Owner’s who demand the highest standards of care and want to attract the best Suppliers are best served by more balanced contracts
Material volatility coupled with ever increasing labor costs, have made navigating the current market extremely difficult.
The roots of the architect can be traced back to the times of the Ancient Greeks. The term architect, or arkhitekton in Greek, was the title given to the master builder who would oversee the design and construction
General Contractor should not rely on the Owner’s contract to define the terms and obligations between the Contractor and his subcontractors. Rather, the GC should specifically state any and all of their sub-contractor terms (including payment obligations) independently of the Owner’s obligations to the GC. The Contractor should adhere to those terms independent of what may or may not be happening between the Contractor and the Owner.
If you have been reading this blog consistently for the past few weeks, you probably were expecting this week’s article to be the fourth and final installment detailing my talk from the ProcureCon Conference this past January.
That article will publish next week. Given the massive impact the Corona virus has had on our lives globally, I could not go on with this blog without addressing it.
So this week, we will talk about the impact the virus could have on ongoing bids and active projects.
Over the last two weeks we have been exploring collaborative agreements.
Two weeks ago, I gave you a brief overview of the difference between the AIA’s two collaborative delivery contract models. Last week, I shared some of the most pivotal clauses that shift the relationship of the parties from adversaries to collaborators.
This week, I want to share some of the case studies I have read from projects that used some form of collaborative agreements and share some of the anecdotal comments I have received from friends and colleagues that have worked under one of these models.
Last week I provided a brief overview of the two contracting models the AIA classifies as collaborate delivery.
We reviewed the nuances between Integrated Project Delivery (IPD) and Single Purpose Entities (SPE). I even correlated SPE agreements in the United States with Alliance Agreements in the United Kingdom
This week, I wanted to share with you some of the contract terms these agreements require you to accept in order to implement the model.
With the start of the New Year, I’ve jumped right back into the deep-end with several projects that began towards the end of last year and grew hot over the break.
Each of these projects have required some amount of re-write of contract terms. Coincidentally all of these agreements started on Vendor paper (or the Vendor’s form of agreement).
As I have completed my reviews (all around the same time), it became evident that the vast majority of these were lacking some of the same things.
Some were vague in their description of scope of work, others had poorly defined payment terms, others simply offered no contractual remedy in the event of a breach.
In previous articles we reviewed the differences between a scope of work and a scope of services. Collectively these two pieces of information convey the scope of the agreement.
Of course this is the number one part of an agreement that needs to be right, but there are a few others:
AR5 establishes stricter criteria for classifying workers as Independent Contractors. In order to qualify as an Independent Contractor AR5 requires the employee to pass the “ABC test”.
The test states that the hiring organizations must prove the worker; (A) is free from the control typically exercised
Why an Architect might consider releasing drawings that are not complete to be a “good practice”?
This had the net effect of holding back the Contractor’s entire fee as a guarantee that they would complete the work.
Be sure that when you move into contracting, you have a firm understanding of how your contract is structured.