By AIA Contract Documents
June 27, 2024
An owner’s representative is a professional hired to oversee and advise the owner throughout the design and construction process. When you work with an owner’s representative, they may have either full authority or limited authority to act on behalf of the owner. The difference between a representative’s full authority and limited authority on a construction project primarily revolves around the representative’s decision-making powers and the extent of the representative’s responsibilities. Below is a comparison table of the two authority types.
Full Authority | Limited Authority | |
| Decision Making | Comprehensive Control: The representative has wide-ranging decision-making powers over various aspects of the project, including budget adjustments, schedule changes, approval of change orders, and negotiations with contractors and suppliers. Autonomy: They can make critical decisions independently without needing further approval from the project owner. | Restricted Control: The representative’s decision-making powers are restricted to specific areas or withing certain monetary thresholds, typically set by the owner or higher management. They may need to seek approval for significant changes or decisions. Boundaries: Their actions are constrained by specific guidelines, policies, or thresholds for spending and changes. |
| Responsibility | Complete Responsibility: The representative is fully accountable for the decisions made and their outcomes, ensuring that all aspects of the project align with the owner’s objectives and expectations. | Shared Responsibility: Decisions often need to be reviewed and approved by the owner or other stakeholders, spreading the responsibility for outcomes.
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| Advantages | Efficiency: Faster decision-making processes as approvals are not delayed by needing higher-level authorization. Flexibility: Ability to respond swiftly to changing project conditions or issues. | Control and Oversight: Ensures that significant decisions are reviewed by the owner, maintaining better alignment with the owner’s strategic goals. Risk Mitigation: Reduces the likelihood of major errors or decisions that could negatively impact the project. |
| Risks | Overreach: Potential for making unilateral decisions that may not fully consider the owner’s preferences or long-term vision. | Delays: Potential for slower decision-making due to the need for higher-level approvals. Bureaucracy: Can create additional layers of bureaucracy, which may hinder quick responses to urgent project needs. |
| Accountability | High level of accountability for all outcomes, whether positive or negative. | Accountability is shared with decision makers |
| Application in Practice | Might be granted in situations where the owner’s representative has proven expertise and the owner has high trust in their decision-making abilities, or in projects requiring rapid and flexible responses. | Common in projects where the owner prefers to maintain closer oversight and control, or where the representative is newer or less experienced, ensuring that critical decisions are thoroughly reviewed. |
Understanding these distinctions helps clarify the representative’s roles and expectations and ensures their authority level aligns with the project’s needs and the owner’s preferences.
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.