Best Practices Construction Law : Construction Lawyer & Attorney : Matthew DeVries : Stites & Harbison Law Firm : Green Building & LEED Litigation

Yesterday, the American Institute of Architects (AIA) and Associated Builders and Contractors (ABC) announced a marketing partnership agreement that is designed to foster a greater understanding and exchange of ideas between architects and contractors in the construction industry.

According to the press release, the industry giants have great things to say about each other.

• AIA President, Clark Manus: “We see this as the beginning of a larger, long-term partnership between the AIA and ABC. For more than 100 years, the AIA has been committed to promoting greater industry collaboration among architects, owners and contractors, and this partnership is a natural extension of this work. ABC’s decision to partner with the AIA speaks volumes about the fair and balanced nature of AIA documents and their universal acceptance in the industry.”

• ABC President and CEO Mike Bellaman: “We believe this partnership will provide value to ABC members by giving them access to more resources to help them  win work and deliver that work safely and productively.  This partnership will allow for a healthy exchange of best practices and enhance relationships between architects and contractors, as well as bring more value to the industry.”

As part of the partnership, AIA will provide a number of benefits to ABC members, including a discount on the purchase of any retail-priced AIA Contract Document software license and access to AIA Contract Documents education programs.

In my personal opinion, this will be an interesting partnership to watch.  You may already know about the growing acceptance of ConsensusDOCS, which includes 35 coalition partners including the Associated General Contractors, as well as ABC.  I look forward to seeing what comes out of the program discussions between AIA and ABC.

Image: Cara_VSAngel

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Earlier this week, I received an alert that "Five AIA Contract Documents are going green!" Developed using AIA’s flagship documents as a base, and incorporating concepts and model language from the AIA’s Guide for Sustainable Projects, the new documents address the unique roles, risks and opportunities encountered on sustainable design and construction projects.

 “The development of these new documents for sustainable projects is a natural next step following the release of the Guide for Sustainable Projects in the spring,” said Ken Cobleigh, Managing Director and Counsel for AIA Contract Documents Content. “We continue to see a demand for incorporating sustainable elements in projects. The AIA Contract Documents program continues to revise existing documents and develop new documents and guides, as necessary, to remain current with trends and changes in the industry and law.”

 The new AIA Contract Documents created for use on sustainable projects include:

1. A101™-2007 SP, Standard Form of Agreement between Owner and Contractor, for use on a Sustainable Project where the basis of payment is a Stipulated Sum
2. B101™-2007 SP, Standard Form of Agreement Between Owner and Architect, for use on a Sustainable Project
3. A201™-2007 SP, General Conditions of the Contract for Construction, for use on a Sustainable Project
4. C401™-2007 SP, Standard Form of Agreement Between Architect and Consultant, for use on a Sustainable Project
5. A401™-2007 SP, Standard Form of Agreement Between Contractor and Subcontractor, for use on a Sustainable Project

AIA Document D503™-2011, Guide for Sustainable Projects (free download), including Agreement Amendments and Supplementary Conditions, was released by the AIA in May 2011. In the short time since it was released, over 4,000 users have downloaded the Guide. In addition to providing model language that may be used to amend or supplement AIA Contract Documents for design-bid-build projects, the Guide discusses the applicability of key concepts to other delivery models such as design-build, construction management and integrated project delivery.

Question: Have you compared the AIA green docs with the ones from ConsensusDOCS?

Image: wonderlane

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I will admit it.  I am open-minded.  I will try anything (...well, almost anything...) at least once.  So, a few years ago when ConsensusDOCS hit the market, I was happy to take the construction documents for a spin ... and I was even happier to learn that ConsensusDOCS offered a metered account that allowed me access to all of the documents and pay for only the final product.

Rather than wait 10 years for a set of standard form revisions like another construction industry group (...rhymes with Bay-Why-Bay...), this week the folks at ConsensusDOCS released new and updated contract documents to respond to changed economic conditions, new technologies, and green building goals.  According to Brian Perlberg, Executive Director of ConsensusDOCS, “Today’s construction industry looks almost nothing like it did 2007. The practical expertise of an expanded coalition effort brought new ideas and actively listened to outside feedback to make the best standard contracts even better.”

Some highlights of this "review, edit and revise" process include:

• Retention of the project-first philosophy mission that put Owners in an active rather than passive role in the construction process;
• Incorporation of English writing style that provides clearer contract interpretation and project administration (...Bryan Garner is celebrating big time...);
• Promotion of promoting collaboration, communication and integration;
• Incorporation of Building information modeling (BIM) and green building goals as specific callouts into the agreements; and
• Creation of two new documents, including a Standard Purchase Agreement  and a new insurance exhibit for the Subsubcontract agreement.

I have only test-driven the ConsensusDOCS on a few projects, but I am a fan.  Have you used them?  What are your thoughts?

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Just a few days ago I wrote about how, like the World Cup soccer games, BIM presented a lot of excitement for many proponents. Turning to another competitive analogy, there continues to be many in the construction industry who simply refuse to go "all-in" with their poker chips.  According to a recent McGraw-Hill Construction report, I may be wrong.  The report concludes that half the industry is behind BIM technology.

The SmartMarket report is titled The Business Value of BIM: Getting Building Information Modeling to the Bottom Line, and was produced with Autodesk and 26 other industry players like HOK, Turner, PB, US Army Corp of Engineers, AIA, DBIA, AGC, SMACNA and others.

The purpose of the survey and report was to find "who's using BIM" and "where are they getting the real business value?" After surveying thousands of AEC participants, here are some key findings:

• Almost 50% of the industry is now using BIM.
• All BIM users plan significant increases in their use.
• The majority of users are experiences real business benefits directly attributable to BIM.

The 52-page report is packed with very detailed findings on numerous issues, such as using BIM to gain a competitive advantage, increasing productivity and investing in your team.  Another interesting finding was that two-thirds of the non-users say that concerns about legal liability have little to no impact on their consideration of BIM.  

What are some key recommendations? For beginners, the value of BIM is on the horizon.  In other words, new users see limited value at the start, but additional opportunities materialize with experience.  For non-users, do not delay your decision to embrace technology.  According to the report, "BIM users are seeing positive returns today and expect those benefits to grow over time." For owners, the lesson is to take charge and demand that your design team use BIM.

What did the report conclude?  While the preliminary findings focused on who is using BIM, the real focus addressed the overall value proposition of BIM.  In this environment, the pressing question for AEC players is whether the return on investment is real.  Among others, here are some key finding about ROI: (1) most users see a positive ROI in their use of BIM; (2) those returns tended to improve with experience; and (3) owners and contractors see the highest returns on BIM.

If you have time, the report is definitely worth a read.  It also contains a number of case studies that provide great illustrative examples of the business value of BIM.

Image: Jam Adams

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Lucidity is defined as clearness of thought or style.  In its recent revisions to the A310 (Bid Bond) and A312 (Performance Bond and Payment Bond), the American Institute of Architects (AIA) attempts to provide a clearness of thought and style.

The first publication of AIA's standard bond form was in 1911.  The most recent revisions were in 1970 for the bid bond and 1984 for the performance bond and payment bond forms.  In 2009, the AIA began revising the bond forms to reflect years of court interpretation of the traditional bond language.  However, as admitted by the AIA, some changes were made simply to "clarify language" in the long-standing bond forms.

You can review the AIA's Bond Form Commentary and Comparison (pdf).  Here are some of the major changes:

• The introductory legalese is now gone.  Do you remember the "Know all men by these present, that we [contractor], as Principal, hereinafter called the Principal, and [surety], a corporation duly organized under the laws of the State of ______________as Surety, hereinafter called the Surety, are held and firmly bound unto ..." ? Principal, obligee, surety ... all that stuff is now gone!  Now, you will find an introductory section that lists Contractor, Surety, Owner, Bond Amount and Project. Now that's clear!
• Bid bond form addresses time for acceptance of bids and statutory requirements.  For various reasons, time limits for acceptance of bids are sometime extended.  The revised document allows for up to a 60-day extension of the time for acceptance of the bid (as between owner and contractor), but the surety must be notified and provide consent to extend the bid bond.  In addition, there is necessary language for public projects that have certain statutory requirements.
• Performance bond eliminates owner-surety conference prior to termination and reduces certain waiting periods.  Under prior documents, the owner had to request a conference when addressing contractor default. Some courts held this to be a condition precedent to the surety's obligation under the bond. Now, the owner may, but is not required to, request a conference as part of its notice of potential contractor default.  In addition, the new form deletes the 20-day waiting period for terminating the contractor after notice of default.  Finally, the new form reduces the 15-day waiting period to a 7-day waiting period for a surety (not contractor) default.
• Payment bond makes a number of clarifications to payment obligations, notices and claims, and compliance with bond provisions.  First, Section 2 was revised to better reflect the parties' obligations under the payment bond.  The revisions also clarifies the difference between a "notice" of nonpayment and a "claim" that is sent to the surety.  Finally, a new Section 7.3 was added to clarify that a surety's failure to act under the bond is not a waiver of defenses.  However, the surety may have to indemnify (repay) the claimant's attorney fees if the surety fails to file an answer or fails to pay undisputed amounts.

While there are a number of other changes, these represent many of the provisions that make the AIA bond forms more clear ... more lucid.

Image: Jakebouma

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On Friday, I read a press release by the USGBC and blogged about the new International Green Construction Code (ICCG).  In my haste to avoid the traffic from the SEC Basketball Tourney in downtown Nashville, I quickly posted and jumped into my car to escape.  With all candor, my post was incomplete . . . I did not hit the bull's eye!

This morning, I received a kind tweet from @AIAStateAffairs, the arm of AIA that supports government and community relations.  According to the AIA, here is a link to the more complete story.  Some of the more important facts and dates include the following:

• The public version of the ICCG will be available today.
• The public and AIA Members will be able to submit comments on the document through May 14, 2010.
• In mid-August, comments will be considered in public hearings, with a view toward the issuance of an updated version of the code in early November.
• Another round of hearings will be held in May, 2011 with the final action hearing occurring in the fall of 2011.
• The final version of the code will be published in 2012.

According to the AiA article, architects must advocate for adoption of the IGCC as it is revised by building officials during the next stages of the code development process.  When the first public version of the IGCC is published in 2012, states and municipalities will be able to use the IGCC as a baseline for their own sustainable construction codes.  The IGCC is written in mandatory, legally enforceable language, which is unlike voluntary green building rating systems.  Finally, the IGCC includes post-occupancy building commissioning, as well as prescriptive versus performance-based metrics. 

@AIAStateAffairs, thanks for the sending me a note!

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Which is worse: (a) one lawyer in a room of one hundred architects; or (b) one architect in a room of one hundred lawyers? 

Two weeks ago I found myself in the first category (... although I'm sure that I was not the only shark in the room ...) at a local United States Green Building Council (USGBC) meeting that featured the "2009 Top Ten Green Projects" awarded by the American Institute of Architect (AIA) Committee on the Environment (COTE). In case you don't know, every year COTE highlights the top green projects based upon the measures of sustainable design.  According to COTE, "Sustainability envisions the enduring prosperity of all living things ... [and] ... [s]ustainable design seeks to create communities, buildings, and products that contribute to this vision."  The measures of sustainable design include, among others, design and innovation, land use & site ecology, materials & construction, and energy flows & energy future.

The "Top Ten" from 2009 may be old news to many of you.  However, it is worth mentioning here because of the AIA / USGBC comparison that was highlighted in the 2009 presentation:

As you can see, the COTE Top Ten Measures go a few steps beyond the LEED rating system.  According to the speakers a few weeks ago, Henry Siegel and Kim Shinn (both were judges on the 2009 Top Ten panel), the COTE measures include both quantitative and qualitative measures (or "intangibles").  In the presentation above, the measures highlighted in yellow on the left are those areas not fully addressed by USGBC's LEED rating system. 

(... DON'T JUMP THE GUN, USGBC!... I am not done yet...)  This presentation was based upon the LEED v 2.2 criteria ... and not LEED 2009, which now addresses some of those areas included in COTE's Top Ten Measures (i.e., regional credits, future energy performance).  For the green-building newbie, the Top Ten Green Projects is a good starting point for seeing various sustainable measures carried out in actual building projects ... with cool pictures, too!

[NOTE: The full presentation can be found on AIA-COTE's website ... about halfway down on the left.]

UPDATE (8-1-09): Thanks to Michael at www.buildinggreen.com, who pointed out that Henry Siegel is past chair of AIA COTE and is currently a committee member. He was not a judge on the panel this year.

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In this day and age of Biggest Loser, South Beach Diet, and the latest fitness craze highlighted by Oprah, I find myself more and more conscious about my eating habits. In fact, if you promise not to tell anyone, we have a little fitness competition within our own law firm starring four fatties. Although I have not been faithful to my own fitness regime (…again, please keep that a secret…), I have found myself diving into a new set of suits in my wardrobe. Herein lies today’s topic…the matter of perspective.

You see, according the average observer, my somewhat strained belt buckle and 1-inch-shy-of-buttoning jacket are signs of an outgrown suit. But little does that average observer know is two months ago I would not have been able to attempt the acrobats of wearing this suit to work. This is one of many suits from 10 years ago! Give me two more months and the pants will be sliding on with room to grow.  You see, that average observer has a different perspective than my family who has never seen me in these suits.

I view a lot of the challenges in the green building industry as emanating from a matter of perspective. There are countless resources available on the web about the legal risks associated with green building—just look at some of the green sites on the sidebar ( -----> ). However, as you scroll through some of those posts on green building, the tone of each writing evidences the perspective of each author. In the same fashion, a green building seminar given to construction attorneys is entirely different than a green building seminar given to owners, design professionals and engineers.

Stated differently, the parties’ expectations about the benefits of a green design will result in disputes. As noted by Frank Musica at the 2007 AIA Convention, these are often “unrealistic expectations” of the owner-developer that place significant risks on the architect. But Frank was presenting to a bunch of architects. What if the talk was given by Professor Thomas E. Glavinich at an annual AGC convention, who defines "the green contractor"?  (... If you look closely, Frank was there, too. Frank is everywhere ...)

Do you understand the potential disputes caused by the parties’ perspective? So long as each party maintains a different perspective on the particular issue, then disagreement will run the project performance. But if the parties are able to clearly and accurately reduce their reasonable expectations to a writing … a contract … then perhaps the perspective they will share is one of success.

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That's a pretty old looking contract ... hanging in the historic courthouse in downtown Arthur, Nebraska.  Good thing our standard form construction contracts are not that old!

Last week, the American Institute of Architects (AIA) held its national convention in San Francisco, California. Although “construction manager” (CM) contract documents had been released in 2007 and 2008, AIA released its replacement CM documents and an updated version of its AIA Contract Documents at last week’s meeting.  Some of the more noteworthy revisions of the CM documents include:

• the famous "dispute resolution" checkbox that now appears in the A-101
• the famous “initial decision maker” (IDM) for disputes
• various provisions regarding digital data

According to AIA, the new release of software includes enhanced document management tools, as well as an easier-to-use platform:

• Data Dialogue box that makes it easy to fill out documents quickly;
• Customizing function that lets you save your favorite drafts as your own document templates for repeat use;
• Microsoft Excel helps you calculate with speed and accuracy

Has anyone used the new software?  You better try it out!  You should also begin looking at the 2007 revised documents because I also hear that the 1997 standard documents will no longer be supported as of May 31, 2009.

Photo: JimmyWayne

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