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A Simple Guide: Contract Documents for Contractors and Subcontractors

AIA Contract Documents aren’t just for architects. Contractors and subcontractors choose AIA documents because our agreements and forms are time-tested, fair and balanced and proven to minimize the risk of potentially ruinous consequential damages that may arise during a project. In this webinar, we review key characteristics and differences between some of the most used contractor agreements, forms and exhibits including Owner/Contractor agreements, Contractor/Subcontractor agreements, Payment Applications, Change Orders and more. Understanding what’s available will help you choose the appropriate contract for your project size and project type, whether that’s fixed-price, cost-plus, or design-build.

Video Transcript:

Table of contents:

  1. Introduction
  2. Design-Bid-Build
  3. Small Projects
  4. Forms and Exhibits
  5. Contract Administration Forms
  6. Insurance and Bonds Exhibit
  7. Digital Practice Documents
  8. Sustainable Projects Exhibits
  9. Master Agreements
  10. Facility Management
  11. Resources and Contact Information

 

0:00 – Intro

Welcome to A Simple Guide for Contract Documents for Contractors and Subcontractors presented by AIA Contract Documents. Before we get started, I am going to briefly go over a few housekeeping items.

This presentation and the information discussed today is protected by U.S. and international copyright laws. The statements expressed by the speakers reflect their own views and do not necessarily reflect the views or positions of ACD Operations, the AIA, or any respective individuals associated with them.

And any information presented during this webinar today is not intended to be provided as legal advice. We recommend you consulting with a licensed attorney in your jurisdiction for further information.

And finally, before we jump in I just want to do a quick introduction. My name is Mali, I am the Training and Education Manager here at AIA Contract Documents and I help our customers use our online service to complete their construction documents.

So I want to acknowledge there is probably a range of familiarly in the audience with not only AIA Contract Documents, but also contract documents in general. I want to quickly go over a few basics before I jump into the documents themselves.

AIA Contract Documents consist of over 240 forms and contracts that range in usage, project type, or delivery method and help define the relationships and terms involved in design and construction projects.  Our goal today is to narrow down this list of documents to help you as contractors and subcontractors know what’s out there, which of these forms and contracts relate to you, and how you can get ahold of them to use them in your own projects.

The documents are drafted and created by AIA Contract Documents Committee, which is made up of experts from across the country in design, construction, law, and insurance. They work together to continuously update and revise the documents to represent industry trends and keep up with ever changing world of construction that most of you in the audience are familiar with. The committee works hard to ensure each document is fair and balanced to all parties involved and are considered the industry standard for construction documents.

To get ahold of these templates to use in your own projects, you have a few options. The first is our state agency- specific documents. These are non-editable documents that you buy one time, enter in your project information, and receive a locked PDF version.

Next is our one time use editable documents which allows you to edit the actual legal language in a document. This options allows you to buy as you go or need, so you purchase a document, edit the document to fit your specific project, and finalize one time.

And finally, is our unlimited use annual subscription. This subscription gives you access to all the documents on the online service, allowing you to download, edit, and finalize as much as you need.

Both the one-time use documents and the annual license use our ACD5 online service. This online software allows you to create and manage your contract documents along with some time saving features like being able to auto-populate data into your forms and agreements. At the end we will put up a few resources if you want to learn more about the online service or how to purchase these documents.

So now, let’s talk about our documents for contractors and subcontractors.

03:37 – Design-Bid-Build

We’re going to begin our simple guide to the documents available by going over a very popular group of documents and that’s our AIA Contract Documents that deal with projects that follow a Conventional or a Design-Bid-Build delivery method. We call this our conventional family of documents, which involves the owner who is dividing his project into separate contracts for design, the architect, and construction, the contractor.

I’m going to use a visual diagram here to set up the key parties that you’ll see in these projects and which documents can define the relationships between the parties. We are going to focus on agreements that involve contractors and or subcontractors, there are more documents in this family then what we present today, but like I said earlier our goal is to help you narrow down the list of documents and try and keep it simple. So in spirit of the simple guide we’re going to focus on just a subset of the conventional family.

So to get us started we have the owner you can assume will be involved in the conventional family. This could be anybody, they could be a tenant for example, they don’t necessarily have to own the project or property. The owner would hire an architect for design, to prepare the drawings and specifications, and then help bid out the work to the contractor who will handle the construction.

We are going to focus on the very important relationship between the owner and the contractor, and there are a few different options in terms of the documents that will be used. These are the options of documents that can define the relationship between an owner and a contractor in a conventional family. Now if you’re familiar with AIA Contract Documents or you’ve seen them before you’re probably familiar with this little alphanumeric that you’re going to see before each document title. This alphanumeric just represents an organizational system in place to categorize each document that we use. Each of these letters and numbers actually represents a different aspect of the document, but for the purpose of today the alphanumeric is just going to serve as a quick and easy way to reference the document as a whole. So, when you’re working with the documents you’ll always see the alphanumeric as part of the title but you may also, for example, hear us reference b101 and that is referencing this entire document. It’s just the titles, they’re very helpful, but they get kind of wordy so I will use the alphanumerics a lot throughout today.

So as far as our owner contractor agreements you have these four up on the screen now and they’re going to differ in the pay structure that will be used in the owner contractor relationship.

You can use the A101 which is going to involve a stipulated sum or a fixed price contract and that’s just going to include just a fixed price flat fee. That’s where the project is done for a certain amount and then the parties agree to that amount, of course things can change, but the parties agree upfront that there isa  stipulated sum.

The A102 and A103 are cost of work contracts, or a Cost Plus pay structure. What this means is that the basis of payment is the cost of the work plus a fee, so the cost of work may not be known up front, but you determine what that is and then there is some sort of agreed upon fee. The difference is the A102 includes a Guaranteed Maximum price, which is a GMP. If you don’t want a guaranteed maximum price, so no price ceiling sky’s the limit, you can work with the A103.

Then the A104 is going to be an abbreviated owner contractor agreement. The A104 which is essentially an abbreviated version, so if you think of A101, A102, and A103 as being on the larger side, A104 you can think of as a medium length document.

As this relationship expands, it is likely the Contractor will also hire Subcontractors. For a contractor to hire a subcontractor there’s actually only one option here in the conventional family and that’s the A401. A common example is using the A401 to define the relationship between General Contractor and the subcontractors. This is a very popular agreement and we see it used a lot.

There also may be a surety that’s involved, a surety being a party that agrees to make payment to the owner in the event of non-performance by the Contractor. We have a few bond forms to define that relationship. The A310 the A312 and the A313 are going to ensure fulfillment of the bid performance payment and any warranty obligations and these forms can be used in conjunction with each other. Bonds and insurance can get pretty complicated, but we have a lot of resources that help you define these term, these forms, and learn more about them which are linked into this presentation.

Now you’ll notice there’s no direct contractual relationship between the contractor and the architect, that isn’t to say of course that they won’t be collaborating plenty throughout the project and they have responsibilities that rely on each other. So the roles and responsibilities are coordinated in this umbrella document that is called the A201 general conditions. The A201 is for the conventional family and like I said earlier this is an umbrella document it covers the entire project and it just coordinates the roles and responsibilities for the architect the owner and the contractor. It’s designed to be used in conjunction with these agreements and you may notice that I’ve slipped an asterisk there next to the a104. That’s because the a104 is not used in conjunction with the A201 general conditions, it has the general conditions written in itself. So, it defines it’s own general conditions whereas the other three documents are used in conjunction with this document. It is important to point out, the all the documents allow the contractor to request evidence of the owner’s financial arrangements to pay for the work prior to commencement of the work however only the A201 allows the contractor to request that kind of evidence after the work has been started but only in certain circumstances. The A201 also has language where the owner can designate its financial information as confidential and some other differences like concealed or unknown conditions, human remains, bureau markers, archaeological sites and unmarked wetlands. You can find this in the A201 but the A104 and smaller documents do not cover it.

 

10:02 – Small Projects

So, in addition to our conventional documents, and I referenced this a little bit earlier there are also these small project documents. This family is only comprised of two total documents, only one pertaining to this simple guide, and these are our short form agreements and they’re stripped down to the essentials basically they’re very short and they’re for small projects. I should mention this is all very subjective so when I’m using words like large, medium and small. There is not a specific definition, so there’s not a dollar amount, there’s not a period of time, this is just sort of to give you a general idea.

So, a small project is still going to have an owner with separate contracts for the architect and the contractor. In this case you would use the A105, the short form owner contractor agreement. It has its own conditions just like the A104 does and it is set up with a stipulated sum. There are some differences when comparing the A105 to the larger documents that are important to point out. One difference is, as I just said the a105, is only for a stipulated some job whereas A104 actually has all three of those options that I mentioned the larger document has, the stipulated sum, cost work – Cost Plus with a GMP and then Cost Work plus a fee without a GMP. The A105 does have its own General conditions and there are some other differences, for example it does not include any dispute resolution clauses.

 

Next up is our Forms and Exhibits, these are administrative forms and exhibits that go at the end of the agreements. They are not stand-alone agreements by any means, but they can be used for various purposes. Again, these are not all of them, but the ones that we decided were most pertinent to contractors and subcontractors.

 

11:35 – Forms and Exhibits

As I mentioned earlier we have over 240 total documents and they’re generally divided into agreements and forms. A form a simple, usually one or two page document, used to achieve some objective during the project, for example a change order or a payment application. The documents we are going to cover today are for the conventional family, but again we have other families and so there are other versions of these documents for the different families. For example there’s a design build family and we have design build versions of these forms.

 

11:53 – Contract Administration Forms

Let’s quickly go over each of these forms and their use:

Starting off, the G701 which is a change order. It is used to change something, anything on a construction project as long as all the parties agree. Most people think of this as being money or perhaps time, and that’s certainly true in most cases, but it could also be used for amending an Owner-Contractor Agreement. When I say amend, I mean in any change. There is a section that allows the parties to describe the terms of the change, it could be anything you want, it’s just an open field you can type in whatever you want. There are fields for changing the contract sum, the contract time, the date of substantial completion, those sorts of things as well. You’ll notice that underneath that we have the g701s which is the subcontractor Edition, so if you’re going to modify a contract or subcontractor agreement you can use the S or subcontractor variation of that form.

The g702 and g703 are intended to be used together and form our payment application document. The G702 is the actually application and certificate for payment and the G703 is the continuation sheet, which is simply a table to list each line item and its scheduled value, work completed, store materials, and things like that. So on the Continuation sheet, the G703, you are breaking down the details and then you are filling out the application for payment, the G702, with the big picture, a cover sheet so to speak. Then you submit it together to get paid. Again, you can see that we have a subcontractor version for each of these forms.

Next is a G704 which is a Certificate of Substantial Completion. This is a form that certifies that a job or portion designated is substantially complete as of a certain date. You can attach an inspection list or punch list of items that are still needed to be completed or corrected, but the owner can still use or occupy the project for its intended use.

G706 and G706a are both affidavits and used probably at or near the end of the job. The G706 is an affidavit of payment, basically stating that all debts and claims have been satisfied including two various subs. G706a is a contractor’s affidavit of release of liens, saying the contractor is not going to file a lien on the property. It is important to note that G706a is not actually a lien release in and of itself, we have recently published some lien releases, so we do have some generic lien release options like unconditional partial, conditional final, and unconditional final you are able to use with that G706A. We also have some state-specific ones for certain states available. Again, the G706a is an affidavit that’s not an actual Lien release, but you can attach a Lien Release that you write up or an AIA Contract Document Lien Release.

The last two forms are similar, we have the G709 and G714. The G709 is a proposal request, it’s a request for some sort of proposal and some sort of information for a proposed change. So any party can just use this to request information about a potential change. The G714 is a construction change directive, which is a directive to the contractor to make a change in the work where that change needs to be done quickly. So if the parties have not reached agreement, then you can’t use a change order, but you can use a CCD to get something done quickly so there’s not a delay on the project.

It is important to note, we do have other versions of the above forms for different families, for example a CM advisor version of the change order and a Design-Build version of the change order. There is a link included to our full list of forms if you want to learn more.

 

16:16 – Insurance and Bonds Exhibit

Next is our insurance and bond exhibits. You can see the list here, they are all insurance and bonds exhibits to the underlying agreement, so each agreement has its own insurance and bond exhibit that goes with it. They are all called Exhibit A, expect for A134 which is Exhibit B. You’ll notice that A104 and A105 do not have a separate exhibit, because they have that information within the document. Also important to note, that A132, A133, and A134 are in different families. As a mentioned earlier, there are different families or groups of documents based on project delivey method. So the A132, for example, is in the Cma family, the construction manager advisor family. So that’s why it says the Cma edition. The A133 and A134 are in the CMc family, the Construction Manager Constructor family.

 

17:13 – Digital Practice Documents

The next group is the Digital Practice Documents. You can see them listed here, but these documents were updated in 2022. C106 is an agreement to license this Digital Data being exchanged across two parties. The rest of the documents are exhibits, with the purpose being you would attach one or more exhibits to the underlying agreement, any of the agreements that we have talked about thus far. A lot of the documents like the A101, A102, A103 and others will refer to exhibits like the ones you see here. Many of these documents refer BIM, or Building Information Modeling. We have exhibits and also the BIM execution plan. There is also a G204 Model Element Table and an abbreviated Version of that Model Element Table, which allows Project Participants to select Levels of Development (LODs) that are assigned to Model Elements at various Project milestones.

 

18:08 – Sustainable Projects Exhibits

Another important type of exhibits are the Sustainable Project Exhibits.  The E204 is used for the conventional family and deals with sustainability for a green or environmentally friendly project. The parties essentially create a plan, a sustainable plan, with certain objectives that the parties agree to meet through the course of the project. We also have the E234 CMc Edition, which is for the Construction Manager Constructor family and the E235 Cma Edition, which is for the Construction Manager Advisor family.

 

18:42 – Master Agreements

We also do have Master Agreements available and those allow for multiple scopes of work. Then the parties would have separate work orders to actually do the work and can be repeated as needed throughout the duration of the project.

The Master Agreements that we have on the construction side are The A121 and A421. The relationships in these documents are very similar to the conventional family because the Owner hires a Contractor and then the Contractor can hire a Subcontractor. Again, the master agreement is for an ongoing situation so that agreement is not for any particular scope of work. The idea is that the parties execute multiple work orders, so every time there is work to be performed the parties execute a work order. For example, the party has executed an A121 Master Agreement and then they executed an A221, which is a very brief work order, every time there is work to be done. The contractor then performs that work for the owner, and you repeat as need. So, you would have multiple A221s, but that is shorter document, so the benefit here is that you don’t have to keep executing a new agreement every time.

 

19:53 – Facility Management

Finally, we have our facility management documents. This is a new family of documents that focus on building repair, maintenance, or improvement that is completed during a project. When you are executing an agreement for design or construction, that’s maybe about the five percent of the building’s life cycle, if that. But what about the remaining 95 percent of the building’s life cycle, while you need to maintain the facility? That is what these documents are for, the rest of the life cycle of the building or project.

The agreements are structured similar to the Master Agreements, where you have a F101 Master Maintenance Agreement, which should be used when an owner or facility manager intends to engage the same maintenance contractor on multiple individual projects over a period of time. F201 and F202, for as needed or ongoing maintenance work. Use of the F101 plus a work order creates a contract that includes both the terms and the scope of the maintenance work. It is an ongoing situation, which is the very nature of maintaining a facility.

There are two stand-alone agreements the F102-2023, Maintenance Agreement for As Needed Maintenance Work and the F103-2023, Maintenance Agreement for Ongoing Maintenance Work. These stand-alone agreements include the terms and scope of the maintenance work in one form. Unlike when using the F101-2023, Master Maintenance Agreement, a separate work order is not needed when using these stand-alone agreements. Stand-alone agreements are used when the contractor will not have reoccurring work with the client.

Then we have forms. The F701, Amendment for Maintenance Work, This document is used for implementing changes to the  parties’ agreement or scope of work. The parties agree upon all terms of the change, including any modifications to the contractor’s compensation and schedule.

F702 is an Invoice for Maintenance Work, similar to the G702 that we covered earlier. The F702 includes fill points that identify the underlying agreement, describe the Maintenance Work performed, identify where payment should be sent, and describe any supporting documentation.

There is also the F703 Request for Certificate of Insurance. This document is used to request a certificate of insurance. This request may be associated with a previously executed agreement or for when requesting a certificate of insurance for bidding purposes. This form is intended for use by either the client or the contractor.

Finally, we have the F704 Status Report for Maintenance Work. This document is used by the Contractor to submit status reports for the maintenance work associated with a work order contract. Section 6.3 of the F101, F102, and F103 provide that the contractor will keep the client reasonably informed of the progress of the maintenance work, including any complaints or incidents related to the maintenance work that may adversely impact the property. The contractor may use F704 to satisfy this requirement.

So these are all the documents available to use to maintain a facility or project.

 

23:07 – Resources and Contact Information

These are some additional resources that you can access for additional information or questions about any AIA document.

Thank you and have a great rest of your day!