Architects and Contractors and Opinion and Project Management and Construction and Real Estate & Retail

ConsensusDOCs an option for construction contracts

November 10, 2008
Although several associations in the construction industry publish their own family of standard form contracts, most, if not all, are plagued by a perceived bias toward members of that particular association.

The most heavily utilized family of standard form contracts is published by the American Institute of Architects. However, contractors routinely criticize the AIA forms because of a perceived bias in favor of the architect.

In part to address this perceived bias, in the fall of 2007, a new set of standard form contract documents were published known as "ConsensusDOCS." As the name suggests, ConsensusDOCS purports to have the consensus or support of all members of the construction industry, including designers, owners, contractors and sureties (hence the acronym DOCS).

To date, the ConsensusDOCS has received an impressive array of endorsements from more than 20 different and influential construction associations. The AIA, however, has not endorsed the ConsensusDOCS and, as an organization, refused an invitation to participate in the drafting of the form contracts.

In fact, the AIA released its most recent standard contract form revisions (including revisions to the A201 General Conditions of the Contract for Construction) about six weeks after the debut of ConsensusDocs.

Important distinctions

There are numerous important distinctions between the ConsensusDOCS and the AIA form contracts that one should be aware of before choosing what form meets a particular project's needs. For example, one major difference between the ConsensusDOCS and the AIA form contracts is that each contract form in Consensus-DOCS is a stand-alone document in that each agreement includes the pertinent general conditions in the body of the contract. In other words, the ConsensusDOCS forms intentionally make very limited references to other agreements.

By contrast, the AIA utilizes the A201, which is, as it always has been, a set of general conditions providing substantive contractual provisions intended to govern most aspects of the entire project. Thus, the A201 is referenced by most other forms in the AIA family of contracts.

With that said, for purposes of comparison, the closest form contract to the AIA A201 in the ConsensusDOCS family of forms is the ConsensusDOCS 200 which is the form for basic general contracting services. The following highlights a few of the more noteworthy distinctions between the two forms.

First, and perhaps not surprisingly, the construction phase role of the architect/engineer, or A/E, in the Consensus-DOCS 200 is minimal unless the owner chooses to involve him or her in the process. Indeed, even though the AIA A201 (as revised in 2007) reduced the construction phase obligations of the A/E compared to prior AIA versions, the ConsensusDOCS 200 minimizes the role even more. For example, under an unmodified ConsensusDOCS 200, the A/E is not necessarily required to approve the contractor's submittals. This is in stark contrast to an unmodified A201, which provides a relatively significant and active role for the A/E during the construction phase.

Claim resolutions

A second noteworthy distinction relates to the applicable dispute-resolution procedures. The ConsensusDOCS 200 has a relatively elaborate requirement that designated project representatives informally discuss claims before submitting to a more formal process.

Specifically, under the ConsensusDOCS 200, the claim-resolution process begins with a mandatory meeting of identified "ground level" project representatives. If the project representatives cannot resolve the dispute, then the issue moves to senior executives to discuss a resolution. If the senior execs cannot agree, the parties may submit the issue to non-binding mediation or a predetermined project-neutral decision maker. If all of the informal processes fail to yield a resolution, the parties submit to binding litigation or arbitration.

By contrast, in 2007, the AIA A201 was modified to create a "new" construction entity referred to as the Intitial Decision Maker, or "IDM." The purpose of the IDM is to render decisions on claims as a precondition to the mandatory mediation.

The IDM can be any neutral third party, but, if not specifically designated, the default is the architect. A claim cannot proceed to mediation and then arbitration or litigation until the IDM renders his or her initial decision on the claim. Unlike the ConsensusDOCS 200, the AIA A201 does not require the informal discussions between designated project representatives prior to submitting to the more formal dispute-resolution procedure.

The third noteworthy distinction relates to indemnity. The ConsensusDOCS 200 contains mutual indemnity provisions running from the contractor to the owner and from the owner to the contractor. On the other hand, the A201 indemnity provision contains a single, one-way indemnity provision running in favor of the owner and architect and against the contractor to the extent of the contractor's fault.

This is a brief introduction to ConsensusDOCS and highlights a few of the distinctions between it and the AIA family of contracts. Although it is anticipated that the AIA contracts will retain much of their popularity, at a minimum, the release of the ConsensusDOCS provides those in the construction industry with an additional set of standard form contracts to consider utilizing on any given project.

___

Devenney is a construction law attorney with Indianapolis-based Drewry Simmons Vornehm LLP. Nathan A. Leach also contributed to this column. Views expressed here are the writer's.
Source: XMLAr02400.xml
ADVERTISEMENT
Comments powered by Disqus