Flashcards in Contracts Deck (140)
What 7 items are included in the "Contract Documents?" What is not included?
1- O/C Agreement
2- General and supplemental conditions
6- Modifications (ex. change orders)
7- Other documents listed in contract (BIM, Sustainable exhibits, etc)
- bidding documents
- geotechnical report
When does contract time start and end? How is contract time measured?
Start can be:
- date of agreement (default if none selected)
- date set forth in notice to proceed
- other specified date
End = substantial completion
Measured in calendar days.
What are Liquidated damages? What do they represent?
If liquidated damages are asked for in the contract, what provision must also be added?
Fees paid to owner by contractor for every day the project is late due to fault of contractor. It is often accompanied by a bonus provision for contractor for early completion.
- These must represent reasonable losses that the owner expects to incur if project is not completed on time (ie. rent)
A provision must be added to make this enforceable in court.
Per AIA Doc A101 and A201, if the Owner terminates the agreement for their convenience, they must pay...
1. the contractor for all work property executed and costs incurred due to termination, but NOT for overhead/profit
2. all costs attributed to termination of subcontractors
3. an agreed-on termination fee
Per AIA Doc A101, what are progress payments?
How is the amount due calculated in A101? What items do these payments cover?
How is the amount due calculated in A102?
Periodic (usually monthly) payments that the Owner makes as the project progresses based on applications for payment that C submits to A).
Amount due is based on the portion of the contract sum that is properly allocable to the work completed and to any materials/equipment that have been purchased and stored on-site for later use on the project.
- work completed is based on schedule of values
- materials/equipment stored off-site also require payment, but only if Owner's approves in writing in advance.
Amount due is based on the percentage of completed work, PLUS the amount allocated for any materials/equipment purchased and stored for later use.
- % of completed work is based on schedule of values, which allocates the GMP to various portions of the work and includes contingency and contractor's fee
Payment made by the owner to the contractor, upon issuance by the architect of the final certificate for payment, of the entire unpaid balance of the contract sum as adjusted by the final change order.
Final application for payment
The contractor’s formal request for the remaining balance of project funds allocated in the contract, submitted on the directive of the architect after final completion has been determined. The final application for payment is submitted after or contemporaneously with the processing of the final change order.
Final change order
A change order to the contract for construction, executed prior to or contemporaneously with the contractor’s final application for payment, that reconciles outstanding contract cost liabilities and variables such as allowances, contingencies, shared savings, penalties, bonuses, or outstanding additional services costs due the architect.
percentage each payment to Contractor (usually 10%) that Owner withholds until final completion of the work
What are the steps in an Owner-Contractor dispute resolution?
1. Disputes referred to Initial Decision Maker (IDM) = Architect uon
2. IDM reviews claims and supporting evidence
3. IDM must take one of the following actions within 10 days:
- request additional support from claimants
- reject claim in whole or in part
- approve the claim
- suggest a compromise
- advise Owner/Contractorthat IDM is unable to resolve the claim
4. IDM's decision is binding but subject to mediation
5. If mediation does not resolve, it is subject to arbitration or litigation
What are 4 main compensation methods for the construction contract?
1. Stipulated sum
- fixed price known up-front
- typ. used in competitive bidding
2. Guaranteed Maximum Price (GMP)
- if project completed for less than GMP, Owner keeps savings
- if project costs exceed GMP, Contractor pays excess
- Contractor is compensated for actual expenses of labor, materials, and subcontractors plus a fixed fee for profit
- allows construction to proceed before design is complete
- main disadvantage = cost unknown
4. Unit price
- not often used for an entire project, but instead for portions of a project
- often used in excavation projects (ie. cost per cubic yard of material)
What is AIA Doc A102? A103?
A102 = Owner-Contractor Agreement (Cost of Work Plus Fee with GMP)
A103 = Owner-Contractor Agreement (Cost of Work Plus Fee without GMP)
Per AIA Doc A102, can revisions to the Contract Documents be made after GMP is set?
Yes, if revisions are consistent with stated assumptions contained in GMP.
Which payments does AIA Doc A102 not allow as reimbursable expenses to anyone hired by contractor/subcontractor/ vendor/etc, unless Owner has made prior approval?
- profit sharing
- insensitive compensation
- other discretionary payments
What type of advance payments do A102 and A103 forbid the Contractor from making?
Advance payments to suppliers for materials delivered to project site without the Owner's prior approval
Per AIA Doc B101, what are the architect's basic services?
Basic: SD, DD, CD, Bidding, CA
- LEED or other sustainable building rating system certification
- post-occupancy evaluation
If the Owner identifies a sustainable objective, which AIA Document should be added to B101?
E204 Sustainable Projects Exhibit
What are AIA Documents that can be used for protocols for transmission and use of instruments of services or other digital information?
What does it mean if neither of these documents are used?
- AIA Doc E203, Building Information Modeling and Digital Data Exhibit
- AIA Document G202, Project Building Information Modeling Protocol Form
If neither is used, it is risky because there is no liability to the other party, contractors, or consultants when using/relying on digital data.
Per B101, what 5 types of insurance must an architect carry?
1. Professional Liability
2. General Liability
4. Worker's Compensation
5. Employers' Liability
**Architect's insurance must include Owner as an additional insured for claims caused by Architect's negligent acts or omissions
For how long does B101 require A to maintain insurance?
Up to 1 year after substantial completion.
Per B101, when must an architect prepare a preliminary schedule for the performance of their services for the Owner's approval?
What must this schedule include?
Once Owner has approved the schedule, time limits...
As soon as practical after agreement is signed.
- Time for Owner's review
- Performance of Owner's consultants
- Approval of submissions by authorities having jurisdiction
- Expected dates for start of construction and substantial completion
... cannot be exceeded by Architect or Owner except for reasonable cause. But the Architect must keep the project schedule updated during the project and inform Owner of any necessary changes/delays.
Per B101, what are an architect's responsibilities regarding sustainability during SD?
The Architect must consider sustainable design alternatives (including materials, building orientation etc) that are consistent with Owner's program, schedule, and budget.
Per B101, what are the architect's responsibilities regarding a preliminary cost of work?
What must the architect do if the estimate exceeds the budget?
Can the architect guarantee bids or negotiated prices?
The architect must prepare a preliminary cost of work and refine as the design work progresses during prep of Construction Documents.
The architect must make recommendations to the owner to adjust the project's size, schedule, or budget. The owner must cooperate with the architect's suggestions.
No! Neither owner nor architect can guarantee prices, only the Contractor can.
Per B101, what must be received at the end of each phase before the architect can start work on the next phase?
Owner's written approval
Per B101, for what 4 tasks is the architect authorized to act as owner's agent regarding construction procurement services?
What is the architect NOT doing while providing these services?
Architect is authorized to act of Owner's agent for these tasks:
- assisting Owner in obtaining competitive bids or negotiated proposals
- determining responsiveness of bids or proposals
- determining the successful bid proposal
- assisting Owner in awarding the contract and preparing contracts for construction
HOWEVER, A is not providing legal services and is not party to Owner-Contract agreement, which must be drafted by an attorney.
What are the architect's basic services during construction procurement? Additional services?
- produce bidding documents
- distribute bidding documents
- hold pre-bid conferences
- answer questions
- prepare addenda
- participates in bid opening
- if substitutions are allowed per CDs, consider requests for substitutions upon Owner's written authorization
If the bids are higher than the budget, what must the architect do per B101?
The architect must modify the bidding documents to comply with the budget without any additional compensation.
Is this service listed as a basic, additional or supplemental service in B101?
Assisting the Owner in establishing a list of prospective contractors and (following the Owner’s approval of the Construction Documents) assisting the Owner in
(1) obtaining either competitive bids or negotiated proposals;
(2) confirming responsiveness of bids or proposals;
(3) determining the successful bid or proposal, if any; and,
(4) awarding and preparing contracts for construction.
Is this service listed as a basic, additional or supplemental service in B101?
Maintaining a record of the Applications and Certificates for Payment.