CM 354 Construction Law Name: Extra Credit Assignment #2

NEWSCHOOL OF ARCHITECTURE + DESIGN 1
CM 354 Construction Law Name:
Extra Credit Assignment #2 (Worth 20 points on the midterm total)
Due 6/11 FIRST OF CLASS
NOTE, it will not be accepted late
This assignment is to evaluate the AIA Contract A102 attached. In this extra assignment I am looking for the
following:
1. Describe each of the major sections and their primary purpose
2. Describe the top items elements of each section
3. Describe any risk for each section
Points based on:
1. Thoroughness of answer
2. Completeness of answer
AIA®
Document A102TM
– 2007
Standard Form of Agreement Between Owner and Contractor
where the basis of payment is the Cost of the Work Plus a
Fee with a Guaranteed Maximum Price
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
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ADDITIONS AND DELETIONS:
The author of this document
has added information
needed for its completion.
The author may also have
revised the text of the
original AIA standard form.
An Additions and Deletions
Report that notes added
information as well as
revisions to the standard
form text is available from
the author and should be
reviewed.
This document has important
legal consequences.
Consultation with an
attorney is encouraged with
respect to its completion
or modification.
This document is not
intended for use in
competitive bidding.
AIA Document A201™–2007,
General Conditions of the
Contract for Construction,
is adopted in this document
by reference. Do not use
with other general
conditions unless this
document is modified.
ELECTRONIC COPYING of any
portion of this AIA® Document
to another electronic file is
prohibited and constitutes a
violation of copyright laws
as set forth in the footer of
this document.
AGREEMENT made as of the «16» day of «October» in the year «2017»
(In words, indicate day, month and year.)
BETWEEN the Owner:
(Name, legal status, address and other information)
«
and the Contractor:
(Name, legal status, address and other information)
«
for the following Project:
(Name, location and detailed description)
«
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
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«Tenant improvement of 80,000 square feet on a single floor of a recently modified shell located at the address abov
e. TI to include office and lab spaces.»
The Architect:
(Name, legal status, address and other information)
«
The Owner and Contractor agree as follows.
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
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TABLE OF ARTICLES
1 THE CONTRACT DOCUMENTS
2 THE WORK OF THIS CONTRACT
3 RELATIONSHIP OF THE PARTIES
4 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
5 CONTRACT SUM
6 CHANGES IN THE WORK
7 COSTS TO BE REIMBURSED
8 COSTS NOT TO BE REIMBURSED
9 DISCOUNTS, REBATES AND REFUNDS
10 SUBCONTRACTS AND OTHER AGREEMENTS
11 ACCOUNTING RECORDS
12 PAYMENTS
13 DISPUTE RESOLUTION
14 TERMINATION OR SUSPENSION
15 MISCELLANEOUS PROVISIONS
16 ENUMERATION OF CONTRACT DOCUMENTS
17 INSURANCE AND BONDS
ARTICLE 1 THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other
Conditions), Drawings, Specifications, Assumptions and Qualifications, Addenda issued prior to execution of this
Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement,
all of which form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated
herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior
negotiations, representations or agreements, either written or oral. If anything in the other Contract Documents,
other than a Modification, is inconsistent with this Agreement, this Agreement shall govern and the Assumptions
and Qualifications on which the Guaranteed Maximum Price is based shall govern over any inconsistent term in any
Contract Documents.
ARTICLE 2 THE WORK OF THIS CONTRACT
The Contractor shall fully execute the Work described in the Contract Documents, except as specifically indicated in
the Contract Documents to be the responsibility of others.
ARTICLE 3 RELATIONSHIP OF THE PARTIES
The Contractor accepts the relationship of trust and confidence established by this Agreement and covenants with
the Owner to cooperate with the Architect and exercise the Contractor’s skill and judgment in furthering the interests
of the Owner; to furnish efficient business administration and supervision; to furnish at all times an adequate supply
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
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of workers and materials; and to perform the Work in an expeditious and economical manner consistent with the
Owner’s interests. The Owner agrees to furnish and approve, in a timely manner, information required by the
Contractor and to make payments to the Contractor in accordance with the requirements of the Contract Documents
No fiduciary relationship is intended by this Agreement.
ARTICLE 4 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
§ 4.1 The date of commencement of the Work shall be the date of this Agreement unless a different date is stated
below or provision is made for the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement or, if applicable, state that the date
will be fixed in a notice to proceed.)
The date of commencement is November 27, 2017.
If, prior to commencement of the Work, the Owner requires time to file mortgages and other security interests, the
Owner’s time requirement shall be as follows:
« »
§ 4.2 The Contract Time shall be measured from the date of commencement.
§ 4.3 The Contractor shall achieve Substantial Completion of the entire Work not later than « » ( « » ) days from the
date of commencement, or as follows:
(Insert number of calendar days. Alternatively, a calendar date may be used when coordinated with the date of
commencement. If appropriate, insert requirements for earlier Substantial Completion of certain portions of the
Work.)
«The Contractor shall achieve Substantial Completion of the entire Work not later than XXX based upon receipt of
permit per the contract schedule.»
Portion of Work Substantial Completion date
« »
(Optional) In the event the Contractor does not achieve Substantial Completion within the Contract Time, including
approved extensions, after a grace period of ____ days, the Contractor shall pay the Owner, as liquidated damages
and not as a penalty, the sum of ______________ ($________) per each day after the expiration of such grace
period, that the actual time of performance exceeds the authorized Contract Time, subject to a maximum of
$_______ with the understanding the payment of such liquidated damages shall constitute the Owner’s sole remedy
for Contractor’s lateness of any kind and inability to use the Project.
, subject to adjustments of this Contract Time as provided in the Contract Documents.
(Insert provisions, if any, for liquidated damages relating to failure to achieve Substantial Completion on time, or
for bonus payments for early completion of the Work.)
« »
ARTICLE 5 CONTRACT SUM
§ 5.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor’s performance of the
Contract. The Contract Sum is the Cost of the Work as defined in Article 7 plus the Contractor’s Fee.
§ 5.1.1 The Contractor’s Fee: X.XX%
(State a lump sum, percentage of Cost of the Work or other provision for determining the Contractor’s Fee.)
« »
§ 5.1.2 The method of adjustment of the Contractor’s Fee for changes in the Work:
For increases in the Guaranteed Maximum Price, not cuased by the breach or default of Contractor, the Contractor’s
Fee shall be increased by __X.XX____% of such increase once changes have exceeded 5% of the GMP
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
User Notes: (3B9ADA2E)
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amount. There shall be no decrease or offset in the Contractor’s Fee for deductive changes.
§ 5.1.3 Limitations, if any, on a Subcontractor’s overhead and profit for increases in the cost of its portion of the
Work: 15%
« »
§ 5.1.4 Rental rates for Contractor-owned equipment shall not exceed « » percent ( « » %) of the standard rate paid
at the place of the Project.
§ 5.1.5 Unit prices, if any:
(Identify and state the unit price; state the quantity limitations, if any, to which the unit price will be applicable.)
Item Units and Limitations Price Per Unit ($0.00)
« »
§ 5.2 GUARANTEED MAXIMUM PRICE
§ 5.2.1 The Contract Sum is guaranteed by the Contractor not to exceed « » ($ « » ), subject to additions and
deductions by Change Order as provided in the Contract Documents and subject to Section 5.2.4 below. Such
maximum sum is referred to in the Contract Documents as the Guaranteed Maximum Price. Costs which would
cause the Guaranteed Maximum Price to be exceeded shall be paid by the Contractor without reimbursement by the
Owner. This Guaranteed Maximum Price shall be amended to this agreement upon the completion of design and the
subcontractor bidding process.
(Insert specific provisions if the Contractor is to participate in any savings.)
§ 5.2.1.1 The Guaranteed Maximum Price shall include a Contingency in the amount of 3% of the Volume of the
Guaranteed Maximum Price for the exclusive use of contractor as necessary during the course of construction. The
Contingency may be used to cover costs including, but not limited to, those associated with items inferred or
intended by the Contract Documents, miscellaneous coordination, unanticipated local market labor or material
conditions, loss or damage to the Work not otherwise payable as a Cost of the Work and to the extent not paid for by
insurance, Subcontractor defaults, scope omissions, etc. In no event shall the Contingency funds be required to be
used to pay for the following 1) costs due to a change in the scope of Work by Owner which are properly the subject
of a Change Order or Construction Change Directive, or 2) the correction of Work not in conformance with the
Contract Documents. As a part of its monthly billing, Contractor shall prepare a Contingency Allocation Summary
delineating how the Contingency was spent in the previous period. Further, nothing in the Contract Documents shall
constitute a “line item” Guaranteed Maximum Price as to any individual line items, and Contractor shall be entitled
to reallocate any unused amounts under a particular line item to any other line item. Contractor shall notify Owner’s
Agent prior to the spending of Contingency Funds, so ling as the overall Guaranteed Maximum Price is not
increased.
Upon final completion of the Work, if the final Cost of the Work plus the Contractor’s Fee is less than the
Guaranteed Maximum Price as finally adjusted, then the resulting difference shall be defined as the “Savings” on the
project. Savings are proposed to be shared in the following manner: Savings from Bid Buyout: 60% Client, 40%
Contractor, Savings from Contractor Contingency: 100% Client.
§ 5.2.2 The Guaranteed Maximum Price is based on the following alternates, if any, which are described in the
Contract Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If bidding or proposal documents permit the
Owner to accept other alternates subsequent to the execution of this Agreement, attach a schedule of such other
alternates showing the amount for each and the date when the amount expires.)
«To be included in the GMP Amendment »
§ 5.2.3 Allowances included in the Guaranteed Maximum Price, if any:
(Identify allowance and state exclusions, if any, from the allowance price.)
Item Price
«To be included in the GMP
Amendment »
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
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§ 5.2.3.1 In the event that the Contractor is required to pay or bear the burden of any federal, state, or local tax, or of
any rate increase of existing tax (except a tax on net profits) as a result of any statute, court decision, written ruling,
or regulation taking effect after the contract date, the Guaranteed Maximum Price shall be increased by the amount
of the new tax, or tax increase.
§ 5.2.4 Assumptions and Qualifications, if any, on which the Guaranteed Maximum Price is based:
«To be included in the GMP Amendment »
§ 5.2.5 To the extent that the Drawings and Specifications identify components anticipated to require further
development by the Architect, the Contractor has provided in the Guaranteed Maximum Price for such further
development consistent with the Contract Documents and reasonably inferable from
the information stated therein, provided however, that where information has been provided in the Drawings and
Specifications, Contractor may rely on the accuracy of such information. The Guaranteed Maximum Price is not
intended to include any changes in scope, systems, kinds, qualities, quantities of materials, finishes or equipment
differing from that shown or reasonably inferable from the information stated in the design documents upon which
the Guaranteed Maximum Price was based, subject to the qualifications and assumptions to that Guaranteed
Maximum Price, all of which, if required would warrant an adjustment to the Guaranteed Maximum Price by
Change Order.
§y Change Order.aximum PrGMP, which is included in this Agreement.
ARTICLE 6 CHANGES IN THE WORK
§ 6.1 Adjustments to the Guaranteed Maximum Price on account of changes in the Work may be determined by any
of the methods listed in Section 7.3.3 of AIA Document A201–2007, General Conditions of the Contract for
Construction.
§ 6.2 In calculating adjustments to subcontracts (except those awarded with the Owner’s prior consent on the basis of
cost plus a fee), the terms “cost” and “fee” as used in Section 7.3.3.3 of AIA Document A201–2007 and the term
“costs” as used in Section 7.3.7 of AIA Document A201–2007 shall have the meanings assigned to them in AIA
Document A201–2007 and shall not be modified by Articles 5, 7 and 8 of this Agreement. Adjustments to
subcontracts awarded with the Owner’s prior consent on the basis of cost plus a fee shall be calculated in accordance
with the terms of those subcontracts.
§ 6.3 In calculating adjustments to the Guaranteed Maximum Price, the terms “cost” and “costs” as used in the
above-referenced provisions of AIA Document A201–2007 shall mean the Cost of the Work as defined in Article 7
of this Agreement and the term “fee” shall mean the Contractor’s Fee as defined in Section 5.1.1 of this Agreement.
§ 6.5 All changes in cost are subject to Exhibit Contractor RFP, which is included in this agreement.
ARTICLE 7 COSTS TO BE REIMBURSED
§ 7.1 COST OF THE WORK
§ 7.1.1 The term Cost of the Work shall mean costs incurred by the Contractor as permitted by this Agreement in the
proper performance of the Work
and the Owner acknowledges that the Guaranteed Maximum Price includes a Construction Contingency for the sole
benefit of the Contractor, and not for use by the Owner for issues such as scope increases or Changes as permitted
hereby.
Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of
the Owner. The Cost of the Work shall include only the items set forth in this Article 7.
§ 7.1.2 Where any cost is subject to the Owner’s prior approval, the Contractor shall obtain this approval prior to
incurring the cost. The parties shall endeavor to identify any such costs prior to executing this Agreement.
§ 7.2 LABOR COSTS
§ 7.2.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work
at the site or, with the Owner’s prior approval, at off-site workshops.
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
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§ 7.2.2 Wages or salaries of the Contractor’s supervisory and administrative personnel when stationed at the site with
the Owner’s prior approval.
(If it is intended that the wages or salaries of certain personnel stationed at the Contractor’s principal or other
offices shall be included in the Cost of the Work, identify in Article 15, the personnel to be included, whether for all
or only part of their time, and the rates at which their time will be charged to the Work.)
§ 7.2.3 Wages and salaries of the Contractor’s supervisory or administrative personnel engaged at factories,
workshops or on the road, in expediting the production or transportation of materials or equipment required for the
Work, but only for that portion of their time required for the Work.
§ 7.2.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required
by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits
such as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on
wages and salaries included in the Cost of the Work under Sections 7.2.1 through 7.2.3.
§ 7.2.5 Bonuses, profit sharing, incentive compensation and any other discretionary payments paid to project
assigned staff of the Contractor with the Owner’s prior approval.
§ 7.3 SUBCONTRACT COSTS
Payments made by the Contractor to Subcontractors in accordance with the requirements of the subcontracts.
§ 7.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION
§ 7.4.1 Costs, including transportation and storage, such storage with Owner’s Approval, of materials and equipment
incorporated or to be incorporated in the completed construction.
§ 7.4.2 Costs of materials described in the preceding Section 7.4.1 in excess of those actually installed to allow for
reasonable waste and spoilage. Unused excess materials, if any, shall become the Owner’s property at the
completion of the Work or, at the Owner’s option, shall be sold by the Contractor. Any amounts realized from such
sales shall be credited to the Owner as a deduction from the Cost of the Work.
§ 7.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS
§ 7.5.1 Costs of transportation, storage, installation, maintenance, dismantling and removal of materials, supplies,
temporary facilities, machinery, equipment and hand tools not customarily owned by construction workers that are
provided by the Contractor at the site and fully consumed in the performance of the Work. Costs of materials,
supplies, temporary facilities, machinery, equipment and tools that are not fully consumed shall be based on the cost
or value of the item at the time it is first used on the Project site less the value of the item when it is no longer used
at the Project site. Costs for items not fully consumed by the Contractor shall mean fair market value.
§ 7.5.2 Rental charges for temporary facilities, machinery, equipment and hand tools not customarily owned by
construction workers that are provided by the Contractor at the site and costs of transportation, installation, minor
repairs, dismantling and removal. The total rental cost of any Contractor-owned item may not exceed the purchase
price of any comparable item. Rates of Contractor-owned equipment and quantities of equipment shall be subject to
the Owner’s prior approval.
§ 7.5.3 Costs of removal of debris from the site of the Work and its proper and legal disposal.
§ 7.5.4 Costs of document reproductions, facsimile transmissions and long-distance telephone calls, postage and
parcel delivery charges, telephone service at the site and reasonable petty cash expenses of the site office.
§ 7.5.5 Costs of materials and equipment suitably stored off the site at a mutually acceptable location, subject to the
Owner’s prior approval.
§ 7.6 MISCELLANEOUS COSTS
§ 7.6.1 Premiums for that portion of insurance and bonds required by the Contract Documents that can be directly
attributed to this Contract. Self-insurance for either full or partial amounts of the coverages required by the Contract
Documents, with the Owner’s prior approval.
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
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§ 7.6.2 Sales, use or similar taxes imposed by a governmental authority that are related to the Work and for which the
Contractor is liable.
§ 7.6.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the
Contractor is required by the Contract Documents to pay.
§ 7.6.4 Fees of laboratories for tests required by the Contract Documents, except those related to defective or
nonconforming Work for which reimbursement is excluded by Section 13.5.3 of AIA Document A201–2007 or by
other provisions of the Contract Documents, and which do not fall within the scope of Section 7.7.3.
§ 7.6.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract
Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement of
the Contract Documents; and payments made in accordance with legal judgments against the Contractor resulting
from such suits or claims and payments of settlements made with the Owner’s consent. However, such costs of legal
defenses, judgments and settlements shall not be included in the calculation of the Contractor’s Fee or subject to the
Guaranteed Maximum Price. If such royalties, fees and costs are excluded by the last sentence of Section 3.17 of
AIA Document A201–2007 or other provisions of the Contract Documents, then they shall not be included in the
Cost of the Work.
§ 7.6.6 Costs for electronic equipment and software, directly related to the Work with the Owner’s prior approval.
§ 7.6.7 Deposits lost for causes other than the Contractor’s negligence or failure to fulfill a specific responsibility in
the Contract Documents.
§ 7.6.8 Legal, mediation and arbitration costs, including attorneys’ fees, other than those arising from disputes
between the Owner and Contractor, reasonably incurred by the Contractor after the execution of this Agreement in
the performance of the Work and with the Owner’s prior approval, which shall not be unreasonably withheld.
§ 7.6.9 Subject to the Owner’s prior approval, expenses incurred in accordance with the Contractor’s standard
written personnel policy for relocation and temporary living allowances of the Contractor’s personnel required for
the Work.
§ 7.6.10 That portion of the reasonable expenses of the Contractor’s supervisory or administrative personnel incurred
while traveling in discharge of duties connected with the Work.
§ 7.7 OTHER COSTS AND EMERGENCIES
§ 7.7.1 Other costs incurred in the performance of the Work if, and to the extent, approved in advance in writing by
the Owner.
. The Owner recognized that the GMP includes a Construction Contingency that is to be freely accessed by
Contractor as provided in this Agreement. The Construction Contingency may be increased to the extent of Savings.
§ 7.7.2 Costs incurred in taking action to prevent threatened damage, injury or loss in case of an emergency affecting
the safety of persons and property, as provided in Section 10.4 of AIA Document A201–2007.
§ 7.7.3 Costs of repairing or correcting damaged or nonconforming Work executed by the Contractor, Subcontractors
or suppliers, provided that such damaged or nonconforming Work was not caused by gross negligence or willful
failure to fulfill a specific responsibility of the Contractor and only to the extent that the cost of repair or correction
is not recovered by the Contractor from insurance, sureties, Subcontractors, suppliers, or others.
§ 7.8 RELATED PARTY TRANSACTIONS
§ 7.8.1 For purposes of Section 7.8, the term “related party” shall mean a parent, subsidiary, affiliate or other entity
having common ownership or management with the Contractor; any entity in which any stockholder in, or
management employee of, the Contractor owns any interest in excess of ten percent in the aggregate; or any person
or entity which has the right to control the business or affairs of the Contractor. The term “related party” includes
any member of the immediate family of any person identified above.
§ 7.8.2 If any of the costs to be reimbursed arise from a transaction between the Contractor and a related party, the
Contractor shall notify the Owner of the specific nature of the contemplated transaction, including the identity of the
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at
16:15:52 on 12/12/2017 under Order No. 7637388956 which expires on 03/28/2018, and is not for resale.
User Notes: (3B9ADA2E)
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related party and the anticipated cost to be incurred, before any such transaction is consummated or cost incurred. If
the Owner, after such notification, authorizes the proposed transaction, then the cost incurred shall be included as a
cost to be reimbursed, and the Contractor shall procure the Work, equipment, goods or service from the related
party, as a Subcontractor, according to the terms of Article 10. If the Owner fails to authorize the transaction, which
was not disclosed at the time of establishing the GMP, the Contractor shall procure the Work, equipment, goods or
service from some person or entity other than a related party according to the terms of Article 10.
§ 7.9 Certain insurance, bonds, wages, benefits and fringes shall be reimbursed as Costs of the Work at the fixed
rates set forth as follows or if not set forth here, as set forth in the Guaranteed Maximum Price or its Assumptions,
Clarifications or Qualifications.
ARTICLE 8 COSTS NOT TO BE REIMBURSED
§ 8.1 The Cost of the Work shall not include the items listed below:
.1 Salaries and other compensation of the Contractor’s personnel stationed at the Contractor’s principal
office or offices other than the site office, except as specifically provided in Section 7.2. or as may be
provided in Article 15;
.2 Expenses of the Contractor’s principal office and offices other than the site office;
.3 Overhead and general expenses;
.4 The Contractor’s capital expenses, including interest on the Contractor’s capital employed for the
Work;
.5 Except as provided in Section 7.7.3 of this Agreement, costs due to the negligence or failure of the
Contractor, Subcontractors and suppliers or anyone directly or indirectly employed by any of them or
for whose acts any of them may be liable to fulfill a specific responsibility of the Contract;
.6 Any cost not specifically and expressly described in Article 7;
.7 Costs, other than costs included in Change Orders approved by the Owner, that would cause the
Guaranteed Maximum Price to be exceeded.
ARTICLE 9 DISCOUNTS, REBATES AND REFUNDS
§ 9.1 Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making
the payment, the Contractor included them in an Application for Payment and received payment from the Owner, or
(2) the Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts
shall accrue to the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus
materials and equipment shall accrue to the Owner, and the Contractor shall make provisions so that they can be
obtained.
§ 9.2 Amounts that accrue to the Owner in accordance with the provisions of Section 9.1 shall be credited to the
Owner as a deduction from the Cost of the Work.
ARTICLE 10 SUBCONTRACTS AND OTHER AGREEMENTS
§ 10.1 Those portions of the Work that the Contractor does not perform with the Contractor’s own personnel shall be
performed under subcontracts or by other appropriate agreements with the Contractor. The Owner may designate
specific persons from whom, or entities from which, the Contractor shall obtain bids. The Contractor shall obtain
bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work and shall
deliver such bids to the Architect. The Owner shall then determine, with the advice of the Contractor and the
Architect, which bids will be accepted. The Contractor shall not be required to contract with anyone to whom the
Contractor has reasonable objection.
§ 10.2 When a specific bidder (1) is recommended to the Owner by the Contractor; (2) is qualified to perform that
portion of the Work; and (3) has submitted a bid that Contactor reasonably deems acceptable in conformance with
the Contract Documents, but the Owner requires that another bid be accepted, then the Contractor may require that a
Change Order be issued to adjust the Guaranteed Maximum Price by the difference between the bid of the person or
entity recommended to the Owner by the Contractor and the amount of the subcontract or other agreement actually
signed with the person or entity designated by the Owner.
§ 10.3 Subcontracts or other agreements shall conform to the applicable payment provisions of this Agreement, and
shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner. If the Subcontract is
awarded on a cost-plus a fee basis, the Contractor shall provide in the Subcontract for the Owner to receive the same
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by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
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audit rights with regard to the Subcontractor as the Owner receives with regard to the Contractor in Article 11,
below.
ARTICLE 11 ACCOUNTING RECORDS
The Contractor shall keep full and detailed records and accounts related to the cost of the Work and exercise such
controls as may be necessary for proper financial management under this Contract and to substantiate all costs
incurred, by implementing the accounting and control systems generally followed by the Contractor in the area on
projects of this nature. The Owner and the Owner’s auditors shall, during regular business hours and upon
reasonable notice, be afforded access to, and shall be permitted to audit and copy, the Contractor’s records and
accounts, including complete documentation supporting accounting entries, books, correspondence, instructions,
drawings, receipts, subcontracts, Subcontractor’s proposals, purchase orders, vouchers, memoranda and other data
relating to this Contract. The Contractor shall preserve these records for a period of three years after final payment,
or for such longer period as may be required by law.
ARTICLE 12 PAYMENTS
§ 12.1 PROGRESS PAYMENTS
§ 12.1.1 Based upon Applications for Payment submitted to the Owner’s Agent (OA) by the Contractor, the Owner
shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in
the Contract Documents.
§ 12.1.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of
the month, or as follows:
« »
§ 12.1.3 Provided that an Application for Payment is received by the OA not later than the «25th» day of a month,
the Owner shall make payment of the certified amount to the Contractor not later than the «25th» day of the
month. If an Application for Payment is received by the OA after the application date fixed above, payment shall be
made by the Owner not later than «30 » days after the OA receives the Application for Payment.
(Federal, state or local laws may require payment within a certain period of time.)
§ 12.1.4 With each Application for Payment, the Contractor shall submit payrolls, petty cash accounts, receipted
invoices or invoices with check vouchers attached, and any other evidence reasonably required in advance by the
Owner or Architect to demonstrate that cash disbursements already made by the Contractor on account of the Cost
of the Work equal or exceed (1) progress payments already received by the Contractor; less (2) that portion of those
payments attributable to the Contractor’s Fee; plus (3) payrolls for the period covered by the present Application for
Payment.
§ 12.1.5 Each Application for Payment shall be based on the most recent schedule of values submitted by the
Contractor in accordance with the Contract Documents
for the purpose of determining the ability to withhold certification pursuant to Section 9.5.1.4 of the AIA Document
A201-2007.
The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the
Work, except that the Contractor’s Fee shall be shown as a single separate item. The schedule of values shall be
prepared in such form and supported by such data to substantiate its accuracy as the OA may require. This schedule,
unless objected to by the OA, shall be used as a basis for reviewing the Contractor’s Applications for Payment.
§ 12.1.6 Applications for Payment shall show the percentage of completion of each portion of the Work as of the end
of the period covered by the Application for Payment. The percentage of completion shall be the lesser of (1) the
percentage of that portion of the Work which has actually been completed; or (2) the percentage obtained by
dividing (a) the expense that has actually been incurred by the Contractor on account of that portion of the Work for
which the Contractor has made or intends to make actual payment prior to the next Application for Payment by (b)
the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.
§ 12.1.7 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be
computed as follows:
.1 Take that portion of the Guaranteed Maximum Price properly allocable to completed Work as
determined by multiplying the percentage of completion of each portion of the Work by the share of
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
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the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.
Pending final determination of cost to the Owner of changes in the Work,
amounts not in dispute shall be included as provided in Section 7.3.9 of AIA Document A201–2007;
.2 Add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment
delivered and suitably stored at the site for subsequent incorporation in the Work, or if approved in
advance by the Owner, suitably stored off the site at a location agreed upon in writing;
.3 Add the Contractor’s Fee, less retainage of 10 percent.The Contractor’s Fee shall be computed upon
the Cost of the Work at the rate stated in Section 5.1.1 or, if the Contractor’s Fee is stated as a fixed
sum in that Section, shall be an amount that bears the same ratio to that fixed-sum fee as the Cost of
the Work bears to a reasonable estimate of the probable Cost of the Work upon its completion;
.4 Subtract retainage of «ten » percent ( «10 » %) from that portion of the Work that the Contractor selfperforms;
.5 Subtract the aggregate of previous payments made by the Owner;
.6 Subtract the shortfall, if any, indicated by the Contractor in the documentation required by Section
12.1.4 to substantiate prior Applications for Payment, or resulting from errors subsequently
discovered by the Owner’s auditors in such documentation; and
.7 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as
provided in Section 9.5 of AIA Document A201–2007.
§ 12.1.8 The Owner and the Contractor shall agree upon a (1) mutually acceptable procedure for review and approval
of payments to Subcontractors and (2) the percentage of retainage held on Subcontracts, and the Contractor shall
execute subcontracts in accordance with those agreements.
§ 12.1.9 In taking action on the Contractor’s Applications for Payment, the Architect shall be entitled to rely on the
accuracy and completeness of the information furnished by the Contractor and shall not be deemed to represent that
the Architect has made a detailed examination, audit or arithmetic verification of the documentation submitted in
accordance with Section 12.1.4 or other supporting data; that the Architect has made exhaustive or continuous onsite inspections; or that the Architect has made examinations to ascertain how or for what purposes the Contractor
has used amounts previously paid on account of the Contract. Such examinations, audits and verifications, if
required by the Owner, will be performed by the Owner’s auditors acting in the sole interest of the Owner.
§ 12.2 FINAL PAYMENT
§ 12.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum, shall be made by the Owner to
the Contractor when
.1 the Contractor has fully performed the Contract except for the Contractor’s responsibility to correct
Work as provided in Section 12.2.2 of AIA Document A201–2007, and to satisfy other requirements,
if any, which extend beyond final payment;
.2 the Contractor has submitted a final accounting for the Cost of the Work and a final Application for
Payment; or
.3 the work has been approved by the governing authorities as acceptable to occupy. and
.4 require close out documentation and as built drawings to Owner..
§ 12.2.2 The Owner’s auditors will review and report in writing on the Contractor’s final accounting within 30 days
after delivery of the final accounting to the OA by the Contractor. Based upon such Cost of the Work as the Owner’s
auditors report to be substantiated by the Contractor’s final accounting, and provided the other conditions of Section
12.2.1 have been met, the OA will, within seven days after receipt of the written report of the Owner’s auditors,
however, not later than 30 days following delivery of the final accounting to the Architect by the Contractor, either
issue to the Owner a final Certificate for Payment with a copy to the Contractor, or notify the Contractor and Owner
in writing of the Architect’s reasons for withholding a certificate as provided in Section 9.5.1 of the AIA Document
A201–2007
and instead issue a Certificate for Payment in such lesser sum after deducting amounts in accordance with Section
9.5.1 of AIA Document A201-2007, in which case Owner shall make a progress payment within 7 days following
issuance of the Certificate for Payment in the amount stated therein.The time periods stated in this Section 12.2.2
supersede those stated in Section 9.4.1 of the AIA Document A201–2007 with respect to final payment. The
Architect is not responsible for verifying the accuracy of the Contractor’s final accounting.
§ 12.2.3 If the Owner’s auditors report the Cost of the Work as substantiated by the Contractor’s final accounting to
be less than claimed by the Contractor, the Contractor shall be entitled to request mediation of the disputed amount
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil
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without seeking an initial decision pursuant to Section 15.2 of A201–2007. Pending a resolution of the disputed
amount, the Owner shall pay the Contractor the amount certified in the Architect’s final Certificate for Payment.
§ 12.2.4 The Owner’s final payment to the Contractor shall be made no later than 30 days after the issuance of the
Architect’s final Certificate for Payment, and all items of 12.2.1 has been provided to the Owner.
« »
§ 12.2.5 If, subsequent to final payment and at the Owner’s request, the Contractor incurs costs described in Article 7
and such costs arenot excluded by Article 8, for example, to correct defective or nonconforming Work, the Owner
shall reimburse the Contractor such costs and the Contractor’s Fee applicable thereto on the same basis as if such
costs had been incurred prior to final payment, but not in excess of the Guaranteed Maximum Price. If the
Contractor has participated in savings as provided in Section 5.2, the amount of such savings shall be recalculated
and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the Contractor.
ARTICLE 13 DISPUTE RESOLUTION
§ 13.1 INITIAL DECISION MAKER
The OA will serve as Initial Decision Maker pursuant to Section 15.2 of AIA Document A201–2007, unless the
parties appoint below another individual, not a party to the Agreement, to serve as Initial Decision Maker.
(If the parties mutually agree, insert the name, address and other contact information of the Initial Decision Maker,
if other than the Architect.)
« »
« »
« »
« »
§ 13.2 BINDING DISPUTE RESOLUTION
For any Claim subject to, but not resolved by mediation pursuant to Section 15.3 of AIA Document A201–2007, the
method of binding dispute resolution shall be as follows:
(Check the appropriate box. If the Owner and Contractor do not select a method of binding dispute resolution
below, or do not subsequently agree in writing to a binding dispute resolution method other than litigation, Claims
will be resolved by litigation in a court of competent jurisdiction.)
[ «X» ] Arbitration pursuant to Section 15.4 of AIA Document A201–2007
[ «» ] Litigation in a court of competent jurisdiction
[ «» ] Other (Specify)
«»
ARTICLE 14 TERMINATION OR SUSPENSION
§ 14.1 Subject to the provisions of Section 14.2 below, the Contract may be terminated by the Owner or the
Contractor as provided in Article 14 of AIA Document A201–2007.
§ 14.2 If the Owner terminates the Contract for cause as provided in Article 14 of AIA Document A201–2007, the
amount, if any, to be paid to the Contractor under Section 14.2.4 of AIA Document A201–2007 shall not cause the
Guaranteed Maximum Price to be exceeded, nor shall it exceed an amount calculated as follows:
.1 Take the Cost of the Work incurred by the Contractor to the date of termination;
.2 Add the Contractor’s Fee computed upon the Cost of the Work to the date of termination at the rate
stated in Section 5.1.1 or, if the Contractor’s Fee is stated as a fixed sum in that Section, an amount
that bears the same ratio to that fixed-sum Fee as the Cost of the Work at the time of termination
bears to a reasonable estimate of the probable Cost of the Work upon its completion; and
.3 Subtract the aggregate of previous payments made by the Owner.
§ 14.3 The Owner shall also pay the Contractor fair compensation, either by purchase or rental at the election of the
Owner, for any equipment owned by the Contractor that the Owner elects to retain and that is not otherwise included
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
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in the Cost of the Work under Section 14.2.1. To the extent that the Owner elects to take legal assignment of
subcontracts and purchase orders (including rental agreements), the Contractor shall, as a condition of receiving the
payments referred to in this Article 14, execute and deliver all such papers and take all such steps, including the
legal assignment of such subcontracts and other contractual rights of the Contractor, as the Owner may require for
the purpose of fully vesting in the Owner the rights and benefits of the Contractor under such subcontracts or
purchase orders.
§ 14.4 The Work may be suspended by the Owner as provided in Article 14 of AIA Document A201–2007; in such
case, the Guaranteed Maximum Price and Contract Time shall be increased as provided in Section 14.3.2 of AIA
Document A201–2007, except that the term “profit” shall be understood to mean the Contractor’s Fee as described
in Sections 5.1.1 and Section 6.4 of this Agreement.
ARTICLE 15 MISCELLANEOUS PROVISIONS
§ 15.1 Where reference is made in this Agreement to a provision of AIA Document A201–2007 or another Contract
Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract
Documents.
§ 15.2 Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated
below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)
« » % « »
§ 15.3 The Owner’s representative:
(Name, address and other information)
«
« »
« »
§ 15.4 The Contractor’s representative:
(Name, address and other information)
«
« »
§ 15.5 Neither the Owner’s nor the Contractor’s representative shall be changed without ten days’ written notice to
the other party.
§ 15.6 Other provisions: Contractors are required by law to be licensed and regulated by the contractor’s state license
board which has jurisdiction to investigate complaints against contractors if a complaint regarding a patent act or
omission is filed within four (4) years of the date of the alleged violation. A complaint regarding a latent act or
omission pertaining to structural defects must be filed within ten (10) years of the date of the alleged violation. Any
questions concerning a contractor may be referred to the registrar, Contractor’s state license board, PO Box 26000,
Sacramento, California 95826.
« »
ARTICLE 16 ENUMERATION OF CONTRACT DOCUMENTS
§ 16.1 The Contract Documents, except for Modifications issued after execution of this Agreement, are enumerated
in the sections below.
§ 16.1.1 The Agreement is this executed AIA Document A102–2007, Standard Form of Agreement Between Owner
and Contractor.
§ 16.1.2 The General Conditions are AIA Document A201–2007, General Conditions of the Contract for
Construction.
AIA Document A102™ – 2007 (formerly A111™ – 1997). Copyright © 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987, 1997 and 2007
by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
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§ 16.1.3 The Supplementary and other Conditions of the Contract:
Document Title Date Pages
«N/A »
§ 16.1.4 The Specifications:
(Either list the Specifications here or refer to an exhibit attached to this Agreement.)
«To be included in the GMP Amendment »
Section Title Date Pages
« »
§ 16.1.5 The Drawings:
(Either list the Drawings here or refer to an exhibit attached to this Agreement.)
«To be included in the GMP Amendment »
Number Title Date
« »
§ 16.1.6 The Addenda, if any:
Number Date Pages
«N/A »
Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding
requirements are also enumerated in this Article 16.
§ 16.1.7 Additional documents, if any, forming part of the Contract Documents:
.1 AIA Document E201™–2007, Digital Data Protocol Exhibit, if completed by the parties, or the
following:
«»
.2 Other documents, if any, listed below:
(List here any additional documents that are intended to form part of the Contract Documents. AIA
Document A201–2007 provides that bidding requirements such as advertisement or invitation to bid,
Instructions to Bidders, sample forms and the Contractor’s bid are not part of the Contract
Documents unless enumerated in this Agreement. They should be listed here only if intended to be
part of the Contract Documents.)
Exhibit A – GMP Budget Estimate
Exhibit B – Construction Schedule
Exhibit C – Insurance Certificate
Exhibit D – Contractor RFP
ARTICLE 17 INSURANCE AND BONDS
The Contractor shall purchase and maintain insurance and provide bonds as set forth in Article 11 of AIA Document
A201–2007.
(State bonding requirements, if any, and limits of liability for insurance required in Article 11 of AIA Document
A201–2007.)
Type of insurance or bond Limit of liability or bond amount ($0.00)
« »
This Agreement entered into as of the day and year first written above.
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by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and
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« » « »
OWNER (Signature) CONTRACTOR (Signature)
« » « »
(Printed name and title) (Printed name and title)

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