Instructions: C199™ – 2010, Standard Form of Agreement Between Single Purpose Entity and Contractor for Integrated Project Delivery

 C199™ – 2010, Standard Form of Agreement Between Single Purpose Entity and Contractor for Integrated Project Delivery

Synopsis. 

AIA Document C199–2010 is a standard form of agreement between a single purpose entity (“the SPE”) and a contractor. AIA Document C199–2010 is intended for use on a project where the parties have formed the SPE utilizing AIA Document C195™–2008, Standard Form Single Purpose Entity Agreement for Integrated Project Delivery. C199–2010 is intended to be a flexible document. C199 can be used for a contractor that only provides construction services, or it can also be used for a contractor that will provide both pre-construction and construction services. C199 is not intended for use in competitive bidding and relies upon an agreed to contract sum, which can be either a stipulated sum (fixed price) or cost of the work plus a fee, with a guaranteed maximum price. In addition to compensation for the contract sum, C199 allows for the contractor to receive additional profit through incentive compensation and goal achievement compensation. For all document details and a record of changes, see the summary  »

 

Using C199–2010.

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.

Parties. Parties to this Agreement should be identified using the full address and 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, 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.

The Company. The limited liability company formed by C195–2008 should be identified by its legal name and the address of its principal place of business, exactly as that information is stated in C195–2008.

Project. The proposed Project should be described in sufficient detail to identify (1) the official name or title of the facility; (2) the location of the site, if known; (3) the proposed building usage; and (4) the size, capacity or scope of the Project, if known.

Members. The Owner, Architect, Construction Manager and other Members of the Company should be identified by their legal name and the address of their principal places of business, exactly as that information is stated in C195–2008.

Article 1 – General Provisions

§ 1.2 Insert a detailed description of This Portion of the Project, which is the part or piece of the Project for which the Contractor will provide its services under this Agreement. This Portion of the Project may describe all services in a particular trade for the entire Project, or it may be limited to services rendered for a particular phase or geographic area of the Project.

Article 2 – Contractor’s Responsibilities

§ 2.5 Select from two choices under which the Contractor will perform: (1) Work during the Preconstruction and Construction phase or (2) Work during the Construction phase only.

§ 2.6 Preconstruction Work

§ 2.6.1 Prior to Execution of the Target Cost Amendment

§ 2.6.1.2 Any services that the Contractor is required to perform prior to execution of the Target Cost Amendment that are not otherwise described in Section 2.6.1.1 should be listed here.

§ 2.6.2 Following Execution of the Target Cost Amendment

§ 2.6.2.2 Any services that the Contractor is required to perform following execution of the Target Cost Amendment that are not otherwise described in Section 2.6.2.1 should be listed here.

§ 2.8 Insurance Requirements

§ 2.8.1 In addition to the insurance requirements set forth in Exhibit A, Terms and Conditions, list any additional insurance requirements for the project including the types and limits of coverage.

Article 3 – Compensation

§ 3.1 Compensation and Payments for Work

§ 3.1.1 Sample language is provided below for describing three methods of computing compensation for the Contractor’s Preconstruction Work provided prior to the execution of the Target Cost 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 3.1.4) of Contractor’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.)

§ 3.1.2 The parties may wish to vary the compensation method after execution of the Target Cost Amendment. For example, payment for Preconstruction Phase services may be made based on Actual Cost prior to execution of the Target Cost Amendment, but may be paid based on a Stipulated Sum following execution of the Target Amendment in order to lock in costs as part of the Target Cost.

§ 3.2 Contractor Incentive Compensation

§ 3.2.1.1 Enter the Contractor’s share of any savings realized as Contractor Incentive Compensation.

§ 3.2.1.2 If Contractor Incentive Compensation is not payable as a share of savings realized, enter another amount or method of determining the amount of Contractor Incentive Compensation.

§ 3.2.2 Indicate the number of days following final reconciliation of the Project accounting that may elapse before interest begins to accrue on overdue Contractor Incentive Compensation payments. Following this period, interest will begin to accrue on the overdue payment at the rate set in Section 6.5.

§ 3.3 Contractor Goal Achievement Compensation

§ 3.3.1 Contractor Project Goals and the amount of Contractor Goal Achievement Compensation are set forth and described in Exhibit C to the Agreement.

§ 3.3.3 Indicate the number of days following achievement of a Contractor Project Goal that may elapse before interest begins to accrue on overdue Contractor Goal Achievement Compensation payments. Following this period, interest will begin to accrue on the overdue payment at the rate set in Section 6.5.

Article 4 – Contract Sum

§ 4.1 Select from two choices for the basis of the Contract Sum: (1) Stipulated Sum or (2) Cost of the Work Plus Contractor’s Fee with a Guaranteed Maximum Price.

Article 6 – Payments

§ 6.1 Payment for Preconstruction Work

§ 6.1.1 Enter the amount of any initial payment payable to the Contractor upon execution of the Agreement.

§ 6.1.2 Indicate the number of days following Contractor’s invoice date that may elapse before interest begins to accrue on overdue payments. Following this period, interest will begin to accrue on the overdue payment at the rate set in Section 6.5.

§ 6.2 Progress Payments For Construction Work

§ 6.2.2 Insert the time period covered by each Application for Payment if it differs from the one given.

§ 6.2.3 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 required for the Company’s evaluation of an Application and issuance of a Certificate for Payment and the time subsequently accorded the Company to make payment in Section A.5.23 of Exhibit A, Terms and Conditions.

Insert the day of the month on which progress payments are due, indicating whether such day is to be in the same or the following month after receipt by the Company of the relevant Application for Payment. (The amount of time should be not less than ten days, as provided in Section A.5.23 of Exhibit A, Terms and Conditions, to allow sufficient time to process the payment applications.)

Due dates for payment should be acceptable to both the Company and Contractor. They should allow sufficient time for the Contractor to prepare an Application for Payment, for the Architect to certify payment, and for the Owner to make payment. They should also be in accordance with time limits established by this Article and Section A.5.23 of Exhibit A, Terms and Conditions.

§ 6.2.8 Progress Payments—Stipulated Sum

§ 6.2.8.2.1 Indicate the percent retainage, if any, to be withheld when computing the amount of each progress payment.

The Company 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 retainage as rapidly as possible, consistent with the continued protection of all affected parties. download AIA Document D503™, Guide for Sustainable Projects, including Commentary on the AIA Sustainable Projects Documents  »

§ 6.2.8.2.2 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 an attachment and enumerated in Section 10.2.3. Provisions regarding transportation to the site and insurance protecting the Company’s interests should be included.

§ 6.2.8.4 Insert the percent or amount of any reduction or limitation of retainage as well as the manner of such reduction or limitation.

§ 6.2.9 Progress Payments—Cost of the Work Plus a Fee with a Guaranteed Maximum Price

§ 6.2.9.2.3 Indicate the percent retainage, if any, to be withheld when computing the amount of each progress payment.

§ 6.2.9.3 Insert the percent retainage to be withheld from Contractor’s payments to subcontractors.

§ 6.5 Enter any agreed-upon interest rate for overdue payments.

Article 7 – Claims and Disputes

§ 7.1.2 Initial Decision Maker. In this section, the Company and Contractor may identify an Initial Decision Maker to render initial decisions on claims arising from or relating to the Contractor’s services. If the parties do not identify an Initial Decision Maker, then the Architect will provide initial decisions.

§ 7.1.3 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 10 – Scope of the Agreement

A detailed enumeration of all Contract Documents must be made in this article. List additional documents in Section 10.2.3 that will form part of the Agreement.

Exhibit A – Terms and Conditions. 

Exhibit A supplies the terms and conditions for C199–2010, Standard Form of Agreement Between Single Purpose Entity and Contractor for Integrated Project Delivery. Do not use AIA Document A201®, General Conditions of the Contract for Construction with C199–2010.

Exhibit B – Contract Sum Amendment. 

This Amendment will typically be completed by the Contractor prior to commencement of the Construction Phase.

Project. Identify the Project exactly as it appears on the cover page of C199–2010, Standard Form Agreement Between Single Purpose Entity and Contractor for Integrated Project Delivery.

Article B.1 – Contract Time

§ B.1.2 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.

§ B.1.3 Enter the document and issuance date for issuance of the Implementation Documents.

Article B.2 – Stipulated Sum

§ B.2.1 Section B.2.1should be completed if the Company and Contractor selected a Stipulated Sum under Section 4.1 of the Agreement. Enter the Stipulated Sum payable to the Contractor if a Stipulated Sum is selected.

§ B.2.1.2 Identify any alternates described in the Contract Documents and accepted by the Company. If bidding or proposal documents permit the Company to accept other alternates, subsequent to this document’s execution, attach a schedule showing the amount of each alternate and the date it expires.

§ B.2.1.3 Identify unit prices and state quantity limitations, if any, to which the unit price will be applicable.

§ B.2.1.4 Identify and state the amount of any allowances.

§ B.2.1.5 Identify and state any assumptions or qualifications on which the Stipulated Sum is based.

Article B.3 – Guaranteed Maximum Price

§ B.3.1 Section B.3.1 should be completed if the Company and Contractor selected Cost of the Work Plus a Fee with a Guaranteed Maximum Price as the basis of the Contract Sum under Section 4.1 of the Agreement. Insert a Guaranteed Maximum Price for the Cost of the Work.

§ B.3.1.1 Insert the Contractor’s Fee or basis for determining the fee.

§ B.3.1.3 Insert an itemized statement of the Guaranteed Maximum Price organized as instructed or reference an attachment with such information.

§ B.3.1.4 Identify any alternates described in the Contract Documents and accepted by the Company. If decisions on alternates are to be made subsequent to execution of the Contract Sum Amendment, attach a schedule showing the amount of each alternate and the date it expires.

§ B.3.1.5 Identify and state the amounts of any allowances.

§ B.3.1.6 State any assumptions on which the Guaranteed Maximum Price is based.

Exhibit C – Contractor Project Goals Amendment. 

Exhibit C contains fill points for the parties to identify specific Contractor Project Goals upon which Contractor Goal Achievement Compensation will be based, and standards for measuring achievement of the Contractor Project Goals. The parties may identify Contractor Project Goals tied to certain milestones throughout the course of the Project, the achievement of which trigger Contractor Goal Achievement Compensation. Contractor Project Goals tied to milestones allow the Contractor to realize some profit prior to the completion of the Project. Additionally, the parties may identify certain Contractor Project Goals that cannot be measured until the Project is complete, such as achieving a specified level of LEED® certification. To the extent that a Project Goal is not met, the allocated Goal Achievement Compensation will not be awarded and the Target Cost will be reduced by a corresponding amount.

Executing the agreement.

The persons executing AIA Document C199–2010 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.

Executing the Amendments. Exhibit B, Contract Sum Amendment, and Exhibit C, Contractor Project Goal Amendment, should be executed by the same parties who signed the original Agreement, or their designated successors. Any formalities to indicate the authority of the signatories which were done for the original Agreement should also be carried out for the Amendments.

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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