FAQs: C198™-2010, Standard Form of Agreement Between Single Purpose Entity and Consultant for Integrated Project Delivery

 C198™ – 2010, Standard Form of Agreement Between Single Purpose Entity and Consultant for Integrated Project Delivery

Does C198–2010 require the consultant to obtain insurance?

C198–2010 sets forth specific requirements with regard to insurance that the consultant is required to maintain throughout the duration of the agreement.  The specific types of coverages listed in the agreement are General Liability, Automobile Liability, Workers’ Compensation, and Professional Liability. If the SPE institutes a Company-Controlled Insurance Program (CCIP), the consultant is required to obtain any insurance the CCIP requires of it.

 

What services are required of the consultant in C198–2010?

C198–2010 initially requires the consultant to collaborate with the members in the provision of the services described in C195™–2008, the Single Purpose Entity Agreement, in order to develop a Target Cost proposal that the SPE can present to the owner as they relate to the consultant’s portion of the project. Upon the owner’s acceptance of the Target Cost proposal and the SPE’s execution of the Target Cost Amendment, which includes a table in which the responsibilities for services are assigned, the consultant is required to perform those services required of it in the Target Cost Amendment as it relates to the consultant’s portion of the project.

 

What is Consultant Incentive Compensation under C198–2010?

Consultant Incentive Compensation is a profit payment from the SPE that the non-member consultant may be entitled to under C198–2010. If the Actual Cost of the project is less than the Target Cost, as those amounts are determined in C195–2008, the non-member consultant is entitled to a portion of the savings as Consultant Incentive Compensation. The SPE and non-member consultant will establish the portion of any savings the non-owner member is entitled to in C198–2010. Any Consultant Incentive Compensation the non-owner member is entitled to receive becomes payable upon final reconciliation of the project accounting. If the Actual Cost of the project is equal to or greater than the Target Cost, there are no savings from which Consultant Incentive Compensation can be paid.

 

What is Consultant Goal Achievement Compensation under C198–2010?

Consultant Goal Achievement Compensation is a profit payment from the SPE that the non-member consultant may be entitled to receive if certain Consultant Project Goals are met. The SPE and the Consultant establish certain Project Goals in Exhibit A to C198–2010. The Consultant Project Goals may relate to goals the SPE establishes in the Target Cost Amendment of C195–2008 or they may relate solely to the Consultants portion of the project. If a Consultant Project Goal is achieved, the non-member consultant receives the amount available for achievement of the goal as Consultant Goal Achievement Compensation. Consultant Goal Achievement Compensation is payable upon achievement of a goal. If the Actual Cost exceeds the Target Cost, the non-member consultant can still retain Consultant Goal Achievement Compensation for any goals previously paid.

 

Who owns the consultant’s Instruments of Service in C198–2010?

The consultant, and their consultants and contractors, retain all ownership rights in their respective Instruments of Service. The consultant licenses the use of the Instruments of Service to the SPE solely and exclusively for use on the project. The license is conditioned on the SPE’s substantial performance of its duties under C198–2010, including prompt payment. 

 

How does the owner get the right to use the consultant’s Instruments of Service after the dissolution of the SPE under C198–2010?

According to C198–2010, upon the SPE’s dissolution, the non-owner members permit the SPE to grant a license to the owner member for the use of their Instruments of Service. The license is contingent upon the SPE’s performance of all its obligations and the consultant receiving from the owner an agreement to release the consultant from all claims and causes of action arising from the owner’s use of the Instruments of Service without retaining the author. Additionally, the owner is required to indemnify and hold harmless the non-owner members from all costs and expenses related to third party claims.

 

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