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March 1, 2024
Scheduling a construction project is a nuanced process, with each project requiring a tailored schedule that reflects its unique characteristics. This article explores important considerations for setting the date for the commencement of work, focusing on AIA Contract Documents, specifically the A201-2017 General Conditions of the Contract for Construction and A101-2017 Standard Form of Agreement between Owner and Contractor.
Understanding Contract Terms: What You Need to Know About Commencement of Work
Before diving into key considerations, it’s essential to understand the contract terms related to scheduling. In A201-2017, Article 8 outlines the general conditions regarding the project schedule. For instance, Section 8.1.1 defines “Contract Time” as the period allocated for the substantial completion of the work, including any authorized adjustments. Additionally, Section 8.2.1 clarifies that the contractor confirms that the Contract Time is a reasonable duration for completing the work.
The specifics of Contract Time are detailed in Article 3 of A101-2017, particularly Section 3.1, which allows the parties to choose the commencement date. This could be:
- The date of the Agreement.
- The date set in a notice to proceed issued by the Owner.
- Another specified date or method for determining the commencement date.
Section 3.2 of A101-2017 further emphasizes that the “Contract Time shall be measured from the date of commencement of the Work.”
Key Considerations When Setting the Commencement of Work Date
Choosing the right commencement date is critical in managing project timelines effectively and avoiding delays or disputes. Below are the key options and considerations for determining this date:
Option 1: The Date of the Agreement
Selecting the Agreement date as the commencement date offers several benefits:
- Faster Start: By initiating the schedule from the Agreement date, the contractor can start project activities without waiting for formal approval or administrative procedures related to the notice to proceed.
- Clarity: Using the Agreement date helps avoid confusion about when the project officially begins.
However, this option also has potential drawbacks:
- Possible Delays: Delays in finalizing the Agreement or obtaining necessary approvals may push back the actual project start, affecting the overall schedule.
- Limited Preparation Time: Starting on the Agreement date may leave insufficient time for crucial preparations such as mobilization, procurement, and resource allocation.
Option 2: The Date Set Forth in a Notice to Proceed
Using the notice to proceed as the commencement date offers a formalized approach:
- Formal Authorization: The notice to proceed provides clear authorization to begin work once all necessary approvals and contracts are in place.
- Risk of Delays: However, this approach can be risky if the notice is contingent upon external factors, such as regulatory approvals. To mitigate this risk, parties may want to limit the time frame for issuing the notice and allow for adjustments to the contract sum if delays occur.
Option 3: A Custom Date or Means to Determine the Commencement Date
In some cases, a specific date other than the Agreement date or notice to proceed may be preferred:
- Tailored Approach: Depending on the unique conditions of the project, this option allows flexibility in setting a commencement date that better aligns with project needs.
- Clear Communication is Key: If the parties opt for a custom date, it’s crucial to negotiate and document how the date will be determined to avoid misunderstandings that could lead to delays or disputes.
Best Practices for Scheduling and Managing Contract Time
Effective project management begins with clear communication and a well-defined schedule. It is vital that all parties involved are aligned on the commencement date to avoid confusion and project delays. If either party feels that any aspects of the contract time are unreasonable, the time to address and negotiate changes is before executing the agreement—not afterward.
A clear, well-communicated commencement date serves as a foundation for a successful project. Addressing any discrepancies or misunderstandings early in the process can help streamline operations and reduce the likelihood of costly delays.
Ensuring a Smooth Start with a Clear Commencement Date
Setting a clear commencement date is an essential first step in any construction project. Whether you choose the Agreement date, a notice to proceed, or another specified date, it’s important to understand the benefits and risks of each option. Proper communication between the owner and contractor ensures that expectations are aligned, which can prevent project delays and disputes.
By selecting the right commencement date, you can pave the way for an efficient project schedule and ensure that your project starts on the right foot.
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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.