Instructions: A141™–2014, Agreement Between Owner and Design-Builder

 

Synopsis. 

AIA Document A141–2014 replaces A141–2004, Standard Form of Agreement Between Owner and Design-Builder, and consists of the Agreement portion and Exhibit A, a Design-Build Amendment that is executed when the Owner and Design-Builder have agreed on the Contract Sum. Additionally, A141–2014 includes two optional exhibits, Exhibit B, Insurance and Bonds, and Exhibit C, Sustainable Projects. AIA Document A141–2014 forms the nucleus of the Contract for Design-Build between the Owner and Design-Builder.

In A141–2014, the Owner provides a set of criteria establishing the requirements for the Project. Thereafter, the Design-Builder will review to develop a Preliminary Design and then provide a proposal to the Owner regarding the Contract Sum. Upon mutual agreement, the Owner and Design-Builder will execute the Design-Build Amendment to establish the Contract Sum and document the information upon which the Contract Sum is based. The Design-Build Amendment also includes the determination for the Cost of the Work, if the Contract Sum is based on a Cost of the Work with or without a Guaranteed Maximum Price. For all document details and a record of changes, see the summary »

 

Using A141-2014.

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.

Parties. Parties to the Agreement should be identified using the full address and legal name under which this 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. Other information may be added, such as telephone numbers and electronic addresses.

Project. Describe the proposed Project in sufficient detail to identify: (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.

Article 1 – General Provisions

§ 1.1 Owner’s Criteria. The parties should take care to be as explicit and detailed as possible with respect to the Owner’s Criteria. The Owner’s Criteria define the Owner’s requirements for the Project and are part of the Design-Build Documents. As such, unless modified by written amendment, the Design-Builder is required to design and construct the Project in accordance with the Owner’s Criteria.

1.3 Binding 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 2 – Compensation and Progress Payments

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 below, singly or in combination with other methods, is a business decision for the Architect and the Owner. Further, the AIA makes no recommendations and has no guidelines or schedules that specify the amount of compensation an architect should be paid.

§ 2.1 Compensation for Work Performed Prior to Execution of the Design-Build Amendment Because the nature of the Design-Builder’s Work will be different, A141–2014 provides separate compensation methods for Work performed prior to and following execution of the Design-Build Amendment. In Section 2.1, insert the basis of compensation for the Design-Builder’s Work prior to Execution of the Design-Build Amendment (Note: the Contract Sum, which will address the Work following execution of the Design-Build Amendment, will be established as part of the Design-Build Amendment). Sample language is provided below for describing some possible methods of computing compensation for Work performed prior to and following execution of the Design-Build Amendment.

Stipulated Sum:

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

Multiple of Direct Personnel Expense:

Compensation shall be based on a multiple of ________ (__) times Direct Personnel Expense (as defined in Section 4.1.4) of Construction Manager’s personnel, plus the following reimbursable cost items.

Actual Cost:

Compensation shall be based on actual costs incurred in the performance of the Preconstruction Phase services. (A maximum cost may be established.)

Professional Fee Plus Expenses:

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.

Exhibit A – Design-Build Amendment

Project and Parties (Cover Page). Identify the Project and the parties just as they appear on the cover page of the Agreement.

Article A.1 – Contract Sum

§ A.1.1 Select the type of Contract Sum by checking the appropriate box. Next, complete the corresponding Section A.1.2, A.1.3 or A.1.4, as appropriate.

§ A.1.2.1 Stipulated Sum Enter the Stipulated Sum payable to the Design-Builder.

§ A.1.2.2 Identify any alternates described in the Design-Build Documents and accepted by the Owner. If decisions on alternates are to be made subsequent to execution of the Design-Build Amendment, attach a schedule showing the change in the Stipulated Sum and the deadline by which the alternate must be accepted.

§ A.1.2.3 Enter the description, unit, and price per unit for any unit prices. If unit prices are not covered in greater detail elsewhere in the Design-Build Documents, the following provision for unit prices is suggested:

The unit prices listed below shall determine the value of extra Work or changes in the Work, as applicable. They shall be considered complete and shall include all material and equipment, labor, installation costs, overhead, and profit. Unit prices shall be used uniformly for additions or deductions.

§ A.1.3 Cost of the Work Plus Design Builder’s Fee

§ A.1.3.2 Insert the Design-Builder’s Fee that will be paid to the Design-Builder in addition to the Cost of the Work as defined in Article A.5, Cost of the Work.

§ A.1.4 Cost of the Work Plus Design-Builder’s Fee with a Guaranteed Maximum Price

§ A.1.4.2 Refer to Section A above.

§ A.1.4.3.1 Guaranteed Maximum Price Insert a Guaranteed Maximum Price for the Cost of the Work and the Design-Builder’s Fee. Insert specific provisions if the Design-Builder is to participate in any savings when the final Contract Sum is below the Guaranteed Maximum Price.

§ A.1.4.3.3 Refer to Section A.1.2.2 above.

§ A.1.4.3.4 Refer to Section A.1.2.3 above.

§ A.1.5 Payments  

§ A.1.5.1.2 Insert the time period covered by each Application for Payment if it differs from one calendar month.

§ A.1.5.1.3 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 allowed for the Owner’s evaluation of an Application and issuance of the Certificate of Payment pursuant to Section 9.4, and a reasonable amount of time subsequently accorded the Owner to make Payment. Due dates for payment should be acceptable to both the Owner and Design-Builder. They should allow sufficient time for the Design-Builder to prepare an Application for Payment, and for the Owner to make payment.

§ A.1.5.2.2.1 Indicate the percent retainage, if any, to be withheld when computing the amount of each progress payment. The Owner frequently pays the Design-Builder 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™, Guide for Supplementary Conditions, for a complete discussion.

§ A.1.5.2.2.2 Insert any additional retainage to be withheld from that portion of the Contract Sum allocable to materials and equipment stored at the site. Payment for materials stored off the site should be provided for in a specific agreement and enumerated in Section 16.1 of the Agreement. Provisions regarding transportation to the site and insurance protecting the Owner’s interests should be included.

§ A.1.5.2.4 Describe any arrangements to reduce or limit retainages indicated in Sections A.1.5.2.2.1 and A.1.5.2.2.2, if not explained elsewhere in the Design-Build documents. A provision for reducing retainage should provide that the reduction will be made only if the Owner judges that the Work is progressing satisfactorily. If the Design-Builder has furnished a bond, demonstration of the surety’s consent to reduction in or partial release of retainage must be provided before such reduction is effected. Use of AIA Document G707A™–1994, Consent of Surety to Final Reduction in or Partial Release of Retainage, is recommended.

§ A.1.5.3.2.2 Indicate the percent of retainage, if any, to be withheld from the Design-Builder’s Fee when computing the amount of each progress payment.

§ A.1.5.3.2.3 Indicate the percent of retainage, if any, to be withheld from that portion of the Work that the Design-Builder’s self-performs when computing the amount of each progress payment.

§ A.1.5.4.2.3 Refer to Section A.1.5.3.2.2 above.

§ A.1.5.4.2.4 Refer to Section A.1.5.3.2.3 above.

Article A.2 – Contract Time

§ A.2.2 Select The time within which Substantial Completion of the Work is to be achieved may be expressed as a number of days (preferably calendar days) or as a specified date. Any requirements for earlier Substantial Completion of portions of the Work should be entered here if not specified elsewhere in the Design-Build documents.

Optionally, insert any provisions for liquidated damages relating to failure to complete on time, or for bonus payments for early completion. Liquidated damages are not a penalty to be inflicted on the Design-Builder, but must bear an actual and reasonably estimable relationship to the Owner’s loss if construction is not completed on time. There is little or no legal precedent to support the proposition of linking a bonus with a penalty. If liquidated damages are to be assessed because delayed construction will result in actual loss to the Owner, the amount of damages due for each day lost should be entered here or in the Supplementary Conditions. Factors such as confidentiality or the need to inform subcontractors about the amount of liquidated damages will help determine the placement of such language.

If a provision for liquidated damages is included, it should be carefully drafted by the Owner’s attorney. Such a provision may be based on the following sample language:

The Design-Builder and the Design-Builder’s surety, if any, shall be liable for and shall pay the Owner the sums hereinafter stipulated as liquidated damages for each calendar day of delay until the Work is substantially complete: ________ ($__).

For further information on liquidated damages, penalties and bonus provisions, see AIA Document A503™–2007, Guide for Supplementary Conditions.

Article A.3 – Information Upon Which Amendment is Based

A detailed enumeration of all documents and other information, including agreed-upon deviations from the Owner’s Criteria, upon which the Design-Build Amendment is based, must be provided in this article.

Exhibit B – Insurance and Bonds

Exhibit B supplies the insurance and bond provisions for A141–2014, Agreement between the Owner and Design-Builder. Exhibit B provides the general requirements relating to insurance and bonds as well as the specific policy limits and bond amounts for the Project. Users are strongly encouraged to review their insurance needs with legal and insurance counsel to determine the appropriate insurance requirements for their particular project.

Project and Parties (Cover Page). Identify the Project and the parties just as they appear on the cover page of the Agreement.

Exhibit C – Sustainable Projects

Exhibit C is an optional exhibit that can be used on a wide variety of sustainable projects; including those in which the Sustainable Objective includes obtaining a Sustainability Certification, such as LEED (Leadership in Energy and Environmental Design), or those in which the Sustainable Objective is based on incorporation of performance-based sustainable design or construction elements. It is intended that if the Owner identifies a Sustainable Objective in the Owner’s Criteria, the parties will incorporate Exhibit C to identify the scope of Design-Builder’s “Sustainability Services” and any obligations the Owner may have in relation to achieving the Sustainable Objective.

Project and Parties (Cover Page). Identify the Project and the parties just as they appear on the cover page of the Agreement. Sustainable design and construction projects create a number of new roles, responsibilities, and risks for project participants. For a more detailed discussion of the roles, responsibilities, and risks unique to sustainable projects, please visit www.aia.org/contractdocs/reference to review AIA Document D503™–2013, Guide for Sustainable Projects, including Commentary on the AIA Sustainable Projects Documents.

 

Executing the agreement.

The persons executing AIA Document A141–2014 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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