A comparison of ConsensusDOCS to the AIA form construction contract agreements

• Published in: Construction Lawyer Vol. 29; no. 1; p. 11
• Main Authors: Stein, Steven G.M, Wietecha, Ronald O
• Format: Newsletter Trade Publication Article
• Language: English
• Published: Chicago American Bar Association 01.01.2009
• Subjects: Agreements; Architects; Building; Comparative analysis; Construction contracts; Construction industry; Contracts; Design; Differences; Endorsements; General contractors; Responsibilities; Roles; Standardized terms of contract; Subcontractors; United States > US
• ISSN: 0272-0116

The A201 provides for the architect's traditional involvement in project execution as both a necessary design services provider and a key player in contract administration. Under the A201, the architect has substantial, although limited, authority to administer the contract (§ 4.2.1). Such authority includes inspecting (without responsibility for means, methods, or quality) (§ 4.2.2), making reports to the owner on project progression (§ 4.2.3), reviewing and making recommendations on applications for payment (§ 4.2.5), rejecting nonconforming work (§ 4.2.6), reviewing and approving submittals (§ 4.2.7), preparing change orders and directives (§ 4.2.8), authorizing minor changes in the work (§ 7.4), preparing substantial and final completion certificates (§ 4.2.9), responding to requests for information (RFIs) (§ 4.2. 14), ordering additional testing (§ 13.5.2), and objecting to the contractor's superintendent, if warranted (§ 3.9.2). In the ConsensusDOCS family of agreements, most of these responsibilities become the owner's, with the assistance and recommendations of the architect.21 The only approval or review authority that the architect is directly involved with regarding the contractor's construction activities under the ConsensusDOCS is to certify pay applications (CD 200 K 9.2.1 and CD 240 K 3.2.8.5). Otherwise, the architect is only assisting and advising the owner through such activities as reviewing and advising the owner regarding the schedule of values (CD 240 ? 3.2.8(1)), coordinating the project schedule with the schedule of the work (CD 240 K 3.2.8(2)), responding to contractor requests for information (CD 240 Tf 3.2.8(4)), and reviewing the contractor's submittals (CD 240 ? 3.2.8.1). Under the ConsensusDOCS agreements, the owner has far greater responsibility for administering the contract with the contractor. One way that subcontractors benefit under the AIA documents is through the incorporation of the A201 into the A401 subcontractor agreement. The ConsensusDOCS 200, being a unitary agreement and general conditions, does not allow for such ease of use as an incorporated set of conditions for the independent use of the CD 750, the subcontractor form of agreement. Thus, the CD 750 only provides for the flow-through of the retainage release benefits in CD 200 Tf 9.2.4.3 if the contractor's agreement with the owner is made using a CD 200 form. Moreover, § 1.2 of the A401 provides that the terms of the A401 control when there is a conflict between them and the A201. In this way, the independent mutual consequential damages waiver in A401 § 15.4 supersedes any modifications to the owner-contractor consequential damages waiver that may have been negotiated in that agreement. Under CD 750 Tf 5.4.1, the subcontractor is bound to whatever consequential damage waiver has been negotiated by the contractor with the owner under their CD 200, leaving the subcontractor unable to negotiate its own independent consequential damages waiver terms with the contractor. There are several ways in which subcontractors would be better situated under the AIA documents than under the ConsensusDOCS agreements. A201 § 9.3.1.2 prohibits the contractor from including amounts in its payment applications that it does not intend to pay to its subcontractors. Also, the contractor is not permitted to withhold a higher percentage from its payments to subcontractors than what the owner withholds from the contractor for the subcontractors' work under A201 § 9.6.2. On the other hand, CD 750 Tf 8.2.4 requires owner approval for onsite materials storage payment even though such approval is not required for the contractor's entitlement for stored materials payment under the CD 200. Finally, the CD 750 contains no mutual indemnification like that in CD 200 Tf 1 0. 1 , so that the subcontractor does not receive the same rights relative to the contractor as the contractor enjoys relative to the owner. The AGC 200 contained at ¶ 3.8.2 a provision that the warranty on work performed after substantial completion ran from the work's completion. This was removed from CD 200 ¶ 3.8. Going beyond the entitlement to an extension of time for delays not caused by the contractor in ¶ 6.3.1, the AGC 200 ¶ 6.3.2 contractor damages limitation for delay caused by force majeure events was replaced by an explicit entitlement by the contractor to an equitable adjustment for delays caused by the owner, architect, changes in the work, and other causes in CD 200 ¶ 6.3. 2.43 Another advantageous addition for the contractor in the CD 200 is the obligation of the owner to mitigate its damages caused by the contractor's default, which was added to ¶ 11.3.4. The CD 200 removed the AGC 200 ¶ 3.13.7.3 contribution waiver for the indemnity the contractor provides for materials brought to the worksite. The CD 200 imposes an additional threeday notice by the owner following the initial seven-day takeover notice in ¶ 11.2. Additionally, CD 200 ¶ 9.2.2 removed from the AGC 200 the owner approval required for payment for materials stored onsite. Finally, the requirement on the contractor to add the owner as an additional insured on the contractor's CGL policy in AGC 200 ¶ 10.3.1 was changed to the optional additional liability coverage the owner may pay the contractor to obtain in CD 200 ¶ 10.5.