Every 10 years, the American Institute of Architects updates its flagship documents, the core AIA Contract Documents; and right on schedule, it introduced the latest versions at its annual Conference on Architecture in April. These latest updates bring the previous 14 Standard Agreements — drafted for various parties including architects, contractors, subcontractors, consultants and clients — up to date with current issues in the industry and recent court decisions. “The changes impact the roles and responsibilities of each of the parties directly,” says Ken Cobleigh, managing director and counsel of AIA Contract Documents, underlining the importance of each change.
Because the documents are made to be the industry standard for balancing allocation of risk and responsibilities between architects and contractors — and ensuring a project’s success — we’re pointing out the six important new elements that everyone should be paying attention to:
1. Better risk management for sustainable projects
In 2007, greener designs were on the rise throughout the country, and now, 10 years later, that’s even truer. But, these projects still pose their own unique legal risks like expectations for meeting specific certification requirements and higher-than-anticipated costs. The new AIA Single Sustainable Projects Exhibit can be attached to any project and most AIA documents to address the issues that arise when working on sustainable projects. It’s in essence an easy way to come to specific agreements about green projects without reworking the language of an entire contract.
2. More “convenient” terminations for all parties
Since 1997, AIA documents have had a standard termination for convenience clause requiring owners to pay for all executed work but also end the project if their situation changes. Although it’s more complicated than simply walking away when it feels inconvenient, activating these clauses can leave architects and contractors expecting more work in the lurch. AIA documents will now feature a fill point prompt to help foster discussion between parties about what kind of fee would be appropriate in the event that a project never gets completed due to constraints on the owner, making the process a little more convenient for architects and contractors, as well.
3. Compensation for redesigns after the bid
In its efforts to address all issues in the design-bid-build model, the new AIA documents will help keep the process moving smoothly from one phase to another by addressing redesign compensation issues that may arise from unanticipated market conditions. From now on, if market conditions cause bids and proposals to exceed an owner’s budget when they could not have been reasonably predicted, the architect will no longer be required to redesign without additional compensation.
4. Clarified services
Helping to manage expectations over the course of an entire project, all AIA documents work with a standard set of Basic Services and Additional Services that may or may not come up over the course of a project. New AIA documents will now offer more clarity on non-basic (Additional) services by adding in the term Supplemental Services to cover non-basic services that the architect agrees to provide at contracting.
5. Simplified payments
Benefitting owners and architects, new language in the Owner/Architect agreements makes payments easier than ever by clarifying confusion as to how their progress payments should be calculated when compensation is based on a percentage of the budget. Contractors, too, have new simpler standards to follow in order to apply for and receive payments.
6. Reassurance for contractors
A major addition for contractors comes in the form of three ways to have peace of mind going into a contract with owners. Revised provisions continue to require proof that an owner has made adequate financial arrangements for a project. At the same time, a completely new exhibit that can be attached to many of the owner/contractor agreements provides updated insurance and bond provisions, while new language is more permissive of direct communication between owners and contractors throughout the work performed.
These six additions are only a glimpse of the revisions that Cobleigh and his team have been working on for years. In order to help people in the industry better understand what changes have been made and how they conform better to the industry of today, AIA is offering plenty of education opportunities to keep everyone on the same page when it comes to these crucial documents.
“It is critically important that industry professionals learn about the 2017 revisions,” says Cobleigh, emphasizing that comparative versions of 2007 and new 2017 versions are available online. “We hope that all industry participants take advantage of the significant written resources and education programming opportunities available to learn about, and understand, the 2017 revisions and full portfolio of AIA Contract documents.”