On May 9, 2011, the American Institute of Architects ("AIA") released AIA Document D503-2011, Guide for Sustainable Projects, including Agreement Amendments and Supplementary Conditions ("Guide"). The Guide was developed to assist owners, design professionals, and contractors to understand contractual issues that are unique to sustainable design and construction projects. The Guide provides model language that can be used to amend or supplement key AIA contract documents, particularly those in the AIA A201 family, for sustainable projects. It is available as a free download at www.aia.org/sustainableprojectsguide.
The Guide is an AIA tool to assist industry participants grapple with the rapidly evolving sustainable design and construction contract and risk management issues, similar in intent to ConsensusDOCS 310 Green Building Addendum ("GBA"), which was released in November 2009, along with a commentary and recommendations guidebook.
The Guide provides a useful synopsis of the current state of sustainable design and construction. The Guide uses the term "sustainable" as synonymous with other terms used to describe environmentally responsible design and construction such as "green design and construction" or "high-performance building." It stresses throughout that an owner has options in deciding whether to incorporate sustainable elements in the design and construction of a project. Those options include consideration of various certification systems or including sustainable design and construction measures in a project without pursuing certification. Additionally, the Guide emphasizes the distinction between certification and building performance. A building that meets an owner's performance expectations is not necessarily the same as that building achieving a specific certification, and vice versa. It is, accordingly, critical that the contract define both the owner's expectations and the certification goals, if any.
The Guide states that the AIA does not endorse any particular sustainability certification, and it provides a brief summary of three of the better known certification programs: Energy Star, Green Globes, and LEED. While AIA does not endorse any particular sustainability certification, it acknowledges that the United States Green Building Counsil's ("USGBC") LEED certification system has become a "popular" rating system. AIA B214-2007, Standard Form of Architect's Services: LEED Certification, is a scope of services document that establishes duties and responsibilities when the owner seeks LEED certification from the Green Building Certification Institute, the certifying authority for LEED.
The Guide provides model language for newly defined terms -- Special Definitions -- and recommends that they be included in the standard AIA contract documents for sustainable projects. Such Special Definitions include "Sustainable Objective," the model language of which follows:
The Sustainable Objective is the Owner's goal of incorporating Sustainable Measures into the design or construction of the Project to achieve a Sustainability Certification or other benefit to the environment, enhance the health and well being of building occupants or improve energy efficiency. The Sustainability Objective is indentified in the Sustainability Plan.
Agreement between Owner and Architect
The next section of the Guide focuses on the agreement between the owner and the architect. One of the motifs in the Guide, stressed in this section, is that the architect designs the building with the intent that the project meet the specified Sustainable Objective but that the "construction, operation and maintenance of the building, as well as interpretations by the Certifying Authority, are beyond the Architect's control." The Guide emphasizes that it is critical that the owner understands that the date of Substantial Completion is not the same as the date of award of the Sustainability Certification. Indeed, certification of a project could occur months or over a year after the date of Substantial Completion. The Guide cautions that changes to the contractual standard of care language could impact both legal liability and insurance coverage issues.
The Guide discusses in some detail scope of service issues for sustainable projects and provides model language for same. In addition, model language is included by which the "Architect does not warrant or guarantee that the project will be granted" certification. The Sustainability Plan is a road map for achieving the Sustainable Objective that outlines the Sustainable Measures and sets forth who is responsible for achieving them.
The Guide acknowledges that many sustainable projects necessitate the use of materials and equipment that are untested in the field and provides model language that attempts to limit the architect's responsibility for any failure of the project to achieve the Sustainable Objective as a result of the use of such materials or equipment.
The Guide observes that AIA has included mutual waivers of consequential damages in its agreements since 1997. The mutual waiver of consequentials to mitigate potential damages is especially applicable to sustainable projects. The Guide includes model language that addresses the unique types of consequential damages that might arise on a sustainable project:
The mutual waiver in this Section 8.1.3 expressly includes those consequential damages resulting from failure of the Project to achieve the Sustainable Objective or one or more Sustainable Measures including unachieved energy savings, unintended operational expenses, lost financial or tax incentives, or unachieved gains in worker productivity.
Agreement between Owner and Contractor and General Conditions
The next section of the Guide focuses on the agreement between the owner and the contractor and general conditions of the contract for construction. As an initial matter, the definition of Contract Documents in A101-2007 and A201-2007 would need to be modified to include "the Sustainability Plan."
One particularly interesting issue, especially for contractors, is the Guide's discussion of and handling of substitutions. The Guide observes that handling substitutions on a sustainable project is complicated by the fact that the "suitability, characteristics, performance and reliability of materials and equipment can have far-reaching impacts, not only on the Project schedule and the long-term function of the Project, but also on whether targeted Sustainable Measures will be achieved." The Guide suggests adding the following section 3.4.21. AA201-2007:
§ 184.108.40.206 The Contractor shall include with any substitution requests submitted in accordance with Section 3.4.2 a written representation identifying any potential effect the substitution may have on Project's ability to achieve a Sustainable Measure or the Sustainable Objective. The Architect is entitled to rely on these representations by the Contractor.
This model language clearly puts to the responsibility of due diligence for substituted materials and technologies on the contractor. Such language in a contract could very well modify a contractor's (and the contractor's surety's) liability if a substituted material or technology failed to perform as represented or if the project failed to achieve the specified Sustainability Certification.
Similar to the commentary concerning warranties and architects, the Guide advises that contractors should avoid incorporating language that might be construed as guaranteeing achievement of the Sustainable Objective. To accomplish this, the Guide suggests adding the following model language, section 3.5.2 to A201-2007:
§ 3.5.2 The Contractor shall perform the Sustainable Measures required to be performed by the Contractor in accordance with the Contract Documents, however, nothing contained in this Section 3.5 shall be construed as a guarantee or warranty by the Contractor that the Project will achieve the Sustainable Objective.
As the Guide provides model language to insert in the owner-architect agreements concerning the mutual waiver of consequential damages to address unique sustainable project concerns, so the Guide provides model language to be added to A201-2007, as follows:
§ 220.127.116.11 In addition to those damages included in Section 18.104.22.168 and 22.214.171.124 the mutual waiver in this Section 15.1.6 expressly includes consequential damages resulting from failure of the Project to achieve the Sustainable Objective or one or more of the Sustainable Measures including unachieved energy savings, unintended operational expenses, lost financial or tax incentives, or unachieved gains in worker productivity.
This article highlights only some of the key issues addressed and model language set forth in the Guide. The reader is referred to the Guide itself (website provided above) for more information. Please note that AIA intends to update the Guide periodically to "reflect changing industry standards and practices, and in response to feedback from industry participants."