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Comparing the Standard Form Design-Build Agreements: AIA, ConsensusDocs & DBIA Agreement Forms
Practising Law Institute June 25, 2014
New York, New York
Alison Ashford Patrick J. O’Connor, Jr.
Brian Perlberg
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Documents Compared
►AIA A141-2014 Owner/Design-Builder Agreement
AIA A141-2004 Agreement
►ConsensusDocs 410 Design-Build Agreement & General Conditions
• Integrated agreement and GCs
►DBIA Nos. 525 & 535 Owner/Design-Builder Agreement and General
Conditions
Scope of Work (Process)
►AIA: Owner’s Criteria (Art. I) – Evaluated by DB (4.2) → Preliminary
Design (4.3) → DB‘s Proposal (4.4) → DB Amendment (4.4.3 + Ex.
A)
►ConsensusDocs: Owner’s Program (2.3.18) → Evaluated by DB
(3.1.1) → Schematic + Construction Drawings (3.1.4 - 3.1.7) → GMP
Proposal (3.2.1) → Acceptance by Owner → Amendment #1 (3.2.4)
(A list of additional services provided at 3.11 for which a separate
agreement is needed unless specifically included in GMP
Amendment)
►DBIA: Basis of Design Documents (Owner’s Criteria (1.2.14) + DB’s
Proposal – Deviation List) = Basis of Agreement (2.1) Design
Documents prepared after agreement formed (2.4)
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Pricing (Construction)
►AIA: Menu Approach → Design-Build Amendment allows parties to
select either (1) stipulated sum; (2) cost of the work + fee; or (3) cost
of the work + fee with a Guaranteed Maximum Price (GMP) (A.1.1)
►ConsensusDocs: Cost of the work + fee with a GMP
(alternative CD 415 lump sum to be used with CD 400)
►DBIA: Lump sum (Art. 6) (Doc. 530 employs a GMP model)
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Design-Builder’s Proposal (Substance)
►AIA:
Preliminary Design Documents (including clarifications, assumptions,
and deviations from Owner’s Criteria)
Proposed Contract Sum (including compensation method, which if cost
of the work, a breakdown by trade, allowances, contingencies and fee)
Substantial Completion Date
Qualifications and Exclusions
Key Personnel
Date proposal expires (4.4.1)
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Design-Builder’s Proposal (Substance) (cont.)
►ConsensusDocs (3.2.2, GMP set by Amendment 1):
List of design documents
List of allowances
List of assumptions and clarifications
Date of Substantial Completion
Schedules of alternative and unit prices
Contingency (3.2.7)
Self-performed work
Statement of patented/copyright materials
Date proposal expires (3.2.2)
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Design-Builder’s Proposal (Substance) (cont.)
►DBIA:
The DB Proposal is a part of the Basis of Design Documents which shall
include a Deviation List (deviations from Owner’s Criteria), if any exist
(2.1.2)
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Design-Build Proposal (Status)
►AIA: Not a Contract Document
►ConsensusDocs: Not expressly identified as a Contract Document
►DBIA: A Contract Document (part of Basis of Design Documents)
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State of Design at Time of Pricing
► AIA: Pre-GMP Amendment (Preliminary Design – program functions, site plan,
building plans, sections and elevations, structural system, major building systems
and outline specifications) (4.3) GMP given after Preliminary Design
Post-Amendment – Construction Documents (only enumerated design documents
are treated as Contract Documents (A.3))
► ConsensusDocs: Pre-GMP Amendment (Schematic to Construction Documents,
although possible to enter into GMP Amendment prior to Construction Documents
(3.1.7 & 3.2.1)) (All design documents at various phases are Contract Documents
(15.1))
► DBIA: Agreement to Construct entered into at signing. Status of Design is set forth
in Basis of Design (Art. 2). Post-Agreement (Interim design submissions, as agreed
upon, shall be consistent with Basis of Design Documents (2.4.1); DB shall submit
Construction Documents to Owner for approval – must be consistent with Basis of
Design Documents (2.4.2))
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Ownership of Design
► AIA: Those who create Instruments of Service (IOS) own the IOS. Owner
receives a limited irrevocable and non-exclusive license to use design for the
project (DB obtains similar license from designers); if Owner alters or uses
the design without retaining authors then Owner releases and indemnifies
DB, architect and authors (Art. 12).
► ConsensusDocs: Owner receives ownership of all design documents
(3.1.8.1) and parties check box on how to assign copyrights (3.1.8.2). Owner
may use design documents upon termination to complete project (3.1.8.3)
and may use design documents to maintain, renovate or expand project
(3.1.8.4), but at Owner’s sole risk if DP is no longer involved.
► DBIA: DB retains ownership (4.1) and Owner receives either limited license
or full ownership (upon selection of alternatives) upon payment (also may
use design upon termination for a specified sum (4.3.2)) and any alteration
by Owner at its sole risk (4.2) and Owner indemnifies others (4.5).
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Project Financial Info
►AIA: (7.2.7) Before moving dirt, yes, afterwards must be 1) fails to
make a payment; 2) material change 3) reasonable concern that
Owner can’t pay
►ConsensusDocs (4.2). DB may request in writing and stop work if not
provided. Owner has affirmative right to give notice of material change
to financing
►DBIA. DB may request and stop work if not provided.
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Warranties and Standard of Care for Design
►AIA: DB warrants the work free from defects (3.1.12). “Work”
includes the design (1.4.3). Warranty may be above standard of care,
which is based on local standards. AIA B143 has not such warranty.
►ConsensusDocs: DB warrants that materials and equipment
furnished under the construction phase will be free from defective
workmanship (3.8.1). Expressly disclaims U.C.C. warranties (3.8.2).
Standard of care is based on national standard for similar projects.
►DBIA: DB warrants that the construction, including materials and
equipment, will be free from defects (2.9.1). DB’s design must meet
prevailing industry standards. However, Owner has option (Art. 15) to
identify specific performance standards that can be objectively
measured.
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Indemnification
►AIA: DB indemnifies Owner (and its agents/employees) from all
claims and losses (including attorneys’ fees) arising out of or resulting
from the performance of the work, but only to the extent caused by
negligent acts or omissions of DB (architect, consultant or contractor).
(3.1.14.1)
►ConsensusDocs: DB indemnifies Owner (employees, consultants,
members, agents) from claims (including attorneys’ fees) for bodily
injury or property damage other than to the Work itself but only to
extent of DB’s negligence (subs or others employed by DB). DB
entitled to reimbursement for defense costs paid above percentage of
liability (11.1.1). A similar indemnity runs from Owner to DB (11.1.2).
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Indemnification (cont.)
►DBIA: DB indemnifies Owner (employees) against claims and losses
(including attorneys’ fees) for bodily injury or property damage other
than to the Work itself to the extent resulting from negligence of DB
(design consultants, subs, or others employed by DB) (7.4). A similar
indemnity runs from Owner to DB (7.5.1) Other indemnities
(patent/copyright, tax claim, payment claim (mechanics’ liens)) apply
(Art. 7).
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Limitation of Liability, Damage Waivers & Liquidated Damages
► AIA: No general limitation of liability provision. There is a prompt in the
DB Amendment for the parties to add language, if they wish, with respect
to liquidated damages (A.2.2). Owner and DB (their contractors (includes
designers), subs, consultants, agents, etc.) waive rights to extent loss
covered by property insurance (B.3.2.7), final payment waivers (9.10.4 &
9.10.5), mutual waiver of consequential damages (14.1.7) with exception
for any liquidated damages
► ConsensusDocs: Limited mutual waiver of consequential damages,
losses covered by insurance or items specifically listed from either
substantial completion or final completion are excluded. No limitation of
liability. Parties can specify liquidated damages (6.4). Final payment
waivers (10.5.2 & 10.5.3), waiver of subrogation (covers designers) for
damages covered by property insurance (11.3.3).
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Limitation of Liability, Damage Waivers & Liquidated Damages (cont.)
►DBIA: Fill in blank for Owner’s Liquidated Damages (5.4) (also
provides for early completion bonus fill point (5.6)); liquidated
damages for DB’s damages for delay fill point (5.7). Mutual waiver of
consequential damages with exception for liquidated damages (10.5).
Final payment waivers (6.7.2 & 6.7.3). Defective work discovered
after substantial completion gives no right to withhold funds but
treated as warranty work (6.7.4). Waiver of subrogation is provided
(5.3.5) and covers designers. Parties can agree to compensate DB
for force majeure events (5.7)
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Termination for Convenience
►AIA: Right afforded to Owner (13.2.4). DB entitled to payment for
work executed plus costs incurred by termination. DB also entitled to
“reasonable overhead and profit” on work not executed.
►ConsensusDocs: Right afforded to Owner (12.3). DB to be paid for
completed work, all loss or expense in connection with the work, plus
demobilization costs. Parties to agree upon payment to DB for Design
Phase and Construction Phase services and a premium based upon
timing of termination (12.3.1 and 12.3.2).
►DBIA: Right afforded to Owner (Art. 8). DB to be paid for work
completed and termination expenses and reasonable overhead and
profit on these items. DB entitled to additional payment as stated
percentage of remaining balance of contract price depending upon
date of termination.
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Changes
► AIA: Owner has right to unilaterally require DB to perform changes in the
work even if dispute over pricing (6.3). The Owner’s Change Directive to be
compensated as agreed upon or by Owner’s choice if no agreement (6.3.3 to
6.3.7). DB may dispute amount of compensation under Disputes article
(6.3.9 and Art. 14). Disputes over whether an item is a change are covered
by Art. 14 and DB must proceed with work (14.1.4).
► ConsensusDocs: Owner has right to unilaterally require DB to proceed with
changed work (9.2). If parties disagree on pricing, the cost of the change to
be determined by the “reasonable actual expense incurred and savings
realized in performance of the Work resulting from the change.” (9.5.4)
Owner pays DB 50% of its actual direct cost to perform the disputed work
and both parties reserve rights to dispute item under the Agreement.
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Changes (cont.)
►DBIA: Owner afforded unilateral right to make changes (Art. 9). DB is
entitled to cost reimbursement for change proposals Owner elects not
to proceed with (9.1.3). Owner may issue change directive prior to
agreement on cost or time (9.2). Disputes over whether an item is a
change or over the cost of an admitted change shall be resolved
under Disputes article (Art. 10), however DB shall proceed with the
work upon Owner’s direction but DB entitled to be paid 50% of its
reasonable estimated direct cost to perform work and both parties
reserve all rights (9.4.3).
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Claims and Disputes
►AIA: Parties to make election between litigation or arbitration (or
other) (1.3). Failure to elect means litigation. Time limit on claims as
per applicable law, but in no event later than 10 years after substantial
completion (14.1.2). Notice requirements for claims – 21 days after
occurrence or recognition if before final payment (14.1.3.1) and upon
prompt notice after final payment (if not waived by final payment)
(14.1.3.2). Initial decision on claim is condition precedent to
arbitration or litigation (14.3.1). Party waives right to pursue claim if,
upon receiving a demand for mediation, it fails to “file” for mediation
within 60 days (14.2.6.1).
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Claims and Disputes (cont.)
► ConsensusDocs: Parties select either arbitration or litigation (13.5). No
default where election is not made. Arbitration may be AAA or JAMS with
AAA the default if no election. Attorneys’ fees and costs borne by non-
prevailing party. Formal dispute resolution to be proceeded by (1) direct
discussions (13.2) and (2) mediation (13.4). There is an option for project
neutral or Dispute Review Board (13.3).
► DBIA: Arbitration is the default method of Dispute Resolution (10.3 / 535)
but parties are prompted to make election for court adjudication in Article 11
of Doc. 525. Parties are first directed to resolve disputes through direct
discussions (10.2.2 and 10.2.3) and, if unsuccessful, then via AAA mediation
(10.2.4). Notice requirements for claims – written notice to be provided not
more than 21 days after occurrence giving rise to claim or after claiming party
reasonably should have recognized event or condition giving rise to claim
(10.1).
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Building Information Modeling/Transmission of Electronic Date
►AIA: Prior to electronic exchange of Instruments of Service or other
documents, parties must agree on specific conditions regarding
format, limitations and licensing (1.1.12). For digital form, parties must
establish necessary protocols governing transmissions (1.1.12)
AIA Document E203-2013
AIA Document G202-2013
►ConsensusDocs: Requires parties to agree to a written protocol
governing the exchange of electronic/digital data and which
encompasses various minimum requirements (4.9)
ConsensusDocs: 200.2
ConsensusDocs: 301 (BIM Addendum)
► 4.3.11 establishes level of reliance and accuracy of transmissions
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Building Information Modeling/Transmission of Electronic Date
►DBIA: Parties to agree upon software for transmission of data and
protocol for making changes to electronic documents. Standard of
care with respect to creation of the data preserved (Article 12).
Building Modeling Information Exhibit
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