December 19, 2005
Over the last fifteen years, the design-build project delivery system has increased dramatically in popularity on traditional vertical construction projects. Project owners however, have become increasingly concerned that the standard forms of agreement for design build projects do not adequately address their needs.
In response to these concerns, the American Institute of Architects (“AIA”) undertook a complete overhaul of the designbuild forms of agreement. The result of this overhaul is the introduction of five completely new forms of agreement and the retirement of the 1996 series (the A191, A491 and the B901).
The new agreements are as follows:
- A141-2004 Agreement Between Owner and Design-Builder (replaces A191-1996)
- A142-2004 Agreement Between Design-Builder and Contractor (replaces A491-1996)
- B142-2004 Agreement Between Owner and Consultant Where the Owner Contemplates Using the Design-Build Method of Project Delivery (no 1996 counterpart)
- B143-2004 Agreement Between Design-Builder and Architect (replaces B901-1996)
- G704-2004 Acknowledgment of Substantial Completion of a Design-Build Project (no 1996 counterpart)
The AIA’s Answer to Bridging
Of course, what distinguishes the design-build delivery system from the traditional design-bid- build delivery system is that the architect and builder are joined together to offer a complete package. While this form of delivery system has certain advantages, owners have come to realize that with the design-build-delivery system, the Owner has less overall control in seeing to it that the Owner’s “intent” is clearly articulated. Out of this concern arises a concept known as “Bridging.” In essence, Bridging is defined as the Owner’s means of conveying its intent to the design-build team.
Bridging can take on various forms. The Owner can take on a more expansive role, in which the Owner has much more say in the design, or the Owner can take on a limited role, and simply set forth its intent in a more conceptual manner.
The new AIA documents address the Bridging concepts directly. The AIA has created a design-build agreement between an Owner and consultant for any initial services that the Owner may require when considering design-build delivery. The B142-2004 Agreement between owner and consultant, where the owner contemplates using the design-build method of the project delivery consists of the Agreement itself and two exhibits. Exhibit A contains initial information, including project parameters and information about the project team. To allow for flexibility, Exhibit B contains a menu or checklist of the consultant’s proposed scope of services. For those familiar with the AIA document B141(1997), the B142 Consultant Agreement follows a very similar format. The parties simply select those services they expect the consultant to perform. Additionally, the agreement between design-builder and architect (AIA B143) utilizes the same menu for selection of services, for consistency.
Those familiar with AIA Agreements will recall that the standard dispute resolution provisions in the past called for non-binding mediation as a condition precedent to binding arbitration. Under the new design-build documents, the requirement of mediation as a condition precedent to other forms of dispute resolution remains. However, the new documents now require that the parties choose among three methods for dispute resolution. The parties can choose binding arbitration, litigation or a third method by the parties own election. If the parties do not choose a binding method of dispute resolution, litigation is the default selection.
Departure from the AIA A201 General Conditions
The terms and conditions in the 1996 family of design-build documents incorporated the AIA A201 General Conditions of the Contract for Construction. The AIA documents A141 Agreement between Owner and Design-Builder no longer incorporates the A201 form, but rather contains its own general conditions as Exhibit A to the Agreement. The AIA document A142 Agreement Between Design-Builder and Contractor also contains its own general conditions.
“Acknowledgment” of Substantial Completion On the typical construction project, the Architect serves as the Owner’s representative and handles much of the project administration, including the certification of substantial completion of the project. On a design-build project, the architect, being part of the design-build team, generally does not carry the same administrative functions. Recognizing this, the AIA has prepared a new form entitled “G704/db Acknowledgment of Substantial Completion of a Design-Build Project.” which requires the owner to inspect the project and acknowledge the date when substantial completion occurs. The form is a variation of the G704-2000 Certificate of Substantial Completion.
The new AIA design-build documents were drafted with the understanding that each Owner approaches a design-build project with different experiences and different criteria. While it may take some period of adjustment before those in the construction business become comfortable with the forms, the use of the “menu option” gives the owner as well as the design-build team more flexibility to make the project work to all parties’ satisfaction. To the extent that the parties are uncomfortable with the format, the AIA suggests, simply removing the exhibits to the Agreement and having the parties create their own substitute exhibits.
The changes to the AIA design-build documents are extensive in nature and cannot possibly be fully summarized in this newsletter. Rather, this article shall serve as notice to our readers that the family of AIA Design-Build Agreements has changed dramatically. If any of our readers have specific questions regarding the agreements or this article, feel free to contact the author directly.