Contract documents

April 25, 2022

A contractor’s or design professional’s preconstruction services can be used to determine project feasibility and maximize project value. These services can range from design assist, cost estimating, and scheduling to logistics planning, material selections, and value engineering. They are performed before construction begins, with the goal of assisting clients to make informed decisions in the early design and development stages of the project.

When a contractor or design professional performs preconstruction services, risk and liability undoubtedly exist. Often, these services are performed without a clear understanding of the scope, anticipated fees, or payment structure. Sometimes, preconstruction services are even performed prior to signing off on an agreement. This can happen where owners, contractors, construction managers, and design professionals have pre-existing relationships and a positive work history. In these cases, those performing the work may believe that they will be compensated for their services under the forthcoming agreement, despite the parties not having yet executed the contract or defined the scope of services. For construction professionals performing preconstruction services, ensuring that any risk and liability, as well as payment terms, are agreed upon prior to performance can lead to an uninterrupted design process.

The AIA’s new C403™–2021, Client and Consultant Agreement for Design Assist Services may help contractors protect against issues that arise when performing preconstruction services. Design Assist is a form of collaboration where a construction professional provides information to assist a design professional in the design of the project. This collaboration typically takes place before the work has been awarded, i.e., during the preconstruction phase. The C403 defines Design Assist services as “all services performed by the Consultant under this Agreement for the purpose of assisting the design professional of record in its obligation to develop the design for the Project.” The agreement allows the parties to insert a description of the Design Assist services and it also sets forth the Client’s responsibilities when Preconstruction Services are performed. Within the C403, “Preconstruction Submissions” are defined as “Instruments of Service . . . that the Client is obligated to submit … to assist with the design of the Project.” As with most AIA Contracts, the Client is granted a limited, irrevocable, and nonexclusive license to use the Consultant’s Instruments of Service. The license is granted to allow the Client’s “other consultants and other Project Participants to reproduce and . . . make changes, corrections, or additions to the Instruments of Service for the purpose of preparing the Preconstruction Submissions and for purposes of designing, constructing, using, maintaining, altering, and adding to the Project, provided that the Client substantially performs its obligations under this Agreement, including prompt payment of all sums due …” Therefore, under the C403, payment must be properly made for the Client to use the Instruments of Service, and make use of the Design Assist services.

The C403 addresses necessary details of preconstruction Design Assist services, including performance and payment terms. By addressing these details upfront, both parties can act with transparency, and expectations over obligations and responsibilities are reasonably set before work is performed. Clients can know how and when services will be performed during the preconstruction phase, and those performing Design Assist services can have a complete understanding of what is expected to properly perform, and when they will receive payment.

Although the standard language in AIA Contract Documents provide a fair and balanced starting point, parties may modify the language to suit their specific needs. In this regard, they can consult the various guides and white papers published by the AIA. If you’re interested in using the C403, see the AIA’s and American Institute of Steel Construction’s White paper: Delegated Design, Design Assist, and Informal Involvement – what does it all mean?

AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.