FAQs: C191™-2009 or IPD Multi-party agreement

Why deliver a project using C191 –2009, Standard Form Multi-Party Agreement for Integrated Project Delivery?

C191–2009 utilizes the principles of Integrated Project Delivery (IPD). IPD will appeal to an experienced and sophisticated project owner who is looking for a way to reduce claims on projects and to achieve important project-specific goals that are more important than the lowest first cost. Such goals are more likely to be achieved by a high degree of collaboration and information sharing among project participants. See IPD family of documents  »

 

How does C191 handle dispute resolution?

The members are required to endeavor to resolve all disputes amicably and through the normal management of the Project. Any issue that arises is first raised with the Project Management Team. If the Project Management Team is unable to reach a unanimous resolution to the issue, it is submitted to the Project Executive Team for unanimous resolution. If the Project Executive Team is unable to unanimously resolve the matter, it is then subject to the dispute resolution procedures outlined in the agreement. In the meantime, however, the Owner may issue a directive, which the Parties must abide by subject only to the results of the dispute resolution process.

If the parties are unable to resolve an issue through the Project Executive Team, a dispute is initiated. Upon initiation of a dispute, the matter is referred to the Dispute Resolution Committee, which is comprised of one representative from each party plus a Project Neutral. Within fifteen days of initiating a dispute, the Project Neutral shall attempt to mediate the dispute with the other members of the Dispute Resolution Committee. If that is unsuccessful, the parties then proceed to the method of binding dispute resolution identified in the Agreement. At the time the C191 is executed, the parties elect the method of binding dispute resolution to be employed, and may choose arbitration before the Project Neutral; arbitration otherwise administered as required in the General Conditions; or any other method of binding dispute resolution they may choose, including litigation.

 

How does the Project Management Team make decisions?

All authorizations, approvals, or other actions of the Project Management Team require the unanimous affirmative vote of each team member. Any matter upon which the Project Management Team cannot reach a unanimous decision is referred to as the Project Executive Team for resolution.

 

How does the Project Executive Team make decisions?

All authorizations, approvals, or other actions of the Project Executive Team require the unanimous affirmative vote of each team member. Any matter upon which the Project Management Team cannot reach a unanimous decision may be referred to the Dispute Resolution Committee.  Pending resolution of an issue by the Dispute Resolution Committee, the Owner may issue a directive on the matter so long as such directive is generally consistent with the scope of the agreement. The parties must abide by the Owner’s directive subject to any subsequent decision by the Dispute Resolution Committee.

 

How does C191–2009 differ from C195™–2008, which establishes a Single Purpose Entity for IPD?

C191 and C195 are similar in many respects. Both utilize many of the same mechanisms to execute and integrate the project, including the use of a Target Cost model, Incentive Compensation and Goal Achievement Compensation. Unlike C195, however, C191 does not require the parties to form an LLC, and project management is through the Project Management Team and the Project Executive Team.

 

What services are required of the non-owner parties in C191?

C191 initially requires the non-owner parties to provide the services described in the agreement in order to develop a Target Criteria Proposal for the owner’s review and approval. The specific requirements for these services are set forth in both the C191 agreement as well as Exhibit A, General Conditions. Upon the owner’s acceptance of the Target Criteria Proposal, the parties execute the Target Criteria Amendment, which includes a table in which the parties’ responsibilities for services are assigned, the non-owner parties are then required to perform those services set out in the Agreement, including the Target Criteria Amendment and the General Conditions.

 

What obligations does the owner have under C191?

C191 requires the owner to furnish certain information as well as any services required of it by the Target Criteria Amendment. Additionally, the owner is required to identify representatives to serve on the Project Management Team, Project Executive Team, and Dispute Resolution Committee on the owner’s behalf. Most significantly, the owner pays for the Cost of the Work, including design and construction.

 

How are risks and rewards handled under C191?

C191 provides incentives for the architect and contractor to perform in the best interest of the Project. The architect and contractor are required to provide their services at cost with any potential profit tied to the achievement of project-related goals that the parties mutually establish. The first form of potential profit is tied to the Target Cost. If the Actual Cost of the project as delivered by the architect and contractor is below the Target Cost, any savings are shared in accordance with the terms of C191. The second form of potential profit is tied to specific Project Goals the parties agree upon at the time the Target Cost is established. If the architect and contractor achieve any of the Project Goals, they are entitled to receive compensation as set forth in the Agreement. If any Project Goal is not achieved, the parties do not receive any compensation related to that Project Goal regardless of who was at fault.

 

Under C191 what is the “Target Cost”?

The Target Cost is the estimate of all costs the architect and contractor may incur to plan, design, construct and commission the project. The parties establish the Target Cost at the conclusion of the Criteria Design Phase. The Target Cost is set forth in the Target Criteria Amendment to C191–2009.

 

What is the Target Criteria Amendment?

The Target Criteria Amendment is an amendment to C191–2009, Standard Form Multi-Party Agreement for Integrated Project Delivery. It is executed at the conclusion of the Criteria Design Phase. The Target Criteria Amendment itself consists of seven exhibits. The first exhibit is the Target Cost Breakdown, which allows the parties to set forth the various elements of the Target Cost in detail. The second exhibit is the Project Definition, which allows the parties to state the Project Definition upon which the Target Criteria are based. The third exhibit is Project Goals. In this exhibit, the parties identify and define the mutually agreed upon Project Goals. The Project Goals exhibit also allows the parties to identify how the non-owner parties will be compensated for the achievement of such goals. The fourth exhibit is the Integrated Scope of Service matrix. This exhibit consists of an extensive matrix of services that allows the parties to allocate responsibility for each such service throughout the project. The fifth exhibit is the Project Schedule, which allows the parties to identify the schedule upon which the project will be completed. The sixth exhibit is the Digital Data Protocol Document. This exhibit will allow the parties to identify how electronic data will be used and exchanged on the Project. The seventh and final exhibit is the Building Information Modeling Protocol Document. This exhibit will allow the parties to identify and determine how they will utilize building information modeling on the project.

 

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