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American Institute of Architects (AIA) Provides New Agreements to Encourage Implementation of Integrated Project Delivery
New Contract Documents Allow for Both Transitional Foray into IPD and More Complete Sharing of Risk and Reward
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For Immediate Release |
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Washington, D.C., May 15,
2008 — The American Institute of Architects (AIA) today introduced two
types of Integrated Project Delivery (IPD) agreements. These new
standard form contracts, which implement the principles and
concepts laid out in Integrated Project Delivery: A Guide (IPD
Guide; www.aiacontractdocuments.org), provide two
levels of design and construction integration. The first type is
transitional, and serves as a comfortable first step into
integrated project delivery; the second type, the Single Purpose
Entity (SPE), introduces a fully integrated way of delivering a
construction project. Both types of agreements provide a roadmap
for implementing IPD.
“We are excited to introduce these agreements, which provide a
clear set of guiding principles to implement the business models
and objectives we laid out in the IPD Guide,” said
Suzanne Harness, managing director and counsel, AIA Contract
Documents. “By providing both the transitional forms and a
full integration approach, parties can select the format that works
best for their projects.”
The Transitional Agreements:
The transitional agreements provide a comfortable step
into IPD because they utilize a familiar, contracting model:
B195™-2008, an owner-architect agreement; A195™-2008, an
owner-contractor agreement with a guaranteed maximum price
amendment; and A295™-2008, a shared “general
conditions” document. Here, however, the general conditions
document takes on a more substantial role because it includes not
only the terms and conditions for construction, but also the
architect’s design services and the contractor’s
pre-construction services. Both B195 and A195 are very short
agreements that provide only the business terms for the
parties’ agreements. The A295 general conditions document
establishes not only the owner’s, architect’s, and
contractor’s respective duties, but also describes in detail
how the parties will work together collaboratively at each phase of
the project.
Both types of the AIA’s IPD agreements require the use of
Building Information Models (BIM), and they both implement the
design and construction phases identified in the IPD
Guide. The IPD phase names reflect the need to cast off
conventional phase names associated with linear processes, such as
schematic design and design development, in favor of phase names
that more closely reflect the integrated processes taking place. In
the transitional agreements, design and construction are completed
using IPD phasing, as follows:
• Conceptualization Phase (expanded
programming) – This phase determines what is to be
built, who will build it, and how it will be built. The architect,
contractor, and key consultants are on board; the program is
finalized, schedules are prepared and key subcontractors and
suppliers are identified.
• Criteria Design Phase (expanded schematic
design) – In this phase, the design takes shape, with
significant input from the contractor regarding cost, scheduling,
and constructability.
• Detailed Design Phase (expanded design
development) – During detailed design, all key design
decisions are finalized. At the conclusion of this phase, the
contractor will prepare a guaranteed maximum price proposal for the
owner’s acceptance.
• Implementation Documents Phase (expanded
construction documents) – The traditional shop
drawing process is merged into this phase, and that information is
added to the BIM.
• Construction Phase – Because of the
greater effort put into finalizing all design decisions and
incorporating shop drawing information prior to construction, the
construction phase under IPD will be much more efficient. Unlike
the traditional approach where dispute resolution procedures
between owner and contractor and owner and architect may be
separate, A295-2008 contemplates completely consolidated
proceedings.
Due to the active participation of contractors, subcontractors and
fabricators during the design phase, the IPD transitional forms
provide the dual benefits of better informed design decisions, and
fewer contractor claims based on construction documents. Also,
utilizing BIM, the parties have the opportunity to resolve design
questions prior to construction, thereby avoiding the collisions
between building systems that often arise under the traditional,
linear process. The contractor may also use BIM to order and
fabricate materials with greater accuracy, resulting in less
waste.
The Single Purpose Entity Agreement:
The AIA’s second type of IPD agreement allows for complete
sharing of risk and reward in a
“one-for-all-and-all-for-one” approach where the owner,
architect and construction manager work together from the beginning
to design and construct the project to achieve mutually agreed-upon
performance and cost goals. In this agreement, C195™-2008, the
owner, architect and construction manager form a limited liability
company with each of the three as a company member. The single
purpose of the company is to plan, design, construct, and
commission the project. This Single Purpose Entity, which may
include other members beyond the three identified here, follows a
more revolutionary contracting approach and incorporates:
• Mutual, unanimous decision making –
The SPE makes its decisions through the unanimous vote of its
members, acting through a governance board; for day-to-day
operations, a Project Management Team makes all decisions
unanimously on a “best for project” basis.
• Mutually agreed-upon target cost –
Prior to the conclusion of the criteria design phase, the members
agree upon a target cost to complete the design and construct the
project. If they cannot agree upon a target cost, the SPE
dissolves.
• Mutually established performance goals
– The members mutually agree upon performance and schedule
goals with associated compensation for goal achievement, and
establish them in an exhibit to the agreement. If a goal is
achieved, all members benefit; if a goal is not achieved, no member
benefits.
• Cost-based compensation – Non-owner
members earn profit only through the achievement of performance
goals, or from sharing any savings achieved by completing the
project for less than the amount of the target cost.
• A waiver of claims – Members waive
claims against the company and against other members, except for
willful misconduct; the company exculpates and indemnifies its
members on the same basis. As a result, all disputes are resolved
through the SPE’s dispute resolution procedures, rather than
in court.
The benefits of the SPE include:
• Greater Efficiency – The formation of
the SPE provides simultaneous participation of members for maximum,
early information sharing. Just as in the transitional forms, the
use of BIM permits early resolution of design conflicts, before
they are cast in concrete and costly to correct, and allows for
more efficient ordering and fabricating of materials.
• Optimal Project Outcomes Based on Goal
Achievement – Members are motivated through incentive
compensation to achieve the project goals they set by mutual
agreement, including the project’s cost and schedule.
Therefore, individual member success is tied to project
success.
• Reduced Claims – Not only do the
members waive their claims against each other, the cost to resolve
disputes is a cost of the project. Because the SPE provides
powerful incentives to minimize the project cost, the members are
motivated to cooperate with each other to meet shared goals,
instead of protecting individual interests.
C195-2008, Single Purpose Entity Agreement for an Integrated
Project, is currently available with a number of optional exhibits,
including the Target Cost Amendment. To avoid challenges presented
by state licensing statutes, the SPE performs professional design
services and construction management services by contracting with
its members. The AIA plans to release a standard form SPE-Member
services agreement and SPE-Owner agreement in November 2008. These
agreements will define the relationships between the SPE and its
members.
Format and Availability
AIA IPD agreements are available in paper form and electronically
in AIA Contract Documents software. The software generates
customizable, Microsoft Word files.
AIA Contract Documents software can be purchased at www.aia.org/docs. Documents in paper format
are available through the AIA’s full service distributors. For
a listing of full service distributors and pricing information,
please visit www.aia.org/docs.
About The American Institute of Architects
For 150 years, members of The American Institute of
Architects have worked with each other and their communities to
create more valuable, healthy, secure, and sustainable buildings
and cityscapes. AIA members have access to the right people,
knowledge, and tools to create better design, and through such
resources and access, they help clients and communities make their
visions real. www.aia.org
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