Instructions: C103™–2015, Standard Form of Agreement Between Owner and Consultant without a Predefined Scope of Consultant’s Services

Synopsis.

AIA Document C103–2015 is a standard form of agreement between owner and consultant that contains terms and conditions, including those related to copyrights and licenses, claims and disputes, termination or suspension, and compensation. C103-2015 does not include a scope of consultant’s services, which must be inserted in Article 2 or attached as an exhibit. Separation of the scope of services from the owner/consultant agreement allows users the freedom to append alternative scopes of services. For all document details and a record of changes, see the summary  »

 

Using C103–2015.

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 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, close 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, to the extent applicable at the time of the Agreement, (1) the official name or title of the facility, (2) the location of the site, (3) the proposed building usage, and (4) the size, capacity, or scope of the Project. Unlike most AIA Contract Documents, the definition of the Project affects the time period, pursuant to Section 6.1.1, in which claims arising out of this Agreement may be made. Depending on the circumstances, including when and why the Consultant is engaged, the Project may be limited to the scope of services to be provided by the Consultant, or the Consultant may be providing services for a Project involving design and construction of one or more structures. Accordingly, care should be taken in describing or defining the Project.

Article 1 – Initial Information

§ 1.1 Initial Information is provided in Article 1. The parties should take care to be as explicit and detailed as possible with respect to the relevant Initial Information. 

§ 1.3 The parties must set forth the Owner’s anticipated design phase milestones and anticipated dates for commencement of construction and Substantial Completion as those dates may be incorporated into the Consultant’s schedule of services in Section 2.8. 

Article 2 – Consultant’s Responsibilities

§ 2.1 C103–2015 does not include a scope of Consultant’s Services. The parties must insert a scope of services, or identify an exhibit setting forth the scope of the Consultant’s services, in Article 2.  

§ 2.8 Time. The parties should select the time provision that is most appropriate for the services provided under this Agreement. A Consultant’s Schedule is often appropriate for services provided over an extended period of time or that require multiple deliverables, the nature of which may be undefined, at the time of executing the Agreement. A Deliverable Time Limit is often appropriate for services provided over a short period of time and that can be defined at the time of executing the Agreement. If appropriate, the parties may select both the Consultant’s Schedule and Deliverable Time Limit.

Article 6 – Claims and Disputes

§ 6.1.1 Unlike most AIA Contract Documents, the definition of the Project affects the time period, pursuant to Section 6.1.1, in which claims arising out of this Agreement may be made. Depending on the circumstances, including when and why the Consultant is engaged, the Project may be limited to the scope of services to be provided by the Consultant, or the Consultant may be providing services for a Project involving design and construction of one or more structures. For example, a land surveyor might be preparing a survey for the Owner’s use in the future, not knowing whether the Owner will decide to purchase, sell, or develop the land. Similarly, a Geotechnical Engineer might be performing a preliminary analysis of the site, without specific development plans by the Owner. In those instances, it might be appropriate for the time limit on claims, as set forth in section 6.1.1, to run from the date the Consultant’s services are sufficiently complete so that the Owner can utilize the survey or analysis for its intended use. In some instances, the Owner may have a plan in mind for development of a specific property, and the Consultant may be providing services and information upon which the Owner and others will rely in the design and construction of one or more structures in that development. In that case it might be appropriate for the time limit on claims to run from the date at which the design and construction of one or more of the structures is sufficiently complete so that the Owner can utilize them for their intended use. Accordingly, care should be taken in describing or defining the Project. 

§ 6.2.4 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 or visit adr.org for more information.

Article 8 – Compensation

There are at least ten methods of computing compensation for a Consultant’s services. Four of these methods are time-based, reflecting in different ways the time spent by the Consultant on the Project:

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.

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 Consultant’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 suggest 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 Consultant and the Owner. Further, the AIA makes no recommendations and has no guidelines or schedules that specify the amount of compensation a consultant should be paid.

§ 8.1 Insert the basis of compensation for the Consultant’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 Consultant’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. 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 the agreement between the Owner and Contractor. 

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.

§ 8.2 See methods of compensation shown above for Section 8.1.

Article 10 – 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 C103–2015 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.

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