Less Negotiating, More Building: The Flexible Contract Worth Considering

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There is no “one size fits all” when it comes to contracts between owners and architects, which is why we have outlined the benefits of standard AIA Documents, like the B101, for architects in the past. That contract allows for addendum lists and references to be customized for covering numerous details of one large project. But, architects pursuing multiple projects with the same client would still need to renegotiate those details every …single … time. What some may not know is that there is an easier way to go about it: using the AIA’s Master Agreements for architects and owners as well as for architects and consultants.

Industry research by the institute in 2012 revealed that task orders, or master agreements and service orders, as the AIA calls them, were some of the most requested documents in the industry. Those who had past experience with the task-order structure, encountered often in government contracts, saw the potential for master agreements in their own business. AIA attorney Joshua Ballance, who helped craft these master agreements, says they were created to simplify long-term relationships and allow architects and consultants to better establish repeat business.

“In my practice, I’ve found that you may do multiple projects with the same owner, and you may do projects on a yearly basis, but if you’re renegotiating your contract every time, it may change over the course of a number of years and different people will want to change the terms,” says Ballance. “What this document allows you to do is negotiate the basic contractual terms up front with the owner and then later establish the scope of services and the architect’s fee by executing a service order.”

The Master Agreement itself has no obligation for either party, but it sets general standards like insurance requirements that will apply to each new project. This way individual service orders function as “mini-contracts” providing for any additional, project-specific needs. “It’s meant to be flexible, and it’s meant to streamline the contractual process,” says Ballance. “In essence, it makes many contracts fall under a similar set of terms rather than one contract for each separate project.”

The B121 will automatically renew every year unless the parties agree to discontinue it, but it still applies to every service order issued while it was valid. With a master agreement in place, architects and owners can be confident their most important terms are in effect from the beginning to the end of every project. For Ballance, this means architects can put more emphasis on what they do best: “If you have an owner that you were doing repeat business with, our thinking was: let’s allow architects to get negotiations out of the way and focus on the work to be done, rather than renegotiating the contract every time.”

Consultants and architects can also enjoy these easier negotiations with the similar C421, which functions in the exact same way. “Architects may have a favorite consultant that they are using on multiple projects,” says Ballance, “The C421 would allow them to set initial terms in the master agreement, and, then, as the architect is awarded projects, they could then simply sign a service order with the consultant to bring them onboard.” In a nutshell, it’s a simpler process that expedites consultants’ help when it is needed.

The AIA has been producing documents to meet architects’ needs for more than a century. Consistent updates to their core documents are released every decade. While updating the core documents is a multiyear process (Ballance and his team have already been working on the 2017 release for some time), a 30-person committee still looks for new ways to better serve the industry in the meantime.

For consultants and architects already accustomed to the AIA core documents, Ballance says that they will find the language they know and trust is still there but differently arranged to provide these additional benefits. For those practitioners who work much in the institutional segment, potential contracts with large developers or any relationship that may be ongoing, Ballance’s advice is that “This is a document worth considering.”

Get free samples of the AIA Master Agreements.

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