Content.

Synopsis

Related documents

Changes from the previous edition

Dispute Resolution—Mediation and Arbitration

 

Synopsis.

AIA Document A103–2017 is appropriate for use on large projects when the basis of payment to the contractor is the cost of the work plus a fee, and the cost is not fully known at the commencement of construction. A103–2017 is not intended for use in competitive bidding. AIA Document A103–2017 adopts by reference and is intended for use with AIA Document A201®–2017, General Conditions of the Contract for Construction.

In addition, A103 is drafted to be used in conjunction with the A103™–2017, Exhibit A, Insurance and Bonds. This insurance and bonds exhibit is a critical part of the owner/contractor agreement and should be discussed with legal and insurance counsel. For use and execution of a document, see its instructions »

 

This document has been prepared for use in conjunction with the AIA Document A201–2007, General Conditions of the Contract for Construction, which is adopted into A103–2007 by specific reference.

The A103– 2007 document is used as one part of the Contract Documents which memorialize the Contract for Construction between the Owner and the Contractor. The other Contract Documents are:

General Conditions (i.e., A201 –2007)

Supplementary Conditions

Insurance and Bonds Exhibit (i.e., A103–2017, Exhibit A, Insurance and Bonds)

Drawings

Specifications

Modifications

Although the AIA does not produce standard documents for Supplementary Conditions, Drawings or Specifications, a variety of model and guide documents are available, including AIA’s MASTERSPEC and AIA Document A503™–2017/2019, Guide for Supplementary Conditions.

AIA Document A103–2017 is published in conjunction with the following related documents:

A201– 2017, General Conditions of the Contract for Construction

A401™– 2017, Agreement Between Contractor and Subcontractor

B101™– 2017, Agreement Between Owner and Architect

C401™– 2017, Agreement Between Architect and Consultant

E203™–2013, Building Information Modeling and Digital Data Exhibit

E204™–2017, Sustainable Projects Exhibit

A503™–2017/2019, Guide for Supplementary Conditions

D503™-2013, Guide for Sustainable Projects, including Commentary on AIA Sustainable Projects Documents

 

Changes from the previous edition.

AIA Document A103–2017 revises AIA Document A103™–2007 to reflect changes made in AIA Document A201–2017. It incorporates alterations proposed by architects, contractors, owners, and professional consultants. The following are some of the significant changes made to the contents of AIA Document A103–2007.

Throughout. References in AIA Document A103–2017 to the General Conditions refer specifically to A201–2017.

Article 4 – Date of Commencement and Substantial Completion

§ 4.1 The format for the date of commencement of the work has been changed to a checkbox allowing the parties to select either (1) the date of the Agreement, (2) the issuance of a notice to proceed (NTP) by the Owner, or (3) a different date as agreed by the parties. To the extent that the Owner needs additional time to file mortgages or security interests or delay the Project start for reasons other than the issuance of a NTP, the parties would select (and complete) option 3.

§ 4.3.1 A checkbox has been added so that the parties can select whether Substantial Completion of the entire Work will be achieved no later than a specified calendar date or within a certain number of days from the date of commencement.

§ 4.3.2 This section has been added to allow for Substantial Completion of certain phases of the Project to be completed prior to the Substantial Completion date for the entire Work set forth in Section 4.3.1 (tiered Substantial Completion dates). This can be used when portions of the Work will be completed and occupied by the Owner prior to Substantial Completion of the entire Work.

§ 4.3.3 Because liquidated damages are a function of the Contractor’s failure to achieve Substantial Completion within the Contract Time, this section has been added to cross-reference the fill point for Liquidated Damages in Article 5 (relating to adjustments in the Contract Sum).

Article 5 – Contract Sum

§ 5.1.6 A fill-point has been included for the parties to specify a liquidated damages provision or amount. The parties are free to define liquidated damages in this section as they may mutually agree; however, consultation with legal counsel is encouraged.

§ 5.1.7 As discussed at 5.1.6 above, AIA Document A103–2007 included a fill point to add a liquidated damages provision and a bonus provision. This fill point was referenced in a parenthetical instruction. Because liquidated damages have been given a separate fill point, a fill point titled “other” has been included to allow the parties to list a bonus provision or other provision that will allow for adjustment of the Contract Sum.

Article 7 – Costs to be Reimbursed

General changes have been made throughout Article 7 to clarify the meaning of provisions relating to costs to be reimbursed. Changes discussed below are limited to those sections where changes will affect the category of cost allowable under the provision.

§ 7.2.2.1 A fill-point has been included in this section to allow the parties to provide for an agreement as to the allowable activities performed and percentage of time spent on activities related to the Work by the Contractor’s supervisory and administrative personnel performing Work at sites other than the Project site.

§ 7.2.5 This new section clarifies that if the parties have agreed to a schedule of labor rates, those labor rates will remain unchanged for the duration of the Project unless the parties execute a Modification.

§ 7.6.1.2 This new section has been included to allow for the cost of insurance through a captive insurer owned or controlled by the Contractor to be included in the Cost of the Work, with the Owner’s prior approval.

Article 8 – Costs Not to be Reimbursed

§ 8.1.2 Formerly Section 7.2.5, language allowing the Contractor to include bonuses, profit sharing, and other incentive compensation of Contractor’s personnel in the Cost of the Work, has been deleted and moved to Section 8.1.2 (costs not to be reimbursed). Section 8.1.2 will allow these costs to be included in the Cost of the Work if approved in advance by the Owner. This is not a change to the operation of the provision; it clarifies that these costs may only be included in the Cost of the Work if approved by the Owner.

Article 10 – Subcontracts and Other Agreements

§ 10.1 This section has been revised to clarify that the Owner is not the party responsible for selecting which Subcontractor bids will be accepted. Rather, the Contractor is responsible for determining which Subcontractor bids will be accepted and the Owner, in consultation with the Architect, may choose to reject Subcontractors proposed by the Contractor.

Article 12 – Payments

§ 12.1.6 The provisions for the calculation of progress payments have been clarified and simplified to clearly delineate the basis for each progress payment.

§ 12.1.7 A more prescriptive provision on retainage has been included that will allow the parties to clearly delineate the retainage amount, exclusions from retainage, and how retainage may be reduced at Substantial Completion.

Article 14 – Termination or Suspension

§ 14.1.3 A fill-point has been added for the parties to identify the termination fee that the Owner will pay to the Contractor in the event of a termination for convenience. This provision works in conjunction with Section 14.4.3 of AIA Document A201–2017.

Article 15 – Miscellaneous Provisions

§ 15.5 This new provision states that the parties will provide insurance and bonds as required in the insurance and bonds exhibit, AIA Document A103–2017 Exhibit A. This replaces Article 17 of A103–2007 with AIA Document A103–2017 Exhibit A. Details on completing AIA Document A103–2017 Exhibit A are included below. It is also important to note that additional insurance provisions are included in Article 11 of AIA Document A201–2017. New for 2017 is a requirement that insurance and bonds be issued by companies lawfully licensed to issue insurance and bonds, as the case may be, in the jurisdiction where the Project is located. Information regarding insurers and sureties admitted to write insurance or issue bonds in your jurisdiction can be found by contacting the insurance commissioner in each state. Contact information for each state’s insurance commissioner can be obtained from the National Association of Insurance Commissioners.

§ 15.6 A new provision is included that will allow the parties to describe how notice may be given in electronic format. This provision works in conjunction with the revised notice provisions found in Article 1 of AIA Document A201–2017. The default for providing notice in electronic format will be through the use of AIA Document E203™–2013, Building Information Modeling and Digital Data Exhibit. However, if the parties elect not to use AIA Document E203–2013, notice in electronic format may be given as specified by the parties in the fill point. While notice in electronic form may be provided as set forth in this provision, other protocols for the use or transmission of digital data and BIM are established through the use of E203-2013, pursuant to A201-2017 section 1.7.

Article 16 – Enumeration of the Contract Documents

§ 16.1.8 This section has been included to allow the parties to incorporate certain optional documents as Contract Documents by checking the appropriate box. Note that AIA Documents E204™–2017, Sustainable Projects Exhibit, and any applicable Sustainability Plan may be incorporated as a Contract Document. These documents will be used where the Project is required to achieve a Sustainable Objective, as specified by the Owner, and will include key provisions applicable to the Owner-Contractor Agreement. For specifics about the use of E204–2017, please see the instructions accompanying the document.

 

Dispute Resolution—Mediation and Arbitration.

This document contains provisions for mediation and arbitration of claims and disputes. Mediation is a non-binding process, but is mandatory under the terms of this agreement. Arbitration may be mandatory under the terms of this agreement. Arbitration is binding in most states and under the Federal Arbitration Act. In a minority of states, arbitration provisions relating to future disputes are not enforceable but the parties may agree to arbitrate after the dispute arises. Even in those states, under certain circumstances (for example, in a transaction involving interstate commerce), arbitration provisions may be enforceable under the Federal Arbitration Act.

The AIA does not administer dispute resolution processes. To submit disputes to mediation or arbitration or to obtain copies of the applicable mediation or arbitration rules, contact the American Arbitration Association at (800) 778-7879 or visit the website at adr.org.