Wednesday, June 19, 2013

The New AIA Sustainable Project Contract Documents: A Good Basis for Managing Risk on Green Building Projects

With “green building” practices and projects becoming more mainstream across the country, it is more important than ever to account for the unique issues they raise.  Recognizing this need, the American Institute of Architects (“AIA”) introduced five new form agreements in the past year to be used on green building projects.  The new agreements are based on widely-used existing AIA form agreements, and incorporate much of the language and recommendations included in the AIA D503-2011 Guide for Sustainable Projects.  They have been drafted to accommodate the additional requirements imposed by new green building codes and third-party certifications, and clearly acknowledge that green building presents new roles, responsibilities, and risks in the design and construction industry.

The five new agreements are:

·         A101-2007 SP – Standard Form of Agreement Between Owner and Contractor, for use on a Sustainable Project where the basis of payment is a Stipulated Sum;

·       A201-2007 SP – General Conditions of the Contract for Construction, for use on a Sustainable Project; 

·       A401-2007 SP – Standard Form of Agreement Between Contractor and Subcontractor, for use on a Sustainable Project;

·      B101-2007 SP – Standard Form of Agreement Between Owner and Architect, for use on a Sustainable Project; and 

·         C401-2007 SP – Standard Form of Agreement Between Architect and Consultant, for use on a Sustainable Project.

The new agreements incorporate important new definitions and processes, most notably including the use of a “Sustainability Plan”.  The Sustainability Plan is prepared by the architect and identifies the project owner’s goals for green construction measures and certifications, outlines how those goals will be achieved, and describes the roles and responsibilities of the architect, contractor, and owner.  The Sustainability Plan also outlines specific details about design reviews, testing, or metrics to be used to verify achievement of green building goals; and the sustainability document required for a project.

For architects, the B101-2007 SP provides for new “sustainability services” in addition to basic services, and outlines substantial additional requirements regarding sustainability certification agreements, Sustainability Plan services (including conducting a “Sustainability Workshop”), design and construction Phases, project registration, and submissions of sustainability documentation to a certifying authority.  The architect must also discuss novel or untested materials or equipment with the owner and inform them of any potential impact on the Sustainable Objective if the product fails.  As provided for in the A201-2007 SP, a limitation of liability is included for the architect in the event of the failure of any such new materials or equipment chosen by the owner for the project.  The standard owner’s license with regard to Instruments of Service is also expanded to include submission to (and publication by, if necessary) a certifying authority to comply with certification requirements for a project.

For contractors and other parties in general, the A201-2007 SP includes a process for identifying the potential impact of material substitutions on green building objectives, the requirement that the contractor discuss novel or untested materials or equipment with the owner and architect to identify any potential impact on green building objectives, a limitation of liability for the contractor and architect if new and untested materials or equipment selected by the owner should fail, and an expansion of the standard waiver of consequential damages to include potential damages applicable to sustainable projects (such as unachieved energy savings, unintended operational expenses, lost financial or tax incentives, or unachieved gains in worker productivity).

For subcontractors, the A401-2007 SP contains additional provisions regarding recycling, reuse, removal, and disposal of materials, and requires the subcontractor to prepare a construction waste management and disposal plan setting forth the procedures and processes for salvaging, recycling, or disposing of construction waste.

Like all AIA form agreements, the new sustainable project contract documents are well thought out, and have been drafted to be appropriate for a wide range of projects.  However, it is important to account for the idiosyncrasies of each individual project, and of green building projects in particular, when preparing contracts.  Ideally, contracts for green building projects should identify a project owner’s expectations and goals for green building objectives, clearly designate the sustainability standard or rating system that a project is intended to achieve, identify any unusual or additional scopes of work for the architect, contractor, and their subcontractors and consultants, and provide for the use of new materials and building methods (and their potential failure).  The AIA sustainable project contract documents provide a solid basis for addressing these issues along with a framework for incorporating many other project considerations, making them a valuable tool for managing green building projects.

 
-         Heidi Gassman is an attorney at Higgins, Hopkins, McLain & Roswell, LLC.  HHMR represents a wide variety of clients, from individuals to small businesses to Fortune 500 companies. For additional information regarding the new AIA Sustainable Project Contract Documents, you can reach Heidi Gassman by e-mail at gassman@hhmrlaw.com or by telephone at (303) 987-9815.  Note that Heidi is also teaching on this subject at a Construction Law Seminar on June 28 and if you are interested in attending, visit www.halfmoonseminars.com and reference Program #13149.

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The information contained in this blog is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.