AIA DOCUMENT A GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION

Audio Presentation Bonus Session AIA DOCUMENT A201-2007 GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION Project Delivery Education Program Const...
Author: Georgiana Woods
0 downloads 0 Views 1MB Size
Audio Presentation

Bonus Session

AIA DOCUMENT A201-2007 GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION Project Delivery Education Program Construction Document Technology (CDT) Preparatory Course 2011 The Construction Specifications Institute

This presentation is protected by US and International copyright laws. Reproduction, distribution, display and use of this presentation without written permission of the speaker and The Construction Specifications Institute is prohibited.

www.csinet.org

1

© The Construction Specifications Institute 2011

AIA

The Construction Specifications Institute is a Registered Provider with The American Institute of Architects Continuing Education Systems. Credit earned on completion of this program will be reported to CES Records for AIA members. Certificates of Completion for non-AIA members available on request. This program is registered with the AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.

2

Standard General Conditions by Professional Organizations •

This bonus session is based on AIA (American Institute of Architects) Document A201-2007 General Conditions of the Contract for Construction



Other standard general conditions by other professional organizations include the following –

EJCDC (Engineers Joint Contract Document Committee) Document C700 Standard General Conditions of the Construction Contract



AGC (Associated General Contractors of America) ConsensusDOCS Document 200 Agreement and General Conditions Between Owner and Contractor

Conditions of the Contract

3

General Conditions Comparison A201 • General Provisions • Owner • Contractor • Architect • Subcontractors •Construction by Owner or by Separate Contractors • Changes in the Work • Time • Payments and Completion • Protection of Persons and Property • Insurance and Bonds • Uncovering and Correction of Work • Miscellaneous Provisions •Termination or Suspension of the Contract • Claims and Disputes

C-700 • • • • • • • • • • • • • • • • •

Definitions and Terminology Preliminary Matters Contract Documents: … Availability of Lands; … Bonds and Insurance Contractor’s Responsibilities Other Work at the Site Owner’s Responsibilities Engineer’s Status During Construction Changes in the Work; Claims Cost of the Work; … Change of Contract Price and Time Tests and Inspections; … Payments and Completion Suspension and Termination Dispute Resolution Miscellaneous

The Construction Specifications Institute

200 • Agreement • General Provisions • Contractor’s Responsibilities • Owner’s Responsibilities • Subcontracts • Contract Time • Contract Price • Changes • Payment •Indemnity, Insurance, Waivers and Bonds • Suspension, Cure, Termination • Dispute Resolution • Miscellaneous • Contract Documents

General Conditions Comparison •



AIA and EJCDC Documents –

Separate and supplemental to Agreement



High page count AIA-39 + EJCDC-62



Design professional is “visible”



AIA subscription / EJCDC download

AGC ConsensusDOCS –

Integrated Agreement



Low page count – 35, more concise



Design professional is not “visible” as much



Subscription

The Construction Specifications Institute

AIA A201 Conditions of the Contract Table of Articles 1. General Provisions 2. Owner 3. Contractor 4. Architect 5. Subcontractors 6. Construction by Owner or by Separate Contractors 7. Changes in the Work 8. Time

Conditions of the Contract

9. Payments and Completion 10. Protection of Persons and Property 11. Insurance and Bonds 12. Uncovering and Correction of Work 13. Miscellaneous Provisions 14. Termination or Suspension of the Contract 15. Claims and Disputes

6

Conditions of the Contract •

Defines basic rights, responsibilities, and relationships of parties involved in performance of Contract



Inherent part of OwnerContractor Agreement

Project Delivery Practice Guide:

7

11.5.4.2

ARTICLE 1 GENERAL PROVISIONS

The Construction Specifications Institute

8

Basic Definitions •

The Contract Documents –

Enumerated in Owner-Contractor Agreement • • • • • • •



Agreement Conditions of the Contract Drawings Specifications Addenda Other documents listed Modification

Modifications • • • •

Written amendment Change order Construction change directive Written order for a minor change

Conditions of the Contract:

9

1.1

Basic Definitions •



The Contract –

Agreement between the parties



Not an agreement with certain other parties

The Work –

Construction and services required by Contract Documents



Labor, materials, equipment and services to fulfill Contractor’s obligations



Whole or part of Project

Conditions of the Contract: 1.1

10

Basic Definitions •

The Project –

Total construction of Work performed under Contract Documents in whole or part



May include construction by Owner and separate Contractors

Conditions of the Contract:

11

1.1

Basic Definitions •



The Drawings –

Graphic and pictorial portions of Contract Documents



Shows design, location and dimensions of Work

The Specifications –





Written requirements for materials, equipment, systems, standards and workmanship for Work

Instruments of Service –

Representations of creative work by Architect and consultants



Studies, surveys, models, sketches, drawings, specifications, and similar materials

Initial Decision Maker –

Person identified to render decisions on claims and terminations

Conditions of the Contract: 1.1

Commentary: Previous editions did not use initial decision maker – Architect was the decision maker

12

Intent of Contract Documents •

Contract Documents to include items necessary for execution and completion of Work by Contractor



Contract Documents are complementary



Performance by Contractor required only to extent of Contract Documents and reasonably inferable

Conditions of the Contract:

13

1.2

Ownership of Instruments of Service •

Architect and consultants deemed author and owners of respective instruments of service



The Following are authorized to use instruments of service exclusively for execution of Work, but does not own or can claim a copyright –

Contractor



Subcontractors



Sub-subcontractors



Material or equipment suppliers

Conditions of the Contract: 1.5

14

ARTICLE 2 OWNER

The Construction Specifications Institute

15

General •

Owner is a person or entity identified in Agreement



Designated representative has express authority to bind Owner to matters requiring approval or authorization



If requested by Contractor, furnish statement of record legal title to property (site) for Contractor’s mechanic’s lien rights

Conditions of the Contract: 2.1

16

Information and Services Required of the Owner •

If requested by Contractor, furnish reasonable evidence of financial arrangements to fulfill obligations



Secure and pay for approvals, easements, assessments and charges (Contractor responsible for permits and fees designated by Contractor Documents) Furnish survey describing physical characteristics, legal limitations, utility locations, and legal description





Furnish information or services designated by Contractor Documents

Conditions of the Contract:

17

2.2

Owner’s Right to Stop the Work •



Can issue written order to Contractor to stop the Work if Contractor –

Fails to correct Work not in accordance with Contract Documents



Repeatedly fails to carry out the Work in accordance with Contract Documents

Has no duty to stop the Work for benefit of others

Conditions of the Contract: 2.3

18

Owner’s Right to Carry out the Work •

Can correct deficiencies in the Work if Contractor –

Defaults



Neglects to carry out Work in accordance with Contract Documents



Fails to commence and continue correction of such default or neglect

Conditions of the Contract:

19

2.4

ARTICLE 3 CONTRACTOR

The Construction Specifications Institute

20

General •

Contractor is a person or entity identified in Agreement



Designated representative has express authority to bind Contractor to matters under Contract



Perform Work in accordance with Contract Documents



Not relieved of obligations –

Tests and inspections or approvals performed by others



Architect’s administration of Contract

Conditions of the Contract:

21

3.1

Review of Contract Documents and Field Conditions by Contractor •



Execution of Contract represents Contractor –

Has visited site



Become generally familiar with local conditions



Correlated observations with Contract Documents

Before starting Work, Contractor shall –

Study and compare various Contract Documents



Take field measurements of existing conditions



Observe any conditions at site affecting Work

Conditions of the Contract: 3.2

22

Supervision and Construction Procedures •

Contractor shall supervise and direct Work using best sill and attention



Solely responsible for, and have control over, following construction activities (even if Contract Documents include instructions for following activities, Contractor obligated to evaluate jobsite safety) –

Means



Methods



Techniques



Sequences



Procedures



Coordination

Conditions of the Contract:

23

3.3

Supervision and Construction Procedures •

Contractor responsible to Owner for acts and omissions of Contractor



Contractor responsible for inspection of Work already performed for proper condition to receive subsequent Work

Conditions of the Contract: 3.3

24

Labor and Materials •

Contractor provides and pays for following for proper execution and completion of the Work –

Labor



Materials



Equipment



Tools



Construction equipment



Water



Heat



Utilities



Transportation



Other facilities and services

Conditions of the Contract:

25

3.4

Labor and Materials •

Contractor may make substitutions –

Only with consent of Owner



After evaluation by Architect



In accordance with • •



Change order Construction change directive

Contractor shall –

Enforce strict discipline and good order among employees and persons carrying out Work



Not employ unfit persons or persons not properly skilled

Conditions of the Contract: 3.4

26

Warranty •



Contractor warrants to Owner and Architect that materials and equipment furnished –

Will be of good quality and new



Will conform to Contract Documents



Will be free from defects

Work not conforming to Contractor’s warranty may be considered defective

Commentary: Contractor does not warrant adequacy of Contract Documents

Conditions of the Contract:

27

3.5

Permits, Fees, Notices, and Compliance with Laws •



Contractor shall secure and pay for –

Building permit



Other permits



Fees



Licenses



Inspections by government agencies

If Contractor performs Work contrary to following, Contractor assumes responsibility and bears cost for correction –

Laws



Codes



Statutes



Rules and regulations



Ordinances



Lawful orders of public authorities

Conditions of the Contract: 3.7

28

Permits, Fees, Notices, and Compliance with Laws •

Contractor to provide notice to Owner and Architect if following conditions encountered –

Subsurface or concealed differences that differ from Contract Documents



Unknown physical conditions of an unusual nature that differ from those ordinarily found to exist

Conditions of the Contract:

29

3.7

Allowances •





Costs included in Allowance –

Cost of material and equipment delivered to site



Taxes, less trade discounts

Costs included in Contract Sum –

Unloading and handling at site



Labor



Installation



Overhead



Profit



Other expenses

Cost differences adjusted by change order

Conditions of the Contract: 3.8

30

Superintendent •

Contractor shall employ competent superintendent and assistants –

In attendance at Project site during performance of Work



That represents the Contractor



Communications are binding as if given to Contractor



Owner and Architect has no reasonable objection



Cannot be changed without Owner’s consent

Conditions of the Contract:

31

3.9

Contractor’s Construction Schedule •



Contractor shall submit construction schedule for the Work –

Shall not exceed Contract Documents time limits



Revised at appropriate intervals



Related to entire Project and extent required by Contract Documents



Shall provide for expeditious and practicable execution of the Work

Contractor shall submit submittal schedule –

Coordinated with construction schedule



Allow Architect reasonable time to review

Conditions of the Contract: 3.10

32

Documents and Samples at the Site •

Contractor shall maintain following at Project site in good order and marked currently to indicated field changes and selections made during construction –

Drawings



Specifications



Addenda



Change orders



Other modifications



Shop drawings



Product data



Samples



Similar required submittals

Conditions of the Contract:

33

3.11

Shop Drawings, Product Data and Samples •

Terms defined



Shop drawings, product data, samples and similar submittals are not Contract Documents



Purpose is to demonstrate way Contractor proposes to conform with information given and design concept expressed in Contract Documents



Submittals not required by Contract Documents may be returned by Architect without action

Conditions of the Contract: 3.12

34

Shop Drawings, Product Data and Samples •

Contractor shall review submittals for compliance with Contract Documents, approve, and submit to Architect



By submitting submittals, Contractor represents to Owner and Architect that Contractor has





Reviewed and approved them



Determined and verified materials, field measurements and field construction criteria



Has checked and coordinated submittal information with requirements of the Work and Contract Documents

Contractor shall perform no Work until respective submittals have been approved by Architect

Conditions of the Contract:

35

3.12

Shop Drawings, Product Data and Samples •

Work shall be in accordance with approved submittals and Contractor is not relieved from deviations from Contract Documents



Contractor not required to provide licensed architectural or engineering services unless –

Performance and design criteria specifically required by Contract Documents for portion of the Work



Unless necessary for means, methods, techniques, sequences and procedures

Conditions of the Contract: 3.12

36

Use of Site •

Contractor shall –

Confine operations to site and areas permitted by • • • • • •



Laws Statutes Ordinances Codes Rules and regulations Lawful orders of public authorities

Not unreasonably encumber site with materials or equipment

Conditions of the Contract:

37

3.13

Cutting and Patching •

Contractor responsible for following and for restoring areas to condition existing prior to –



Cutting



Fitting



Patching

Contractor shall not damage or endanger Work of the Owner or separate Contractors

Conditions of the Contract: 3.14

38

Cleaning Up •

Contractor shall keep premises free from accumulation of waste materials or rubbish



At completion of Work, Contractor shall remove





Waste materials



Rubbish



Contractor’s tools



Construction equipment



Machinery



Surplus materials

If Contractor fails to clean up, Owner may do so and be reimbursed by Contractor

Conditions of the Contract:

39

3.15

Access to Work •

Contractor should provide Owner and Architect access to the Work in preparation and progress

Conditions of the Contract: 3.16

40

Royalties, Patents and Copyrights •

Contractor shall pay royalties and license fees



Contractor shall defend suits or claims for infringement of copyrights and patent rights and hold Owner and Architect harmless from loss



Contractor not responsible for such defense or loss when particular design, process or product of particular manufacturer is required by Contract Documents

Conditions of the Contract:

41

3.17

Indemnification •

Contractor shall indemnify and hold harmless the following from claims, damages, losses and expenses from performance of the Work to the extent caused by negligent acts or omissions –

Owner



Architect



Architect’s consultant

Conditions of the Contract: 3.18

42

ARTICLE 4 ARCHITECT

The Construction Specifications Institute

43

General •

Architect is a person or entity identified in Agreement



Designated representative has express authority to bind Contractor to matters under Contract



Duties, responsibilities and limitations of authority of Architect as set forth in Contract Documents shall not be





Restricted



Modified



Extended

If Architect is terminated, Owner shall employ successor architect as to whom Contractor has no reasonable objection

Conditions of the Contract: 4.1

44

Administration of the Contract •

Architect will –

Provide administration of the Contract as described in Contract Documents



Be Owner’s representative during construction



Have authority to act on behalf of Owner to extent provided in Contract Documents

Conditions of the Contract:

45

4.2

Administration of the Contract •

Architect will visit site at intervals appropriate to stage of construction



To become generally familiar with progress and qualify of portion of Work completed



To determine in general if Work observed is being performed in a manner , when completed, will be in accordance to Contract Documents



Not required to make exhaustive or continuous on-site inspections to check quality or quantity of the Work

Conditions of the Contract: 4.2

46

Administration of the Contract •

Architect will keep Owner reasonably informed about progress and quality of Work completed and report to Owner



Known deviations from Contract Documents and schedule



Defects and deficiencies observed in the Work



Architect not responsible for Contractor’s failure to perform Work in accordance with Contract Documents

Conditions of the Contract:

47

4.2

Administration of the Contract •

Architect will not have control over, charge of, or responsibility for, construction



Means



Methods



Techniques



Sequences



Procedures



Safety precautions and programs

Conditions of the Contract: 4.2

48

Administration of the Contract •

Architect will have no control over or charge of and will not be responsible for acts and omissions of



Contractor



Subcontractors



Agents or employees



Other persons or entities performing Work

Conditions of the Contract:

49

4.2

Administration of the Contract •



Based on Contractor’s Applications for Payment, Architect will –

Review and certify amounts due



Issue Certifications for Payment

Architect has authority –

To reject Work not conforming with Contract Documents



To require inspection or testing of Work whether or not fabricated, installed or completed

Conditions of the Contract: 4.2

50

Administration of the Contract •

Architect will review and take action on Contractor’s submittals –

For limited purpose of checking for conformance with information given



Design concept expressed in Contract Documents



Not conducted for purpose of determining accuracy and completeness of details, dimensions, and quantities of for substantiating instruction for installation or performance of equipment or systems



Review does not constitute approval of safety precautions

Conditions of the Contract:

51

4.2

Administration of the Contract •

Architect will –

Prepare Change Orders and Construction Change Directives



Authorize minor changes



Investigate and make determinations and recommendations regarding concealed and unknown conditions

Conditions of the Contract: 4.2

52

Administration of the Contract •

If Owner and Architect agree, Architect will provide project representatives at site



Architect will interpret and decide matters concerning performance under, and requirements of, Contract Documents on written request of either Owner and Contractor (this may want to be changed if initial decision maker is used)



Regarding communications –

Owner and Contractor shall endeavor to communicate through Architect



Communications by and with Architect’s Consultants through Architect



Communications by and with Subcontractors through Contractor

Conditions of the Contract:

53

4.2

Administration of the Contract •



Interpretations and decisions of Architect will –

Be consistent with intent of, and reasonably inferable from, Contract Documents



Endeavor to secure faithful performance by Owner and Contractor



Not show partiality to Owner or Contractor



Not be liable for results of interpretations or decisions rendered in good faith

Architect’s decisions on aesthetic effect will be final if consistent with intent expressed in Contract Documents

Conditions of the Contract: 4.2

54

Administration of the Contract •

Architect will review and respond to requests for information about Contract Documents

Conditions of the Contract:

55

4.2

ARTICLE 5 SUBCONTRACTORS

The Construction Specifications Institute

56

Definitions •

Subcontractor is a person or entity who has direct Contract with Contractor to perform portion of Work at site



Sub-subcontractor is a person or entity who has direct or indirect Contract with Subcontractor to perform portion of Work at site

Conditions of the Contract:

57

5.1

Award of Subcontracts and Other Contracts for Portions of the Work •

Contractor –

Shall not contract with entity to whom Owner or Architect has made objection



Will not be required to contract with anyone Contractor has made objection



Shall not substitute Subcontractor if Owner or Architect has made objection

Conditions of the Contract: 5.2

58

Subcontractual Relations •

Contractor shall require Subcontractors –

To be bound by terms of Contract Documents



To assume toward Contractor all obligations and responsibilities which Contractor assumes toward Owner and Architect



To enter into similar agreements with Sub-subcontractors

Conditions of the Contract:

59

5.3

Contingent Assignment of Subcontracts •

If Owner terminates Contractor for cause, subcontracts are assigned by Contractor to Owner who assumes Contractor’s rights and obligations



Owner may further assign subcontract to successor Contractor or other entity

Conditions of the Contract: 5.4

60

ARTICLE 6 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS

The Construction Specifications Institute

61

Owner’s Right to Perform Construction and to Award Separate Contracts •

Owner reserves right to perform construction or operations with Owner’s own forces and to award separate Contracts



Owner shall coordinate activities of Owner’s own forces and separate Contractors with Work of Contractor



When Owner performs construction or operations, Owner subject to same Conditions of the Contract as Contractor

Conditions of the Contract: 6.1

62

Mutual Responsibility •

Regarding Owner and separate Contractors, Contractor shall –

Afford opportunity for storage of materials and equipment



Allow performance of their activities



Connect and coordinate Contractor’s construction and operations with theirs



If Contractor’s Work depends on Owner or separate Contractors, Contractor shall report discrepancies or defects in such construction; failure to report constitutes acceptance



Contractor shall reimburse Owner for costs payable to separate Contractors because of Contractor’s delays, improperly timed activities or defective construction; and vice versa

Conditions of the Contract:

63

6.2

Owner’s Right to Clean Up •

If disputed among Contractor, separate Contractors and Owner concerning clean up, Owner may clean up and Architect will allocate cost among those responsible

Conditions of the Contract: 6.3

64

ARTICLE 7 CHANGES IN THE WORK

The Construction Specifications Institute

65

General •



Changes accomplished after Contract execution that do not invalidate Contract –

Change order – Based on agreement among Owner, Contractor and Architect



Construction Change Directive – Requires agreement by Owner and Architect and may or may not be agreed to by Contractor



Minor change in the Work – Issued by Architect alone

Promptly performed under applicable provisions of Contract Documents

Conditions of the Contract: 7.1

66

Change Orders •

Written instrument, prepared by Architect and signed by Owner and Contractor, agreeing to –

Change in the Work



Amount of adjustment in Contract Sum



Amount of adjustment in Contract Time

Conditions of the Contract:

67

7.2

Construction Change Directive •





Written order, prepared by Architect and signed by Owner and Architect, directing a change in the Work prior to agreement on –

Amount of adjustment in Contract Sum



Amount of adjustment in Contract Time

Owner may, without invalidating the Contract, order following changes in the Work with the “CCD” –

Additions



Deletions



Other revisions

Used in absence of total agreement on Change Order terms

Conditions of the Contract: 7.3

68

Construction Change Directive •

Methods for adjustment of Contract Sum –

Itemized lump sum



Unit price



Fixed or percentage fee



Approved otherwise



Upon receipt, Contractor promptly proceeds with change and indicates agreement of disagreement with adjustment



Contractor’s signature indicates agreement

Conditions of the Contract:

69

7.3

Construction Change Directive •

If Contractor does not proceed or disagrees with method of adjustment of Contract Sum, Architect will determine reasonable method of adjustment that includes –

Costs of labor



Costs of materials



Equipment rental costs



Costs for • • •



Premiums for bonds and insurance Permit fees Sales, use or similar taxes

Additional costs of supervision and field office personnel

• When Contractor agrees, Change Order issued by A/E Conditions of the Contract: 7.3

70

Minor Changes in the Work •



Architect has authority to order minor changes in the Work not involving –

Adjustment in Contract Sum



Adjustment in Contract Time



Not inconsistent with Contract Documents

No Change Order needed

Conditions of the Contract:

71

7.4

ARTICLE 8 TIME

The Construction Specifications Institute

72

Definitions •

Contract Time – Period of time, including adjustments, allotted in Contract Documents for Substantial Completion of the Work



Date of Commencement of the Work – Date established in Agreement



Date of Substantial Completion – Date certified by Architect



Day – Calendar days unless otherwise defined

Conditions of the Contract:

73

8.1

Progress and Completion •

Time is of the essence – By executing Contract, Contractor confirms Contract Time is reasonable



Contractor cannot prematurely commence operations before effective date of insurance



Contractor proceeds expeditiously with adequate forces to achieve Substantial Completion within Contract Time

Conditions of the Contract: 8.2

74

Delays and Extensions of Time •

If Contractor is delayed by any of following, then extended by Change Order –

Act or neglect by Owner or Architect



Changes in the Work



Labor disputes



Fire



Unusual delay in deliveries



Unavoidable casualties



Mediation of arbitration



Other causes justified by Architect

Conditions of the Contract:

75

8.3

ARTICLE 9 PAYMENTS AND COMPLETION

The Construction Specifications Institute

76

Contract Sum •

Stated in Agreement, including adjustments, is total amount payable by Owner to Contractor for performance of the Work

Conditions of the Contract:

77

9.1

Schedule of Values •

Allocates entire Contract Sum to various portions of the Work



Prepared in form and supported by data to substantiate accuracy as Architect requires



Basis for reviewing Contractor’s Applications for Payment

Conditions of the Contract: 9.2

78

Applications for Payment •

Contractor submits in accordance with Schedule of Values supported by data substantiating right to payment



Includes –

Completed portions of the Work



Change Orders



Authorized Construction Change Directives



Stored materials



Cannot include requests for payment for portions of the Work for which a Subcontractor will not be paid

• Contractor warrants –

By time of payment, title to Work passes to Owner



Upon submittal, previous Certificates for Payment free of liens and claims

Conditions of the Contract:

79

9.3

Applications for Payment

Conditions of the Contract: 9.3

80

Certificates for Payment •

Upon receipt of Contractor’s Application for Payment, Architect will perform one of following –

Issue Certificate for Payment to Owner



Notify Contractor and Owner of Architect’s reasons for withholding certification in whole or in part

Conditions of the Contract:

81

9.4

Certificates for Payment •



Upon receipt of Contractor’s Application for Payment, Architect will perform one of following –

Issue Certificate for Payment to Owner



Notify Contractor and Owner of Architect’s reasons for withholding certification in whole or in part

Representation by Architect to Owner that –

Work has progressed to point indicated and quality in accordance with Contract Documents



Contractor is entitled to amount certified

Conditions of the Contract: 9.4

82

Certificates for Payment •

Not a representation that Architect –

Made exhaustive or continuous on-site inspections to check quality or quantity of the Work



Reviewed construction • • • • •

Means Methods Techniques Sequences Procedures



Reviewed data to substantiate Contractor’s right to payment



Ascertained purpose Contractor has used previous payments

Conditions of the Contract:

83

9.4

Decisions to Withhold Certification •



Architect may withhold Certificate for Payment in whole of in part –

To extent reasonably necessary to protect Owner



If in Architect’s opinion representations to Owner cannot be made

Architect may withhold a Certificate for Payment or may nullify Certificate previously issued to protect Owner because of subsequently discovered evidence because of –

Defective Work not remedied



Third party claims



Failure of Contractor to make payments to Subcontractors

Continued on following slide Conditions of the Contract: 9.5

84

Decisions to Withhold Certification Continued from previous slide –Reasonable evidence that Work cannot be completed for unpaid balance –Damage to Owner of separate Contractor –Reasonable evidence Work cannot be completed within Contract Time –Repeated failure to carry out Work in accordance with Contract Documents



When reasons are removed, certification will be made for amounts previously withheld



Owner may issue joint checks to Contractor and any entity to whom Contractor failed to make payment

Conditions of the Contract:

85

9.5

Progress Payments •

After Certificate issued, Owner makes payment



Contractor makes payment to Subcontractors reflecting retainage



Owner has right to request evidence that Contractor has made payments to others



Following does not constitute acceptance of Work not in accordance with Contract Documents –

Certificate for Payment



Progress payment



Partial or entire use or occupancy of Project

Conditions of the Contract: 9.6

86

Failure of Payment •

Contractor may stop Work until payment is received if any of following happen –

Architect does not issue Certificate



Owner does not pay Contractor

Conditions of the Contract:

87

9.7

Substantial Completion •

Stage in progress of Work when sufficiently complete in accordance with Contract Documents so that Owner can occupy or utilize for intended purpose



When Contractor considers Work substantially complete, Contractor prepares comprehensive list of items to be completed or corrected



Architect will make an inspection to determine whether the Work is substantially complete



Contractor completes or corrects items on list

Conditions of the Contract: 9.8

88

Substantial Completion •

When Work is substantially complete, Architect –

Prepares Certificate of Substantial Completion



Establishes Date of Substantial Completion



Establishes responsibilities of Owner and Contractor for • • • • • • •

Security Maintenance Heat Utilities Damage to Work Insurance Fix time for Contractor to finish list of items

Conditions of the Contract:

89

9.8

Substantial Completion •

Warranties commence on Date of Substantial Completion



Upon acceptance by Owner, and consent of surety, Owner makes payment of retainage

Conditions of the Contract: 9.8

90

Partial Occupancy or Use •

Owner may occupy or use any completed or partially completed portion of the Work



Can commence whether or not substantially complete



Consent of Contractor to partial occupancy or use cannot be unreasonably withheld



Partial occupancy or use does not constitute acceptance of the Work

Conditions of the Contract:

91

9.9

Final Completion and Final Payment •

When Contractor is ready for final inspection and acceptance, upon receipt of final Application for Payment –

Architect will make such final inspection



When Architect finds Work acceptable under Contract Documents and Contract fully performed



Architect will issue final Certificate of Payment stating entire balance is due and payable

Conditions of the Contract: 9.10

92

Final Completion and Final Payment •





Prior to Final Payment, Contractor must submit –

Affidavit that all payments made



Evidence that required insurance will remain in effect for period of time



Statement that insurance will be renewable



Consent of surety



Other data required by Owner

Making Final Payment constitutes waiver of claims by Owner except –

Unsettled liens, claims, security interests or encumbrances



Failure of Work to comply with Contract Documents



Terms of special warranties

Acceptance of Final Payment constitutes waiver of claims

Conditions of the Contract:

93

9.10

ARTICLE 10 PROTECTION OF PERSONS AND PROPERTY

The Construction Specifications Institute

94

Safety Precautions and Programs •

Contractor responsible for initiating, maintaining and supervising safety precautions and programs

Conditions of the Contract:

95

10.1

Safety of Persons and Property •

Contractor responsible for safety and protection to prevent damage, injury or loss to –

Employees on the Work



Work and materials and equipment



Other property at, or adjacent to, site

Conditions of the Contract: 10.2

96

Safety of Persons and Property •

Contractor shall –

Comply with applicable safety laws, statues, ordinances, codes, rules and regulations, and lawful orders



Erect and maintain safeguards



Exercise utmost care with explosives and hazardous materials



Remedy damage and loss



Designate Contractor employee with duty of prevention of accidents



Not permit loading that causes damage or unsafe condition

• Injury or damage to person or property –

If either party suffers injury or damage because of act or omission of other party, written notice to other party required



Notice should contain information to enable investigation

Conditions of the Contract:

97

10.2

Hazardous Materials •

Contractor –

Responsible for compliance with Contract Documents



If hazardous materials encountered, Contractor may stop Work in area and notify Owner

• Owner –

Responsible for hazardous materials required by Contract Documents except for Contractor’s negligence



Not responsible for hazardous materials Contractor brings on site not required by Contract Documents



Responsible if Contractor held liable by governmental agency for remediation of material from performing Work

Conditions of the Contract: 10.3

98

Emergencies •

In an emergency affecting safety, Contractor may act, at Contractor’s discretion, to prevent threatened damage, injury or loss

Conditions of the Contract:

99

10.4

ARTICLE 11 INSURANCE AND BONDS

The Construction Specifications Institute

100

Contractor’s Liability Insurance •

Contractor purchases and maintains insurance to protect from claims resulting from operations under Contract at limits specified or required –

Worker’s compensation



Bodily injury or death of Contractor’s employees



Bodily injury or death of other than Contractor’s employees



Personal injury liability



Damages because of injury or destruction of tangible property



Use of motor vehicles



Damage arising out of completed operations



Contractual liability

Conditions of the Contract:

101

11.1

Owner’s Liability Insurance •

Owner purchases and maintains Owner’s usual liability insurance

Conditions of the Contract: 11.2

102

Property Insurance •

Owner purchases and maintains builder’s risk “all risk” insurance which includes –



Perils of fire and physical loss



Windstorm



False-work



Theft



Testing and startup



Vandalism



Temporary buildings



Malicious mischief



Debris removal



Collapse



Contractor’s compensation



Earthquake



Architect’s compensation



Floor

Owner purchases and maintains boiler and machinery insurance

Conditions of the Contract:

103

11.3

Property Insurance •

Owner, at Owner’s option, may purchase and maintain insurance to insure Owner against loss of use of Owner’s property due to fire or other hazards



.Waivers of Subrogation –

Owner and Contractor waive all rights for damages against Each other and their subcontractors, sub-subcontractors, agents and employees, each of the other



Architect, Architect’s consultants, separate Contractors, and their subcontractors, sub-subcontractors, agents and employees



Subrogation: The purpose of subrogation is to compel the ultimate payment of a debt by the party who, in Equity (fairness) and good conscience, should pay it. This subrogation is an equitable device used to avoid injustice.

Conditions of the Contract: 11.3

104

Performance Bond and Payment Bond •

Owner has right to require Contractor to furnish bonds covering faithful performance and payment of obligations

Conditions of the Contract: 11.4

105

ARTICLE 12 UNCOVERING AND CORRECTION OF WORK

The Construction Specifications Institute

106

Uncovering of Work •

Architect may request portions of the Work covered, contrary to A/E request or requirements, be uncovered for Architect’s examination and replaced at Contractor’s expense



If Architect has not requested opportunity for examination, portions of the Work covered should be uncovered for Architect’s examination –

Replacement at Owner’s expense if Work in accordance with Contract Documents



Correction of Work and replacement at Contractor’s expense if Work not in accordance with Contract Documents

Conditions of the Contract:

107

12.1

Correction of Work •

Before or after Substantial Completion, Contractor should correct Work rejected by Architect for failing to conform to Contract Documents whether fabricated, installed or completed or not



After Substantial Completion, if within one year after Date of Substantial Completion or after commencement of warranties, Contractor should correct nonconforming Work –

Requires notice by Owner; failure to do so constitutes Owner’s waiver



If Contractor fails to correct Work, Owner has right to do so at Contractor’s cost



One year correction period not extended for Work corrected under this article.



Work not finished at Substantial Completion has extended dates.

Conditions of the Contract: 12.2

108

Acceptance of Nonconforming Work •

If Owner prefers to accept Work not in accordance with Contract Document –

Owner may do so instead of requiring removal and correction



Appropriate and equitable adjustment to Contract Sum

Conditions of the Contract:

109

12.3

ARTICLE 13 MISCELLANEOUS PROVISIONS

The Construction Specifications Institute

110

Governing Law •

Contract governed by law of Project location

Successors and Assigns •

Owner and Contractor bind themselves, their partners, successors, assigns and legal representatives to covenants, agreements and obligations contained in Contract Documents

Conditions of the Contract:

111

13.1 and 13.2

Written Notice •

Written notice deemed duly served –

Delivered in person to individual or member of firm or entity



Delivered to officer of corporation



With proof of delivery

Rights and Remedies •

Duties and obligations imposed by Contract Documents and rights and remedies in addition to those available by law

Conditions of the Contract: 13.3 and 13.4

112

Tests and Inspections •



Tests, inspections and approvals made as required by –

Contract Documents



Applicable laws, statutes, ordinances, codes, rules and regulations or lawful orders of public authorities

Contractor shall –



Make arrangements with independent entity



Bear costs



Bear costs to remedy deficient Work identified from testing and inspections

Owner will –

Bear costs for tests, inspections or approvals required after bids received



Bear costs for tests, inspections or approvals where law prohibits Owner from delegating cost to Contractor

Conditions of the Contract:

113

13.5

Tests and Inspections •

If additional testing, inspection or approvals is required, Architect will instruct Contractor to perform –

Owner bears costs if Work conforms to Contract Documents



Contractor bears costs if Work does not conform to Contract Documents

Interest •

Payments due and unpaid bears interest

Conditions of the Contract: 13.5 and 13.6

114

Time Limits on Claims •

Owner and Contractor commences claims and causes of action against other according to –

Agreement stipulations



Within time period specified by law, but not more than 10 years after Date of Substantial Completion

Conditions of the Contract: 13.7

115

ARTICLE 14 TERMINATION OR SUSPENSION OF THE CONTRACT

The Construction Specifications Institute

116

Termination by the Contractor •

Contract may be terminated if Work is stopped for 30 consecutive days through no fault of Contractor for any of following reasons –

Public authority order to stop Work



Act of government that requires Work to be stopped



Architect has not issued a Certificate for Payment, or Owner has not made payment



Owner fails to furnish evidence of financial arrangements to fulfill obligations

Conditions of the Contract:

117

14.1

Termination by the Contractor •

Contract may be terminated due to: –

Repeated suspensions



Delays or interruptions of entire Work

if time is equal to an aggregate of 100 percent of total number of days scheduled for completion, or 120 days out of any 365 day period •

Contractor may, upon 7 days written notice, terminate contract with Owner and recover payment for Work executed



Contract may be terminated if Work is stopped for 60 consecutive days because Owner has repeatedly failed to fulfill Owner’s obligations important to progress of the Work

Conditions of the Contract: 14.1

118

Termination by the Owner for Cause •



Owner may terminate Contract if Contractor –

Refuses or fails to supply workers and materials



Fails to make payment to Subcontractors



Disregards applicable laws, statutes, ordinances, codes, rules and regulations or lawful orders of public authorities



Breach of provision of Contract Documents

If Initial Decision Maker certifies cause exists, Owner may terminate Contract –

Exclude Contractor from site and take possession of materials and equipment



Accept assignment of Subcontractors



Finish the Work

Conditions of the Contract:

119

14.2

Termination by the Owner for Cause •

When terminates, Contractor not entitled to further payment



If unpaid balance exceeds costs of finishing, excess shall be paid to Contractor



If costs of finishing exceeds unpaid balance, Contractor pays Owner

Conditions of the Contract: 14.2

120

Suspension by the Owner for Convenience •

Owner may, without cause, order Contractor to suspend, delay or interrupt the Work in whole or in part



Contract Sum and Contract Time adjusted by Change Order and included profit; no adjustment for –

Performance would have been suspended, delayed, or interrupted by another cause for which Contractor responsible



Adjustment made or denied under another provision of Contract Documents

Conditions of the Contract:

121

14.3

Termination by the Owner for Convenience • •



Owner may terminate Contract for convenience and without cause Contractor shall –

Cease operations



Take action to protect and preserve the Work



Terminate all Subcontracts and Purchase Orders

Contractor entitled to –

Payment for Work executed



Costs for termination



Overhead and profit on the Work not executed

Conditions of the Contract: 14.4

122

ARTICLE 15 CLAIMS AND DISPUTES

The Construction Specifications Institute

123

Claims •





Demand or assertion by one party seeking payment of money or other relief with respect to Contract terms –

Includes other disputes and matters in question



Party making claim responsible for substantiation

Must be initiated by written notice to other party, Initial Decision Maker and Architect within 21 days after –

Occurrence of event giving rise to claim



Condition giving rise to claim first recognized

Pending resolution –

Contractor should proceed with the Work



Owner should continue to make payments

Conditions of the Contract: 15.1

124

Claims •

If Contractor wishes to make claim for increase in Contract Sum, written notice required prior to executing the Work



If Contractor wishes to make claim for increase in Contract Time, written notice required with cost estimate and probable effect of delay on progress



If weather conditions are basis of claim for additional time –

Claim should be documented substantiating conditions were abnormal



Conditions could not have been anticipated



Conditions had adverse effect on scheduled construction

Conditions of the Contract:

125

15.1

Claims •

Contractor and Owner waive claims against each other for consequential damages –

Damages incurred by Owner for • • •



Rental expenses Loss of use, income, profit, financing, business and reputation Loss of management or employee productivity or services

Damages incurred by Contractor for •

Principal office expenses including personnel compensation



Loss of business and reputation



Loss of anticipated profit

This does not include Liquidated Damages Conditions of the Contract: 15.1

126

Initial Decision •

Claims referred to Initial Decision Maker for initial decision



Initial Decision Maker reviews claim and take one of following actions –

Request additional supporting data



Reject claim in whole or in part



Approve claim



Suggest compromise



Advise parties unable to resolve claim



Initial decision shall be final and binding, but subject to mediation, and if that fails, to binding dispute resolution



Either party may file for mediation of an initial decision

Conditions of the Contract:

127

15.2

Mediation •

Claims, disputes or other controversial matters subject to mediation as a condition precedent to binding dispute resolution



Parties should endeavor to resolve claims by mediation, unless parties agree otherwise Fees shared by both parties

• •

Agreements reached are enforceable as settlement agreements in any court having jurisdiction

Conditions of the Contract: 15.3

128

Arbitration •

If selected as method for binding dispute resolution, claims not resolved by mediation subject to arbitration



Award rendered is final and judgment may be entered upon it according to applicable law in any court having jurisdiction



Either party may consolidate an arbitration under this Agreement with any other arbitration to which it is a party under certain conditions

Conditions of the Contract:

129

15.4

Questions? Call Friends, Network with other professionals, Call CSI members, GO online to CSI’s discussion forum at www.csinet.org

130