A232–2019 General Conditions of the Contract for Construction, Construction Manager as Adviser Edition
Changes from the previous edition
Dispute Resolution—Mediation and Arbitration
AIA Document A232–2019 sets forth the rights, responsibilities, and relationships of the owner, contractor, construction manager and architect. A232–2019 is adopted by reference in owner/architect, owner/contractor, and owner/construction manager agreements in the CMa family of documents. Under A232–2019, the construction manager serves as an independent adviser to the owner, who enters into multiple contracts with prime trade contractors.
CAUTION: Do not use A232–2019 in combination with agreements where the construction manager takes on the role of constructor, such as in AIA Document A133™–2019 or A134™–2019.
For use and execution of a document, see its instructions »
AIA Document A232–2019, General Conditions of the Contract for Construction, Construction Manager as Adviser Edition, is considered the keystone document of the Construction Manager as Adviser family of documents because it provides the terms and conditions under which the Owner, Construction Manager as Adviser, Contractor and Architect will work together during the building construction process. When adopted into an Owner-Contractor agreement, AIA Document A232–2019 provides an essential component of the construction contract. In addition, A232–2019 is incorporated by reference into the Owner-Construction Manager as Adviser and Owner-Architect agreements in the Construction Manager as Adviser Family of Documents.
A232–2019 is incorporated by reference into three other Construction Manager as Adviser documents:
A132™–2019, Standard Form of Agreement Between Owner and Contractor, Construction Manager as Adviser Edition;
B132™–2019, Standard Form of Agreement Between Owner and Architect, Construction Manager as Adviser Edition; and
C132™–2019, Standard Form of Agreement Between Owner and Construction Manager as Adviser.
The Contract Documents, including A232–2019, record the Contract for Construction between the Owner and the Contractor. The other Contract Documents are the Owner-Contractor agreement, Supplementary Conditions, Drawings, Specifications, and Modifications. Although the AIA does not produce standard documents for Supplementary Conditions, Drawings or Specifications, a variety of model and guide documents are available, including AIA’s MASTERSPEC and AIA Document A533™, Guide for Supplementary Conditions.
On construction projects, contractual relationships are created between owners, architects, architects’ consultants, contractors, subcontractors, sub-subcontractors, and others down through the multiple tiers of participants. If custom-crafted agreements were written in isolation for each of those contractual relationships, the problems of overlaps and gaps in the numerous participants’ responsibilities could lead to mass confusion and chaos. To prevent and solve this problem, the construction industry commonly uses standardized general conditions, such as AIA Document A232–2019, for coordinating those many relationships on the project by its adoption into each contract.
The AIA expends significant time and resources in the development of A232 and its related agreements to provide coordinated linkages in the tiers of legal relationships. AIA documents related to A232 are crafted with common phrasing, uniform definitions and a consistent, logical allocation of responsibilities down through the tiers of relationships. Together these documents are known as the Construction Manager as Adviser family of documents, and are listed below:
A132–2019, Agreement Between Owner and Contractor, Construction Manager as Adviser Edition
A533–2019, Guide for Supplementary Conditions, Construction Manager as Adviser Edition
B132–2019, Agreement Between Owner and Architect, Construction Manager as Adviser Edition
C132–2019, Agreement Between Owner and Construction Manager as Adviser
E235-2019, Sustainable Projects Exhibit, Construction Manager as Adviser Edition
The Construction Manager as Adviser family is augmented by a number of standard contract administration documents (G-Series) generally used for processing payments to the Contractor and formalizing changes in the Work.
Insurance and Bonds.
Unlike previous editions of AIA Document A232, which included general contractual terms regarding insurance, insurance terms related to the type and amount of coverage are included in the Insurance and Bonds Exhibit to the Owner-Contractor agreement, A132–2019. This Insurance and Bonds Exhibit forms an integral part of the Contract for construction and allows the parties to establish key insurance terms related to the Project. Failure to use the Insurance and Bonds Exhibit could result in the parties having little or no insurance coverage to respond to a loss or third-party claim related to the Project. The AIA encourages you to discuss the Insurance and Bonds Exhibit, along with Article 11 of AIA Document A232–2019, with your insurance broker and legal counsel so that insurance appropriate to your company and Project can be put in place before the start of construction.
Changes from the previous edition.
AIA Document A232–2019 revises AIA Document A232–2009 to reflect changes made in construction industry practices and the law, and changes made in AIA documents in 2017, including A201–2017.
A number of substantial changes have been made to A232–2019. The principal changes are described below:
Article 1 – General Provisions
§ 1.1.1 The last sentence of this section has been modified to recognize that portions of Addenda relating to both bidding and proposal requirements are excluded from the Contract Documents unless agreed otherwise. Previously, the document only specifically excluded portions of Addenda relating to bidding requirements.
§ 1.1.5 This new section defines Contractors as persons or entities, other than the Contractor or Separate Contractors, who perform Work under contracts with the Owner that are administered by the Architect and Construction Manager. The term Multiple Prime Contractors is no longer used in the document.
§ 1.1.6 This new section defines Separate Contractors as persons or entities who perform construction under separate contracts with the Owner not administered by the Architect and Construction Manager.
§ 1.1.10 This section has been revised to clarify that the initial decision-maker may not show partiality to the Owner or Contractor and will not be liable for the results of interpretations and decisions rendered in good faith.
§ 22.214.171.124 This new provision has been included to avoid a situation where the entire Contract, or a provision of the Contract, may be rendered invalid because a provision of the Contract is held invalid or unenforceable by a court of law or arbitrator(s). Where a provision of the Contract has been deemed invalid or unenforceable, such provision will be read out of the Contract to the extent necessary to maintain the validity and enforceability of the remainder of the Contract or provision.
§ 1.6 The section on written notice has been moved from Article 13 to Article 1. In addition, the revised provision requires that all notices under the Contract be in writing. Additionally, language has been included that allows the parties to provide notice through electronic means, such as email. Notice of Claims may not be provided electronically and must be delivered to the designated representative of the party to whom the notice is addressed by certified or registered mail, or by courier providing proof of delivery.
§ 1.7 Formerly Section 1.6 in AIA Document A232–2009, this section now requires the use of AIA Document E203™–2013, Building Information Modeling and Digital Data Exhibit, for the development of protocols for the transmission of Instruments of Service or other data in digital form.
§ 1.8 This new section requires the parties to develop protocols for the use of, and reliance on, a building information model or portion thereof. Use of, or reliance on, a building information model without established protocols will be at the using or relying parties sole risk. This provision requires the use of AIA Document E203–2013 and AIA Document G202™–2013, Project Building Information Modeling Protocol Form, for the establishment of these protocols.
Article 2 – Owner
§ 2.2 The provisions requiring the Owner to provide evidence that it has made financial arrangements for the Project have been modified for clarity. The Contractor’s right to request financial information remains largely unchanged from the 2009 edition. However, new language has been added as Section 2.2.4 to recognize that financial information provided by the Owner should be treated as confidential by the Contractor.
§ 2.5 Revisions to this section clarify that when the Contractor defaults or neglects to carry out the Work in accordance with the Contract Documents, the Owner may correct the Work and the Construction Manager or Architect may withhold or nullify a Certificate for Payment to the extent reasonably necessary to reimburse the Owner for the cost of correction. Previously, this provision required a Modification to the Contract Documents to effectuate the withholding. A Modification is impractical because it would require agreement by the Contractor to the withholding. If the Contractor disagrees with the withholding, it may make a Claim in accordance with Article 15.
Article 3 – Contractor
§ 3.3.1 This section has been modified to address concerns that the Contractor could be required to perform construction means or methods specified in the Contract Documents that it deems unsafe. Under the new language, where the Contractor deems construction means and methods proposed in the Contract Documents to be unsafe, it may perform under alternative means and methods provided the Architect or the Construction Manager does not object.
§ 3.5.2 This new provision requires that material, equipment, and other special warranties (e.g. a twenty-year roof warranty) must be written in the name of the Owner or be transferable to the Owner and will commence in accordance with Section 9.8.4.
§ 3.7.4 Feedback from various industry participants suggested that the 21- day period in A201-2007 for the Contractor to report concealed or unknown conditions was unnecessarily long. The reporting period was shortened to 14 days in A201®-2017, and the same revision was made in this section.
§ 3.10.1 This section has been expanded to require that the Contractor’s schedule contain detail appropriate to the Project, including: (1) the date of commencement, interim milestone dates, and the date of Substantial Completion; (2) an apportionment of the Work by construction activity; and (3) the time required for completion of each portion of the Work. These changes are meant to balance the need for a more detailed schedule with the ability to use AIA Document A232–2019 on projects of differing complexity.
§ 3.11 Revisions to this section clarify that the Contractor may maintain Contract Documents, Change Orders, Construction Change Directives, and other Modifications at the site in electronic format.
§ 126.96.36.199 In certain circumstances, the Contractor may hire its own design professionals to design specific portions of the Work-based on design criteria provided by the Architect. This new section requires that the Contractor provide the Owner, Construction Manager, and Architect with certification from its design professional that construction Work based on the design professional’s design has been completed in accordance with the design criteria.
Article 4 – Architect and Construction Manager
§ 4.2.6 In order to allow for direct communication between the Owner and Construction Manager while maintaining the Architect’s ability to remain abreast of discussions relating to or affecting its duties on the Project, this section has been modified to state that the Architect is required to be included in conversations between the Owner and Construction Manager only when related to the Architect’s services or professional responsibilities. The Owner is required to notify the Architect of conversations that relate to the Project even when they do not affect the Architect’s services or professional responsibilities.
Article 6 – Construction by Owner or by Separate Contractors
§ 6.1.1 The term Separate Contractors is now defined at Section 1.1.6.
Article 7 – Changes in the Work
§ 7.4 Revisions to this section clarify that the Contractor should not proceed with a minor change in the Work directed by the Architect if the Contractor believes that the change will affect the Contract Sum or Contract Time. If the Contractor proceeds without giving notice to the Construction Manager that it believes a change in the Contract Sum or Contract Time is warranted, it waives any right to a change resulting from the changed Work.
Article 8 – Time
§ 8.3.1 Revisions to this section clarify that adverse weather conditions as set forth in Section 188.8.131.52 may entitle the Contractor to an extension of the Contract Time. In addition, for other causes not enumerated, the Contractor must make an assertion that must be approved by the Architect, based on the recommendation of the Construction Manager.
Article 9 – Payment and Completion
§ 9.1.2 Section 7.3.4 of AIA Document A232–2009 regarding unit prices has been moved to Section 9.1.2.
§ 9.2 This section has been modified to require that changes to the schedule of values must be submitted to the Construction Manager and will be used as the basis for reviewing subsequent applications for payment.
§ 9.3.1 This section has been revised to include releases and waivers of liens as documents that the Owner, Construction Manager, and Architect may require to accompany an application for payment.
§ 9.4.1 This section has been revised to clarify that the Architect has three options with respect to the Contractor’s Application for Payment. The Architect may: (1) issue a Certificate for Payment for the full amount of the Application; (2) issue a Certificate for Payment for a portion of the Application and notify the Construction Manager and Owner of its reasons for withholding certification of a portion of the Application; or (3) withhold certification of the entire Application and notify the Construction Manager and Owner of its reason for withholding certification.
§ 184.108.40.206 This section has been revised to include the same three options with respect to the Architect’s review of a Project Certificate for payment as are listed in Section 9.4.1 with respect to a single Contractor’s Application for Payment.
§ 9.6.8 This new provision requires that the Contractor indemnify the Owner for any lien claim or other claim related to payment by a Subcontractor, provided the Owner has fulfilled its obligations under the Contract Documents.
§ 9.8.4 Edits were made to this section to clarify that one Certificate of Substantial Completion will be issued when the Work of all of the Contractors, or designated portion thereof, is substantially complete.
§ 9.10.1 This section has been revised to clarify the inspection process at final completion.
§ 9.10.4 New language has been included stating that the making of final payment by the Owner does not constitute a waiver of claims arising from audits performed by the Owner after final payment, if permitted by the Contract Documents.
Article 11 – Insurance and Bonds
Many of the insurance provisions have been removed from AIA Document A232 and are included in an exhibit to the Owner-Contractor agreement. Sections regarding the waiver of subrogation and the Owner’s obligation to hold insurance proceeds as a fiduciary to the party experiencing a loss remain in AIA Document A232–2019, along with other provisions dealing with failure to purchase or cancellation of required insurance coverage. Detailed instructions for the use of the Owner-Contractor agreement, Insurance and Bonds Exhibit, may be found in the instructions for A132–2019. Note that AIA Document A232–2019 requires that insurance and bonds be issued by companies lawfully licensed to issue insurance and bonds, as the case may be, in the jurisdiction where the Project is located. Information regarding insurers and sureties admitted to write insurance or issue bonds in your jurisdiction can be found by contacting the insurance commissioner in each state. Contact information for each state’s insurance commissioner can be obtained from the National Association of Insurance Commissioners.
As previously stated, the AIA encourages you to discuss the Insurance and Bonds Exhibit, along with Article 11 of AIA Document A232–2019, with your insurance broker and legal counsel so that insurance appropriate to your company and Project can be put in place before the start of construction.
Article 14 – Termination or Suspension of the Contract
§ 14.4.3 The Owner-Contractor agreement has been modified to establish a termination fee that will be agreed to by the parties and payable in the event the Owner terminates the Contractor for convenience. This provision has been revised to reference that the termination fee is payable upon termination of the Contractor for convenience by the Owner. Additionally, revisions have been made to clarify that costs payable to the Contractor under a termination for convenience include costs attributable to terminating subcontracts.
Article 15 – Claims and Disputes
Several changes have been made to this Article. First, the section on “time limits on claims” has been moved to Article 15 from Article 13. Second, revisions clarify that claims occurring before conclusion of the corrections period are subject to a 21- day notice period and are also subject to initial decision by the Initial Decision Maker. Claims made after conclusion of the corrections period are not subject to the 21- day notice requirement and do not require a decision by the Initial Decision Maker. This change is meant to clarify that the reason for the 21- day notice period and decision by the Initial Decision Maker is to keep the Project moving without delay. This is not a necessity following conclusion of the corrections period.
§ 15.1.4 This section has been separated into two subsections. The first, Section 220.127.116.11, includes existing language requiring the Contractor to perform, and the Owner to make payment, in accordance with the Contract Documents pending resolution of a dispute. The second, Section 18.104.22.168, is a clarification of the existing requirement that the Architect issue Change Orders in accordance with the decision of the Initial Decision Maker (IDM). Under the new section, the Contract Sum and Contract Time will be adjusted in accordance with the decision of the IDM, subject to the parties’ rights to proceed to mediation or binding dispute resolution. This distinction is made because a Change Order must be signed by the Owner, Contractor, Construction Manager, and Architect. Where the decision of the IDM is disputed by one of the parties, it is unlikely that the disputing party would be willing to execute a Change Order.
§ 22.214.171.124 Revisions to this section set clear and identifiable time limits. The 2009 version used the date of the initial decision from the Initial Decision Maker as the trigger for both the demand for mediation (30 days from initial decision) and the filing of mediation by the party receiving the demand (60 days from initial decision). This could prove problematic if, for some reason, actual receipt of the initial decision is delayed for some period of time. New language establishes receipt of the initial decision as the trigger for demanding mediation and receipt of the demand as the trigger for the other party to file for mediation. Both time periods have been set to 30 days to allow for speedy resolution of disputes.
§ 15.3.3 A232 has long allowed one party to demand that the other party file for mediation following an initial decision under Section 126.96.36.199. However, if mediation is concluded without resolution of the Claim or mediation is progressing without resolution, a party could not similarly demand that the other party file for binding dispute resolution in order to speed the final resolution of the claim. Section 15.3.3 has been added to allow for one party to demand that the other party file for binding dispute resolution within 30 days from the date mediation is concluded without resolution of a Claim or 60 days after mediation has been demanded without resolution. If the party receiving the demand for binding dispute resolution fails to file within 60 days of receipt of the demand, then both parties waive their right to further pursue the Claim.
§ 15.4.4 This section has been revised to clarify that consolidation and joinder decisions cannot be made at the sole discretion of the party seeking consolidation and joinder but, rather, must be made in accordance with the applicable arbitration rules.
Dispute Resolution—Mediation and Arbitration.
This document contains provisions for mediation and arbitration of claims and disputes. Mediation is a non-binding process, but is mandatory under the terms of this agreement. Arbitration may be mandatory under the terms of this agreement. Arbitration is binding in most states and under the Federal Arbitration Act. In a minority of states, arbitration provisions relating to future disputes are not enforceable but the parties may agree to arbitrate after the dispute arises. Even in those states, under certain circumstances (for example, in a transaction involving interstate commerce), arbitration provisions may be enforceable under the Federal Arbitration Act.
The AIA does not administer dispute resolution processes. To submit disputes to mediation or arbitration or to obtain copies of the applicable mediation or arbitration rules, contact the American Arbitration Association at (800) 778-7879 or visit the website at adr.org.