Instructions: A145™–2015, Standard Form of Agreement Between Owner and Design-Builder for a One or Two Family Residential Project

A145– 2015 Standard Form of Agreement Between Owner and Design-Builder for a One or Two Family Residential Project

Synopsis. 

AIA Document A145–2015 is intended to be used for a one or two-family residential project 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. A145–2015 is a streamlined document developed to meet the needs of residential owners and design-builders. For commercial or multi-family design-build projects, AIA Document A141™–2014, Agreement Between Owner and Design-Builder, is more appropriate. For all document details and a record of changes, see the summary »

 

Using A145-2015.

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, 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. 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; (4) the legal description of the property or any statutorily required description of the project; and (5) the size, capacity or scope of the Project.

Article 1 –  General Provisions

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

§ 1.2 Statutory Requirements. Many jurisdictions require that contracts for residential design-build projects include specific language that places the owner of the project on notice of its rights with respect to the contract. These provisions are often mandatory and there may be specific statutory language, format and font requirements that must be closely followed. Section 1.2 lists a number of common topic headings where jurisdictional requirements may be included. Additionally, the requirements for single-family and two-family projects may be different. It is important to consult with the relevant authorities having jurisdiction over the project or legal counsel to ensure that the proper information is included in the contract.

Article 2  – Compensation and Progress Payments

§ 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 before and after execution of the Design-Build Amendment, A145 provides separate compensation sections 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 ________ ($__).

Multiple of Direct Personnel Expense:

Compensation for services rendered by principals, employees and professional consultants shall be based on a Multiple of Direct Personnel Expense. Direct Personnel Expense is the direct salaries of the Design-Builder’s personnel engaged on the project and the portion of the cost of their mandatory and customary contributions and benefits related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holidays, vacations, pensions, and similar contributions and benefits.

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 compensation for services rendered by Principals, employees, and professional consultants.

Article 16 –  Insurance

Insert specific insurance requirements for the types of insurance and dollar limits of coverage that the Design-Builder is required to maintain for the project.

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 and Payment

§ A.1.1 A145–2015 is meant to be flexible with respect to determination of the Contract Sum. The method for determining the Contract Sum agreed to by the Owner and Design-Builder should be described in detail.

§ A.1.3 Insert the time period covered by each Application for Payment.

Article A.2 –  Contract Time

§ A.2.2 Insert the calendar date for Commencement of the Construction Phase and Substantial Completion. 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™, 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.

 

Executing the agreement.

The persons executing AIA Document A145–2015 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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