Summary: The AIA earlier this week introduced its 2007 Update to AIA Contract Documents, which have defined the contractual relationships in the design and construction industry for 120 years. The AIA prepared the 2007 Update, which consists primarily of agreements in the popular A201 family of documents, with input from owners, contractors, attorneys, architects, and engineers. The 2007 Update includes nearly 40 contract documents, including new owner/architect agreements.

The AIA revises the A201 family every 10 years to reflect changes in industry trends and practices. The revision process began in 2004, when the AIA solicited industry feedback on the 1997 A201 family of documents from more than a dozen industry groups, including:

• Associated General Contractors
• Associated Specialty Contractors,
• American Subcontractors Association
• Associated Builders and Contractors
• Council of American Structural Engineers
• National Association of State Facilities Administrators
• Commercial Owners Association of America
• American Council of Construction Lawyers
• Attorneys from Divisions 2 and 12 of the American Bar Association’s Forum on the Construction Industry.

The AIA Documents Committee and AIA staff attorneys met with most of these groups and worked with them to address their concerns, which included dispute resolution, financial matters, the right to obtain payment information, insurance, the architect’s standard of care, and sustainable design. The first drafts of the 2007 agreements were completed in 2005. The AIA sent the drafts out to the industry for review, made revisions to respond to the comments received, and sent out additional drafts in 2006 before finalizing the agreements for the November 2007 release.

“We are very grateful to the industry for candidly sharing hundreds of comments—these provided the feedback we needed to address all parties’ concerns,” says Suzanne Harness, AIA, Esq., managing director and counsel, AIA Contract Documents. “AIA documents are the most respected and widely used in the design and construction industry. We think that’s because we provide a winning combination: agreements that fairly balance the interests of contracting parties and easy-to-use software that delivers documents in Microsoft Word®.”

The 2007 Update
Major changes include:

• Update to A201, General Conditions of the Contract for Construction:
  Significant changes to A201—the backbone of the A201 family of documents because it forms the relationship among the owner, contractor, and architect—reflect transformations in industry practices since A201 was last revised in 1997.
  • Removal of Mandatory Arbitration. Parties are no longer required to resolve disputes through arbitration. The 2007 Update now offers arbitration as an option. However, if no option is specifically selected, the default procedure is litigation.
  • Consolidation of Arbitrations. New provisions allow for the architect and his or her consultants, the owner, the contractor, and subcontractors to participate in one multi-party arbitration, as long as certain conditions are met.
  • Initial Decision Maker. Previous versions of the documents assigned the architect the role of serving as a neutral party to decide disputes between the owner and contractor. The 2007 Update provides the owner and contractor with the opportunity to hire a third-party initial decision maker (IDM) for dispute resolution. The architect remains as the default if an IDM is not identified in the contract.
  • Statute of Limitations. The revised A201 designates that the time limit for commencing claims is determined by state law. However, this time limit cannot be longer than 10 years after substantial completion of the project.
  • Additional Insured Provisions. Project Management Protective Liability Insurance is deleted and substituted with a practice that has become common in the industry, naming the owner, architect, and the architect’s consultants as additional insureds under the contractor’s general liability policy.
  • Right to Financial Information. The 2007 Update limits the contractor’s right to request financial information from the owner after work commences to the occurrence of enumerated events that would lead to concern about the owner’s ability to pay. The revisions also allow the owner a greater opportunity to learn of contractor/subcontractor payment problems and address a contractor’s failure to pay a subcontractor by allowing the owner to write joint checks.
• New Numbering System: A noticeable change is the new numbering system, which provides consistency in document numbering and establishes a meaning for each number. While the documents maintain a letter to denote the agreement parties, the first number indicates the type of agreement or form (e.g., prime or subcontract), the second number identifies the family, and the third number indicates sequence. For example, A141™–2004, is a prime agreement in the design-build family and is the first document in the sequence.
• Digital Practice Documents: E201–2007, Digital Data Protocol Exhibit, which allows parties to establish project-specific protocols for data transfer, and C106–2007, Digital Data Licensing Agreement were introduced in early 2007. As the use of paper construction documents continues to decrease, these documents allow parties to manage their digital data.