The latest update on design-build contract documents from the American Institute of Architects (AIA) establishes a two-phase work agreement, with the design and construction phases and the costs and fees associated with each phase separated into two distinct documents.
Previously, the 2004 AIA A141 Design Build contract documents required you to establish the contract sum before completing the design phase, which could be difficult to do.
The new 2014 edition came down at the end of 2015. AIA typically updates its series of construction documents every 10 years.
Design-build contract documents are used whenever an owner hires one company to do both the design and the construction work, whether it is new construction or a renovation project. The “design-builder” is typically a general contractor that subcontracts or consults with an architect to do the design work.
The major change in the A141 Owner-Design Builder Agreement is the documents (and the work for the project) are done in two phases. First, the parties agree to the general terms and conditions and set the parameters and fees for the design work in the main agreement. Second, the parties establish pricing for the project once the design plans are complete. The new A141 documents are similar to the “Construction Manager as Constructor” documents where the parties establish fees for pre-construction services in the main agreement, then agree to a contract sum once the design plans have been finalized.
In that sense, the 2014 version of the Design-Build documents harken back to the 1997 AIA 191 Design Build Part I and Part II format. The 2014 design-build documents step away from the 2004 version, with the pricing arrangement for the entire project established up front even with incomplete design plans. This move makes sense since it would be difficult to establish a contract sum without having completed project design plans and specification.
Some additional changes in the 2014 A141 compared to the 2004 version:
- Standard Form Agreement between owner and design-builder: Lays out the owner’s criteria for the project, such as the budget, design requirements, physical characteristics, milestone dates, general terms and conditions and other initial standards.
- Exhibit A – Design-Build Amendment: Establishes the contract sum for the project, but excludes the fees for work performed before signing the amendment, such as the design work. The contract sum could either be stipulated sum, cost of work plus design-builder’s fee, or cost of work plus design-builder’s fee with a guaranteed maximum price. The amendment also covers the terms for progress payments, final payments and the substantial completion date. This new exhibit also lists the design-builder’s superintendent, key personnel, consultants and subcontractors.
- Exhibit B – Insurance and Bonds: The equivalent to Exhibit C of the 2004 version. Other than that, there are no substantive changes compared to the 2004 version.
- Exhibit C – Sustainability: A new document to the A141 Design-Build documents and has provisions relating to sustainability. It references sustainable programs such as such as LEED®, Green Globes™, Energy Star, so use this document if an owner wants to incorporate these sustainable programs into the project.
Hopefully, this new 2014 version will make it easier for the design-builder to manage the project in stages rather than predicting upfront the fees and costs without having first completed the design plans for the project.