Changes from the previous edition
Dispute Resolution—Mediation and Arbitration
AIA Document A401®–2017 establishes the contractual relationship between the contractor and subcontractor. It sets forth the responsibilities of both parties and lists their respective obligations, which are written to parallel AIA Document A201®–2017, General Conditions of the Contract for Construction, which A401–2017 incorporates by reference. If another general conditions document will be used, such as A232™, General Conditions of the Contract for Construction, Construction Manager as Adviser, then A401–2017 will have to be modified to refer to that general conditions document instead of AIA Document A201–2017. Additionally, AIA Document A401–2017 may be modified for use as an agreement between the subcontractor and a sub-subcontractor, and must be modified if used with AIA Document A104™–2017 or A105™–2017 as the owner/contractor agreement. For use and execution of a document, see its instructions »
AIA Document A401–2017 establishes the contractual relationship between the Contractor and Subcontractor. As a default term, this document adopts by reference AIA Document A201–2017, General Conditions of the Contract for Construction, and a pre-existing Prime Contract between the Contractor and Owner (see Related Documents section below regarding the use of other General Conditions documents). The completed A401–2017 document will thus form an Agreement whereby the duties and responsibilities of the Contractor under the Prime Contract pass to the Subcontractor with respect to a portion of the work designated in the completed A401–2017 document.
This document has been prepared for use with a Prime Contract which may be based upon the latest editions of one or more of the AIA A-Series documents, especially those that relate to and adopt AIA Document A201–2017, General Conditions of the Contract for Construction. If another general conditions document will be used, A401®–2017 will have to be modified to refer to that general conditions document instead of AIA Document A201–2017. A401-2017 can be used in conjunction with a Prime Contract that references General Conditions other than A201-2017. If another general conditions document will be used, such as A232™, General Conditions of the Contract for Construction, Construction Manager as Adviser, or if a Prime Contract containing incorporated General Conditions, such as A104™-2017, Standard Abbreviated Form of Agreement Between Owner and Contractor will be used, then A401–2017 will have to be modified to refer to that general conditions document instead of AIA Document A201–2017. Most AIA General Conditions documents contain similar terms, however, if the Prime Contract references a General Conditions document other than A201-2017, care must be taken to ensure that section number cross references in A401 are correct and any other cross references are confirmed.
Changes from the previous edition.
AIA Document A401–2017 revises the 2007 edition of A401 to reflect changes made in AIA Document A201–2017 (see Related Documents section above regarding the use of other General Conditions documents). It incorporates alterations proposed by subcontractors, architects and other interested parties. The following are some of the significant changes made to A401–2017.
Throughout. References in A401–2017 to the General Conditions refer specifically to A201–2017 (see Related Documents section above regarding the use of other General Conditions documents).
Article 1 – The Subcontract Documents
§ 1.1 Modifications to this section have been made to clearly distinguish between Modifications to the Prime Contract and Modifications to the Subcontract. This clarification is repeated throughout the document as appropriate to clarify whether a Modification to the Prime Contract or a Modification to the Subcontract is being addressed.
§ 1.4 Revisions to this section define a Modification to the Subcontract as being a written amendment to the Subcontract signed by the Contractor and Subcontractor or as described in Article 5, Changes in the Work.
Article 3 Contractor
§ 3.1 A definition of Contractor has been added to A401®–2017 for consistency with the AIA owner-contractor agreements. This new language also makes explicit the obligation of the Contractor to make decisions in a timely manner in accordance with the Contractor’s construction schedule.
§ 3.3.5 This new section obligates the Contractor to notify the Subcontractor of any fault or defect in the Work under the Subcontract, or nonconformity with the Subcontract Documents. By requiring the Contractor to inform the Subcontractor of faults, defects, and nonconformities, the Subcontractor may work to resolve the fault, defect, or nonconformity quickly with less disruption or impact to the Project schedule..
§ 3.5 Revisions to this section clarify that when the Subcontractor defaults or neglects to carry out the Work in accordance with the Subcontract Documents, the Contractor may correct the Work and withhold the cost of correction from current or future payments. Previously, this provision required a Modification to the Subcontract Documents to effectuate the withholding. A Modification is impractical because it would require agreement by the Subcontractor to the withholding.
Article 4 – Subcontractor
§ 4.1 Similar to Section 3.1, A401®–2017 now includes a definition of Subcontractor. The Subcontractor must be lawfully licensed if required in the jurisdiction where the Project is located..
§ 4.2.3 New language has been included in Section 4.2.3 to recognize the Contractor’s duty to timely review the Subcontractor’s submittals. Additionally, and consistent with the Contractor’s obligation to the Owner under A201–2017 (see Related Documents section above regarding the use of other General Conditions documents), the Subcontractor is required to represent that, in submitting Shop Drawings, Product Data, Samples, and similar submittals, it has (1) reviewed and approved them; (2) determined and verified materials, field measurements, and field construction criteria related thereto, or will do so; and (3) checked and coordinated the information contained within such submittals with the requirements of the Work and of the Subcontract Documents.
§ 4.6.2 Similar to new language in A201–2017 (see Related Documents section above regarding the use of other General Conditions documents), 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 the Subcontract Documents.
§ 4.9 A new set of provisions has been included to align A401®–2017 with the Contractor’s responsibility under A201–2017 (see Related Documents section above regarding the use of other General Conditions documents) when the Contractor has hired the Subcontractor to perform professional design services. The new provisions differentiate between design services that are required of the Contractor by the Contract Documents and those that arise because of specific means, methods, techniques, sequences, or procedures required by the Contractor. In the first instance, the Contractor will provide the Subcontractor with the performance and design criteria provided by the Owner. In the latter case, the Contractor will provide the Subcontractor with all performance and design criteria that such services must satisfy. Where professional design services are required of the Subcontractor, they must be provided by a properly licensed design professional.
Article 6 – Claims and Disputes
Changes have been made to Article 6 to maintain consistency with AIA Document A201–2017 (see Related Documents section above regarding the use of other General Conditions documents). While the changes are generally minor, note that, where arbitration is selected, the arbitration will be conducted in the place where the Project is located and the award rendered by the arbitrator will be final and binding.
Article 9 – Date of Commencement and Substantial Completion
§ 9.1 The format for the date of commencement of the work has been changed to a checkbox allowing the parties to select either (1) the date of the Agreement, (2) the issuance of a notice to proceed (NTP) by the Contractor, or (3) a different date as agreed by the parties.
§ 9.2.2 A checkbox has been added so that the parties can select whether substantial completion of the entirety of the Subcontractor’s Work will be achieved no later than a specified calendar date or within a certain number of days from the date of commencement.
§ 9.2.3 This section has been added to allow for substantial completion of certain phases of the Subcontractor’s Work to be completed prior to the substantial completion date for the entirety of the Subcontractor’s Work set forth in Section 9.2.2 (tiered substantial completion dates). This can be used when portions of the Subcontractor’s Work will be completed prior to substantial completion of the entirety of the Subcontractor’s Work.
§ 9.2.4 Because liquidated damages are a function of the Subcontractor’s failure to achieve substantial completion within the Subcontract Time, this section has been added to cross-reference the provision for liquidated damages payable by the Subcontractor under Section 3.4.
Article 10 – Subcontract Sum
§ 10.2 In order to clarify the handling of alternates on a Project, this provision has been modified to clearly identify alternates that are accepted at the time of contract execution and those alternates that may be accepted after a condition precedent has been met. This clarifies information previously provided in a parenthetical instruction.
Article 11 Payments
§ 11.1.7 The Provisions for the calculation of progress payments have been clarified and simplified to clearly delineate the basis for each progress payment.
§ 11.1.8 A more prescriptive provision on retainage has been included that will allow the parties to clearly delineate the retainage amount, exclusions from retainage, and how retainage may be reduced during the course of the Project.
§ 11.1.10 This new provision requires that the Subcontractor indemnify the Contractor and Owner for any lien claim or other claim related to payment by any of the Subcontractor’s subcontractors, suppliers, or vendors, provided the Contractor has fulfilled its obligations under the Subcontract Documents.
Article 12 – Insurance and Bonds
The insurance section has been expanded and modified to track the insurance requirements set forth in the 2017 owner-contractor agreements. The AIA encourages you to discuss the insurance and bonds requirements of A401®–2017 with your insurance broker and legal counsel so that appropriate insurance can be put in place before the start of construction
Article 14 – Miscellaneous Provisions
§ 14.2 In keeping with AIA owner-contractor agreements, a fill point has been included to identify the Contractor’s representative.
§ 14.3 In keeping with AIA owner-contractor agreements, a fill point has been included to identify the Subcontractor’s representative.
§ 14.4 This provision was revised to require that all notices under the Subcontract be in writing. Additionally, language has been added 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. The default for providing notice in electronic format will be through the use of AIA Document E203™–2013, Building Information Modeling and Digital Data Exhibit. However, if the parties elect not to use AIA Document E203–2013, notice in electronic format may be given as specified by the parties in the fill point.
§ 14.6 This new provision has been included to avoid a situation where the entire Subcontract, or a provision of the Subcontract, may be rendered invalid because a provision of the Subcontract is held invalid or unenforceable by a court of law or arbitrator(s). Where a provision of the Subcontract has been deemed invalid or unenforceable, such provision will be read out of the Subcontract to the extent necessary to maintain the validity and enforceability of the remainder of the Subcontract or provision.
§ 14.7 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.
§ 14.7.1 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.
Dispute Resolution—Mediation and Arbitration.
Through its adoption by reference of AIA Document A201–2017 (see Related Documents section above regarding the use of other General Conditions documents), 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.