Instructions: A142™–2014, Agreement Between Design-Builder and Contractor

 

Synopsis. 

AIA Document A142–2014 replaces AIA Document A141™–2004, Standard Form of Agreement Between Design-Builder and Contractor, and consists of the Agreement portion and four exhibits: Exhibit A, Terms and Conditions; Exhibit B, Insurance and Bonds; Exhibit C, Preconstruction Services; and Exhibit D, Determination of the Cost of the Work.

A142–2014 obligates the contractor to perform the work in accordance with the contract documents, which include A142 with its attached exhibits, supplementary and other conditions, drawings, specifications, addenda, and modifications. Like AIA Document A141–2014, AIA Document A142–2014 requires the parties to select the payment type from three choices: (1) Stipulated Sum, (2) Cost of the Work Plus Design-Builder’s Fee, and (3) Cost of the Work Plus Design-Builder’s Fee with a Guaranteed Maximum Price.

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

 

Using A142-2014.

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 Design-Builder, 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 3.1.

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.

Date of Design-Build Contract. Enter the date of the agreement between the Owner and the Design-Builder.

Project. Describe the 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.

Owner. Provide the name and address of the Project Owner, as they appear on the agreement between the Owner and the Design-Builder.

Article 3 – Date of Commencement and Substantial Completion

§ 3.1 Enter the date of commencement of the Work if it is different from the date of the Agreement. It should not be earlier than the date of execution (signing) of the Agreement. Enter either the specific date of commencement of the Work, or if a notice to proceed is to be used, enter the sentence, “The date of commencement shall be stipulated by the notice to proceed.” When time of performance is to be strictly enforced, the statement of starting time should be carefully weighed.

§ 3.3 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. 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. Any requirements for earlier Substantial Completion of portions of the Work should be entered here, if not specified elsewhere in the Contract 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 Contractor, but must bear an actual and reasonably estimable relationship to the Design-Builder’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 Design-Builder, 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 provision for liquidated damages is included, it should be carefully drafted by the Design-Builder’s attorney. Such a provision may be based on the following sample language:

The Contractor and the Contractor’s surety, if any, shall be liable for and shall pay the Design-Builder 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™, Guide for Supplementary Conditions.

Article 4  – Contract Sum

§ 4.1 Select the type of Contract Sum by checking the appropriate box. Next, complete the corresponding Section 4.2, 4.3 or 4.4, as appropriate.

§ 4.2.1 Stipulated Sum. Enter the Stipulated Sum payable to the Contractor.

§ 4.2.2 Identify any alternates described in the Contract Documents and accepted by the Design-Builder. If decisions on alternates are to be made subsequent to execution of A142–2014, attach a schedule showing the amount of each alternate and the date it expires.

§ 4.2.3 Enter the description, unit and price per unit for any unit prices. If unit prices are not covered in greater detail elsewhere in the Contract 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.

§ 4.2.4 Cash allowances, cash contingency allowances or specific allowances for overhead and profit on Change Orders may be included under this section.

§ 4.4.7 Guaranteed Maximum Price

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.

§ 4.4.7.1 Refer to Section 4.2.2 above.

§ 4.4.7.2 Refer to Section 4.2.4 above.

Article 6 –  Payments

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

§ 6.1.3 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 Design-Builder’s evaluation of an Application and issuance of the written acknowledgement of receipt pursuant to Section A.9.4, and a reasonable amount of time subsequently accorded the Owner to make Payment to the Design-Builder under A491–2004, Agreement Between the Owner and Design-Builder. Due dates for payment should be acceptable to both the Design-Builder and Contractor. They should allow sufficient time for the Contractor to prepare an Application for Payment, and for the Design-Builder to make payment.

§ 6.2.2.1 Indicate the percent of retain age, if any, to be withheld when computing the amount of each progress payment. The Design-Builder 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 retain age 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.

§ 6.2.2.2 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 identified in Article 9. Provisions regarding transportation to the site and insurance protecting the Design-Builder’s interests should be included.

§ 6.2.4 Describe any arrangements to reduce or limit retain ages indicated in Sections 6.2.2.1 and 6.2.2.2, if not explained elsewhere in the Contract Documents. A provision for reducing retain age should provide that the reduction will be made only if the Design-Builder judges that the Work is progressing satisfactorily. If the Contractor has furnished a bond, demonstration of the surety’s consent to reduction in or partial release of retain age must be provided before such reduction is effected. Use of AIA Document G707™–1994, Consent of Surety to Final Reduction in or Partial Release of Retainage, is recommended.

§ 6.3.2.2 Indicate the percent of retainage, if any, to be withheld from the Contractor’s Fee when computing the amount of each progress payment.

§ 6.4.2.3 Indicate the percent of retainage, if any, to be withheld from the Contractor’s Fee when computing the amount of each progress payment.

Article 7  – Dispute Resolution

§ 7.1 Select from three choices of binding dispute resolution: (1) arbitration, (2) litigation or (3) another method that they must identify. Other types of dispute resolution include a dispute review 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 9 –  Enumeration of the Contract Documents

A detailed enumeration of all Contract Documents must be made in this article.

Exhibit A  – Terms and Conditions

Exhibit A supplies the terms and conditions for the A142–2014, Agreement between the Design-Builder and Contractor. Do not use A201®, General Conditions of the Contract for Construction, with the A142–2014 Agreement.

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

Exhibit B – Insurance and Bonds

Exhibit B provides the location for specifying the types of insurance, applicable limits and other terms and conditions of the insurance required of the Contractor, and for specifying the type and penal sum of any surety bonds. Exhibit B also provides terms and conditions for the specified insurance and bonds, including for waivers of subrogation.

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

Exhibit C –  Preconstruction Services

Exhibit C provides the location for the Contractor’s preconstruction services, if any, and the method of compensation for those services. If the Contractor will not provide preconstruction services, then Exhibit C is inapplicable. It should be noted any preconstruction services the Contractor provides will likely occur after the Owner and Design-Builder execute the Design-Build Amendment to their agreement.

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

Exhibit D – Determination of the Cost of the Work

Exhibit D 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 4.2 of the Agreement, Exhibit D is not applicable.

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

 

Executing the agreement.

The persons executing AIA Document A142–2014 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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