Instructions: A104™–2017, Standard Abbreviated Form of Agreement Between Owner and Contractor

Synopsis. 

AIA Document A104–2017 is a stand-alone agreement with its own internal general conditions and is intended for use on construction projects of limited scope and complexity. A104-2017 replaces AIA Document A107™-2007, Standard Form of Agreement Between Owner and Contractor for a Project of Limited Scope. It may be used for projects where payment is based on either a stipulated sum or the cost of the work plus a fee, with or without a guaranteed maximum price. Parties using AIA Document A104–2017 will also use A104 Exhibit A, Determination of the Cost of the Work, if using a cost-plus payment method. AIA Document B104™–2017, Standard Abbreviated Form of Agreement Between Owner and Architect, coordinates with A104–2017 and incorporates it by reference.

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

 

Using A104–2017.

Cover Page

Date. The date represents the date the Agreement becomes effective. It may be the date an original oral agreement was reached, the date the Agreement was originally submitted to the Owner, the date authorizing action was taken or the date of actual execution. It will be the date from which the Contract Time is measured unless a different date is inserted under Section 2.1.

Parties. Parties to the 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. Other information may be added, such as telephone numbers and electronic addresses.

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; and (3) a brief description of the Project, including the proposed building usage, size, and capacity or scope of the Project.

Architect. The Architect’s full legal or corporate title should be used.

Article 2 – Date of Commencement and Substantial Completion

The following items should be included as appropriate:

§ 2.1 The date of commencement of the Work should be identified by checking the appropriate box. The date of commencement could be the date of this Agreement, a date set forth in a notice to proceed issued by the Owner, or another date using a method established by the parties. It is important to note that if a selection is not made, the default will be the date of the Agreement.

§ 2.3.1 The time within which Substantial Completion of the Work is to be achieved may be expressed as a number of calendar days or as a specified date. Select the appropriate box and insert the date or number of days as appropriate. If a specified date is used and the date of commencement is to be given in a notice to proceed, these dates must be carefully coordinated to allow sufficient time for completion of the Work.

§ 2.3.2 Where portions of the Work may be occupied and used prior to Substantial Completion of the entire Work, each portion of the Work can be described in this section and the Substantial Completion date for each portion of the Work may be indicated.

Article 3 – Contract Sum

§ 3.1 Check the box next to the method used for determining the Contract Sum (lump sum, percentage of Cost of the Work with a Guaranteed Maximum Price, or percentage of Cost of the Work without a Guaranteed Maximum Price). Based upon the selection, complete either Section 3.2, or 3.3, or 3.4.

§ 3.2 Enter the Contract Sum payable to the Contractor if using a Stipulated Sum.

§ 3.2.1 If using a Stipulated Sum, identify any alternates described in the Contract Documents and accepted by the Owner. If decisions on alternates are to be made subsequent to execution of AIA Document A104–2017, attach a schedule showing the amount of each alternate and the date it expires.

§ 3.2.2 Identify unit prices, and state quantity limitations, if any, to which the unit price will be applicable.

§ 3.2.3 Identify and state the amounts of any allowances.

§ 3.3.2 Enter the method used for determining the Contractor’s Fee (lump sum, percentage of Cost of the Work or other method) and explain how the Contractor’s Fee will be adjusted for changes in the Work.

§ 3.4.2 Enter the method used for determining the Contractor’s Fee (lump sum, percentage of Cost of the Work or other method) and explain how the Contractor’s Fee will be adjusted for changes in the Work.

§ 3.4.3.1 Insert a Guaranteed Maximum Price for the Cost of the Work and the Contractor’s Fee. Insert specific provisions if the Contractor is to participate in any savings when the final Contract Sum is below the Guaranteed Maximum Price.

§ 3.4.3.2 Identify any alternates described in the Contract Documents and accepted by the Owner. If decisions on alternates are to be made subsequent to execution of A104–2017, attach a schedule showing the amount of each alternate and the date it expires.

§ 3.4.3.3 Identify unit prices and state quantity limitations, if any, to which the unit price will be applicable.

§ 3.4.3.4 Identify and state the amounts of any allowances.

§ 3.5 Insert the amount and any conditions for liquidated damages relating to failure to achieve Substantial Completion of the Work, or designated portion of the Work, on time. Liquidated damages are not a penalty to be inflicted on the Contractor, but must bear an actual and reasonably estimable relationship to the Owner’s loss if construction is not completed on time. If a provision for liquidated damages is included, it should be carefully drafted by the Owner’s attorney and acceptable to the Contractor’s attorney. For further information on liquidated damages see AIA Document A503™, Guide for Supplementary Conditions.

Article 4 – Payments

§ 4.1.2 Insert the time period covered by each Application for Payment if it differs from the one given.

§ 4.1.3 Insert the time schedule for presenting Applications for Payment, and indicate due dates for making progress payments.

The last day upon which Work may be included in an Application should normally be no less than 14 days prior to the payment date, in consideration of the seven days required for the Architect’s evaluation of an Application and issuance of a Certificate for Payment and the time subsequently accorded the Owner to make payment. The Contractor may prefer a few additional days to prepare the Application.

Due dates for payment should be acceptable to both the Owner and Contractor. They should allow sufficient time for the Contractor to prepare an Application for Payment, for the Architect to certify payment, and for the Owner to make payment.

§ 4.1.4 Indicate the percent of retainage, if any, to be withheld when computing the amount of each progress payment.

The Owner frequently pays the Contractor the bulk of the earned sum when payments fall due, retaining a percentage to ensure faithful performance. These percentages may vary with circumstances and localities. The AIA endorses the practice of reducing retainage as rapidly as possible, consistent with the continued protection of all affected parties. See AIA Document A503–2007, Guide for Supplementary Conditions, for a complete discussion.

§ 4.1.5 Enter any agreed-upon interest rate for overdue payments.

§ 4.2.2 Insert the date by which Owner shall make final payment, if it differs from the one stated.

Article 5 – Dispute Resolution

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 or visit adr.org for more information.

Article 6 – Enumeration of Contract Documents

A detailed enumeration of all Contract Documents must be made in this article. Where optional documents are listed in Section 6.1.7.1 that will be incorporated as Contract Documents, check the appropriate box and insert an appropriate description of the document. List additional documents in Section 6.1.7.2 that will form part of the Contract Documents.

Article 7 – General Provisions

§ 7.9.1 Section 7.9.1 allows the Owner and Contractor to provide notice in electronic format. It is recommended that the parties use AIA Document E203™–2013, Building Information Modeling and Digital Data Exhibit, to establish the protocols for electronic communication. If E203–2013 is not used, insert the requirements for delivering notice in electronic form such as the name, title, and email address of the recipient and whether the system will be required to generate a read receipt (recommended). While notice in electronic form may be provided as set forth in this provision, other protocols for the use or transmission of digital data and BIM are established through the use of E203-2013, pursuant to Section 7.7.

Article 17 – Insurance and Bonds

§ 17.1 Contractor’s Insurance

§ 17.1.1 Where the Contractor is required to maintain required insurance for a duration other than the period for correction of the Work, indicate the duration of required coverages in the fill point provided.

§ 17.1.2 Indicate the applicable coverage limits for the Contractor’s commercial general liability coverage.

§ 17.1.3 Indicate the applicable coverage limits for the Contractor’s automobile liability coverage.

§ 17.1.4 Some insurers have written excess policies which 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”). Polices 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 “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

§ 17.1.6 Indicate the applicable coverage limits for the Contractor’s employer’s liability coverage.

§ 17.1.7 Indicate the applicable coverage limits for the Contractor’s professional liability coverage, if applicable.

§ 17.1.8 Indicate the applicable coverage limits for the Contractor’s pollution liability coverage, if applicable.

§ 17.1.9 Where the Contractor will provide professional liability and pollution liability coverage under a combined policy, indicate the applicable coverage limits.

§ 17.1.14 If the Contractor will be required to purchase and maintain other insurance, list the type of coverage and any applicable coverage limits.

§ 17.2 Owner’s Insurance

§ 17.2.3 If the Owner will be required to purchase and maintain other insurance, list the type of coverage and any applicable coverage limits.

Article 19 – Miscellaneous Provisions

§ 19.4 Identify the Owner’s representative and provide contact information.

§ 19.5 Identify the Contractor’s representative and provide contact information.

Article 20 – Termination of the Contract

§ 20.3 Insert the amount of any termination fee or the method for calculating the termination fee. For example, the Owner and Contractor may agree to progressively increase the termination fee up to fifty percent completion and then agree to progressively reduce the Contractor’s termination fee until final completion. Another example would be to begin with a large termination fee that is progressively reduced as the project progresses.

Exhibit A – Determination of the Cost of the Work

Exhibit A provides the definition for the Cost of the Work and a detailed listing of the costs to be reimbursed and those costs not to be reimbursed. If the Contract Sum is a Stipulated Sum, in accordance with Section 3.2 of the Agreement, Exhibit A is not applicable.

§ A.1.2.2.1 Identify the wages or salaries of supervisory and administrative personnel that will perform Work away from the site, the type of activity, and, if applicable, any agreed percentage of time to be devoted to the Work.

 

Executing the agreement.

The persons executing AIA Document A104–2017 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.

ISO® is a registered trademark and Insurance Services Office™ and the titles of the ISO proprietary insurance forms identified herein are trademarks of Insurance Services Office, Inc. (“ISO”). Information which is copyrighted by and proprietary to Insurance Services Office, Inc. or its affiliates (“ISO Material”) is included and referenced in this publication. Use of the ISO Material is limited to ISO Participating Insurers and their Authorized Representatives and other licensees, in each case as licensed by ISO. Use by ISO Participating Insurers is limited to use in those jurisdictions for which the insurer has an appropriate participation with ISO. Use of the ISO Material by Authorized Representatives is limited to use solely on behalf of one or more ISO Participating Insurers, as licensed by ISO.

 

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..

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