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Construction Contracts with Private Owners

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  1. Construction Contracts with Private Owners • Common Contract Documents Used • AIA Documents • AGC Documents • EJCDC Documents

  2. Standardized Forms Issued by industry and professional associations and governmental agencies for use in private and public projects. The most commonly used ones are prepared by: AGC - Associated General Contractors of America AIA - American Institute of Architects ASCE - American Society of Civil Engineers CEC - Consulting Engineers Council EDA - Economical Development Association EPA - Environmental Protection Agency FHA Farmers Home Administration HUD - Housing and Urban Development

  3. Standardized Formscontinued JPL - Jet Propulsion Laboratory NASA - National Aeronautics and Space Administration NAVFAC- Naval Facilities Engineering Command NSPE - National Society of Professional Engineers SCS - Soil Conservation Service USBR - US Bureau of Reclamation USCE - US Army Corps of Engineers (joint) - Contract Documents for Federally-assisted Water and Sewer Projects EDA; EPA; FHA; HUD; ACEC; APWA; ASCE; AGC; NSPE; NUCA

  4. AIA Document A201 • General Conditions of the Contract for Construction • 1999 Edition • This document has been approved and endorsed by the Associated General Contractors of America • Used in private work • Entire document is in text. READ EVERY WORD!

  5. AIA A201Articles, 1999 • 1. General Provisions • 2. Owner • 3. Contractor • 4. Administration of the Contract • 5. Subcontractors • 6 Construction by Owner or by Separate Contractors • 7. Changes in the Work • 8. Time

  6. AIA A201Articles, 1999 • 9. Payments and Completion • 10. Protection of Persons & Property • 11. Insurance & Bonds • 12. Uncovering & Correction of Work • 13. Miscellaneous Provisions • 14. Termination or Suspension of the Contract

  7. Article 1General Provisions CONTRACT DOCUMENTS CONSIST OF: • Agreement between Owner and Contractor • Conditions of the Contract General, Supplementary & other Conditions • Drawings • Specifications • Addenda issued prior to execution of the Contract • Other documents listed in the Agreement and Modifications issued after execution of the Contract

  8. A Modification is: • A written amendment to the Contract signed by both parties • Change Order • Construction Change Directive or • A minor change in the work issued by the Architect.

  9. The Contract Documents • Shall not be construed to create a contractual relationship: • Between the Architect & Contractor • Between the Owner & a Subcontractor or Sub-subcontractor • Between any persons or entities other than the Owner and Contractor

  10. Article 2Owner • The Owner shall furnish the Contractor reasonable evidence that financial arrangements have been made • Surveys’ describing physical characteristics, legal limitations and utility locations • Information or services under the Owner’s control

  11. Article 3Contractor • The Contractor shall pay • Sales taxes • Consumer use taxes • And similar taxes

  12. The Contractor will not perform work to be contrary to: • Laws • Statutes • Ordinances • Building codes, rules, regulations • The Contractor shall employ a competent superintendent

  13. The Contractor shall • Review, approve & submit to the architect shop drawings, product data, samples and similar submittals required by the contract • Provide the owner and architect accesses to the work

  14. Indemnification • The Contractor shall indemnify and hold harmless the Owner, Architect, Architect’s consultants, and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of the work

  15. Article 4Administration of The Contract • The architect will provide administration of the contract • During construction until final payment is due • Advise and consult with the owner and visit the site • Make inspections to check quality or quantity of work • Keep the owner informed of progress • Guard against defects and deficiencies • Review and certify the amounts due the contractor • Issue certificates for payment • Have authority to reject work and approve contractor’s submittals • Prepare change orders and directives, and may authorize minor changes

  16. Architect Will Review Claims • Take actions within ten days: • Request additional supporting data • Submit schedule • Reject the claim in whole or in part, stating reasons for rejection • Recommend approval of the Claim • Suggest a compromise

  17. Arbitration • In accordance with the Rules of American Arbitration Association • The award rendered by the arbitrator shall be final

  18. Article 5Subcontractors • The Contractor shall not • contract with a proposed person whom the owner or Architect has made reasonable and timely objection • be required to contract with anyone whom the Contractor has made reasonable objection

  19. Subcontractors • The Contractor shall not contract with a proposed person whom the owner or Architect has made reasonable and timely objection • Be required to contract with anyone whom the Contractor has made reasonable objection

  20. Article 6Construction By OwnerOr Separate Contract • Use owner’s workforce • Separate contract new company • Owner provides coordination • Owners right to clean up and to charge the contractors

  21. Article 7Change In Work May be accomplished by: • Change order • Change directive • Minor change order

  22. Change Orders • A Change Order is a written instrument prepared by the Architect and signed by the Owner, Contractor and Architect, stating their agreement upon all of the following: • Change in the Work • Change in the Contract Sum • Change the Contract Time

  23. Construction Change Directives • A written order prepared by the Architect and signed by the Owner • Directing a change in the Work • Shall be used in the absence of total agreement on the terms of a Change Order • Change Order is based upon agreement among the Owner, Contractor and Architect

  24. Minor Changes In The Work • Architect will have authority to order minor changes in the Work • Not involving adjustment in the Contract Sum or extension of the time • Such changes shall be effected by written order and shall be binding

  25. Article 8Time • Contract Time is the period of time for Substantial Completion • The date of commencement of the work is the date established in the agreement • The term day as used in the Contract documents shall mean calendar day

  26. Article9Payments & Completion • Schedule of values • Applications for payment • Certificates for payment • Decisions to withhold certification • Progress payments • Failure of payment • Substantial completion • Partial occupancy or use • Final completion and final payment

  27. Article 10Prot of Persons &Property • Safety Programs • Contractor shall take reasonable precautions • Hazardous materials • Emergencies

  28. Article 11Insurance & Bonds • Protects Contractor from claims or damage • Under workmen’s compensation • Because of bodily injury, sickness, or death of the Contractor’s employees • Same for any person other than the Contractor’s employees • Insured by usual personal injury liability coverage • Other than to the Work itself because of injury to or destruction of tangible property • Because of bodily injury death of a person or property damage arising from use of a motor vehicle and • Liability insurance applicable to the Contractor’s obligations under indemnification

  29. Certificates Of Insurance • Acceptable to the Owner shall be filed with the Owner prior to commencement of the work • Certificates will not be cancelled until at least 30 days’ prior written notice has been given to the Owner

  30. Owner’s Liability Insurance The Owner shall be responsible for purchasing and maintaining the Owner’s usual liability insurance

  31. Property Insurance • The Owner shall purchase property insurance • This insurance shall include interests of the Owner, the Contractor, Subcontractors and Sub-subcontractors • Property insurance shall be on an all-risk policy form and shall insure against “The perils of fire physical loss or damage including theft, vandalism malicious mischief, collapse, falsework, temporary buildings and debris removal including demolition”

  32. Waivers of Subrogation • The Owner and Contractor waive all rights against each other and • Any of their subcontractors, sub-subcontractors, agents and employees, each of the other, and • The Architect, Architect’s consultants, separate contractors • And any of their subcontractors, sub-subcontractors

  33. Performance & Payment Bonds Thc Owner shall have the right to require the Contractor to furnish bonds covering faithful performance

  34. Article 12Uncovering & Correction of Work • Uncovering work for Architect’s examination • Who pays • Conditions • Corrections • Before or after Substantial Completion • Acceptance of nonconforming work

  35. Article13Miscellaneous Provisions • Governing law • Successors and assigns • Written notice • Rights and remedies • Acceptance of nonconforming work • Tests and inspections • Interest

  36. Article14Termination Or Suspensionof the Contract Contractor may terminate the Contract if: • A court or other public authority having jurisdiction orders it • An act of government, such as a declaration of national emergency • Architect has not issued a Certificate for Payment • If repeated suspensions, delays or interruptions by the Owner • Owner has failed to furnish to the Contractor promptly reasonable evidence of financing.

  37. Termination ByThe Owner for Cause • The Owner may terminate the Contract if the Contractor: Persistently refuses to supply enough properly skilled workers or proper materials • Fails to make payment to Subcontractors for materials or • Persistently disregards laws, ordinances, or rules, regulations or orders of a public authority • Otherwise is guilty of substantial breach of a provision of the Contract Documents

  38. Suspension By The Owner For Convenience The Owner may, without cause, order the Contractor in writing to suspend, delay or interrupt the Work