents, and their electronic
source, are representations of the design intent and are not an accurate model of the
building that can be scaled or measured. Providing electronic files to the Contractor can
be construed as a product that we warrant as fit for use in the preparation of Shop
Drawings, material take-offs and quantity counts. We also need to have our Owners
understand the limitations of such AutoCAD files. We need to effectively explain to our
Owners the perils ownership of the IOS and that it is not a simple matter of possession.
As the profession moves to model based design, wholesale changes in the industry will
need to take place including how Architects practice and how they are compensated. We
should not let the future blind us to the perils of today’s delivery paradigm.
There is also the issue of the timing of delivery of IOS to the Owner. First, there are
progress submittals to the Owner during the design phase. Typically we do these in hard
copy form, but some Owners may want them electronically. Where Owners want interim
submittals electronically, we should be very wary of submitting operable AutoCAD files
since the opportunity for misuse is very significant. It is best if we submit files as “.pdf”
files. If we are required to deliver IOS to the Owner, we should stipulate that, “the
delivery shall occur one time after the completion of the Contract Documents Phase of
our services.”
The second timing issue is during construction, usually for the use by the Contractor for
the preparations of Shop Drawings. See the language proposed above for this instance.
Care should be taken when such documents are requested during bidding or pricing to
assure that they cannot be construed as altering the requirements of the Contract
Documents. Certainly no electronic copies of the Bidding or Contract Documents should
be issued to a bidder or contractor in AutoCAD format, only as “.pdf” files.
The third timing issue is at the end of the Project and is usually in some form of “Record
Drawings.” Although Record Drawing services are not required in the unedited B1012007, there is a check-off box under Paragraph 4.1.15 that could invoke Record
Document services. If so you should include a services descriptor that says that Record
Documents will be prepared from information provided by the Contractor. Such a
request by an Owner for us to provide Record Drawing services should immediately
initiate a discussion as to how the Owner plans to use such electronic files. If the Owner
says for archive purposes only, we should strive to get the Owner to accept delivery of
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the Record Drawings as “.pdf” files. If the Owner says for facilities management, we
should point out the difficulties of using the AutoCAD layers, x-references and other
cross referencing aspects of the data for facilities management. We should suggest that
we create (for a fee) AutoCAD documents that are usable for facilities management,
stripped of cross-references, title blocks (or replacement title blocks), and extraneous
construction information. We can also point out the short life span of the forms of
electronic data and that hard copies are really timeless. Similar arguments can be used
for almost any other reason the Owner might have to obtain AutoCAD IOSs.
§ 7.2 The Architect and the Architect’s consultants shall be deemed the authors and owners of their
respective Instruments of Service, including the Drawings and Specifications, and shall retain all common
law, statutory and other reserved rights, including copyrights. Submission or distribution of Instruments of
Service to meet official regulatory requirements or for similar purposes in connection with the Project is
not to be construed as publication in derogation of the reserved rights of the Architect and the Architect’s
consultants.
§ 7.3 Upon execution of this Agreement, the Architect grants to the Owner a nonexclusive license to use the
Architect’s Instruments of Service solely and exclusively for purposes of constructing, using, maintaining,
altering and adding to the Project, provided that the Owner substantially performs its obligations, including
prompt payment of all sums when due, under this Agreement. The Architect shall obtain similar
nonexclusive licenses from the Architect’s consultants consistent with this Agreement. The license granted
under this section permits the Owner to authorize the Contractor, Subcontractors, Sub-subcontractors, and
material or equipment suppliers, as well as the Owner’s consultants and separate contractors, to reproduce
applicable portions of the Instruments of Service solely and exclusively for use in performing services or
construction for the Project. If the Architect rightfully terminates this Agreement for cause as provided in
Section 9.4, the license granted in this Section 7.3 shall terminate.
§ 7.3.1 In the event the Owner uses the Instruments of Service without retaining the author of the
Instruments of Service, the Owner releases the Architect and Architect’s consultant(s) from all claims and
causes of action arising from such uses. The Owner, to the extent permitted by law, further agrees to
indemnify and hold harmless the Architect and its consultants from all costs and expenses, including the
cost of defense, related to claims and causes of action asserted by any third person or entity to the extent
such costs and expenses arise from the Owner’s use of the Instruments of Service under this Section 7.3.1.
The terms of this Section 7.3.1 shall not apply if the Owner rightfully terminates this Agreement for cause
under Section 9.4.
§ 7.4 Except for the licenses granted in this Article 7, no other license or right shall be deemed granted or
implied under this Agreement. The Owner shall not assign, delegate, sublicense, pledge or otherwise
transfer any license granted herein to another party without the prior written agreement of the Architect.
Any unauthorized use of the Instruments of Service shall be at the Owner’s sole risk and without liability to
the Architect and the Architect’s consultants.
This Article is usually a hot button for Owners. The old onerous requirement for no
reuse of Instruments of Service (IOS) when we were terminated for convenience was
corrected. With this correction, Owners have no valid reason to edit this Article unless
the Owner is planning to screw us. Only under the direst circumstances should we agree
to transfer our copyrights to the Owner, because this could inhibit our right to re-use any
of our standard details used on the Project for other projects without getting permission
from this Owner first.
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ARTICLE 8 CLAIMS AND DISPUTES
§ 8.1 GENERAL
§ 8.1.1 The Owner and Architect shall commence all claims and causes of action, whether in contract, tort,
or otherwise, against the other arising out of or related to this Agreement in accordance with the
requirements of the method of binding dispute resolution selected in this Agreement within the period
specified by applicable law, but in any case not more than 10 years after the date of Substantial Completion
of the Work. The Owner and Architect waive all claims and causes of action not commenced in accordance
with this Section 8.1.1.
This Subparagraph is extremely helpful in mitigating litigation, as it cuts off Owners
claims as of an early date certain. Smart Owners, however, will not stand still for this
and will opt to use the State law. In Maryland, the Statute of Limitations for professional
errors or omissions is three years from the date of discovery. This means that if an
Owner’s roof starts leaking nine and one-half years after final completion, the Owner has
another three years to file suit. This Paragraph cuts off everything after 10 years
regardless of a late discovery. Maryland’s Statute of Repose that bars litigation for
problems that are discovered more than ten years after the date of end of services. There
should not be any difficulty in preserving this language intact.
§ 8.1.2 To the extent damages are covered by property insurance, the Owner and Architect waive all rights
against each other and against the contractors, consultants, agents and employees of the other for damages,
except such rights as they may have to the proceeds of such insurance as set forth in AIA Document A201–
2007, General Conditions of the Contract for Construction. The Owner or the Architect, as appropriate,
shall require of the contractors, consultants, agents and employees of any of them similar waivers in favor
of the other parties enumerated herein.
It is very important to keep the above Paragraph intact as it provides us with some
protection. Be sure that you require contractors, consultants, agents and employees of
any of them similar waivers in favor of the other parties.
§ 8.1.3 The Architect and Owner waive consequential damages for claims, disputes or other matters in
question arising out of or relating to this Agreement. This mutual waiver is applicable, without limitation,
to all consequential damages due to either party’s termination of this Agreement, except as specifically
provided in Section 9.7.
We typically would like to keep this Paragraph on a waiver of consequential damages
even though, it is very one sided against Owners since they usually have bigger
consequential damages. However, if it is struck in our agreement with an Owner, we
must insist that it be struck in A201-2007 General Conditions binding the Owner and the
Contractor. If we do not have this protection and the Contractor and Owner have waived
such damages, we will be the only party left exposed in the event that either incurs
significant consequential damages through no fault of ours. You can bet that a wily
lawyer can figure out how to convert an Owner initiated delay into malfeasance by the
Architect. As a way out of an instance where the Owner is insisting on not waiving
consequential damages is to ask for a liquidated damages provision that at least quantifies
the Owner’s potential claims.
Typically we prefer to keep all mediation provisions below since they often help
eliminate arbitration or litigation.
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§ 8.2 MEDIATION
§ 8.2.1 Any claim, dispute or other matter in question arising out of or related to this Agreement shall be
subject to mediation as a condition precedent to binding dispute resolution. If such matter relates to or is the
subject of a lien arising out of the Architect’s services, the Architect may proceed in accordance with
applicable law to comply with the lien notice or filing deadlines prior to resolution of the matter by
mediation or by binding dispute resolution.
§ 8.2.2 The Owner and Architect shall endeavor to resolve claims, disputes and other matters in question
between them by mediation which, unless the parties mutually agree otherwise, shall be administered by
the American Arbitration Association in accordance with its Construction Industry Mediation Procedures in
effect on the date of the Agreement. A request for mediation shall be made in writing, delivered to the other
party to the Agreement, and filed with the person or entity administering the mediation. The request may be
made concurrently with the filing of a complaint or other appropriate demand for binding dispute resolution
but, in such event, mediation shall proceed in advance of binding dispute resolution proceedings, which
shall be stayed pending mediation for a period of 60 days from the date of filing, unless stayed for a longer
period by agreement of the parties or court order. If an arbitration proceeding is stayed pursuant to this
section, the parties may nonetheless proceed to the selection of the arbitrator(s) and agree upon a schedule
for later proceedings.
§ 8.2.3 The parties shall share the mediator’s fee and any filing fees equally. The mediation shall be held in
the place where the Project is located, unless another location is mutually agreed upon. Agreements reached
in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof.
§ 8.2.4 If the parties do not resolve a dispute through mediation pursuant to this Section 8.2, the method of
binding dispute resolution shall be the following:
(Check the appropriate box. If the Owner and Architect do not select a method of binding dispute
resolution below, or do not subsequently agree in writing to a binding dispute resolution method other than
litigation, the dispute will be resolved in a court of competent jurisdiction.)
[ ] Arbitration pursuant to Section 8.3 of this Agreement
[ ] Litigation in a court of competent jurisdiction
[ ] Other (Specify)
Typically we should revise the Subparagraph above to say that disputes shall be resolved
through arbitration pursuant to Section 8.3 of this Agreement as follows:
Ҥ 8.2.4 If the parties do not resolve a dispute through mediation pursuant to this
Section 8.2, the method of binding dispute resolution shall be arbitration pursuant
to Section 8.3 of this Agreement.”
If the Owner insists on the courts, then make this revision instead:
Ҥ 8.2.4 If the parties do not resolve a dispute through mediation pursuant to this
Section 8.2, the method of binding dispute resolution shall be litigation in a court
of competent jurisdiction.”
If arbitration is selected, we should strongly recommend preserving the balance of
Section 8.3 below. Otherwise the Arbitration Paragraphs 8.3 below can be deleted.
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§ 8.3 ARBITRATION
§ 8.3.1 If the parties have selected arbitration as the method for binding dispute resolution in this
Agreement, any claim, dispute or other matter in question arising out of or related to this Agreement
subject to, but not resolved by, mediation shall be subject to arbitration which, unless the parties mutually
agree otherwise, shall be administered by the American Arbitration Association in accordance with its
Construction Industry Arbitration Rules in effect on the date of this Agreement. A demand for arbitration
shall be made in writing, delivered to the other party to this Agreement, and filed with the person or entity
administering the arbitration.
§ 8.3.1.1 A demand for arbitration shall be made no earlier than concurrently with the filing of a request for
mediation, but in no event shall it be made after the date when the institution of legal or equitable
proceedings based on the claim, dispute or other matter in question would be barred by the applicable
statute of limitations. For statute of limitations purposes, receipt of a written demand for arbitration by the
person or entity administering the arbitration shall constitute the institution of legal or equitable
proceedings based on the claim, dispute or other matter in question.
§ 8.3.2 The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or
entity duly consented to by parties to this Agreement shall be specifically enforceable in accordance with
applicable law in any court having jurisdiction thereof.
§ 8.3.3 The award rendered by the arbitrator(s) shall be final, and judgment may be entered upon it in
accordance with applicable law in any court having jurisdiction thereof.
It is very important to keep the language below if we use arbitration.
§ 8.3.4 CONSOLIDATION OR JOINDER
§ 8.3.4.1 Either party, at its sole discretion, may consolidate an arbitration conducted under this Agreement
with any other arbitration to which it is a party provided that (1) the arbitration agreement governing the
other arbitration permits consolidation; (2) the arbitrations to be consolidated substantially involve common
questions of law or fact; and (3) the arbitrations employ materially similar procedural rules and methods for
selecting arbitrator(s).
§ 8.3.4.2 Either party, at its sole discretion, may include by joinder persons or entities substantially involved
in a common question of law or fact whose presence is required if complete relief is to be accorded in
arbitration, provided that the party sought to be joined consents in writing to such joinder. Consent to
arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim,
dispute or other matter in question not described in the written consent.
§ 8.3.4.3 The Owner and Architect grant to any person or entity made a party to an arbitration conducted
under this Section 8.3, whether by joinder or consolidation, the same rights of joinder and consolidation as
the Owner and Architect under this Agreement.
ARTICLE 9 TERMINATION OR SUSPENSION
§ 9.1 If the Owner fails to make payments to the Architect in accordance with this Agreement, such failure
shall be considered substantial nonperformance and cause for termination or, at the Architect’s option,
cause for suspension of performance of services under this Agreement. If the Architect elects to suspend
services, the Architect shall give seven days’ written notice to the Owner before suspending services. In the
event of a suspension of services, the Architect shall have no liability to the Owner for delay or damage
caused the Owner because of such suspension of services. Before resuming services, the Architect shall be
paid all sums due prior to suspension and any expenses incurred in the interruption and resumption of the
Architect’s services. The Architect’s fees for the remaining services and the time schedules shall be
equitably adjusted.
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§ 9.2 If the Owner suspends the Project, the Architect shall be compensated for services performed prior to
notice of such suspension. When the Project is resumed, the Architect shall be compensated for expenses
incurred in the interruption and resumption of the Architect’s services. The Architect’s fees for the
remaining services and the time schedules shall be equitably adjusted.
§ 9.3 If the Owner suspends the Project for more than 90 cumulative days for reasons other than the fault of
the Architect, the Architect may terminate this Agreement by giving not less than seven days’ written
notice.
§ 9.4 Either party may terminate this Agreement upon not less than seven days’ written notice should the
other party fail substantially to perform in accordance with the terms of this Agreement through no fault of
the party initiating the termination.
§ 9.5 The Owner may terminate this Agreement upon not less than seven days’ written notice to the
Architect for the Owner’s convenience and without cause.
§ 9.6 In the event of termination not the fault of the Architect, the Architect shall be compensated for
services performed prior to termination, together with Reimbursable Expenses then due and all Termination
Expenses as defined in Section 9.7.
§ 9.7 Termination Expenses are in addition to compensation for the Architect’s services and include
expenses directly attributable to termination for which the Architect is not otherwise compensated, plus an
amount for the Architect’s anticipated profit on the value of the services not performed by the Architect.
Revise 9.7 to read:
“§ 9.7 Termination Expenses are in addition to compensation for the Architect’s services
and include expenses which are directly attributable to termination. Termination
Expenses shall be computed as a percentage of the total compensation for the Architect’s
services earned to the time of termination as follows:
§ 9.7.1 Twenty percent of the total compensation for the Architect’s services
earned to date if termination occurs before or during the predesign, site analysis,
or Schematic Design Phases; or
§ 9.7.2 Ten percent of the total compensation for the Architect’s services earned to
date if termination occurs during the Design Development Phase; or
§ 9.7.3 Five percent of the total compensation for the Architect’s services earned
to date if termination occurs during any subsequent phase.”
You can reason with Owners that we can strike this provision if the Owner will strike
their right to terminate for convenience. The two aspects go hand-in-hand. You can
explain to Owners that if the Owner has the right to terminate for convenience with no
penalty, the courts could find the agreement to be an “illusory contract” that may not be
enforceable. Termination Expenses are different from the fee for using the Architect’s
Instruments of Service but you can negotiate back and forth. As an example, an Owner
may object to Termination Expenses but settle for a higher fee for the use of the
Architect’s Instruments of Service, or vice versa.
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§ 9.8 The Owner’s rights to use the Architect’s Instruments of Service in the event of a termination of this
Agreement are set forth in Article 7 and Section 11.9.
ARTICLE 10 MISCELLANEOUS PROVISIONS
§ 10.1 This Agreement shall be governed by the law of the place where the Project is located, except that if
the parties have selected arbitration as the method of binding dispute resolution, the Federal Arbitration Act
shall govern Section 8.3.
We would like to have all litigation resolved under Maryland law. This is particularly the
case when we do jobs in states like West Virginia that are renowned for jurisprudence
unfavorable to design professionals. However, the fairest thing is that the parties use the
State where the Project is located as the Section states. Be very careful when Owners
insist on using the Owner’s State when it is not the same State as the Project.
§ 10.2 Terms in this Agreement shall have the same meaning as those in AIA Document A201–2007,
General Conditions of the Contract for Construction.
Keep the above Section in all cases.
§ 10.3 The Owner and Architect, respectively, bind themselves, their agents, successors, assigns and legal
representatives to this Agreement. Neither the Owner nor the Architect shall assign this Agreement without
the written consent of the other, except that the Owner may assign this Agreement to a lender providing
financing for the Project if the lender agrees to assume the Owner’s rights and obligations under this
Agreement.
Owners love to give themselves the right to assign the agreement to anybody including
the devil himself and prevent us from having any assignment rights. We usually don’t
care since there is seldom any real assignment need by our clients (even though they
often think so). If this Subparagraph is to be modified, we must be vigilant that the
assignee assumes all obligations to us of the Owner including past due payments. If the
Owner demands to have a provision added requiring us to sign consents, we should
demand to see the form that will be used.
§ 10.4 If the Owner requests the Architect to execute certificates, the proposed language of such certificates
shall be submitted to the Architect for review at least 14 days prior to the requested dates of execution. If
the Owner requests the Architect to execute consents reasonably required to facilitate assignment to a
lender, the Architect shall execute all such consents that are consistent with this Agreement, provided the
proposed consent is submitted to the Architect for review at least 14 days prior to execution. The Architect
shall not be required to execute certificates or consents that would require knowledge, services or
responsibilities beyond the scope of this Agreement.
Because we seldom deal with Owners who finance their projects, we do not usually have
a lot of problem with the Section above. If possible, without making a mountain out of a
molehill, we should strike this Section in its entirety. If the Section is retained, there
needs to be language added that enable us to modify the certification language to be
acceptable. To do so insert after the second sentence the following:
“In the event the Architect finds the proposed language of such certificates or
consents unacceptable, the Architect shall revise the language to an acceptable
form for execution.”
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Generally the following four Sections are retained intact.
§ 10.5 Nothing contained in this Agreement shall create a contractual relationship with or a cause of action
in favor of a third party against either the Owner or Architect.
§ 10.6 Unless otherwise required in this Agreement, the Architect shall have no responsibility for the
discovery, presence, handling, removal or disposal of, or exposure of persons to, hazardous materials or
toxic substances in any form at the Project site.
§ 10.7 The Architect shall have the right to include photographic or artistic representations of the design of
the Project among the Architect’s promotional and professional materials. The Architect shall be given
reasonable access to the completed Project to make such representations. However, the Architect’s
materials shall not include the Owner’s confidential or proprietary information if the Owner has previously
advised the Architect in writing of the specific information considered by the Owner to be confidential or
proprietary. The Owner shall provide professional credit for the Architect in the Owner’s promotional
materials for the Project.
§ 10.8 If the Architect or Owner receives information specifically designated by the other party as
“confidential” or “business proprietary,” the receiving party shall keep such information strictly
confidential and shall not disclose it to any other person except to (1) its employees, (2) those who need to
know the content of such information in order to perform services or construction solely and exclusively
for the Project, or (3) its consultants and contractors whose contracts include similar restrictions on the use
of confidential information.
Written Notice
In this electronic age, the question of what constitutes “written notice” needs to be
clarified. As such we should include the following:
Ҥ 10.9 Written Notice: Written notice shall be deemed to have been given when a text
notification in English is transmitted to the parties’ Designated Representative
listed in the Initial Information by the following methods:
.1 by hand to the Designated Representative in person, or
.2 by US Postal Service regular mail service to the address listed in the Initial
Information, or
.3 bona fide commercial messenger/delivery service with a receipt signature of
anyone at the Designated Representative’s address listed in the Initial
Information, or
.4 if a facsimile telephone number is given in the address in the Initial
Information, by facsimile with a contemporaneous transmission receipt, or
.5 if an e-mail address is given in the address in the Initial Information, by an email with a return receipt.”
Other issues that come up under this Article 10 Miscellaneous Provisions are addressed
in XLDP’s Contract Guide that describes issues and give recommended solutions to a
wide variety of problem we encounter negotiating agreements with Owners. Of
particular importance are the following issues:
Liability Indemnification
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Owners typically want the agreement to address the Architect’s errors and omissions.
Errors and omissions have to be considered in the context of a standard of care for our
profession. Acceptable language to be added to the agreement to address this issue
follows:
“The Architect agrees, to the fullest extent permitted by law, to indemnify and
hold harmless the Owner against damages, liabilities and costs arising from the
negligent acts of the Architects in the performance of professional services under
this Agreement, to the extent that the Architect is responsible for such damages,
liabilities and costs.”
It is very important to use the terms “damages” or “loss,” “arising from” or “due to” the
Architect’s “negligent acts.” Negligence is a concept in law that embraces the standard
of care. Under this concept, errors and omissions only requires indemnification if they
are inconsistent with the standard of care. This new form of Agreement now has a
Standard of Care provision under Section 2.2 above.
If there is any doubt, when we accept an indemnification agreement, we should add the
above language and define our standard of care as “normal’ or “ordinary” as is provided
in Section 2.2 When marketing our services we should never use terms like “highest
skill,” “best efforts,” or similar language that may elevate our standard of care higher
than “normal” or “ordinary.” Similarly, we should not accept such terms in our
agreements.
An adjunct of liability indemnification is that the Owner must suffer “damages” as a
result of our negligence. Thus, we could make a horrendous error with potential costs
millions of dollars that the Contractor catches and has us correct at no cost or delays to
the Owner and the Owner would have no right of indemnification. Similarly, if our
design omits something that the Owner wanted but has not “bought” in the Contractor’s
original bid and the Owner decides to “buy it” from the Contractor after the fact, the costs
to “buy” it are considered a betterment to the project and are not recoverable under
liability indemnification.
Whenever the issue of liability or indemnification comes up with Owner’s we should take
the time to explain that our services are not going to be perfect and that the Owner should
expect and pay for nominal errors within the standard of care. We do not and cannot
warrant or guarantee or work. Furthermore our professional liability insurance excludes
coverage under any warranty or guarantee.
Typically we recommend that the Owner carry a contingency fund for our errors and
omissions and for unknown conditions of one to two percent of the construction costs
for new construction and five or more percent for renovations, alterations and
rehabilitation construction.
Existing Structures
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Typically we add the following applicable paragraph to this Section:
Ҥ 10.10 Existing Structures: If the Project involves renovations or remodeling of
existing structures, the risk of pre-existing conditions, that are not a part of the
Project or cannot be reasonably or economically determined by the services by the
Architect that are to be provided under this Agreement, shall be borne by the
Owner and the Owner agrees to indemnify and hold the Architect and the
Architect’s consultants harmless against all damages, liabilities or costs, including
reasonable attorneys’ fees and defense costs arising out of or in any way
connected with the Project, excepting only those damages, liabilities or costs
attributable to the negligence of the Architect and the Architect’s consultants.”
Limitation of Liability
Typically we add the following applicable paragraph to this Section:
Ҥ 10.11 LIMITATION OF LIABILITY: THE OWNER AGREES TO
LIMIT THE ARCHITECT’S LIABILITY FOR THE OWNER’S
DAMAGES TO SUM OF $50,000.00 OR THE ARCHITECTS TOTAL FEE,
WHICHEVER IS GREATER.”
or the less onerous
Ҥ 10.11 LIMITATION OF LIABILITY: THE OWNER AGREES TO
LIMIT THE ARCHITECT’S LIABILITY FOR THE OWNER’S
DAMAGES TO THE AMOUNT OF THE ARCHITECT’S
PROFESSIONAL LIABILITY INSURANCE AVAILABLE AT THE TIME
OF SETTLEMENT OR JUDGEMENT.”
Usually we offer the limitation of liability (LoL) as a fee reducing incentive. If we know
we have a tight fee, we can say we have been able to provide a lower fee to meet the your
[Owner’s] expectations by including this LoL provision. If we can get over 50% of our
agreements with Owners to have a LoL provision, we get a reduction in our insurance
premium. Also note that LoL provisions have to be conspicuous, hence the all-bold
capital letters.
Americans with Disabilities Act
Ҥ 10.12 Americans with Disabilities Act (ADA): The Architect shall use its
reasonable professional efforts and judgment to interpret applicable ADA
requirements and other federal, state and local laws, rules, codes, ordinances and
regulations as they apply to the Project. Since these requirements are subject to
various and possibly contradictory interpretations, the Architect cannot and does
not warrant or guarantee that the Owner’s Project as designed will comply with
all interpretations of ADA requirements and requirements of other federal, state
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and local laws, rules, codes, ordinances and regulations as they may apply to the
Project.”
Preprinted Terms and Conditions
We should never accept a preprinted sheet of terms and conditions as an attachment to
our agreements. As a side note, we should never accept a preprinted sheet of terms and
conditions from our consultants (and we should expressly reject such forms when
tendered to us). All terms and conditions must be individually evaluated for relevance
and acceptability. The word “expressly” means “in writing.”
LEED® Responsibility
If we are to provide LEED® services, we should use the AIA Document B214-2007
attached to the B101-2007, amended as appropriate. Before launching into the LEED®
process you should be aware of some issues with it.
We should add language here as follows:
“§ 10.13 LEED® Certification: The Architect shall use its reasonable professional
efforts and judgment to interpret applicable LEED® requirements and criteria as
they apply to the Project and to provide the services set forth in AIA Document
B214-2007 attached hereto. Since the award of points based on these
requirements and criteria are subject to various and possibly contradictory
interpretations, and often beyond the Architect’s control, the Architect cannot and
does not warrant or guarantee that the Owner’s Project as designed will attain or
be awarded any specific final level of LEED® certification.”
We cannot guarantee a final level of LEED® certification that will be awarded to a
Project. Since we have a responsibility to meet the programmatic requirements and
budget constraints set by the Owner, including the LEED® certification process, it is but
one of many impinging factors on the design of a project. In addition, the LEED®
certification process is limited to projections and estimations which are, by their nature,
subject to influences beyond our control.
We should never allow an assertion that a building will achieve a particular level of
certification before certification has officially been awarded as it may turn out to be false.
That is not to say that the LEED® process is necessarily flawed or that design
professionals are incapable of predicting the level of certification that a project should be
able to achieve. Clearly, there is still much to learn when it comes to the processes of
green design and LEED® certification, specifically with regard to the complexities and
imponderables that are an unavoidable part of any construction project, and particularly
those where LEED® certification is involved.
Therefore, any assessment of LEED® certification presented during the design phase is,
by necessity, an informed estimation which cannot be guaranteed. It is critical that the
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client understand the vagaries and subtleties of the LEED® process and its impact on their
project. Specifically, when presented with a LEED® estimation, the client has to be
sensitized to the contingent nature of the assessment, and the potential factors that may
influence the final level of LEED® certification. It is particularly important on projects
where preliminary checklists estimate that a project is only 1 or 2 points into a particular
level of certification.
You need to explain to our Owners that as with many aspects of design and construction,
LEED® certification is an inexact science, with no guarantees. The following paragraphs
discuss areas within the LEED® credits where problems can occur, illustrating the
potential issues that can arise, negating these kinds of guarantees.
There is very little published documentation of LEED® projects that indicates the credits
sought versus the credits obtained. There have been articles discussing the fact that many
projects start out using the LEED® checklist, but do not go through the full certification
process. Costs as well as the opaque nature of the process are cited most often as the
reasons for abandoning LEED® certification, but it is also possible that without having a
guarantee that the money spent will produce the desired results, that owners and
developers are less likely to take the risk. Outlined below are four potential areas that are
beyond the control of the design team, and yet could impact the number of credits earned
(i.e., could result in earning fewer credits than anticipated).
1. General Contractor-dependant credits
While the majority of what makes a building LEED® certified is determined by its
design, the contractor also plays a role in implementing and providing information
for many credits.

Site Selection Prerequisite 1 requires the contractor to reduce pollution from
construction activities. Although the Construction Documents provide
specific details and methods to be followed on the Sediment and Erosion
Control plans, this is an activity that requires a considerable amount of
oversight and maintenance throughout the entire construction period. If the
prescribed methods are not enforced and maintained consistently, thereby not
fulfilling this prerequisite, LEED® certification would be lost completely,
since prerequisite credits are required by LEED®.

Site Selection Credit 5.1 requires the contractor to limit site disturbance for
Greenfield sites per the Construction Documents. It is possible that this
boundary could be surveyed incorrectly or inadvertently exceeded resulting in
site disturbance beyond the limitations allowed by the credit.

Materials and Resources Credits 2.1 and 2.2 rely on the contractor to
implement a construction waste management plan to accurately separate and
weigh all construction waste and to submit supporting paperwork so that the
total amount of waste is reduced by reuse or recycling. If the separation
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process is inconsistent, resulting in less material being recycled than the
maximum amount possible, the point for this credit would not be earned.

Indoor Environmental Quality Credit 3.1 requires the contractor to implement
SMACNA guidelines, protect on-site materials from mold-causing damage,
and to change filters on temporary equipment in order to protect workers
during construction. If these requirements are not strictly adhered to at all
times, it could result in the loss of the point.

Indoor Environmental Quality Credits 4.1, 4.2, 4.3, and 4.4 require the
installation of products meeting the specifications. Because many products
and installation practices required by LEED® may be unfamiliar to
contractors, the wrong material or method may be used during construction.
For example, if paint containing higher VOC content than specified is used on
the project inadvertently, its use cannot be reversed, and the point for this
credit would be lost.
2. Unforeseen conditions or events during construction
Unforeseen conditions are not uncommon in standard construction projects,
particularly with existing conditions. These and other factors may interfere with
the attainment of LEED credits.

Site Selection Credit 2 requires that a project be located within a particular
radius of ten “basic services” businesses, such as hardware stores, dry
cleaners, grocery stores, etc. It is possible that 1 or more of the businesses
counted towards this credit would go out of business prior to completion of
construction, resulting in the loss of the point.

Materials and Resources Credits 1.1, 1.2, and 1.3 require the reuse of portions
of an existing building. As is typical for many renovation projects,
assumptions regarding existing conditions and materials are often disproved
during demolition. It is possible that materials or elements that were intended
for reuse may be found to be hazardous or unsuitable during construction.

Materials and Resources Credits 4.1, 4.2, 5.1, 5.2, and 6 all rely on the fact
that particular products that are specified during the design phase are still
available at the time of construction. These credits also use the monetary
value of these products as the basis for receiving points; therefore, if the
estimated costs in the design phase are different than the actual costs at the
time of construction, the required total cost may not be met and that point
would be lost.
3. Owner-dependant credits
Generally speaking, an owner’s primary role in LEED® certification is in the
decision-making capacity, and not necessarily in the implementation, however,
there is one credit that relies on the Owner.
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
For Energy and Atmosphere Credit 6, it is the responsibility of the Owner to
contract with a green energy provider as required by the credit. If the terms of
the LEED® credit are not followed or carried through, this point will not be
achieved.
4. USGBC interpretation of credit criteria
At the end of the design and construction phases, when all LEED® submissions
have been made, it is ultimately at the discretion of the USGBC reviewers to
determine whether or not a credit is awarded to a project. While specific
submittals and requirements are spelled out by USGBC in the LEED® guidelines,
there are many specific instances where credits are open to interpretation by the
design professional. It is possible that the USGBC reviewer may not agree with a
particular approach or calculation used in a submittal. Likewise, any nonsubscribed Innovation in Design credit that is submitted is subject to
interpretation and acceptance by the USGBC reviewers on a case-by-case basis.
The analyses of these four areas, while not exhaustive, clearly demonstrate the many
different factors that may influence the outcome of a project’s final LEED® certification
level beyond the documents on which a preliminary estimate is based. Even the USGBC
itself is unwilling to guarantee a LEED® credit for a project until after the construction is
complete and the documentation is submitted for all credits in order to ensure that the
construction is executed in accordance with the design phase documents. It is only the
completion of a project that will confirm compliance with LEED®. On a standard
project, Owners are advised to have contingencies in place at the start of construction to
allow for the unexpected, and projects that incorporate LEED® are no different.
Furthermore, expecting that a particular level of LEED® certification can be guaranteed
at any time prior to the end of construction would be ill informed.
Based on this discussion it is clear that design professionals and Owners need to begin a
project with a mutual understanding of the uncertainties associated with design and
construction in general, and with LEED® certification in particular, as well as the
responsibilities of each party involved in the process. LEED certification must be a
primary discussion topic at the Pre-Construction meeting. This will allow the team to
stress the importance of following the LEED® requirements to both General and Subcontractors, to make sure expectations during construction are understood, and to
facilitate questions from all contractors involved regarding how they will be affected by
LEED®. While the initial design, specification, and estimates set the stage for successful
LEED® certification, there is heavy reliance on the entire team during construction to
ensure that the product and system requirements are met in the final installation.
The four key outlined above are areas that can affect a project’s final LEED® score have
been identified and illustrate that the best laid plans may not always come to fruition.
Presumably other issues will come to light as the process continues to unfold. We should
strive to continue these discussions in order to better serve our clients and our
communities towards a more sustainable future. It is also important for all parties
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involved to remember what sustainable design is really about; it’s more than just a plaque
on the wall.
ARTICLE 11 COMPENSATION
§ 11.1 For the Architect’s Basic Services described under Article 3, the Owner shall compensate the
Architect as follows:
(Insert amount of, or basis for, compensation.)
GWWO’s preferred compensation is a lump-sum fee negotiated to a specific scope of
work (it is important to use the words “lump-sum” or “stipulated sum”). We do not lose
too much if we accept hourly compensation without any not-to-exceed limit and using
our fully loaded normal rates (i.e. 3.45 times direct wages). Only under great duress
should we accept a not-to-exceed limit using our fully loaded normal rates. We should
never, and I mean never, accept hourly compensation with a not-to-exceed limit at any
labor rates that are less than our normal billing rates.
An example of language to insert in this blank follows:
“Lump-sum of $843,250.00 allocated to be paid over the duration of the Project in
accordance with the payment schedule attached as Exhibit K.”
or
“Lump-sum of $100,000.00 distributed over the following phases:
Schematic Design
Design Development
Construction Documents
Bidding
Contract Administration
Total
$ 15,000.00
$ 20,000.00
$ 40,000.00
$ 5,000.00
$ 20,000.00
$100,000.00”
or
“Hourly at two and one-half times the Architect’s Direct Personnel Expense
(defined as direct wages plus customary and mandatory benefits or see Paragraph
11.10.5 below) and one and two tenths times the Architect’s consultants’ billings
to the Architect. Since the scope of work and services required are difficult to
determine at the time of this Agreement, the Architect has suggested the Owner
budget $150,000.00 for the services anticipated for the Project. If, during the
course of the Project, the Architect determines that the cost of the services
necessary to complete the Project will exceed the budget, the Architect will stop
work and notify the Owner of the Projects status. If the Project is to continue, the
Owner shall authorize an appropriate increase in the fee budget and the Architect
shall continue to provide services.”
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Note that if you are working on an hourly basis or if a portion of the services is to be
billed hourly, both our services and the consultants’ services must be described with
the appropriate multipliers in this blank space under 11.1. The multipliers and rates
described in the Paragraphs 11.3 and 11.4 below apply only to changes. So you should
add the following language whenever any components of our services are to or might be
provided on an hourly basis:
“§ 11.1.1 When services are provided on an hourly basis the Architect’s
compensation for those services shall be billed at two and one-half times the
Architect’s Direct Personnel Expense (defined as direct wages plus customary and
mandatory benefits or see Paragraph 11.10.5 below) and one and two tenths times
the Architect’s consultants’ billings to the Architect.”
Hourly Rates:
Although we prefer to do our work under “lump-sum” compensation agreements, we
often are required to display our personnel billing rate derivation and possibly the rates
themselves. If possible we should try to avoid giving specific number billing rates,
particularly rates for specific individuals. Always try and use the “Direct Personnel
Expense (defined as direct wages plus customary and mandatory benefits or see
Paragraph 11.10.5 below) x 2.5” phrase where hourly rates are appropriate or required.
Most commonly we display our billing rate derivation for compensation for Additional
Services.
The following is a discussion of these rates and how we should display them.
Compensation Definitions:
fees or compensation: The aggregate of all direct costs, overhead costs and profit that are
to be paid for the services provided under an agreement with a client.
direct costs: All expenses that can be directly attributable to a project.
overhead costs: All expenses that are necessary to do business but are not directly
attributable to a project. Typically overhead costs do not include (1) direct wages, (2)
consultants’ expense, (3) expenses disallowed by the Federal Acquisition Regulations
(FAR) including other direct costs, advertising, interest expense, collections expenses,
gifts, penalties, dividends, recruiting expenses, and entertainment expenses, and (4)
benefits or “burden” if using Direct Personnel Expenses (defined as direct wages plus
customary and mandatory benefits or see Paragraph 11.10.5 below) as the base wage.
profit: An amount in addition to costs that is compensation for the risk involved in an
undertaking. Usually a profit of 10% is allowable on all “at risk” costs.
at risk: Money paid or obligated to be paid for expenses incurred in performing under an
agreement.
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direct wages (dw): Actual salary or wages paid to an individual (W-2). Usually
expressed in hourly units (W-2 divided by 2080 hours), and also called “direct salaries.”
As a warning, under a serious audit, direct hourly wage could be determined as total
annual compensation divided by the number of hours recorded on one’s timesheet
(including overtime). If this is ever applied, the overtime one worked will dilute the
compensation resulting in a lower hourly wage than as derived above. The good news is
that bonuses should be added in to off-set the dilution and may result in a higher hourly
wage.
Direct Personnel Expense (DPE): Direct wages or direct salaries of the Architect's
personnel engaged on the project and the portion of the cost of their mandatory and
customary contributions and benefits related thereto, such as employment taxes and other
statutory employee benefits, insurance, sick leave, holidays, vacations, employee
retirement plans and similar contributions. Direct Personnel Expenses are further defined
as one and thirty-eight one hundredths times direct wages.
consultants’ expense (ce): All costs of consultants hired to perform services on behalf of
the client.
other direct costs (odc): Costs, other than direct wages and consultants’ expense that are
specifically project related including expenses for reproductions, delivery, plotting,
travel, communications, etc., commonly called “reimbursable expenses.”
factor: Used with overhead and profit to describe the raw percentage for calculating.
(i.e. our profit factor is 10%).
multiplier: Used with overhead and profit to describe the number that when used to
multiply the base number yields the combined result (i.e. our profit multiplier is 1.10)
Accounting:
Actual Cost: We have arbitrarily set our overhead factor as 176% of direct wages as our
break even overhead costs. This results in an overhead multiplier of 2.76 times direct
wages. In fact, our overhead costs multiplier usually runs in the 3.1 to 3.4 times direct
wages range after bonuses.
Profit in Billing Rates: We have arbitrarily set our profit factor as 25% of our actual
costs to set personnel billing rates.
Profit on Reimbursable Expenses: We have arbitrarily set our profit factor as 10% of our
actual other direct costs or a multiplier of 1.1 times other direct costs (reimbursables).
Mark-up on Consultants’ Expenses: We have arbitrarily set the multiplier for
consultants’ expenses as 1.20 times the consultants’ expense. This is derived as follows
as a percentage of the consultants’ expense:
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Professional liability insurance premium
Administrative personnel expenses
Overhead expense
Total costs
2%
4%
3%
9%
Profit
10%
Thus: [ce + (ce x 9%)] x 1.1 = 1.2 x ce
or
1.2 times consultants’ expense
Project Budgets and Job Costs: When we evaluate project budgets, we use the multiplier
of 2.76 times direct wages to determine the break-even costs or “job cost.” The 2.76
multiplier is derived as follows:
dw + (dw x 1.76) = 2.76 x dw
or
2.76 times direct wages for actual Job Costs
Billing Rates: When we set billing rates we use the multiplier 3.45 times direct wages to
determine our rates. The 3.45 multiplier is derived as follows:
[dw + (dw x 1.76)] x 1.25 = 3.45 x dw
or
[dw + (dw x 1.76)] = {[dw = (dw x 1.76)] x .25} = 3.45 x dw
or
3.45 times direct wages for Billing Rates
Payroll Burden for DPE: We arbitrarily use a factor of 38 % as our payroll burden to
determine our Direct Personnel Expense (defined as direct wages plus customary and
mandatory benefits or see Paragraph 11.10.5 below). Our actual “burden” can range
from as low as 25% to over 50% depending on many factors
Displaying Billing Rates:
When we are required to display our billing rates we should say:
“Direct Personnel Expense (defined as direct wages plus customary and
mandatory benefits or see Paragraph 11.10.5 below) times 2.5 equals Billing
Rate”
or
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“DPE (defined as direct wages plus customary and mandatory benefits or see
Paragraph 11.10.5 below) x 2.5 = Billing Rate.”
When we use this terminology we must capitalize the words Direct Personnel Expense
we should always define it since the AIA Agreement no longer defines the term.
The multiplier of “2.5 times” has become imprinted in our clients’ perception of
“normal” fees and this presentation seems to assuage that perception.
Some clients want further explanations of billing rates and we can display the following:
“Direct wages times (defined as direct wages plus customary and mandatory
benefits or see Paragraph 11.10.5 below) 1.38 burden factor times 2.5 equals
Billing Rate.”
The client can recognize this “double” multiplier and object so we try to avoid this type
of display in favor of just giving the all ready calculated billing rates in a chart with a
derivation sentence that helps to obscure the double multiplier such as:
“The billing rates set out above are determined by multiplying our Direct
Personnel Expense (defined as direct wages plus customary and mandatory
benefits or see Paragraph 11.10.5 below) for each classification by a factor of
125% for overhead expenses and, after combining those expenses, applying a
10% profit factor.”
If we have to display direct wages and the multiplier thereto we should display the
following:
“Direct wages times 3.45 overhead and profit multiplier equals Billing Rate”
If they want further breakdowns for profit display the following:
“Direct wages times 3.14 overhead multiplier times 1.1 profit multiplier equals
Billing Rate”
This really exposes the highness of our rates and we have been forced to “reduce” our
terms. Also, the 3.14 multiplier cannot be supported by our financial statements as it
includes the “other” 15% profit. However, in no case should we reduce our Billing Rates
below the following:
“Direct wages times 2.76 overhead multiplier times 1.1 profit multiplier equals
Billing Rate.”
This last computation results in rates that are just above break-even and to go any lower
would result in us performing services at below cost or losing money. Special Principal
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permission is necessary to use any lowered Billing Rate. If permission is given, the
Principal’s bonus shall be reduced by all losses incurred on a resulting project.
Another aspect of billing rates is the selection of categories of personnel. Short of
naming each individual by name (something that should never be done except under the
direst circumstance, again with Principal permission), we group personnel by job
classifications as follows:
Classification
low
high
average
Typical Categories (good until July 2009):
Principal
Project Manager
Project Architect
(Senior) Architect
(Architectural) Designer
CAD (Draftsman)
Clerical
189.75
131.10
113.85
106.95
84.53
70.73
41.40
293.25
162.15
143.75
172.50
112.13
82.80
48.30
235.74
140.31
133.41
128.51
97.84
75.90
44.85
48.30
62.10
52.89
189.75
148.35
189.75
127.65
258.75
113.85
Special categories:
Student
Specification Writer
Report Writer
Cost Estimator
Construction Coordinator
Special Skills (Historical, etc.)
Interior Designer
To give us as much wiggle room as possible we should always use the highest rate in
each category. If the fee may be subject to Federal DCAA audit, we should use the
average rate. We can also “play” with who we put in each category.
We “escalate” the rates we give to the mid-point of the duration of the project. This can
be done by compounding the rates about by a factor of 1.05 (5% annual increase) for
each year of duration.
The use of the billing rates is important. If the rates are only going to be used to develop
lump-sum fees, the importance of applying this rationale is more limited. However, if
these rates may or will be used to multiply actual time times by these rates for billing
purposes, this we must be very cognizant of using every rationale to obtain the highest
rates possible. We do not pad hours to make up for any deficiencies in billing rates so we
will lose money as sure as if we threw money out the window if we negotiate bad rates.
We cannot provide services where the rate we are permitted to bill is less than our cost.
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Whenever we use billing rates as specific numbers we should always add the following
language:
“The rates given are current (escalated) rates and are subject to adjustments in
accordance with our normal salary review practices.”
So in summary, when you are required to give rates, try a give rates only for generalized
categories of personnel (i.e. Principal, Project Manager, Architect, CAD Operator,
Clerical). If generalized categories are acceptable be sure to at least give an averaged rate
for each category (including averaged escalation for the duration of the Project), but
strive to use the highest rate in each category. If the Owner insists on specific personnel
rates, give them a copy of the rates for our entire staff with each employee identified by
their Social Security number listing only the billing rate (dw x 3.45) for each, again
including averaged escalation for the duration of the Project. Also include a caveat that
the rates given are subject to change and that personnel may be added to or deleted from
our staff.
§ 11.2 For Additional Services designated in Section 4.1, the Owner shall compensate the Architect as
follows:
(Insert amount of, or basis for, compensation. If necessary, list specific services to which particular
methods of compensation apply.)
The same discussion in Section 11.1 above applies here and should be consistent in fee
breakdown methodology as the Basic Services. Note that this goofy new document
results in two numbers for the contracted services. One may find it less cumbersome to
delete this Section and rewrite Section 11.1 to include both Basic Services and designated
Additional Services under one Section.
§ 11.3 For Additional Services that may arise during the course of the Project, including those under Section
4.3, the Owner shall compensate the Architect as follows:
(Insert amount of, or basis for, compensation.)
We should rewrite this Section as follows:
Ҥ 11.3 For Additional Services that may arise during the course of the Project,
including those under Section 4.3, the Owner shall compensate the Architect a
negotiated lump-sum amount or, absent a negotiated lump-sum agreement, on an
hourly basis at two and one-half times the Architect’s Direct Personnel Expense
(defined as direct wages plus customary and mandatory benefits or see Paragraph
11.10.5 below).”
§ 11.4 Compensation for Additional Services of the Architect’s consultants when not included in Section
11.2 or 11.3, shall be the amount invoiced to the Architect plus
( ), or as otherwise stated below:
Delete the Section and replace it with the following language:
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“§ 11.4 Compensation for Additional Services of the Architect’s consultants shall
be the amount invoiced by the consultant to the Architect multiplied by one and
two tenths.”
As explained above, the rationale is that we are entitled to costs and profit on all “at risk”
investments. Our costs include 2% for our increased professional liability, 4% for related
administrative services (solicitation, proposal, negotiation, contracting, billing and
payments), 3% for related G&A expenses (postage, banking, data processing and
depreciation). 10% is a reasonable rate of profit. When multiplied out this results in a 1.2
multiplier.
You may elect to use this Section 11.5 for our lump-sum (stipulated sum) fee
arrangements instead of under 11.1, but I don’t recommend it. Beware that 11.5
addresses Basic Services only. Again, the goofy split of Basic and Additional Services is
not covered in this matrix and you will have to amend the language to combine them or
do another matrix for the Additional Services portion. Usually we do the math and
display the actual amount as opposed to citing a percentage that has to be recalculated
each time. Also, using rounded percentages erodes the fees credibility and that our fee is
nothing more than a WAG.
§ 11.5 Where compensation for Basic Services is based on a stipulated sum or percentage of the Cost of the
Work, the compensation for each phase of services shall be as follows:
Schematic Design Phase
Design Development Phase
Construction Documents
Phase
Bidding or Negotiation Phase
Construction Phase
Total Basic Compensation
one hundred
percent (
percent (
percent (
%)
%)
%)
percent (
percent (
%)
%)
percent (
100
%)
We should delete Section 11.6 in its entirety since we do not ever provide services under
a contingent percentage of the Cost of the Work since it is an inherent conflict of interest.
§ 11.6 When compensation is based on a percentage of the Cost of the Work and any portions of the Project
are deleted or otherwise not constructed, compensation for those portions of the Project shall be payable to
the extent services are performed on those portions, in accordance with the schedule set forth in Section
11.5 based on (1) the lowest bona fide bid or negotiated proposal, or (2) if no such bid or proposal is
received, the most recent estimate of the Cost of the Work for such portions of the Project. The Architect
shall be entitled to compensation in accordance with this Agreement for all services performed whether or
not the Construction Phase is commenced.
§ 11.7 The hourly billing rates for services of the Architect and the Architect’s consultants, if any, are set
forth below. The rates shall be adjusted in accordance with the Architect’s and Architect’s consultants’
normal review practices.
(If applicable, attach an exhibit of hourly billing rates or insert them below.)
Employee or Category
Rate
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We prefer to keep the second sentence of this Section above, particularly if the Project is
using hourly rates. See the discussion under 11.1 for what to include here if you want to
use this Section. Otherwise I suggest you delete the first sentence and the chart below it.
§ 11.8 COMPENSATION FOR REIMBURSABLE EXPENSES
§ 11.8.1 Reimbursable Expenses are in addition to compensation for Basic and Additional Services and
include expenses incurred by the Architect and the Architect’s consultants directly related to the Project, as
follows:
.1
Transportation and authorized out-of-town travel and subsistence;
.2
Long distance services, dedicated data and communication services, teleconferences, Project
Web sites, and extranets;
.3
Fees paid for securing approval of authorities having jurisdiction over the Project;
.4
Printing, reproductions, plots, standard form documents;
.5
Postage, handling and delivery;
.6
Expense of overtime work requiring higher than regular rates, if authorized in advance by
the Owner;
.7
Renderings, models, mock-ups, professional photography, and presentation materials
requested by the Owner;
.8
Architect’s Consultant’s expense of professional liability insurance dedicated exclusively to
this Project, or the expense of additional insurance coverage or limits if the Owner requests
such insurance in excess of that normally carried by the Architect’s consultants;
.9
All taxes levied on professional services and on reimbursable expenses;
.10 Site office expenses; and
.11 Other similar Project-related expenditures.
Paragraph 11.8.1 pretty well covers every possible expense we could claim for
reimbursement. However if we know of something big it would be good to note it here.
Generally this list is edited for project specific reimbursables and Owner idiosyncrasies.
Things like “overtime” stick in Owners’ craws and they refuse to include it as a
reimbursable expense even though it requires their authorization. Subparagraph 11.8.1.9
covers us in the event sales taxes get levied on architectural services
§ 11.8.2 For Reimbursable Expenses the compensation shall be the expenses incurred by the Architect and
the Architect’s consultants plus
( ) of the expenses incurred.
In all cases add the following language in the blank as follows:
“one and one tenths (1.1)”
As explained above, the rationale is that we are entitled to a profit on all at risk
investments. 10% is a reasonable rate of profit. We are at risk because we pay for the
expense first and get reimbursed later. If the Owner has a big problem with this
provision, get them to pay directly for all expenses by setting up a reproduction house
account, give us their messenger and delivery service account numbers, having them buy
our airfare tickets for us, etc., etc.
§ 11.9 COMPENSATION FOR USE OF ARCHITECT’S INSTRUMENTS OF SERVICE
If the Owner terminates the Architect for its convenience under Section 9.5, or the Architect terminates this
Agreement under Section 9.3, the Owner shall pay a licensing fee as compensation for the Owner’s
continued use of the Architect’s Instruments of Service solely for purposes of completing, using and
maintaining the Project as follows:
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Good luck on getting Owners to swallow this Section above. A fair number for this
amount would be the anticipated profit on the unpaid balance of the fee, as it was in the
old B141 version. This is a wide open issue that has to be carefully crafted with the
termination for convenience provision.
§ 11.10 PAYMENTS TO THE ARCHITECT
Unless the client is Charles, we typically do not ask for an initial payment. We usually
delete Paragraph 11.10.1 below in its entirety or we enter “none” in the amount. If we do
get an initial payment, fill-in the appropriate amount.
§ 11.10.1 An initial payment of
($ ) shall be made upon execution of this Agreement and is the
minimum payment under this Agreement. It shall be credited to the Owner’s account in the final invoice.
We typically fill-in “thirty (30)” in the blank in the middle of this Paragraph and add
“eight percent per annum” at the end.
§ 11.10.2 Unless otherwise agreed, payments for services shall be made monthly in proportion to services
performed. Payments are due and payable upon presentation of the Architect’s invoice. Amounts unpaid
( ) days after the invoice date shall bear interest at the rate entered below, or in the absence thereof at the
legal rate prevailing from time to time at the principal place of business of the Architect.
(Insert rate of monthly or annual interest agreed upon.)
The last sentence of the Paragraph below is key in that it does not allow the Owner to
reduce or “hold” our fee for errors or omissions until we are found to be liable in court.
Try and keep this language at all costs”
§ 11.10.3 The Owner shall not withhold amounts from the Architect’s compensation to impose a penalty or
liquidated damages on the Architect, or to offset sums requested by or paid to contractors for the cost of
changes in the Work unless the Architect agrees or has been found liable for the amounts in a binding
dispute resolution proceeding.
Good practice requires we keep the Paragraph below intact.
§ 11.10.4 Records of Reimbursable Expenses, expenses pertaining to Additional Services, and services
performed on the basis of hourly rates shall be available to the Owner at mutually convenient times.
We usually must add the following since the term Direct Personnel Expense is no longer
defined in the Agreement but it is a critical component of our fee negotiations:
Ҥ 11.10.5 Direct Personnel Expense is defined as the direct salaries of the
Architect's personnel engaged on the Project and the portion of the cost of their
mandatory and customary contributions and benefits related thereto, such as
employment taxes and other statutory employee benefits, insurance, sick leave,
holidays, vacations, employee retirement plans and similar contributions. Direct
Personnel Expenses are further defined as one and thirty-eight one hundredths
times direct wages.”
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ARTICLE 12 SPECIAL TERMS AND CONDITIONS
Special terms and conditions that modify this Agreement are as follows:
Here is a catch all for anything you (or the Owner) want to add.
ARTICLE 13 SCOPE OF THE AGREEMENT
§ 13.1 This Agreement represents the entire and integrated agreement between the Owner and the Architect
and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement
may be amended only by written instrument signed by both Owner and Architect.
Read this Section above, it means what it says. All prior discussion, handshakes,
agreements or promises vanish unless they are embraced in this agreement. We typically
attach or otherwise bind into the agreement our proposal(s), our consultants’ proposals
(with appropriate redactions) and anything else that defines our scope of work. If the
Owner says the Project will be a “piece of cake,” make sure the agreement includes the
piece of paper that says it will be a piece of cake. The fill-in blanks in Section 13.2
below are the appropriate place to list these documents and attachments.
§ 13.2 This Agreement is comprised of the following documents listed below:
.1
AIA Document B101™–2007, Standard Form Agreement Between Owner and Architect
.2
AIA Document E201™–2007, Digital Data Protocol Exhibit, if completed, or the following:
After the two documents cited above you should add the words “…as amended.” Amend
and add language to include any other relevant documents such as your proposal, the
RFP, consultants’ proposals, correspondence, etc.
.3
Other documents:
(List other documents, if any, including Exhibit A, Initial Information, and additional scopes
of service, if a, forming part of the Agreement.)
List all of the Exhibits that are to be attached to this agreement in this blank.
This Agreement entered into as of the day and year first written above.
OWNER
ARCHITECT
(Signature)
(Signature)
(Printed name and title)
(Printed name and title)
GWWO’s signature line should be filled-in with the words, “Grieves Worrall Wright &
O’Hatnick, Inc./Architects” above the signature line leaving room for a signature of a
Principal of the firm. This is the firm’s legal name and must be used on all legal
documents.
Typically we prepare a written proposal to negotiate services and fees. This proposal
should be attached to the agreement as an Exhibit and we should go through B101-2007
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to make sure the language is in parity with what we proposed. For instance, if we are
including Civil Engineering in our services, we have to make the changes to reflect this
Additional Service. We should include the appropriate information that it is the
Architect’s responsibility and identify the location of the description of those services
(usually the civil engineers proposal).
Contracts typically should be presented to Owners without any signatures so that if they
fail to sign the agreement we don’t have a unilateral contract hanging out there. At least
two copies should be delivered to the Owner requesting the Owner’s signature on both
copies and returning both copies to us for final signatures. Instruct the Owner that we
will return a fully signed copy to them for their files after we sign the agreement.
XLDP, our professional liability insurance carrier has published a book entitled, “XLDP’s
Contract Guide.” This book should be consulted for additional language changes and
language for special applications that may apply to a given client.
Every Owner/Architect Contract form prepared by an Owner or any B101-2007
agreement with substantial changes should be reviewed by our attorneys, Howard G.
Goldberg at Goldberg, Pike & Besche, PC, telephone 410-468-1360. This can be
accomplished by faxing a copy with a transmittal requesting a review to 410-539-2392.
© Copyright 2008 GRIEVES WORRALL WRIGHT & O’HATNICK, INC./ARCHITECTS
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