What Are the Main Contracts Used in Project Management?
1. The Importance of Contracts in Architecture
Understanding contracts is essential both for the initialization of a project and for understanding the scope of work and responsibilities of the parties involved once work is undertaken. The Project Management exam of the ARE® tests candidates on their knowledge of a number of AIA Contract Documents. These are AIA documents B101, C401, A101, and A201. These documents are updated every decade or so, but the latest versions of them date from 2017, and these are the versions that should be reviewed for the exam.
2. Why Were AIA Contracts Developed in the First Place?
The AIA documents were developed to provide industry standard documents that reflect fair and typical practices. The earliest AIA contract documents date from over 125 years ago, and they have evolved over time, incorporating changes in industry practice, culture, and technology. The documents are now widely used and well known in the construction industry. The AIA publishes a large number of documents, and new documents are occasionally published, but only those four documents listed above are covered on the ARE exam.
It should be noted that AIA documents are not always used on projects. Sometimes a client insists on the use of their own custom written contract. The use of the AIA documents is often preferred by architects both because they are often already familiar with them, but also because it helps prevent them from becoming trapped in contractual conditions which are unfavorable to the architect. In all cases, the architect should be well informed of the conditions of the contract before signing in order to reduce the risk of issues later on.
An additional note concerning contracts is that contracts should be signed before the architect's design work begins. For various reasons, architects are sometimes pressured into beginning design work before a contract is signed. This is to be avoided since without a signed contract, there is often little or no legal basis for the expectations which the architect and owner hold, and the architect is at risk for doing work which they may ultimately not get paid for, or the amount of work which is done in order to get paid may exceed any reasonable scale of work. Thus, having signed contracts prior to the start of any design work is the best practice, and the most commonly used AIA documents are the standards of the industry.
3. The Most Used Contracts
In preparing for the ARE exam, it is advised that the B101, C401, A101, and A102 documents should be read and studied in their entirety. This blog post is only intended as an introduction to acquaint the exam-taker with which documents must be studied and provide a general and non-exhaustive understanding of each. Note that for actual use on a project, the documents must be purchased, but for study purposes, a free sample preview file of each document can be downloaded from the AIA Contracts website, aiacontracts.org. Note that the website also contains a useful link for each document with section by section instructions describing how they are to be used, along with a synopsis of the document.
4. AIA Document B101
AIA Document B101 is the Standard Form of Agreement Between Owner and Architect. It describes the responsibilities of the architect and owner, the scope of the architect's basic services, and what would be covered under supplemental and additional services, as well as additional provisions, such as how the architect should be compensated and how disputes are to be resolved. These include arbitration, litigation, or some other agreed upon method such as mediation.
It should be noted that an understanding of the basic services of the architect is critical for understanding what the architect is to provide an owner for a given fee. The B101 outlines these architectural services, which are divided into the five project phases of schematic design: design development, construction documents, procurement, and construction. It also lists a number of services which would be considered supplemental services. In other words, an architect would perform these other services only if explicitly indicated in the contract (and for an additional fee). Examples of common supplemental services include programming, site evaluation and planning, architectural interior design, and furniture, furnishings, and equipment design. A table is provided within the document listing the additional services so that any which are necessary for the project can be indicated within it.
5. AIA Document C401
AIA Document C401 is the Architect-Consultant Agreement. It would be used, for example, between an architect and an engineering consultant, such as a structural, mechanical, plumbing, or electrical engineer being engaged on a project. It could also be used between an architect and a consulting architect, for example, in the case where an architect hires another architect to conduct an accessibility or code analysis. The C401 document describes the responsibilities of the consultant and architect, the scope of consultant's work, how the consultant is to be compensated, and other contractual provisions.
6. AIA Document A101
AIA Document A101 is a Standard Form of Agreement Between Owner and Contractor. It can be used when a stipulated sum or fixed price is used as the basis of payment for the contractor. It should be noted that this document is to be used for relatively large-scale projects. Other documents are available for smaller scale projects. The A101 describes what is included in the contract documents and provides sections for indicating when the work is to commence as well as when the project is considered to be substantially complete, in addition to the actual payment amount and how it is to be paid. Additionally, it includes a section on dispute resolution and another on conditions of termination or suspension, among other provisions.
7. AIA Document A201
Lastly, AIA Document A201 is the General Conditions of the Contract for Construction. It applies to design-bid-build projects and is referenced by the A101, B101, and other documents. It describes the relationships between the architect, owner, and contractor, while also providing detail on the responsibilities and rights of each of these parties. It also includes information on insurance and bonds, as well as dispute resolution.
Becoming familiar with the aforementioned contract documents is key in understanding the typical obligations and relationships between owner, architect, and contractor. Understanding contracts is also essential for successful project management.
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