AIA Document C196–2008 is a standard form of agreement between a single purpose entity (“the SPE”) and a project owner, called the owner member. C196–2008 is intended for use on a project where the project participants have formed the SPE utilizing AIA Document C195™–2008, Standard Form Single Purpose Entity Agreement for Integrated Project Delivery. It is coordinated with AIA Document C195–2008 in order to implement the principles of integrated project delivery, including the accomplishment of mutually-agreed goals. C196 provides the terms under which the owner member will fund the SPE in exchange for the design and construction of the project. The SPE provides for the design and construction of the project through separate agreements with other members, including an architect and construction manager, utilizing AIA Document C197™–2008, Standard Form of Agreement Between Single Purpose Entity and Non-Owner Member for Integrated Project Delivery. The SPE may also enter into agreements with non-member design consultants, specialty trade contractors, vendors and suppliers. For all document details and a record of changes, see the summary »
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 the 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.
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 by name and location or address.
Article 2 – Owner’s Responsibilities
§ 2.2 The Owner is required to fund the Company for the Actual Costs the Company incurs in developing the Target Cost, and, if the Company executes the Target Cost Amendment, for the Actual Costs the Company incurs to complete the Project. Once the Target Cost is established in the Target Cost Amendment, the Owner is not required to fund the Company for Actual Costs above the Target Cost, subject to two exceptions. The Owner is required to fund the Company for Actual Costs in excess of the Target Cost associated with (1) costs the Company incurs pursuant to the Company’s agreements with Non-Members and (2) costs the Company incurs for any Goal Achievement Compensation earned pursuant to the Company’s agreements with the Non-Owner Members.
§ 2.4 The Owner is also required to obtain the Owner’s usual liability insurance for the Project. If, however, the Company decides to institute a Company-Controlled Insurance Program (CCIP), the Owner is required to participate in the CCIP and obtain the insurance required of it under the CCIP. The Owner’s insurance obligations under the CCIP may be in addition to, or instead of, its usual liability insurance requirements.
Article 3 – Company’s Responsibilities
The Company, pursuant to this Agreement, agrees to furnish to the Owner the planning, design, construction and commissioning services required to complete the Project. It is understood, however, that the Company itself will not directly perform any services. Rather, the Company will furnish the described services through service agreements with the Architect Member, Construction Manager Member, and other Non-Owner Members, if any, and construction agreements with various trade contractors. Specifically, the Company is required to furnish the services necessary to develop a Target Cost proposal. If the Owner accepts the Target Cost proposal and the Company executes the Target Cost Amendment, the Company is required to furnish the services set forth in the Target Cost Amendment necessary to complete the Project.
Executing the agreement.
The persons executing AIA Document C196–2008 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.
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