Using AIA Contracts - Owner / Contractor Agreements

Navigating AIA Owner / Contractor Agreements: A Guide to Contract Content and Specifics

Part 2 of a Series

AIA Contract Documents

When embarking on a construction project, it is crucial to establish clear expectations and responsibilities between the owner and contractor. AIA (American Institute of Architects) contracts provide a reliable framework for such agreements. In this article, we will explore AIA's owner/contractor agreements, including A101, A102, A103, and A104. Understanding the content and specifics of these contracts is essential for successful construction project management.

A101 – Standard Form of Agreement Between Owner and Contractor

The A101 contract is a widely used owner/contractor agreement that outlines the general terms and conditions for construction projects. It establishes the fundamental relationship between the owner and contractor. Key provisions covered in A101 include:

1. Scope of Work: Clearly defines the project's scope, specifications, and deliverables.

2. Contract Price and Payment Terms: Outlines the agreed contract price, payment schedule, and methods of payment.

3. Change Orders: Establishes a process for handling changes to the project scope, including documentation and cost adjustments.

4. Contract Duration: Specifies the project's start and completion dates, as well as any provisions for time extensions.

5. Termination: Describes conditions and procedures for contract termination, including the rights and obligations of both parties.

A102 – Standard Form of Agreement Between Owner and Contractor for a Cost Plus Fee with a Guaranteed Maximum Price

The A102 contract is used when the owner wants to establish a guaranteed maximum price (GMP) for the project while also allowing for cost-plus-fee compensation. Key provisions covered in A102 include:

1. Guaranteed Maximum Price (GMP): Sets the maximum amount the owner will pay for the project.

2. Cost Reimbursement: Outlines how costs are reimbursed to the contractor, including documentation and verification processes.

3. Fee Calculation: Defines the method for determining the contractor's fee based on a percentage of the actual construction costs.

4. Savings and Overruns: Addresses how savings or overruns in project costs are handled, including provisions for sharing or retaining the savings.

5. Change Orders and Adjustments: Establishes the process for handling changes to the project scope and associated cost adjustments within the GMP framework.

A103 – Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee without a Guaranteed Maximum Price

The A103 contract is similar to A102 but does not include a guaranteed maximum price. Instead, it allows for cost-plus-fee compensation without a set limit. Key provisions covered in A103 include:

1. Cost Reimbursement: Details how costs are reimbursed to the contractor, including tracking and documentation requirements.

2. Fee Calculation: Specifies the method for calculating the contractor's fee based on a percentage or fixed fee, separate from project costs.

3. Change Orders and Adjustments: Outlines the process for handling changes to the project scope and associated cost adjustments without a GMP limitation.

4. Reporting and Auditing: Establishes reporting requirements and auditing rights to ensure transparency and accountability in cost management.

5. Termination: Describes conditions and procedures for contract termination, including the rights and obligations of both parties.

A104 – Standard Abbreviated Form of Agreement Between Owner and Contractor

The A104 contract is a simplified and abbreviated version of the A101 agreement. It is typically used for smaller-scale projects with less complexity. Key provisions covered in A104 include:

1. Scope of Work: Defines the project scope, specifications, and deliverables in a concise manner.

2. Contract Price and Payment Terms: Specifies the contract price, payment schedule, and methods of payment.

3. Change Orders and Adjustments: Provides a streamlined process for handling changes to the project scope, including documentation and cost adjustments. 4. Contract Duration: Specifies the project's start and completion dates, as well as any provisions for time extensions in a concise manner.

4. Termination: Describes conditions and procedures for contract termination, including the rights and obligations of both parties.

A105 – Standard Short Form of Agreement Between Owner and Contractor

The A105 contract is another abbreviated version of the A101 agreement, commonly used for small-scale construction projects of limited scope. Key provisions covered in A105 include:

1. Scope of Work: Clearly defines the project's limited scope, specifications, and deliverables.

2. Contract Price and Payment Terms: Outlines the agreed contract price, payment schedule, and methods of payment.

3. Change Orders: Provides a simplified process for handling changes to the project scope, including documentation and cost adjustments.

4. Contract Duration: Specifies the project's start and completion dates, as well as any provisions for time extensions in a concise manner.

5. Termination: Describes conditions and procedures for contract termination, including the rights and obligations of both parties.

Using AIA Contracts - Owner/Contractor Agreements play a crucial role in establishing a clear understanding and framework for construction projects. The A101, A102, A103, A104, and A105 contracts provide specific guidelines and provisions tailored to different project scenarios, offering flexibility and protection for both owners and contractors. By familiarizing yourself with the content and specifics of these contracts, you can navigate your construction projects more effectively, minimize risks, and ensure successful outcomes.

It is always recommended to consult legal professionals and refer to the official AIA contract documents for comprehensive understanding and implementation.

References:

1. AIA Contract Documents: Official website of the AIA contract documents.

2. A101-2017: Standard Form of Agreement Between Owner and Contractor.

3. A102-2017: Standard Form of Agreement Between Owner and Contractor for a Cost Plus Fee with a Guaranteed Maximum Price.

4. A103-2017: Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee without a Guaranteed Maximum Price.

5. A104-2017: Standard Abbreviated Form of Agreement Between Owner and Contractor.

6. A105-2017: Standard Short Form of Agreement Between Owner and Contractor.

Jay Holland is the publisher of Archidoodles with over 40 years of experience as a builder, developer, investor, consultant, marketer, and broker for commercial properties ranging from raw land to urban mixed-use developments. He has been a pioneer in the development and use of digital media, databases, and related cutting-edge publishing tools for the promotion of both properties and services within the design, build, and operating disciplines. You can contact him at jholland@archidoodles.com.