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The Construction Specifications Institute
Audio Presentation
Bonus SessionAIA DOCUMENT A201-2007
GENERAL CONDITIONS OF THECONTRACT FOR CONSTRUCTION
Project DeliveryEducation Program
Construction Document Technology (CDT)Preparatory Course
2011
1www.csinet.org
This presentation is protected by US and International copyright laws. Reproduction, distribution, display and use of this presentation without written permission of the speaker and The Construction Specifications Institute is prohibited.
© The Construction Specifications Institute 2011
The Construction Specifications Institute is a Registered Provider with The American Institute of Architects Continuing Education Systems. Credit earned on completion of this program will be reported to CES Records for AIA members. Certificates of Completion for non-AIA members available on request.
This program is registered with the AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.
AIA
2
Standard General Conditions by Professional Organizations
• This bonus session is based on AIA (American Institute of Architects) Document A201-2007 General Conditions of the Contract for Construction
• Other standard general conditions by other professional organizations include the following– EJCDC (Engineers Joint Contract Document Committee) Document C-
700 Standard General Conditions of the Construction Contract – AGC (Associated General Contractors of America) ConsensusDOCS
Document 200 Agreement and General Conditions Between Owner and Contractor
3Conditions of the Contract
The Construction Specifications Institute
General Conditions Comparison
A201 C-700 200• General Provisions• Owner• Contractor• Architect• Subcontractors•Construction by Owner or by Separate Contractors• Changes in the Work• Time• Payments and Completion• Protection of Persons and Property• Insurance and Bonds• Uncovering and Correction of Work• Miscellaneous Provisions•Termination or Suspension of the Contract• Claims and Disputes
• Definitions and Terminology• Preliminary Matters• Contract Documents: …• Availability of Lands; …• Bonds and Insurance• Contractor’s Responsibilities• Other Work at the Site• Owner’s Responsibilities• Engineer’s Status During Construction• Changes in the Work; Claims• Cost of the Work; …• Change of Contract Price and Time• Tests and Inspections; …• Payments and Completion• Suspension and Termination • Dispute Resolution• Miscellaneous
• Agreement• General Provisions• Contractor’s Responsibilities• Owner’s Responsibilities• Subcontracts• Contract Time• Contract Price• Changes• Payment•Indemnity, Insurance, Waivers and Bonds• Suspension, Cure, Termination • Dispute Resolution• Miscellaneous• Contract Documents
The Construction Specifications Institute
General Conditions Comparison• AIA and EJCDC Documents
– Separate and supplemental to Agreement– High page count AIA-39 + EJCDC-62– Design professional is “visible”– AIA subscription / EJCDC download
• AGC ConsensusDOCS– Integrated Agreement– Low page count – 35, more concise– Design professional is not “visible” as much– Subscription
AIA A201 Conditions of the ContractTable of Articles
1. General Provisions2. Owner3. Contractor4. Architect5. Subcontractors6. Construction by Owner
or by Separate Contractors
7. Changes in the Work8. Time
6Conditions of the Contract
9. Payments and Completion
10. Protection of Persons and Property
11. Insurance and Bonds12. Uncovering and
Correction of Work13. Miscellaneous
Provisions14. Termination or
Suspension of the Contract
15. Claims and Disputes
Conditions of the Contract• Defines basic rights,
responsibilities, and relationships of parties involved in performance of Contract
• Inherent part of Owner-Contractor Agreement
Project Delivery Practice Guide: 11.5.4.2 7
The Construction Specifications Institute
ARTICLE 1GENERAL PROVISIONS
8
Basic Definitions• The Contract Documents
– Enumerated in Owner-Contractor Agreement• Agreement• Conditions of the Contract• Drawings• Specifications• Addenda• Other documents listed• Modification
– Modifications• Written amendment • Change order• Construction change directive• Written order for a minor change
9Conditions of the Contract: 1.1
Basic Definitions• The Contract
– Agreement between the parties
– Not an agreement with certain other parties
• The Work– Construction and services
required by Contract Documents
– Labor, materials, equipment and services to fulfill Contractor’s obligations
– Whole or part of Project
10Conditions of the Contract: 1.1
Basic Definitions• The Project
– Total construction of Work performed under Contract Documents in whole or part
– May include construction by Owner and separate Contractors
11Conditions of the Contract: 1.1
Basic Definitions• The Drawings
– Graphic and pictorial portions of Contract Documents– Shows design, location and dimensions of Work
• The Specifications– Written requirements for materials, equipment, systems, standards and
workmanship for Work
• Instruments of Service– Representations of creative work by Architect and consultants– Studies, surveys, models, sketches, drawings, specifications, and
similar materials
• Initial Decision Maker– Person identified to render decisions on claims and terminations
Commentary: Previous editions did not useinitial decision maker – Architect was thedecision maker 12
Conditions of the Contract: 1.1
Intent of Contract Documents• Contract Documents to include items necessary for
execution and completion of Work by Contractor• Contract Documents are complementary• Performance by Contractor required only to extent of
Contract Documents and reasonably inferable
13Conditions of the Contract: 1.2
Ownership of Instruments of Service• Architect and consultants deemed author and owners of
respective instruments of service • The Following are authorized to use instruments of service
exclusively for execution of Work, but does not own or can claim a copyright– Contractor– Subcontractors– Sub-subcontractors– Material or equipment suppliers
14Conditions of the Contract: 1.5
The Construction Specifications Institute
ARTICLE 2OWNER
15
General• Owner is a person or entity identified in Agreement• Designated representative has express authority to bind
Owner to matters requiring approval or authorization• If requested by Contractor, furnish statement of record legal
title to property (site) for Contractor’s mechanic’s lien rights
16Conditions of the Contract: 2.1
Information and Services Required of the Owner
• If requested by Contractor, furnish reasonable evidence of financial arrangements to fulfill obligations
• Secure and pay for approvals, easements, assessments and charges (Contractor responsible for permits and fees designated by Contractor Documents)
17Conditions of the Contract: 2.2
• Furnish survey describing physical characteristics, legal limitations, utility locations, and legal description
• Furnish information or services designated by Contractor Documents
Owner’s Right to Stop the Work• Can issue written order
to Contractor to stop the Work if Contractor – Fails to correct Work not in
accordance with Contract Documents
– Repeatedly fails to carry out the Work in accordance with Contract Documents
• Has no duty to stop the Work for benefit of others
18Conditions of the Contract: 2.3
Owner’s Right to Carry out the Work• Can correct deficiencies in the Work if Contractor
– Defaults – Neglects to carry out Work in accordance with Contract Documents– Fails to commence and continue correction of such default or neglect
19Conditions of the Contract: 2.4
The Construction Specifications Institute
ARTICLE 3CONTRACTOR
20
General• Contractor is a person or entity identified in Agreement• Designated representative has express authority to bind
Contractor to matters under Contract• Perform Work in accordance with Contract Documents• Not relieved of obligations
– Tests and inspections or approvals performed by others– Architect’s administration of Contract
21Conditions of the Contract: 3.1
Review of Contract Documents andField Conditions by Contractor
• Execution of Contract represents Contractor– Has visited site– Become generally familiar with local
conditions– Correlated observations with Contract
Documents
• Before starting Work, Contractor shall– Study and compare various Contract
Documents– Take field measurements of existing
conditions– Observe any conditions at site affecting Work
22Conditions of the Contract: 3.2
Supervision and ConstructionProcedures
• Contractor shall supervise and direct Work using best sill and attention
• Solely responsible for, and have control over, following construction activities (even if Contract Documents include instructions for following activities, Contractor obligated to evaluate jobsite safety)– Means– Methods– Techniques– Sequences – Procedures – Coordination
23Conditions of the Contract: 3.3
Supervision and ConstructionProcedures
• Contractor responsible to Owner for acts and omissions of Contractor
• Contractor responsible for inspection of Work already performed for proper condition to receive subsequent Work
24Conditions of the Contract: 3.3
Labor and Materials• Contractor provides and pays for following for proper
execution and completion of the Work– Labor– Materials– Equipment– Tools– Construction equipment– Water – Heat– Utilities– Transportation– Other facilities and services
25Conditions of the Contract: 3.4
Labor and Materials• Contractor may make substitutions
– Only with consent of Owner– After evaluation by Architect– In accordance with
• Change order• Construction change directive
• Contractor shall – Enforce strict discipline and good order
among employees and persons carrying out Work
– Not employ unfit persons or persons not properly skilled
26Conditions of the Contract: 3.4
Warranty• Contractor warrants to Owner and Architect that materials and
equipment furnished– Will be of good quality and new – Will conform to Contract Documents– Will be free from defects
• Work not conforming to Contractor’s warranty may be considered defective
Commentary: Contractor does not warrant adequacy ofContract Documents
27Conditions of the Contract: 3.5
Permits, Fees, Notices, and Compliance with Laws
• Contractor shall secure and pay for– Building permit– Other permits– Fees– Licenses– Inspections by government agencies
• If Contractor performs Work contrary to following, Contractor assumes responsibility and bears cost for correction– Laws– Statutes– Ordinances
28Conditions of the Contract: 3.7
– Codes– Rules and regulations– Lawful orders of public
authorities
Permits, Fees, Notices, and Compliance with Laws
• Contractor to provide notice to Owner and Architect if following conditions encountered– Subsurface or concealed differences that differ from Contract Documents– Unknown physical conditions of an unusual nature that differ from those
ordinarily found to exist
29Conditions of the Contract: 3.7
Allowances• Costs included in Allowance
– Cost of material and equipment delivered to site– Taxes, less trade discounts
• Costs included in Contract Sum– Unloading and handling at site– Labor– Installation– Overhead– Profit – Other expenses
• Cost differences adjusted by change order
30Conditions of the Contract: 3.8
Superintendent• Contractor shall employ
competent superintendent and assistants– In attendance at Project site
during performance of Work– That represents the Contractor– Communications are binding
as if given to Contractor– Owner and Architect has no
reasonable objection– Cannot be changed without
Owner’s consent
31Conditions of the Contract: 3.9
Contractor’s Construction Schedule• Contractor shall submit construction schedule for the Work
– Shall not exceed Contract Documents time limits– Revised at appropriate intervals– Related to entire Project and extent required by Contract Documents– Shall provide for expeditious and practicable execution of the Work
• Contractor shall submit submittal schedule
32Conditions of the Contract: 3.10
– Coordinated with construction schedule
– Allow Architect reasonable time to review
Documents and Samples at the Site• Contractor shall maintain following at Project site in good
order and marked currently to indicated field changes and selections made during construction– Drawings– Specifications– Addenda– Change orders – Other modifications– Shop drawings– Product data– Samples– Similar required submittals
33Conditions of the Contract: 3.11
Shop Drawings, Product Data and Samples
• Terms defined• Shop drawings, product data,
samples and similar submittals are not Contract Documents
• Purpose is to demonstrate way Contractor proposes to conform with information given and design concept expressed in Contract Documents
• Submittals not required by Contract Documents may be returned by Architect without action
34Conditions of the Contract: 3.12
Shop Drawings, Product Data and Samples
• Contractor shall review submittals for compliance with Contract Documents, approve, and submit to Architect
• By submitting submittals, Contractor represents to Owner and Architect that Contractor has– Reviewed and approved them– Determined and verified materials, field measurements and field
construction criteria– Has checked and coordinated submittal information with requirements of
the Work and Contract Documents
• Contractor shall perform no Work until respective submittals have been approved by Architect
35Conditions of the Contract: 3.12
Shop Drawings, Product Data and Samples
• Work shall be in accordance with approved submittals and Contractor is not relieved from deviations from Contract Documents
• Contractor not required to provide licensed architectural or engineering services unless
36Conditions of the Contract: 3.12
– Performance and design criteria specifically required by Contract Documents for portion of the Work
– Unless necessary for means, methods, techniques, sequences and procedures
Use of Site• Contractor shall
– Confine operations to site and areas permitted by• Laws• Statutes • Ordinances• Codes• Rules and regulations• Lawful orders of public
authorities– Not unreasonably
encumber site with materials or equipment
37Conditions of the Contract: 3.13
Cutting and Patching• Contractor responsible for following and for restoring areas to
condition existing prior to– Cutting– Fitting – Patching
• Contractor shall not damage or endanger Work of the Owner or separate Contractors
38Conditions of the Contract: 3.14
Cleaning Up• Contractor shall keep premises free from accumulation of
waste materials or rubbish• At completion of Work, Contractor shall remove
– Waste materials– Rubbish– Contractor’s tools– Construction equipment– Machinery– Surplus materials
• If Contractor fails to clean up, Owner may do so and be reimbursed by Contractor
39Conditions of the Contract: 3.15
Access to Work• Contractor should provide Owner and Architect access to the
Work in preparation and progress
40Conditions of the Contract: 3.16
Royalties, Patents and Copyrights• Contractor shall pay royalties and license fees• Contractor shall defend suits or claims for infringement of
copyrights and patent rights and hold Owner and Architect harmless from loss
• Contractor not responsible for such defense or loss when particular design, process or product of particular manufacturer is required by Contract Documents
41Conditions of the Contract: 3.17
Indemnification• Contractor shall indemnify and hold harmless the following
from claims, damages, losses and expenses from performance of the Work to the extent caused by negligent acts or omissions– Owner– Architect– Architect’s consultant
42Conditions of the Contract: 3.18
The Construction Specifications Institute
ARTICLE 4ARCHITECT
43
General• Architect is a person or entity identified in Agreement• Designated representative has express authority to bind
Contractor to matters under Contract• Duties, responsibilities and limitations of authority of Architect
as set forth in Contract Documents shall not be – Restricted– Modified – Extended
44Conditions of the Contract: 4.1
• If Architect is terminated, Owner shall employ successor architect as to whom Contractor has no reasonable objection
Administration of the Contract• Architect will
– Provide administration of the Contract as described in Contract Documents
– Be Owner’s representative during construction
– Have authority to act on behalf of Owner to extent provided in Contract Documents
45Conditions of the Contract: 4.2
Administration of the Contract• Architect will visit site at intervals appropriate to stage of
construction– To become generally familiar with progress and qualify of portion of Work
completed– To determine in general if Work observed is being performed in a manner ,
when completed, will be in accordance to Contract Documents– Not required to make exhaustive or continuous on-site inspections to check
quality or quantity of the Work
46Conditions of the Contract: 4.2
Administration of the Contract• Architect will keep Owner reasonably informed about progress
and quality of Work completed and report to Owner– Known deviations from Contract Documents and schedule– Defects and deficiencies observed in the Work
• Architect not responsible for Contractor’s failure to perform Work in accordance with Contract Documents
47Conditions of the Contract: 4.2
Administration of the Contract• Architect will not have control over, charge of, or responsibility
for, construction – Means– Methods – Techniques– Sequences– Procedures– Safety precautions and programs
48Conditions of the Contract: 4.2
Administration of the Contract• Architect will have no
control over or charge of and will not be responsible for acts and omissions of
– Contractor– Subcontractors– Agents or employees– Other persons or entities
performing Work
49Conditions of the Contract: 4.2
Administration of the Contract• Based on Contractor’s
Applications for Payment, Architect will– Review and certify amounts due– Issue Certifications for Payment
• Architect has authority – To reject Work not conforming
with Contract Documents– To require inspection or testing
of Work whether or not fabricated, installed or completed
50Conditions of the Contract: 4.2
Administration of the Contract• Architect will review and take action
on Contractor’s submittals– For limited purpose of checking for
conformance with information given– Design concept expressed in Contract
Documents– Not conducted for purpose of
determining accuracy and completeness of details, dimensions, and quantities of for substantiating instruction for installation or performance of equipment or systems
– Review does not constitute approval of safety precautions
51Conditions of the Contract: 4.2
Administration of the Contract• Architect will
– Prepare Change Orders and Construction Change Directives– Authorize minor changes – Investigate and make determinations and recommendations regarding
concealed and unknown conditions
52Conditions of the Contract: 4.2
Administration of the Contract• If Owner and Architect agree, Architect will provide project
representatives at site• Architect will interpret and decide matters concerning
performance under, and requirements of, Contract Documents on written request of either Owner and Contractor (this may want to be changed if initial decision maker is used)
• Regarding communications – Owner and Contractor shall endeavor to communicate through Architect– Communications by and with Architect’s Consultants through Architect – Communications by and with Subcontractors through Contractor
53Conditions of the Contract: 4.2
Administration of the Contract• Interpretations and decisions of Architect will
– Be consistent with intent of, and reasonably inferable from, Contract Documents
– Endeavor to secure faithful performance by Owner and Contractor– Not show partiality to Owner or Contractor– Not be liable for results of interpretations or decisions rendered in good
faith
54Conditions of the Contract: 4.2
• Architect’s decisions on aesthetic effect will be final if consistent with intent expressed in Contract Documents
Administration of the Contract• Architect will review and respond to requests for information
about Contract Documents
55Conditions of the Contract: 4.2
The Construction Specifications Institute
ARTICLE 5SUBCONTRACTORS
56
Definitions• Subcontractor is a person or entity who has direct Contract
with Contractor to perform portion of Work at site• Sub-subcontractor is a person or entity who has direct or
indirect Contract with Subcontractor to perform portion of Work at site
57Conditions of the Contract: 5.1
Award of Subcontracts and OtherContracts for Portions of the Work
• Contractor– Shall not contract with entity
to whom Owner or Architect has made objection
– Will not be required to contract with anyone Contractor has made objection
– Shall not substitute Subcontractor if Owner or Architect has made objection
58Conditions of the Contract: 5.2
Subcontractual Relations• Contractor shall require Subcontractors
– To be bound by terms of Contract Documents– To assume toward Contractor all obligations and responsibilities which
Contractor assumes toward Owner and Architect – To enter into similar agreements with Sub-subcontractors
59Conditions of the Contract: 5.3
Contingent Assignmentof Subcontracts
• If Owner terminates Contractor for cause, subcontracts are assigned by Contractor to Owner who assumes Contractor’s rights and obligations
• Owner may further assign subcontract to successor Contractor or other entity
60Conditions of the Contract: 5.4
The Construction Specifications Institute
ARTICLE 6CONSTRUCTION BY OWNER OR BY
SEPARATE CONTRACTORS
61
Owner’s Right to Perform Construction and to Award Separate Contracts
• Owner reserves right to perform construction or operations with Owner’s own forces and to award separate Contracts
• Owner shall coordinate activities of Owner’s own forces and separate Contractors with Work of Contractor
• When Owner performs construction or operations, Owner subject to same Conditions of the Contract as Contractor
62Conditions of the Contract: 6.1
Mutual Responsibility• Regarding Owner and separate Contractors, Contractor shall
– Afford opportunity for storage of materials and equipment– Allow performance of their activities– Connect and coordinate Contractor’s construction and operations with
theirs
• If Contractor’s Work depends on Owner or separate Contractors, Contractor shall report discrepancies or defects in such construction; failure to report constitutes acceptance
• Contractor shall reimburse Owner for costs payable to separate Contractors because of Contractor’s delays, improperly timed activities or defective construction; and vice versa
63Conditions of the Contract: 6.2
Owner’s Right to Clean Up• If disputed among Contractor, separate Contractors and
Owner concerning clean up, Owner may clean up and Architect will allocate cost among those responsible
64Conditions of the Contract: 6.3
The Construction Specifications Institute
ARTICLE 7CHANGES IN THE WORK
65
General• Changes accomplished after Contract execution that do not
invalidate Contract– Change order – Based on agreement among Owner, Contractor and
Architect– Construction Change Directive – Requires agreement by Owner and
Architect and may or may not be agreed to by Contractor– Minor change in the Work – Issued by Architect alone
• Promptly performed under applicable provisions of Contract Documents
66Conditions of the Contract: 7.1
Change Orders• Written instrument,
prepared by Architect and signed by Owner and Contractor, agreeing to
67Conditions of the Contract: 7.2
– Change in the Work– Amount of adjustment in
Contract Sum– Amount of adjustment in
Contract Time
Construction Change Directive• Written order, prepared by Architect and signed by Owner and
Architect, directing a change in the Work prior to agreement on– Amount of adjustment in Contract Sum– Amount of adjustment in Contract Time
• Owner may, without invalidating the Contract, order following changes in the Work with the “CCD”– Additions– Deletions– Other revisions
• Used in absence of total agreement on Change Order terms
68Conditions of the Contract: 7.3
Construction Change Directive• Methods for adjustment of
Contract Sum– Itemized lump sum– Unit price– Fixed or percentage fee– Approved otherwise
• Upon receipt, Contractor promptly proceeds with change and indicates agreement of disagreement with adjustment
• Contractor’s signature indicates agreement
69Conditions of the Contract: 7.3
Construction Change Directive• If Contractor does not proceed or disagrees with method of
adjustment of Contract Sum, Architect will determine reasonable method of adjustment that includes – Costs of labor– Costs of materials– Equipment rental costs– Costs for
• Premiums for bonds and insurance• Permit fees• Sales, use or similar taxes
– Additional costs of supervision and field office personnel
• When Contractor agrees, Change Order issued by A/E
70Conditions of the Contract: 7.3
Minor Changes in the Work• Architect has authority to order
minor changes in the Work not involving – Adjustment in Contract Sum– Adjustment in Contract Time– Not inconsistent with Contract
Documents
• No Change Order needed
71Conditions of the Contract: 7.4
The Construction Specifications Institute
ARTICLE 8TIME
72
Definitions• Contract Time – Period of time,
including adjustments, allotted in Contract Documents for Substantial Completion of the Work
• Date of Commencement of the Work – Date established in Agreement
• Date of Substantial Completion –Date certified by Architect
• Day – Calendar days unless otherwise defined
73Conditions of the Contract: 8.1
Progress and Completion• Time is of the essence – By
executing Contract, Contractor confirms Contract Time is reasonable
• Contractor cannot prematurely commence operations before effective date of insurance
• Contractor proceeds expeditiously with adequate forces to achieve Substantial Completion within Contract Time
74Conditions of the Contract: 8.2
Delays and Extensions of Time• If Contractor is delayed by any of following, then extended by
Change Order– Act or neglect by Owner or Architect– Changes in the Work– Labor disputes– Fire– Unusual delay in deliveries– Unavoidable casualties– Mediation of arbitration– Other causes justified by Architect
75Conditions of the Contract: 8.3
The Construction Specifications Institute
ARTICLE 9PAYMENTS AND COMPLETION
76
Contract Sum• Stated in Agreement, including adjustments, is total amount
payable by Owner to Contractor for performance of the Work
77Conditions of the Contract: 9.1
Schedule of Values• Allocates entire Contract Sum to various portions of the Work • Prepared in form and supported by data to substantiate
accuracy as Architect requires• Basis for reviewing Contractor’s Applications for Payment
78Conditions of the Contract: 9.2
Applications for Payment• Contractor submits in accordance with Schedule of Values
supported by data substantiating right to payment• Includes
– Completed portions of the Work– Change Orders– Authorized Construction Change Directives– Stored materials– Cannot include requests for payment for portions of the Work for which a
Subcontractor will not be paid
• Contractor warrants– By time of payment, title to Work passes to Owner– Upon submittal, previous Certificates for Payment free of liens and claims
79Conditions of the Contract: 9.3
Applications for Payment
80Conditions of the Contract: 9.3
Certificates for Payment• Upon receipt of
Contractor’s Application for Payment, Architect will perform one of following– Issue Certificate for
Payment to Owner– Notify Contractor and
Owner of Architect’s reasons for withholding certification in whole or in part
81Conditions of the Contract: 9.4
Certificates for Payment• Upon receipt of Contractor’s Application for Payment, Architect
will perform one of following– Issue Certificate for Payment to Owner– Notify Contractor and Owner of Architect’s reasons for withholding
certification in whole or in part
• Representation by Architect to Owner that– Work has progressed to point indicated and quality in accordance with
Contract Documents – Contractor is entitled to amount certified
82Conditions of the Contract: 9.4
Certificates for Payment• Not a representation that Architect
– Made exhaustive or continuous on-site inspections to check quality or quantity of the Work
– Reviewed construction • Means• Methods • Techniques• Sequences • Procedures
– Reviewed data to substantiate Contractor’s right to payment
– Ascertained purpose Contractor has used previous payments
83Conditions of the Contract: 9.4
Decisions to Withhold Certification• Architect may withhold Certificate for Payment in whole of in
part– To extent reasonably necessary to protect Owner– If in Architect’s opinion representations to Owner cannot be made
• Architect may withhold a Certificate for Payment or may nullify Certificate previously issued to protect Owner because of subsequently discovered evidence because of– Defective Work not remedied– Third party claims– Failure of Contractor to make payments to Subcontractors
Continued on following slide
84Conditions of the Contract: 9.5
Decisions to Withhold CertificationContinued from previous slide–Reasonable evidence that Work cannot be completed for unpaid balance–Damage to Owner of separate Contractor–Reasonable evidence Work cannot be completed within Contract Time–Repeated failure to carry out Work in accordance with Contract Documents
• When reasons are removed, certification will be made for amounts previously withheld
• Owner may issue joint checks to Contractor and any entity to whom Contractor failed to make payment
85Conditions of the Contract: 9.5
Progress Payments• After Certificate issued, Owner makes payment • Contractor makes payment to Subcontractors reflecting
retainage• Owner has right to request evidence that Contractor has made
payments to others• Following does not constitute acceptance of Work not in
accordance with Contract Documents– Certificate for Payment– Progress payment– Partial or entire use or occupancy of Project
86Conditions of the Contract: 9.6
Failure of Payment• Contractor may stop
Work until payment is received if any of following happen– Architect does not issue
Certificate– Owner does not pay
Contractor
87Conditions of the Contract: 9.7
Substantial Completion• Stage in progress of Work when sufficiently complete in
accordance with Contract Documents so that Owner can occupy or utilize for intended purpose
• When Contractor considers Work substantially complete, Contractor prepares comprehensive list of items to be completed or corrected
• Architect will make an inspection to determine whether the Work is substantially complete
• Contractor completes or corrects items on list
88Conditions of the Contract: 9.8
Substantial Completion• When Work is substantially complete,
Architect– Prepares Certificate of Substantial
Completion – Establishes Date of Substantial Completion – Establishes responsibilities of Owner and
Contractor for• Security• Maintenance• Heat• Utilities• Damage to Work• Insurance• Fix time for Contractor to finish list of
items
89Conditions of the Contract: 9.8
Substantial Completion• Warranties commence on Date of Substantial Completion• Upon acceptance by Owner, and consent of surety, Owner
makes payment of retainage
90Conditions of the Contract: 9.8
Partial Occupancy or Use• Owner may occupy or use any
completed or partially completed portion of the Work
• Can commence whether or not substantially complete
• Consent of Contractor to partial occupancy or use cannot be unreasonably withheld
• Partial occupancy or use does not constitute acceptance of the Work
91Conditions of the Contract: 9.9
Final Completion and Final Payment• When Contractor is ready for final inspection and acceptance,
upon receipt of final Application for Payment– Architect will make such final inspection– When Architect finds Work acceptable under Contract Documents and
Contract fully performed– Architect will issue final Certificate of Payment stating entire balance is due
and payable
92Conditions of the Contract: 9.10
Final Completion and Final Payment• Prior to Final Payment, Contractor must submit
– Affidavit that all payments made– Evidence that required insurance will remain in effect for period of time– Statement that insurance will be renewable– Consent of surety– Other data required by Owner
• Making Final Payment constitutes waiver of claims by Owner except– Unsettled liens, claims, security interests or encumbrances– Failure of Work to comply with Contract Documents– Terms of special warranties
• Acceptance of Final Payment constitutes waiver of claims
93Conditions of the Contract: 9.10
The Construction Specifications Institute
ARTICLE 10PROTECTION OF PERSONS
AND PROPERTY
94
Safety Precautions and Programs• Contractor responsible for initiating, maintaining and
supervising safety precautions and programs
95Conditions of the Contract: 10.1
Safety of Persons and Property• Contractor responsible for safety and protection to prevent
damage, injury or loss to– Employees on the Work– Work and materials and equipment– Other property at, or adjacent to, site
96Conditions of the Contract: 10.2
Safety of Persons and Property• Contractor shall
– Comply with applicable safety laws, statues, ordinances, codes, rules and regulations, and lawful orders
– Erect and maintain safeguards – Exercise utmost care with explosives and hazardous materials– Remedy damage and loss– Designate Contractor employee with duty of prevention of accidents– Not permit loading that causes damage or unsafe condition
• Injury or damage to person or property– If either party suffers injury or damage because of act or omission of other
party, written notice to other party required– Notice should contain information to enable investigation
97Conditions of the Contract: 10.2
Hazardous Materials• Contractor
– Responsible for compliance with Contract Documents – If hazardous materials encountered, Contractor may stop Work in area
and notify Owner
• Owner– Responsible for hazardous materials required by Contract Documents
except for Contractor’s negligence– Not responsible for hazardous materials Contractor brings on site not
required by Contract Documents– Responsible if Contractor held liable by governmental agency for
remediation of material from performing Work
98Conditions of the Contract: 10.3
Emergencies• In an emergency
affecting safety, Contractor may act, at Contractor’s discretion, to prevent threatened damage, injury or loss
99Conditions of the Contract: 10.4
The Construction Specifications Institute
ARTICLE 11INSURANCE AND BONDS
100
Contractor’s Liability Insurance• Contractor purchases and maintains insurance to protect from
claims resulting from operations under Contract at limits specified or required – Worker’s compensation– Bodily injury or death of Contractor’s employees– Bodily injury or death of other than Contractor’s employees– Personal injury liability– Damages because of injury or destruction of tangible property– Use of motor vehicles– Damage arising out of completed operations– Contractual liability
101Conditions of the Contract: 11.1
Owner’s Liability Insurance• Owner purchases and maintains Owner’s usual liability
insurance
102Conditions of the Contract: 11.2
Property Insurance• Owner purchases and maintains builder’s risk “all risk”
insurance which includes
• Owner purchases and maintains boiler and machinery insurance
103Conditions of the Contract: 11.3
– Perils of fire and physical loss
– Theft– Vandalism– Malicious mischief– Collapse– Earthquake– Floor
– Windstorm– False-work– Testing and startup – Temporary buildings– Debris removal– Contractor’s compensation– Architect’s compensation
Property Insurance• Owner, at Owner’s option, may purchase and maintain
insurance to insure Owner against loss of use of Owner’s property due to fire or other hazards
• .Waivers of Subrogation– Owner and Contractor waive all rights for damages against Each other and their
subcontractors, sub-subcontractors, agents and employees, each of the other– Architect, Architect’s consultants, separate Contractors, and their subcontractors,
sub-subcontractors, agents and employees
– Subrogation: The purpose of subrogation is to compel the ultimate payment of a debt by the party who, in Equity (fairness) and good conscience, should pay it. This subrogation is an equitable device used to avoid injustice.
104Conditions of the Contract: 11.3
Performance Bond and Payment Bond• Owner has right to require Contractor to furnish bonds
covering faithful performance and payment of obligations
105Conditions of the Contract: 11.4
The Construction Specifications Institute
ARTICLE 12UNCOVERING AND CORRECTION
OF WORK
106
Uncovering of Work• Architect may request portions of the Work covered, contrary
to A/E request or requirements, be uncovered for Architect’s examination and replaced at Contractor’s expense
• If Architect has not requested opportunity for examination, portions of the Work covered should be uncovered for Architect’s examination– Replacement at Owner’s expense if Work in accordance with Contract
Documents– Correction of Work and replacement at Contractor’s expense if Work not
in accordance with Contract Documents
107Conditions of the Contract: 12.1
Correction of Work• Before or after Substantial Completion, Contractor should
correct Work rejected by Architect for failing to conform to Contract Documents whether fabricated, installed or completed or not
• After Substantial Completion, if within one year after Date of Substantial Completion or after commencement of warranties, Contractor should correct nonconforming Work– Requires notice by Owner; failure to do so constitutes Owner’s waiver– If Contractor fails to correct Work, Owner has right to do so at
Contractor’s cost– One year correction period not extended for Work corrected under this
article. – Work not finished at Substantial Completion has extended dates.
108Conditions of the Contract: 12.2
Acceptance of Nonconforming Work• If Owner prefers to accept Work not in accordance with
Contract Document– Owner may do so instead of requiring removal and correction– Appropriate and equitable adjustment to Contract Sum
109Conditions of the Contract: 12.3
The Construction Specifications Institute
ARTICLE 13MISCELLANEOUS PROVISIONS
110
Governing Law• Contract governed by law of Project location
Successors and Assigns• Owner and Contractor bind themselves, their partners,
successors, assigns and legal representatives to covenants, agreements and obligations contained in Contract Documents
111Conditions of the Contract: 13.1 and 13.2
Written Notice• Written notice deemed duly served
– Delivered in person to individual or member of firm or entity– Delivered to officer of corporation– With proof of delivery
Rights and Remedies• Duties and obligations imposed by Contract Documents and
rights and remedies in addition to those available by law
112Conditions of the Contract: 13.3 and 13.4
Tests and Inspections• Tests, inspections and approvals made as required by
– Contract Documents– Applicable laws, statutes, ordinances, codes, rules and regulations or
lawful orders of public authorities
• Contractor shall– Make arrangements with independent entity– Bear costs– Bear costs to remedy deficient Work identified from testing and
inspections
• Owner will– Bear costs for tests, inspections or approvals required after bids received– Bear costs for tests, inspections or approvals where law prohibits Owner
from delegating cost to Contractor
113Conditions of the Contract: 13.5
Tests and Inspections• If additional testing, inspection or approvals is required,
Architect will instruct Contractor to perform – Owner bears costs if Work conforms to Contract Documents– Contractor bears costs if Work does not conform to Contract Documents
Interest• Payments due and unpaid bears interest
114Conditions of the Contract: 13.5 and 13.6
Time Limits on Claims• Owner and Contractor commences claims and causes of
action against other according to – Agreement stipulations – Within time period specified by law, but not more than 10 years after Date
of Substantial Completion
115Conditions of the Contract: 13.7
The Construction Specifications Institute
ARTICLE 14TERMINATION OR SUSPENSION
OF THE CONTRACT
116
Termination by the Contractor• Contract may be terminated if Work is stopped for 30
consecutive days through no fault of Contractor for any of following reasons– Public authority order to stop Work– Act of government that requires Work to be stopped– Architect has not issued a Certificate for Payment, or Owner has not
made payment– Owner fails to furnish evidence of financial arrangements to fulfill
obligations
117Conditions of the Contract: 14.1
Termination by the Contractor• Contract may be terminated due to:
– Repeated suspensions– Delays or interruptions of entire Work
if time is equal to an aggregate of 100 percent of total number of days scheduled for completion, or 120 days out of any 365 day period
• Contractor may, upon 7 days written notice, terminate contract with Owner and recover payment for Work executed
• Contract may be terminated if Work is stopped for 60 consecutive days because Owner has repeatedly failed to fulfill Owner’s obligations important to progress of the Work
118Conditions of the Contract: 14.1
Termination by the Ownerfor Cause
• Owner may terminate Contract if Contractor– Refuses or fails to supply workers and materials– Fails to make payment to Subcontractors– Disregards applicable laws, statutes, ordinances, codes, rules and
regulations or lawful orders of public authorities– Breach of provision of Contract Documents
• If Initial Decision Maker certifies cause exists, Owner may terminate Contract– Exclude Contractor from site and take possession of materials and
equipment– Accept assignment of Subcontractors– Finish the Work
119Conditions of the Contract: 14.2
Termination by the Ownerfor Cause
• When terminates, Contractor not entitled to further payment
• If unpaid balance exceeds costs of finishing, excess shall be paid to Contractor
• If costs of finishing exceeds unpaid balance, Contractor pays Owner
120Conditions of the Contract: 14.2
Suspension by the Ownerfor Convenience
• Owner may, without cause, order Contractor to suspend, delay or interrupt the Work in whole or in part
• Contract Sum and Contract Time adjusted by Change Order and included profit; no adjustment for– Performance would have been suspended, delayed, or interrupted by
another cause for which Contractor responsible– Adjustment made or denied under another provision of Contract
Documents
121Conditions of the Contract: 14.3
Termination by the Ownerfor Convenience
• Owner may terminate Contract for convenience and without cause
• Contractor shall– Cease operations– Take action to protect and preserve the Work– Terminate all Subcontracts and Purchase
Orders
• Contractor entitled to – Payment for Work executed– Costs for termination– Overhead and profit on the Work not
executed
122Conditions of the Contract: 14.4
The Construction Specifications Institute
ARTICLE 15CLAIMS AND DISPUTES
123
Claims• Demand or assertion by one party seeking payment of money
or other relief with respect to Contract terms– Includes other disputes and matters in question– Party making claim responsible for substantiation
• Must be initiated by written notice to other party, Initial Decision Maker and Architect within 21 days after– Occurrence of event giving rise to claim– Condition giving rise to claim first recognized
• Pending resolution– Contractor should proceed with the Work– Owner should continue to make payments
124Conditions of the Contract: 15.1
Claims• If Contractor wishes to make claim for increase in Contract
Sum, written notice required prior to executing the Work• If Contractor wishes to make claim for increase in Contract
Time, written notice required with cost estimate and probable effect of delay on progress
• If weather conditions are basis of claim for additional time
125Conditions of the Contract: 15.1
– Claim should be documented substantiating conditions were abnormal
– Conditions could not have been anticipated
– Conditions had adverse effect on scheduled construction
Claims• Contractor and Owner waive claims against each other for
consequential damages – Damages incurred by Owner for
• Rental expenses• Loss of use, income, profit, financing, business and reputation• Loss of management or employee productivity or services
– Damages incurred by Contractor for • Principal office expenses including personnel compensation• Loss of business and reputation• Loss of anticipated profit
This does not include Liquidated Damages
126Conditions of the Contract: 15.1
Initial Decision• Claims referred to Initial Decision Maker for initial decision• Initial Decision Maker reviews claim and take one of following
actions– Request additional supporting data– Reject claim in whole or in part– Approve claim– Suggest compromise– Advise parties unable to resolve claim
• Initial decision shall be final and binding, but subject to mediation, and if that fails, to binding dispute resolution
• Either party may file for mediation of an initial decision
127Conditions of the Contract: 15.2
Mediation• Claims, disputes or other controversial matters subject to
mediation as a condition precedent to binding dispute resolution
• Parties should endeavor to resolve claims by mediation, unless parties agree otherwise
128Conditions of the Contract: 15.3
• Fees shared by both parties
• Agreements reached are enforceable as settlement agreements in any court having jurisdiction
Arbitration• If selected as method for binding dispute resolution, claims not
resolved by mediation subject to arbitration• Award rendered is final and judgment may be entered upon it
according to applicable law in any court having jurisdiction• Either party may consolidate an arbitration under this
Agreement with any other arbitration to which it is a party under certain conditions
129Conditions of the Contract: 15.4
Questions?
130
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