The American Institute of Architects (AIA) has for nearly 130 years produced standardized form contracts for the construction industry.  The AIA reviews and updates its form contracts based on industry trends and important decisions, and in 2017 revealed substantive changes to its form documents.  Detailed below are some of the substantive changes made to the more frequently used forms:

• A101-2017; A103-2017 – Standard Form of Agreement Between Owner and Contractor:
  • A new Exhibit was added with comprehensive insurance and bonds provisions.
  • The ability of the Owner and Contractor to directly communicate about the project while maintaining the Architect’s ability to remain informed about communications that affect its services was expanded.
  • It clarified provisions that require the Owner to provide proof that it has made financial arrangements to pay for the project.
  • Provisions for the Contractor to apply for and receive payments were simplified.
• A401-2017 – Standard Form of Agreement Between Contractor and Subcontractor:
  • It now requires the Contractor (within 30 days of request) to furnish the Subcontractor with a copy of any bond covering payment obligations under the subcontract.
  • It now provides that all material, equipment or other special warranties required by the subcontract document shall be issued in the name of the Owner, or shall be transferable to the Owner.
  • The Subcontractor shall no longer be required to provide professional services that constitute the practice of architecture or engineering unless such services are specifically required by the subcontract or unless the Subcontractor is required to provide such services in order to carry out its responsibilities for its own construction means, methods, techniques, sequences and procedures.
  • The parties are now required to equally share any mediation fee.
  • It now includes a waiver of claims for consequential damages, while still allowing an award of liquidated damages.
  • The progress payment mechanism was substantially reworked.
  • It revised the Notice provision to (except for notice of a claim) permit other general notices to be served electronically.

• B101-2017; B103-2017 – Owner-Architect Agreement:
  • A Single Sustainable Exhibit can now be used for any project and added to any AIA contract document to address the risks and responsibilities associated with sustainable services.
  • It now contains a fill point to prompt the parties to discuss and insert an appropriate “Termination Fee” for terminations for convenience.
  • The Architect is no longer required to re-design for no additional compensation if he or she could not have reasonably anticipated the market conditions caused the bids or proposals to exceed the owner’s budget.
  • Additional Services identified at the time of agreement are now categorized as Supplemental Services to avoid confusion with Additional Services that arise during the course of the project.
  • It now clarifies how the Architect’s progress payments will be calculated if compensation is on a percentage basis.

• A201-2017 – General Conditions of the Contract for Construction (frequently incorporated into the base contract):
  • The Insurance provisions were revised to now provide for a separate Insurance Exhibit to allow for greater customization of insurance terms.
  • In the event of a termination for convenience, the Termination provisions now provide for a negotiable termination fee, rather than overhead and profit.
  • Except for notice of a claim, the contract now permits all other general notices to be served electronically.
  • The Liquidated Damages provision now provides greater flexibility to fix the amount and/or to negotiate the terms and rationale behind the damages.
  • An owner’s right to self-perform is now included in the Payments provision.
  • There were revisions to Cost of Work provisions.
  • Revisions to Owner’s Financial Disclosure Requirements now permit the Contractor to stop or suspend work pending proof of Owner’s ability to pay.

Navigating the complex maze of AIA construction documents can be daunting.  If you have questions regarding construction law matters, please contact Joshua Pope or one of the other attorneys in MPBA’s Real Estate Department.