Conditions of the Contract

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Conditions of the
Contract
ACT 380
1
Objective
To provide an overview of the Conditions of
the Contract, their purpose, content, and
relationship to other parts of the Project
Manual
2
What is their purpose?
O Define the basic rights, responsibilities, and
relationships of the entities involved in the
performance of the contract
O The conditions are a part of the ownercontractor agreement and are “general
clauses” of the agreement
3
2 Major Conditions of the
Contract:
O General Conditions – usually published
standard documents that include principles
common to most construction contracts
O Supplementary Conditions – specially
prepared to modify and expand the general
conditions as needed to fit the unique
requirements of a specific project
4
A/E’s Interest in Conditions of the
Contract:
Although the A/E doesn’t sign the ownercontractor agreement, their common
duties/responsibilities may be described
there
5
A/E’s Duties/Responsibilities:
O Act as the Owner’s representative by
O
O
O
O
O
O
O
routinely visiting the site to observe &
evaluate progress
Validate the progress of the work in order to
authorize payments at various stages
Prepare Change Orders
Clarify & Interpret the construction
documents
Approve/Disapprove authority on submittals
Review shop drawings
Reject defective work
Determine dates of substantial & final
completion
6
General Conditions (GC)
O It is typical to use a standard document
published by AIA or EJCDC
O AIA A201; A201/CMa (construction
manager); A201/SC (supplementary
conditions)
O There are also abbreviated owner-contractor
agreements which contain shortform
general conditions (used for less complex
projects)
7
GC
O Federal, state & local government agencies
usually produce standard general conditions
documents that they require be used on
projects
O Sometimes large A/E firms develop their
own documents
8
GC Related to Type of Contract
O Standard general conditions are based on
the concept of a Single Prime Contract
O If a Multiple Prime Contract is used, the
general conditions document should be
designed for this (e.g., AIA Document
A201/CMa)
9
GC
O Should always be bound (or may be
incorporated by reference) into the Project
Manual
O See pages 5.24 & 5.25 (AIA format -Section 5.4.1.1)
O See page 5.25 (EJCDC format – Section
5.4.1.2)
10
Supplementary Conditions
(SC)
O Modify and expand the general conditions
O May accommodate such items as:
O Specific project conditions
O Owner’s varying requirements
O Office procedures
O Unusual aspects of the project
11
SC Subjects Which Require
Provisions
O Insurance requirements
O Progress payments
O Wage rate requirements
O Equal employment opportunity requirements
O Liquidated damages
O Retainages
O Tax exempt status of the owner
12
SC Considerations
O Should be based on the unique
requirements of each specific project
O Although there are published guidelines for
preparing SC – examples of wording of
modifications – they may not meet the
unique requirements of every project
O Should be prepared in conjunction with the
project bid form & instructions to bidders
because of their interrelationship
13
Coordination w/Division 1—
General Requirements
O Several articles found in the general
conditions are usually expanded in Division
1 – General Requirements (e.g., allowances,
shop drawings, product data, closeout
procedures)
O General & supplementary conditions are
written in paragraph style while Division 1 –
General Requirements as a part of the
specifications, are written in the 3-Part
format
14
Caution !!
O General & supplementary conditions are
conditions of the contract and are NOT
specifications
O The general & supplementary conditions
have LEGAL consequences that are the
owner’s responsibility
O An A/E should not initiate conditions without
approval & guidance from the owner & the
owner’s legal counsel
15
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