Instructions: C132™ – 2019, Standard Form of Agreement Between Owner and Construction Manager as Adviser

 C132™ – 2019, Standard Form of Agreement Between Owner and Construction Manager as Adviser

Synopsis. 

AIA Document C132–2019 provides the agreement between the owner and the construction manager, a single entity that is separate and independent from the architect and the contractor, and who acts as an adviser (CMa) to the owner throughout the course of the project, beginning in the preconstruction phase. AIA Document C132–2019 is coordinated for use with AIA Document B132™–2019, Standard Form of Agreement Between Owner and Architect, Construction Manager as Adviser Edition.

Both C132–2019 and B132–2019 are based on the premise that there will be multiple construction contractors whose contracts with the owner will be administered by the construction manager and the architect under AIA Document A232™–2019. AIA Document C132–2019 is not coordinated with, and should not be used with documents where the construction manager acts as the constructor for the project, such as in AIA Document A133™–2019 or A134™–2019.

For all document details and a record of changes, see the summary » 

 

Using C132–2019.

Cover Page

Date. The date represents the date the Agreement becomes effective. It may be the date that an oral agreement was reached, the date the Agreement was originally submitted to the other party, the date authorizing action was taken or the date of actual execution. Professional services should not be performed prior to the effective date of the Agreement. 

Parties. Parties to this Agreement should be identified using the full address and legal name under which the Agreement is to be executed, including a designation of the legal status of both parties (sole proprietorship, partnership, joint venture, unincorporated association, limited partnership or corporation [general, limited liability, closed or professional], etc.). Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached.

Project. The proposed Project should be described in sufficient detail to identify (1) the official name or title of the facility, (2) the location of the site, if known, (3) the proposed building usage, and (4) the size, capacity or scope of the Project, if known.

 

Article 1 – Initial Information

§ 1.1 Initial Information is provided in Section 1.1. The parties should take care to be as explicit and detailed as possible with respect to the relevant Initial Information.

§ 1.1.4 The parties must set forth the Owner’s anticipated dates for construction commencement and Substantial Completion as those dates are to be incorporated into the Construction Manager’s initial Project schedule.

§ 1.1.11 The AIA publishes standard form Owner-Consultant Agreements, including C103™–2015, Standard Form of Agreement Between Owner and Consultant without a Predefined Scope of Consultant’s Services, which sets the terms and conditions governing the relationship between the Owner and its Consultant. C103–2015 does not include a scope of services and must be paired with another document providing a description of the required services. The AIA also publishes, C201™–2015, Standard Form of Consultant’s Services: Land Survey and C202™–2015, Standard Form of Consultant’s Services: Geotechnical Engineering.

 

Article 2 – Construction Manager’s Responsibilities

§ 2.8.3 Some insurers have written excess policies that expressly state that they apply only in the event the underlying policies are exhausted through payments made by the underlying insurers (sometimes referred to as “actual exhaustion”). Policies that do not expressly require actual exhaustion are interpreted to permit exhaustion of the underlying policies through payments or contributions made by any combination of underlying insurers, insureds or third parties (sometimes referred to as “functional exhaustion”.) Policies that only permit actual exhaustion are counterproductive to settlement, whereas policies that permit functional exhaustion encourage settlement. The intent of this section is to facilitate settlement by requiring that any excess policies allow for functional exhaustion.

§ 2.10 A fill-point has been provided if the parties wish to include items in the centralized electronic document management system that are not listed in Article 3 of E203-2013.

 

Article 4 – Supplemental and Additional Services

§ 4.1.1 The parties should complete the table contained in Section 4.1.1 prior to executing the Agreement. For each Supplemental Service listed, the parties should indicate the party responsible for providing the service in the appropriate column. The Construction Manager is not responsible for any listed Supplemental Service unless specifically so designated in the Responsibility column of the table.

§ 4.1.2.1 This Section provides space for the parties to provide a detailed description of the Construction Manager’s Supplemental Services identified in Section 4.1.1. Alternatively, the parties can identify and reference an exhibit in this section that provides a detailed description of the Construction Manager’s Supplemental Services.

§ 4.1.2.2 This Section provides space for the parties to provide a detailed description of the Owner’s Supplemental Services identified in Section 4.1.1. Alternatively, the parties can identify and reference an exhibit in this section that provides a detailed description of the Owner’s Supplemental Services.

§ 4.2.5 Insert the number of months beyond which the Construction Manager shall be entitled to compensation as Additional Services.

 

Article 8 – Claims and Disputes.

§ 8.2.4 Select from three choices of binding dispute resolution: (1) arbitration, (2) litigation or (3) another method that the parties must identify. Other types of dispute resolution include a dispute resolution board or a mini-trial. For additional information about other methods of dispute resolution, refer to The Construction Industry’s Guide to Dispute Avoidance and Resolution.

 

Article 11 – Compensation

The Construction Manager’s compensation in this section is modeled after the Architect’s compensation in many AIA Owner-Architect Agreements. There are at least ten methods of computing compensation for the Construction Manager’s services. Four of these methods are time-based, reflecting in different ways the time spent by the Construction Manager on the Project. Sample language is provided below for describing three methods of computing compensation:

Multiple of Direct Salary Expense,in which direct salaries of designated personnel are multiplied by a factor representing benefits, overhead, and profit.

Multiple of Direct Personnel Expense,in which the salaries plus benefits of designated personnel are multiplied by a factor representing overhead and profit.

Professional Fee Plus Expenses,in which the salaries, benefits, and overhead of designated personnel are the expense and the fee may be a multiplier, percentage or lump sum representing profit.

Hourly Billing Rates,in which salaries, benefits, overhead and profit are included in the rate for designated personnel.

Other methods, while they may be indirectly related to time expended on the Project, do not use time as a factor in the calculation:

Stipulated Sum,in which compensation is listed as a dollar amount:

Compensation shall be the stipulated sum of ________ ($__), plus the following reimbursable cost items:

Percentage of Cost of the Work,in which compensation is calculated by applying an assumed percentage to the estimated or actual Cost of the Work, whichever is most certain at the time the calculation is made.

Multiple of Consultants’ Billing, in which Consultants’ bills are multiplied by a factor representing the Construction Manager’s administrative costs, overhead, and profit.

Square Footage, in which the square footage of the structure is multiplied by a pricing factor.

Unit Cost, in which the number of certain units such as rooms, acres, etc., is multiplied by a pricing factor.

Royalty, in which compensation is a share in the Owner’s income or profit derived from the built facility.

The AIA makes no recommendation as to the appropriateness of any of these methods of compensation on a particular project, nor does the AIA suggests that the foregoing list includes all methods that are possible, practical or in actual use. The use of any of the compensation methods described above, singly or in combination with other methods, is a business decision for the Construction Manager and the Owner. Further, the AIA makes no recommendations and has no guidelines or schedules that specify the amount of compensation a Construction Manager should be paid.

§ 11.1 Insert the basis of compensation for the Construction Manager’s Basic Services. Sample language is provided below for several of the most widely used methods of compensation.

If a Multiple of Direct Salary Expense is used, include multipliers using words and numerals in the following insert:

Compensation for services rendered by principals and employees shall be based on a multiple of ________ (__) times Direct Salary Expense, which shall be defined as the direct salaries of the Construction Manager’s personnel engaged on the Project excluding any costs of mandatory or customary contributions and benefits. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

If a Multiple of Direct Personnel Expense is used, include multipliers using words and numerals in the following insert:

Compensation for services rendered by principals and employees shall be based on a multiple of ________ (__) times Direct Personnel Expense of Construction Manager’s personnel, plus the following reimbursable cost items. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

If a Professional Fee Plus Expenses is to be used, include the dollar figure and the appropriate multipliers (using words and numerals) in the following insert:

Compensation shall be a Fixed Fee of ________ ($__) plus a multiple of ________ (__) times Direct Personnel Expense. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

Alternatively, the fee (representing profit) may be calculated as a multiplier or percentage.

If Hourly Billing Rates are used, include the cumulative amount for salary, benefits, overhead, and profit to fix each rate using words and numerals in the following insert:

Compensation for services rendered by Principals and employees shall be based upon the hourly billing rates set forth below:

        1. Principals’ time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, the Principals are: (List Principals, such as owners, partners, corporate officers and participating associates.)
        2. Supervisory time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, supervisory personnel include: (List managerial personnel by name or job title, such as general manager, department head or project manager.)
        3. Technical Level I time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level I personnel include: (List those personnel by name or job title who are highly skilled specialists, such as job captains, senior designers, senior drafters, senior planners, senior specifiers or senior construction administrators.)
        4. Technical Level II time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level II personnel include: (List those personnel by name or job title who hold intermediate-level positions relative to Technical Level I, such as professionals awaiting licensure and managers of clerical staff.)
        5. Technical Level III and clerical personnel time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level III and clerical personnel include: (List those personnel by name or job title who occupy junior-level positions, such as word processor or office assistant.)
        6. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

If a Percentage of Cost of the Work is to be used, insert the following:

Compensation shall be ________ percent (__%) of the Cost of the Work, as defined in Section 6.1.

If a Stipulated Sum is to be used, insert the sum in words and numerals in the following sample language:

Compensation shall be a stipulated sum of ________ ($__).

No sample language is provided for compensation based on square footage, unit cost or royalty. Parties choosing one or more of these methods should craft their own language based on the particulars of the Project.

§ 11.2 See methods of compensation shown above for Section 11.1.

§ 11.3 See methods of compensation shown above for Section 11.1.

§ 11.4 See methods of compensation shown above for Section 11.1, if other than a percentage of the invoiced amount.

§ 11.8.1 Insert the dollar amount of the initial payment.

 

Article 12 – Special Terms and Conditions

Insert any modifications to the standard text of the document, if the modifications are not otherwise inserted elsewhere in the document. For more information about modifying the document, refer to the Modifications section of these Instructions.

 

Executing the agreement.

The persons executing AIA Document C132–2019 should indicate the capacity in which they are acting (i.e., president, secretary, partner, etc.) and the authority under which they are executing the Agreement. Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached.

 

Important.

Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or modifying a document.

Reproductions. This document is a copyrighted work and may not be reproduced or excerpted from without the express written permission of the AIA. There is no implied permission to reproduce this document, nor does membership in The American Institute of Architects confer any further rights to reproduce this document. For more information, see the document footer and the AIA Contract Documents® Terms of Service.

Was this article helpful?
1 out of 1 found this helpful
Have more questions?
Submit a request